UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2017~~2019

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-11350

CONSOLIDATED-TOMOKA LAND CO.

(Exact name of registrant as specified in its charter)

Florida

59-0483700

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

1140 N. Williamson Blvd., Suite 140

Daytona Beach, Florida

32114

(Address of principal executive offices)

(Zip Code)

Registrant’s Telephone Number, including area code

(386) 274-2202

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT


Title of each ~~class~~class:	Trading Symbol	Name of each exchange on which ~~registered~~registered:
~~COMMON STOCK, $1 PAR VALUE~~common stock, $1.00 par value	CTO	NYSE American

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

NONE

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ~~YES~~Yes ☐ NONo ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ~~YES~~Yes ☐ NONo ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ~~YES~~Yes ☒ NONo ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate website, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T ~~(S232.405~~(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). ~~YES~~Yes ☒ NONo ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (S229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ◻	Accelerated filer ☒	Non-accelerated filer ◻	Smaller reporting company ◻
		(Do not check if a smaller reporting company)	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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES ☐ NO ☒

~~The~~At June 30, 2019, the aggregate market value of ~~the shares of~~voting and non-voting common stock held by non-affiliates of the registrant atwas $282,627,143 based upon the last reported sale price on the NYSE American on June ~~30, 2017, was approximately $307,616,923.~~ 28, 2019, the last business day of the registrant's most recently completed second fiscal quarter. The determination of affiliate status is solely for the purpose of this report and shall not be construed as an admission for the purposes of determining affiliate status.

The number of shares of the registrant’s Common Stock outstanding on February ~~15, 2018~~28, 2020 was ~~5,595,040.~~ 4,794,923.

~~Portions~~Registrant incorporates by reference into Part III (Items 10, 11, 12, 13 and 14) of ~~the registrant’s~~this Annual Report on Form 10-K portions of Consolidated- Tomoka Land Co.’s definitive Proxy Statement for the ~~2018~~2020 Annual Meeting of ~~Shareholders, which will~~Stockholders to be filed with the Securities and Exchange Commission ~~within~~(the “Commission”) pursuant to Regulation 14A. The definitive Proxy Statement will be filed with the Commission not later than 120 days after the end of the ~~registrant’s~~ fiscal year ~~ended December 31, 2017, are incorporated~~covered by ~~reference in Part III of~~ this ~~report.~~Annual Report on Form 10-K.

Table of Contents

TABLE OF CONTENTS


		Page #
	PART I
Item 1.	BUSINESS	12
Item 1A.	RISK FACTORS	1415
Item 1B.	UNRESOLVED STAFF COMMENTS	2737
Item 2.	PROPERTIES	2737
Item 3.	LEGAL PROCEEDINGS	2837
Item 4.	MINE SAFETY DISCLOSURES	2837

	PART II
Item 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES	2938
Item 6.	SELECTED FINANCIAL DATA	3142
Item 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW	3243
Item 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	5371
Item 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	5372
Item 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	5372
Item 9A.	CONTROLS AND PROCEDURES	5372
Item 9B.	OTHER INFORMATION	5473

	PART III
Item 10.	DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE	5473
Item 11.	EXECUTIVE COMPENSATION	5574
Item 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	5574
Item 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	5574
Item 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	5574

	PART IV
Item 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES	5675
Item 16.	FORM 10-K SUMMARY	5675
Signatures		6181

Table of Contents

PART I

When we refer to “we,” “us,” “our,” or “the Company,” we mean Consolidated-Tomoka Land Co. and its consolidated subsidiaries. References to “Notes to Financial Statements” refer to the Notes to the Consolidated Financial Statements of Consolidated-Tomoka Land Co. included in Item 8 of this Annual Report on Form 10-K. Statements contained in this Annual Report on Form 10-K, including the documents that are incorporated by reference, that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Also, when the Company uses any of the words “anticipate,” “assume,” “believe,” “estimate,” “expect,” “intend,” or similar expressions, the Company is making forward-looking statements. ~~Although management~~Management believes ~~that~~ the expectations reflected in such forward-looking statements are based upon present expectations and reasonable ~~assumptions,~~assumptions. However, the Company’s actual results could differ materially from those set forth in the forward-looking statements. ~~Certain factors~~Further, forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update or revise such forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, unless required by law. The risks and uncertainties that could cause our actual results to differ materially from those presented in our forward-looking statements, include, but are not limited to, the following:

we are subject to risks related to the ownership of commercial real estate that could affect the performance and value of our properties;

our business is dependent upon our tenants successfully operating their businesses, and their failure to do so could materially and adversely affect us;

competition that traditional retail tenants face from e-commerce retail sales, or the integration of brick and mortar stores with e-commerce retail operators, could adversely affect our business;

we operate in a highly competitive market for the acquisition of income properties and more established entities or other investors may be able to compete more effectively for acquisition opportunities than we can;

the loss of revenues from our income property portfolio or certain tenants would adversely impact our results of operations and cash flows;

our revenues include receipt of management fees and potentially incentive fees derived from our provision of management services to Alpine Income Property Trust, Inc. (“PINE”) and the loss or failure, or decline in the business or assets, of PINE could substantially reduce our revenues;

there are various potential conflicts of interest in our relationship with PINE, including our executive officers and/or directors who are also officers and/or directors of PINE, which could result in decisions that are not in the best interest of our stockholders;

a prolonged downturn in economic conditions could adversely impact our business, particularly with regard to our ability to maintain revenues from our income-producing assets and our ability to monetize parcels of land in Crisp39 SPV LLC (the “Land JV”);

a part of our investment strategy is focused on investing in commercial loan investments which may involve credit risk;

we may suffer losses when a borrower defaults on a loan and the value of the underlying collateral is less than the amount due;

the Company’s real estate investments are generally illiquid;

if we are not successful in utilizing the like-kind exchange structure in deploying the proceeds from dispositions of income properties, or our like-kind exchange transactions are disqualified, we could incur significant taxes and our results of operations and cash flows could be adversely impacted;

the Company may be unable to obtain debt or equity capital on favorable terms, if at all, or additional borrowings may impact our liquidity or ability to monetize any assets securing such borrowings;

servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our business to service or pay our debt;

our operations and properties could be adversely affected in the event of natural disasters, pandemics, or other significant disruptions; and

we may encounter environmental problems which require remediation or the incurrence of significant costs to resolve, which could adversely impact our financial condition, results of operations, and cash flows.

The Company describes the risks and uncertainties that could cause actual results orand events to differ materially ~~from those the Company anticipates or projects are described~~ in ~~“Item 1A. Risk~~“Risk Factors” (Part I, Item 1A of this Annual Report on Form ~~10-K. Given these uncertainties, readers are cautioned not to place undue reliance on such statements, which speak only as~~10-K), “Quantitative and Qualitative Disclosures about Market Risk” (Part II, Item 7A), and “Management’s Discussion and Analysis of ~~the date~~Financial Conditions and Results of this Annual Report on Form 10-K or any document incorporated herein by reference. The Company undertakes no obligation to publicly release any revisions to these forward-looking statements that may be made to reflect events or circumstances after the dateOperations” (Part II, Item 7).

Table of ~~this Annual Report on Form 10-K.~~Contents

ITEM 1. BUSINESS

~~We are~~Recent Developments Impacting our Business

During the fourth quarter of 2019, the Company, a ~~diversified real estate~~Florida corporation, completed the following transactions that were transformational to the Company and its operating ~~company. We own~~results for the year ended December 31, 2019 and ~~manage thirty-seven commercial real estate properties in twelve states~~meaningful to its ongoing operations in the ~~United States. As of~~periods subsequent to December 31, ~~2017, we owned twenty-six single-tenant~~2019:

Land JV Transaction

On October 16, 2019, the Company completed the sale of a controlling interest in its wholly-owned subsidiary, Crisp39 SPV LLC to affiliates of Magnetar Capital LLC (the “Magnetar Land Sale”); (i) Flacto, LLC (“Flacto”); (ii) Magnetar Longhorn Fund LP (“Longhorn”); and ~~eleven multi-tenant income-producing properties~~(iii) Magnetar Structured Credit Fund, LP (“Magnetar SCF” and collectively with ~~over 2.1 million square feet of gross leasable space. We also own~~Flacto and ~~manage a portfolio~~Longhorn, the “Magnetar Investors”) pursuant to an Interest Purchase Agreement (the “Purchase Agreement”), for $97 million. Crisp39 SPV LLC holds the approximately 5,300 acres of undeveloped land ~~totaling approximately 8,100 acres~~ in ~~the City of~~ Daytona Beach, Florida (the ~~“City”~~“Land JV”). Following the closing of the Purchase Agreement, the Magnetar Investors collectively own a notional 66.50% equity interest in the Land JV, and the Company owns a notional 33.50% equity interest in the Land JV (collectively, the Company and the Magnetar Investors are herein referred to as the “JV Partners”). The transaction resulted in a gain of approximately $78.6 million, or approximately $12.21 per share, after tax, on the sale of the 66.50% equity interest in the Land JV, and a non-cash gain of approximately $48.9 million on the Company’s retained interest in the Land JV, or approximately $7.59 per share, after tax.

The Company serves as the manager (the “Manager”) of the Land JV and is responsible for day-to-day operations at the direction of the JV Partners. All major decisions and certain other actions must be approved by the unanimous consent of the JV Partners (the “Unanimous Actions”). Unanimous Actions include the approval of pricing for all land parcels in the Land JV; approval of contracts for the sale of land that contain material revisions to the standard purchase contract of the Land JV; entry into any lease agreement affiliated with the Land JV; entering into listing or brokerage agreements; approval and amendment of the Land JV’s operating budget; obtaining financing for the Land JV; admission of additional members; and dispositions of the Land JV’s real property for amounts less than market value. Pursuant to the Limited Liability Company of the Land JV will pay the Manager a management fee in the initial amount of $20,000 per month, which amount will be evaluated on a quarterly basis and reduced based on the value of real property that remains in the Land JV.

As a result of the Magnetar Land Sale, the Company has effectively divested all of its land holdings and as such the impact of the occurrence of land sales, which had been a primary element of the Company’s business for virtually its entire history, has been essentially eliminated. Consequently, the operations associated with our land holdings were treated as discontinued operations and accordingly the revenues and expenses that had been presented within the Company’s real estate operations segment in prior periods were reclassified in the statement of operations for the year ended December 31, ~~2017, we had two commercial loan investments including a variable-rate B-Note representing a secondary tranche~~2019 and all prior periods presented. In addition, the need for utilizing the 1031 like-kind exchange structure to deploy proceeds from land sales into replacement assets, primarily income properties, has also been reduced substantially.

Alpine Income Property Trust, Inc. (NYSE: PINE)

On November 26, 2019, as part of the initial public offering (the “IPO”) of Alpine Income Property Trust, Inc. (“PINE”) on the New York Stock Exchange, the Company and certain of its affiliates entered into purchase and sale agreements with PINE and Alpine Income Property OP, LP (the “PINE OP”), pursuant to which the Company and such affiliates sold, and PINE or the PINE OP purchased, 15 properties for aggregate cash consideration of $125.9 million (collectively, the “Purchase and Sale Transaction”). In addition, the Company and certain of its affiliates entered into contribution agreements with the PINE OP, pursuant to which the Company and such affiliates contributed to the PINE OP five properties (the “Contributed Properties”) for an aggregate of 1,223,854 OP units of the PINE OP (the “OP Units”), which have an initial value of approximately $23.3 million (the “Contribution Transaction”), and collectively with the Purchase and Sale Transaction, (the “PINE Income Property Sale Transactions”). The PINE Income Property Sale Transactions resulted in a ~~commercial mortgage loan and~~gain of approximately $1.0 million, or approximately $0.16 per share, after tax.

Concurrently with the PINE Income Property Sale Transactions, the Company purchased 394,737 shares of PINE common stock for a ~~fixed-rate first mortgage loan. We have golf operations which consist~~total purchase price of $7.5 million (the “Private Placement”). Also, on November 26, 2019, the ~~LPGA International Golf Club, which is managed by~~Company purchased 421,053 shares of PINE common stock in the IPO for a ~~third party. We also lease some~~total purchase price of our land for nineteen billboards, have agricultural operations that are managed by a third party, which consist of leasing land for hay production, timber harvesting, and hunting leases, and own and manage Subsurface Interests (hereinafter defined). The results of our agricultural and subsurface leasing operations are included in Agriculture and Other Income and Real Estate Operations, respectively, in our consolidated statements of operations.

$8.0 million

Table of Contents

(the “IPO Purchase” and together with the Private Placement, the “Equity Transactions”). Including the Company’s investment in PINE as a result of receiving 1,223,854 OP Units, the Company owns, in the aggregate, approximately 2.04 million shares of PINE common stock, or approximately 22.3% of PINE’s total shares outstanding.

In addition to the PINE Income Property Sale Transactions, the PINE IPO was significant for the Company and our business because concurrent with the PINE IPO, the Company entered into a management agreement with PINE (the “Management Agreement”) pursuant to which the Company is responsible for managing, operating, and administering the day-to-day operations, business and affairs of PINE, subject to the direction and supervision of PINE’s board of directors (the “PINE Board”) and in accordance with the investment guidelines approved and monitored by the PINE Board. Pursuant to the Management Agreement, PINE agreed to pay the Company a base management fee equal to 0.375% per quarter (or 1.5% annually) of PINE’s “total equity” (as defined in the Management Agreement) calculated and payable in cash, quarterly in arrears. Based on the equity raised in PINE’s IPO and the Private Placement, the initial base management fee would approximate $2.6 million. In addition, we have the ability to earn an incentive fee based on PINE’s shareholders achieving an annual return that exceeds an 8% annual hurdle, subject to a high-water mark price. The amount of the incentive fee would equal 15% of the amount by which the PINE shareholders annual return exceeds 8% in any given year. The initial term of the Management Agreement is five (5) years and the Management Agreement cannot be terminated by either party during the initial term except for certain definitive events which pertain primarily to our default or lack of performance. We also entered into an exclusivity and right of first offer agreement (the “Exclusivity and ROFO Agreement”) with PINE at the date of its IPO. Pursuant to the Exclusivity and ROFO Agreement, the Company agreed not to invest in single-tenant net lease income properties, with limited exceptions. Further, the Company agreed to provide PINE with a right of first offer should the Company decided to sell any of its remaining portfolio of single-tenant net leased income properties in the future.

Golf Operations

On October 17, 2019, the Company sold its interest in the golf operations for $3.45 million (the “Golf Sale”), resulting in no gain on the transaction. The Company provided the buyer with financing in the form of an approximately $2.1 million first mortgage loan with a term of one year. As a result of the sale of the golf operations, the Company is no longer engaged in the ownership and operation of LPGA or any other golf club business.

Our Business

We are a diversified real estate operating company that was founded in 1910. As of December 31, 2019, we own and manage, sometimes utilizing third-party property management companies, thirty-four commercial real estate properties in eleven states in the United States, with approximately 1.8 million square feet of gross leasable space. These thirty-four properties in our portfolio comprise our income property operations segment.

In addition to our income property portfolio, as of December 31, 2019, or business included the following:

Management Services:

A fee-based management business that is engaged in managing PINE and the Land JV, see Note 5, “Related Party Management Services Business”.

Commercial Loan Investments:

A portfolio of commercial loan investments.

Real Estate Operations:

A portfolio of mineral interests consisting of approximately 455,000 subsurface acres in 20 counties in the state of Florida and a portfolio of mitigation credits;

A retained interest in the Land JV which is seeking to sell approximately 5,300 acres of undeveloped land in Daytona Beach, Florida; and

An interest in a joint venture (the “Mitigation Bank JV”) that owns an approximately 2,500 acre parcel of land in the western part of Daytona Beach, Florida which is engaged in the operation of a mitigation bank, which, pursuant to a mitigation plan approved by the applicable state and federal authorities, produces mitigation credits that are marketed and sold to developers of land in the Daytona Beach area for the purpose of enabling the developers to obtain certain regulatory permits.

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Our business also includes, as outlined above, our investment in PINE of approximately $38.8 million resulting from the Equity Transactions, or approximately 22.3% of the PINE’s outstanding equity, including the OP Units which are exchangeable into common stock of PINE on a one-for-one basis, at PINE’s election. Our investment in PINE should generate investment income through the dividends distributed by PINE. In addition to the dividends we receive from PINE, our investment in PINE may benefit from any appreciation in PINE’s stock price, although no assurances can be provided that such appreciation will occur, the amount by which our investment will increase in value, or the timing thereof. Any dividends received from PINE are included in Investment Income on the accompanying statement of operations.

Prior to 2019, the Company operated in four primary business segments: income properties, commercial loan investments, real estate operations, and golf operations. During the fourth quarter of 2018, the Company commenced efforts to monetize the golf operations and accordingly, as of December 31, 2018, the golf assets and liabilities related to the golf operations were classified as held for sale in the accompanying consolidated balance sheets and the results of golf operations were classified as discontinued operations in the accompanying consolidated statements of income for all years presented. The golf operations segment, although discontinued in 2018, held assets as of December 31, 2018. Accordingly, the identifiable assets and liabilities have been disclosed separately as discontinued golf operations for the years presented.

As a result of the significant transactions during the fourth quarter of 2019, including the Land JV transaction, the PINE Income Property Sale Transactions, and the Golf Sale, the Company’s segment structure has been modified to more closely align with the continuing operations of the Company. The Company now operates in four primary business segments: income properties, management services, commercial loan investments, and real estate operations. The new management services segment consists of the revenue generated from managing PINE and the Land JV. The management services segment had no assets as of December 31, 2019, 2018, or 2017. The real estate operations segment previously included land sales from the Daytona Beach land portfolio as well as revenue and expenses related to the sale of mitigation credits and subsurface operations. Upon the completion of the Land JV transaction in the fourth quarter of 2019, the real estate operations related to land sales have been classified as discontinued operations in the accompanying consolidated statements of income for the years ended December 31, 2019, 2018, and 2017 and the continuing real estate operations segment remaining consists of subsurface operations and mitigation credit sales. The identifiable assets and liabilities related to the discontinued real estate operations have been separately disclosed as discontinued real estate operations for the years presented.

The following is a summary of financial information regarding the Company’s business segments (amounts in thousands) for the years ended December 31:


	2017		2016		2015		2019		2018		2017
Revenues of each segment are as follows:
Income Properties	$	31,407	$	25,093	$	19,041	$	41,956	$	40,076	$	31,407
Interest Income from Commercial Loan Investments		2,053		2,588		2,691
Real Estate Operations		52,522		38,144		15,943
Golf Operations		5,095		5,190		5,244
Agriculture and Other Income		335		60		79
Total Revenues	$	91,412	$	71,075	$	42,998
Operating income (loss) from Continuing Operations before income tax for each segment is as follows:
Income Properties	$	24,489	$	19,888	$	15,385
Management Services								304		—		—
Commercial Loan Investments		2,053		2,588		2,691		1,829		616		2,053
Real Estate Operations		35,042		23,263		11,650		852		2,966		5,191
Golf Operations		(863)		(397)		(349)
Agriculture and Other Income		239		(107)		(148)
General and Administrative Expenses		(10,253)		(10,298)		(8,754)
Impairment Charges		—		(2,181)		(510)
Total Revenues							$	44,941	$	43,658	$	38,651
Operating income from Continuing Operations before income tax for each segment is as follows:
Income Properties							$	34,956	$	31,906	$	24,489
Management Services								304		—		—
Commercial Loan Investments								1,829		616		2,053
Real Estate Operations								748		2,375		3,770
General and Corporate Expense								(9,818)		(9,785)		(10,253)
Depreciation and Amortization		(12,664)		(8,195)		(5,213)		(15,797)		(15,762)		(12,314)
Gain on Disposition of Assets		—		12,759		5,517		21,977		22,035		—
Land Lease Income		2,226		—		—
Total Operating Income	$	40,269	$	37,320	$	20,269	$	34,199	$	31,385	$	7,745
Identifiable assets of each segment are as follows:
Income Properties	$	388,603	$	302,757	$	277,520	$	464,285	$	492,094	$	388,603
Commercial Loan Investments		43,296		24,033		38,487		35,742		—		11,964
Real Estate Operations		11,964		58,868		59,787		65,555		14,316		4,416
Golf Operations		6,262		3,676		3,608
Agriculture and Other (1)		16,005		19,289		24,952
Discontinued Real Estate Operations								833		20,972		38,880
Discontinued Golf Operations								—		4,462		6,262
Corporate and Other (1)								136,871		24,486		16,005
Total Assets	$	466,130	$	408,623	$	404,354	$	703,286	$	556,330	$	466,130

⁽¹⁾

~~Agriculture~~Corporate and Other assets includes all other corporate assets, including cash, restricted cash, and investment securities.

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BUSINESS PLAN

Our business plan going forward is primarily focused on investing in income-producing real estate, and when possible, monetizing the value of our land holdings through land sales to redeploy the proceeds, on a tax-deferred basis, into our investments in income-producing real estate. Our investments in income-producing real estate are primarily ~~through the acquisition of single-tenant and~~multi-tenant commercial retail properties occupied by retail or office tenants. We may also self-develop multi-tenant income properties, as we have done in the ~~self-development of multi-tenant income properties, or investing~~past. We may also invest in commercial loans or similar financings secured by commercial real estate. Our investment in ~~single-tenant,~~ multi-tenant ~~and office~~ income properties, ~~when possible, utilizes~~and possibly single-tenant net lease assets that fall outside our Exclusivity and ROFO agreement with PINE, may utilize proceeds from ~~other real estate transactions which~~the sale of an income property currently in our portfolio and because our tax basis in property likely carries a tax basis from the low-basis land parcel we sold to by the existing property, we may seek to have the sale of the existing income property qualify for income tax deferral through the like-kind exchange provisions under Section 1031 of the Internal Revenue Code including land sales and the disposition of other income properties. We have held the significant majority of our portfolio of land holdings, which are used in our agricultural operations, for most of our over 100-year history, and, as a result, our book basis in the majority of these assets is very low. Because of theCode. The low tax basis in our income property portfolio is the result of us having acquired the original land ~~holdings, dispositions~~primarily in the early part of our ~~land typically would generate large taxable gains.~~100 plus year history. Utilizing the like-kind exchange structure allows us to continue to defer the related income taxes on ~~these~~the original gains from the land sales and ~~reinvest nearly all~~possibly the gains achieved on the sale of the ~~net sales proceeds of the qualifying transaction into income-producing~~original replacement property or properties. Generally, in order to utilize the like-kind exchange structure, we are prohibited from engaging in activities that are typically indicative of the developer of ~~the~~an income property therefore we seek to complete land transactions with counterparties who will serve as the developer of the property. In limited circumstances, we have reacquired land that we have previously sold, either pursuant to the terms of the original sales agreement or ~~through foreclosure. Land we have reacquired typically has~~ a ~~higher book basis.~~dealer in income property sales. Our approach in investing in income-producing real estate is to use leverage, when appropriate or necessary, to fund our acquisitions and to help achieve our business ~~plan~~ objectives. Our use of leverage in acquiring income-producing real estate is intended to provide positive returns relative to our borrowing costs. We believe this enhances our Company’s income-generating real estate asset base while keeping us cash flow ~~positive given that a significant portion of our market capitalization is represented by land assets which largely yield no income.~~

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positive.

Our investment strategy seeks to acquire income properties, primarily multi-tenants, which will continue to broaden the credit base of our lease tenants, diversify our income property portfolio geographically, with an emphasis on major markets and growth markets in the U.S., and diversify the type of income-producing property. We may selectively choose to complete the development of an income property which in the future may include hospitality, industrial, or other retail. We have self-developed four of our existing multi-tenant income-producing properties, all of which are located in Daytona Beach, Florida. As of January 2018, we completed the self-development of two single-tenant net lease restaurant properties in Daytona Beach, Florida. Our investments in commercial loans or similar structured finance investments have been, and will continue to be, secured by commercial real estate, residential real estate developments, land or a borrower’s pledge of its ownership interest in the entity that owns the real estate. We believe investment in each of these income-producing asset classes provide attractive opportunities for stable current cash flows and increased returns in the long run and the potential for capital appreciation.investment.

Proceeds from ~~closed land transactions,~~completed sales of income properties ~~and certain transactions involving our subsurface interests provide~~supply us with investible capital. Our access to sources of debt financing, particularly our borrowing capacity under our Credit Facility, also provide a source of capital for our investment strategy. Our strategy is to utilize leverage, when appropriate and necessary, and potentially proceeds from ~~land~~sales of income properties, the disposition or payoffs of our commercial loan investments, and certain transactions involving our Subsurface Interests, to acquire income ~~properties,~~properties. We may also acquire or originate commercial loan investments, ~~and~~ invest in securities of real estate companies, or make other ~~shorter term~~shorter-term investments. Our ~~primary~~ targeted investment classes may include the following:

~~Single-tenant retail and office double-or-triple-net leased properties in major metropolitan areas or areas with high growth;~~

Multi-tenant office and retail properties ~~primarily~~ in major metropolitan areas ~~or areas with high~~and growth ~~and~~markets, typically stabilized;

Single-tenant retail and office, double or triple net leased, properties in major metropolitan areas and growth markets that are compliant with our commitments under the Exclusivity and ROFO agreement;

Purchase or origination of ground ~~leases;~~leases, that are compliant with our commitments under the Exclusivity and ROFO agreement;

Self-developed properties ~~on Company owned land, including~~comprised of select ~~office, flex, industrial,~~retail and ~~retail;~~office;

Joint venture development using ~~Company~~land owned ~~land;~~by the Land JV;

Origination or purchase of commercial loan investments with loan terms of 1-10 ~~year term loans~~years with strong risk-adjusted yields secured by property types to include hotel, office, retail, residential, land and industrial;

~~Real estate related investment securities, including commercial mortgage backed securities, preferred or common stock, and corporate bonds; and~~

Select regional area investments using Company market knowledge and expertise to earn ~~good~~strong risk-adjusted ~~yields.~~yields; and

Real estate-related investment securities, including commercial mortgage-backed securities, preferred or common stock, and corporate bonds.

Our investments in income-producing properties ~~have single or multiple tenants~~are typically subject to long-term leases. For multi-tenant properties, each tenant typically pays its proportionate share of the aforementioned operating expenses of the property, although for such properties we typically incur additional costs for property management services. Single-tenant leases ~~primarily~~are typically in the form of triple or double net leases and ground leases. Triple-net leases generally require the tenant to pay property operating expenses such as real estate taxes, insurance, assessments and other governmental fees, utilities, repairs and maintenance, and capital expenditures. For multi-tenant properties, each tenant typically pays its proportionate share of the aforementioned operating expenses of the property, although for such properties we typically incur additional costs for property management services.

Table of Contents

INCOME PROPERTIES

We have pursued a strategy of investing in income-producing properties, when possible, by utilizing the proceeds from real estate transactions, including ~~land sales,~~the disposition of income properties and transactions involving our ~~subsurface interests, and the disposition of other income properties, qualifying for income tax deferral through like-kind exchange treatment for tax purposes.~~Subsurface Interests.

Our strategy for investing in income-producing properties is focused on factors including, but not limited to, long-term real estate fundamentals and target markets, including major markets or those markets experiencing significant economic growth. We employ a methodology for evaluating targeted investments in income-producing properties which includes an evaluation of: (i) the attributes of the real estate (e.g. location, market demographics, comparable properties in the market, etc.); (ii) an evaluation of the existing ~~tenant~~tenant(s) (e.g. credit-worthiness, property level sales, tenant rent levels compared to the market, etc.); (iii) other market-specific conditions (e.g. tenant industry, job and population growth in the market, local economy, etc.); and (iv) considerations relating to the Company’s business and strategy (e.g. strategic fit of the asset type, property management needs, alignment with the Company’s 1031 like-kind exchange structure, etc.).

We believe investment in each of these income-producing asset classes provides attractive opportunities for stable current cash flows and increased returns in the long run and the potential for capital appreciation.

During the year ended December 31, ~~2017,~~2019, the Company acquired ~~six income properties (four~~ten single-tenant income properties and ~~two~~one multi-tenant income ~~properties)~~property, for an aggregate purchase price of approximately ~~$79.8~~$164.7 million as described below:

Tenant Description

Tenant Type

Property Location

Date of Acquisition

Property Square-Feet

Property Acres

Purchase Price

Percentage Leased

Remaining Lease Term (in years)
Staples, Inc. (an affiliate of)

Single-Tenant

Sarasota, Florida

01/27/17

18,120

1.2

$
4,075,000

100%

5.0
Grocery-Anchored Shopping Center (Westcliff)

Multi-Tenant

Fort Worth, Texas

03/01/17

136,185

10.3

15,000,000

96%

4.1
JoAnn Stores, Inc.

Single-Tenant

Saugus, Massachusetts

04/06/17

22,500

2.6

6,315,000

100%

11.8
LA Fitness
Multi-Tenant Retail Building

Single-Tenant
Multi-Tenant

Brandon, Florida

04/28/17

45,000
6,715

5.3

14,650,000

100%

13.9
Wells Fargo Bank, N.A.

Single-Tenant

Hillsboro, Oregon

10/27/17

211,863

18.9

39,750,000

100%

8.2

440,383

$
79,790,000

8.9


Tenant Description	Tenant Type	Property Location	Date of Acquisition	Property Square-Feet	Property Acres	Purchase Price		Percentage Leased		Remaining Lease Term at Acquisition Date (in years)
Hobby Lobby Stores, Inc.	Single-Tenant	Winston-Salem, NC	05/16/19	55,000	7.6	$	8,075,000		100%	10.9
24 Hour Fitness USA, Inc.	Single-Tenant	Falls Church, VA	05/23/19	46,000	3.1		21,250,000		100%	8.6
Walgreen Co.	Single-Tenant	Birmingham, AL	06/05/19	14,516	2.1		5,500,000		100%	9.8
Family Dollar Stores of Massachusetts, Inc.	Single-Tenant	Lynn, MA	06/07/19	9,228	0.7		2,100,000		100%	4.8
Walgreen Co.	Single-Tenant	Albany, GA	06/21/19	14,770	3.6		3,634,000		100%	13.6
Carpenter Hotel (1)	Single-Tenant	Austin, TX	07/05/19	N/A	1.4		16,250,000		100%	99.1
General Dynamics Corporation	Single-Tenant	Reston, VA	07/12/19	64,319	3.0		18,600,000		100%	9.9
Live Nation Entertainment, Inc.	Single-Tenant	East Troy, WI	08/30/19	N/A	158.3		7,500,000		100%	10.6
Party City Corporation	Single-Tenant	Oceanside, NY	09/24/19	15,500	1.2		7,120,000		100%	10.2
Burlington Stores, Inc.	Single-Tenant	N. Richland Hills, TX	10/28/19	70,891	5.3		11,940,000		100%	9.3
The Strand	Multi-Tenant	Jacksonville, FL	12/09/19	212,402	52.0		62,701,000		95%	9.5
	Total / Weighted Average			502,626		$	164,670,000			18.4

(1)The ground lease with The Carpenter Hotel includes two tenant repurchase options. Pursuant to FASB ASC Topic 842, Leases, the $16.25 million investment has been recorded in the accompanying consolidated balance sheet as of December 31, 2019 as a commercial loan investment. See Note 4, “Commercial Loan Investments”.

~~Additionally, on April 7, 2017, rent commenced on~~In addition to the ~~15-year~~20 single-tenant net lease ~~with 24 Hour Fitness,~~properties sold to PINE in November 2019, the ~~anchor tenant at The Grove at Winter Park located in Winter Park, Florida. The lease is for~~Company completed the sale of four other income properties during the year ended December 31, 2019. In February 2019, the Company sold its approximately ~~40,000 square feet, or 36% of the 112,000~~59,000 square foot multi-tenant retail ~~center. As~~property located in Sarasota, Florida that was anchored by a Whole Foods Market grocery store, for approximately $24.6 million. In May 2019, the Company sold its approximately 112,000 square foot retail strip center, anchored by a 24-Hour Fitness, for approximately $18.3 million. In June 2019, the Company sold its approximately 76,000 square foot multi-tenant office property in Santa Clara, California for approximately $37.0 million. And finally, in August of ~~December 31, 2017,~~2019, the ~~multi-tenant retail center~~Company sold its property that was subject to a ground lease with WaWa for approximately ~~63% leased~~$2.8 million. In aggregate, the four dispositions generated approximately $82.6 million in proceeds with ~~eleven different tenants including 24 Hour Fitness.~~gains recognized of approximately $20.8 million, or approximately $3.06 per share, after tax.

Our current portfolio of ~~twenty-six~~twenty-nine (29) single-tenant income properties generates approximately ~~$18.8~~$20.4 million of revenues from straight-line base lease payments on an annualized basis and ~~has~~had a weighted average remaining lease term of ~~9.2~~9.1 years as of December 31, ~~2017.~~2019. Our current portfolio of ~~eleven~~five (5) multi-tenant properties generates approximately ~~$9.9~~$8.9 million of revenue from straight-line base lease payments on an annualized basis and ~~has~~had a weighted average remaining lease term of ~~4.0~~6.5 years as of December 31, ~~2017.~~

We expect to continue to focus on acquiring income-producing properties during fiscal year 2018, and in the near term thereafter, maintaining our use of the aforementioned tax deferral structure whenever possible.2019.

As part of our overall strategy for investing in income-producing ~~investments,~~properties, we have self-developed properties, including five ~~of our~~ multi-tenant office properties, all of which are located in Daytona Beach, ~~Florida,~~Florida. We sold one these properties in 2016 and the four of which we still own as of December 31, 2017. The first self-developed property, located at the northeast corner of LPGA and Williamson Boulevards in Daytona Beach, Florida, is an approximately 22,000 square foot, two-story, building, known as the Concierge Office Building, which was approximately 91% leased as of December 31, 2017. The second twoother properties known as the Mason Commerce Center, consist of two buildings totaling approximately 31,000 square-feet (15,360 each), which were 100% leased as of December 31, 2017. During the year ended December 31, 2014, construction was completed on two additional properties, known as the Williamson Business Park, which are adjacent to the Mason Commerce Center. One of the two 15,360 square-foot Williamson Business Park buildings was sold in April 2016. The remaining Williamson Business Park building was approximately 50% leased and 100% occupied as of December 31, 2017 as the Company now occupies the remaining 50% of the property as its new corporate office.March 26, 2018.

Table of Contents

We ~~also~~ self-developed two single-tenant net lease restaurant properties on a 6-acre beachfront parcel in Daytona Beach, Florida. The development was completed in January of ~~2018; therefore, during the first quarter of~~ 2018 ~~we will add these two properties~~and rent commenced from both tenants pursuant to ~~our income property portfolio.~~their separate leases. On a limited basis, we have acquired and may continue to selectively acquire other real estate, either vacant land or land with existing structures, that we would demolish and develop into additional income properties, possibly in the downtown and beachside areas of Daytona Beach, Florida. Through December 31, 2019, we invested approximately $5.2 million to acquire approximately 6.0 acres in downtown Daytona Beach that is located in an opportunity zone. Specifically, our investments in the Daytona Beach area would target opportunistic acquisitions of select catalyst sites, which are typically distressed, with an objective of having short investment horizons. Should we pursue such acquisitions, we may seek to partner with developers to develop these sites rather than self-develop the properties.

Our focus on acquiring income-producing investments includes a continual review of our existing income property portfolio to identify opportunities to recycle our capital through the sale of income properties based on, among other possible factors, the current or expected performance of the property and favorable market conditions. ~~No income-producing~~In the recent past, the Company was pursuing an effort to the monetize certain of our multi-tenant income properties ~~were disposed~~with the Company intending to reinvest the potential proceeds from these dispositions into single-tenant net lease income properties. As a result of that strategy, we sold three multi-tenant income properties during the year ended December 31, ~~2017. Should~~2019. In part, as a result of entering into the Exclusivity and ROFO Agreement, our income property investment strategy will be focused primarily on multi-tenant retail and office properties. We may pursue this strategy, in part, by monetizing certain of our single-tenant properties, and should we ~~sell income properties, it is likely that~~do so, we would seek to ~~do so utilizing~~utilize the 1031 like-kind exchange structure to preserve the tax-deferred gain on the original transaction(s) that pertains to the replacement asset.

As of December 31, 2019, the Company owned twenty-nine single-tenant and five multi-tenant income properties in eleven states. Following is a summary of these properties:


Tenant	City	State	Area (Square Feet)	Year Built
24 Hour Fitness USA, Inc.	Falls Church	VA	46,000	2012
Aspen Development	Aspen	CO	19,596	2015
Bank of America	Monterey	CA	32,692	1982
Wawa (formerly Barnes & Noble)	Daytona Beach	FL	—	Under Construction
Big Lots	Phoenix	AZ	34,512	2000
Big Lots	Germantown	MD	25,589	2000
Burlington Stores, Inc.	N. Richland Hills	TX	70,891	1993
Carpenter Hotel	Austin	TX	—	1949/2018
Carrabba's Italian Grill	Austin	TX	6,528	1994
Chase Bank	Jacksonville	FL	3,614	2017
Chuy's Restaurant & Bar	Jacksonville	FL	7,950	2017
Crabby's Restaurant (formerly Cocina 214)	Daytona Beach	FL	5,780	2018
CVS	Dallas	TX	10,340	2016
Fidelity Investments (affiliate of)	Albuquerque	NM	210,067	2009
Firebirds Wood Fired Grill	Jacksonville	FL	6,948	2017
General Dynamics Corporation	Reston	VA	64,319	1984/2018
Harris Teeter	Charlotte	NC	45,089	1993
LandShark Bar & Grill	Daytona Beach	FL	6,264	2018
Lowe’s Corporation	Katy	TX	131,644	1997
Macaroni Grill	Arlington	TX	8,123	1993
Moe's Southwest Grill	Jacksonville	FL	3,111	2017
Outback Steakhouse	Austin	TX	6,176	1994
PDQ	Jacksonville	FL	3,366	2017
Party City Corporation	Oceanside	NY	15,500	1999/2014
Rite Aid Corp.	Renton	WA	16,280	2006
Staples	Sarasota	FL	18,120	2012
Walgreens	Clermont	FL	13,650	2003
Wawa	Jacksonville	FL	6,267	2017
Wells Fargo	Raleigh	NC	450,393	1996/1997
29 Single-Tenant Properties			1,268,809
7-Eleven	Dallas	TX	4,685	1973
World of Beer/Fuzzy's Taco Shop	Brandon	FL	6,715	2006
Riverside Avenue	Jacksonville	FL	136,856	2003
Westcliff Shopping Center	Fort Worth	TX	136,185	1954
The Strand	Jacksonville	FL	212,402	2017/2018
5 Multi-Tenant Properties			496,843
Total 34 Properties			1,765,652

Table of Contents

~~As of December 31, 2017, the Company owned twenty-six single-tenant and eleven multi-tenant income properties in twelve states. Following is a summary of these properties:~~

Tenant

City

State

Area
(Square Feet)

Year Built

At Home

Raleigh

NC

116,334

1995

Bank of America

Monterey

CA

32,692

1982

Barnes & Noble

Daytona Beach

FL

28,000

1995

Best Buy

McDonough

GA

30,038

2005

Big Lots

Phoenix

AZ

34,512

2000

Big Lots

Germantown

MD

25,589

2000

Carrabba's Italian Grill

Austin

TX

6,528

1994

Century Theatres

Reno

NV

52,474

2000

Container Store

Glendale

AZ

23,329

2015

CVS

Dallas

TX

10,340

2016

Dick’s Sporting Goods

McDonough

GA

46,315

2006

Harris Teeter

Charlotte

NC

45,089

1993

Hilton Grand Vacations

Orlando

FL

102,019

1988

Hilton Grand Vacations

Orlando

FL

31,895

2000

JoAnn Fabric

Saugus

MA

22,500

2008

LA Fitness Center

Brandon
��
FL

45,000

2006

Lowe’s Corporation

Katy

TX

131,644

1997

Outback Steakhouse

Austin

TX

6,176

1994

Outback Steakhouse

Charlottesville

VA

7,216

1984

Outback Steakhouse

Huntersville

NC

6,297

1997

Rite Aid Corp.

Renton

WA

16,280

2006

Staples

Sarasota

FL

18,120

2012

Walgreens

Clermont

FL

13,650

2003

Walgreens

Alpharetta

GA

15,120

2000

Wells Fargo

Hillsboro

OR

211,863

1978/2009

Wells Fargo

Raleigh

NC

450,393

1996/1997

26 Single-Tenant Properties

1,529,413

7-Eleven

Dallas

TX

4,685

1973

3600 Peterson

Santa Clara

CA

75,841

1978/2015

Concierge Office Building

Daytona Beach

FL

22,012

2009

World of Beer/Fuzzy's Taco Shop

Brandon

FL

6,715

2006

Mason Commerce Center-Building 1

Daytona Beach

FL

15,360

2009

Mason Commerce Center-Building 2

Daytona Beach

FL

15,360

2009

The Grove

Winter Park

FL

112,292

1985

Riverside Avenue

Jacksonville

FL

136,856

2003

Westcliff Shopping Center

Fort Worth

TX

136,185

1954

Whole Foods Market Centre

Sarasota

FL

59,341

2004

Williamson Business Park-Building 1

Daytona Beach

FL

15,360

2014

11 Multi-Tenant Properties

600,007

Total 37 Properties

2,129,420

Subsequent to December 31, 2017, and prior to the date of this report, the Company completed two self-developed single-tenant net lease restaurant properties on a 6-acre beachfront parcel in Daytona Beach, Florida and acquired a newly constructed commercial building located in Aspen, Colorado under a twenty-year master lease to a single tenant, bringing the number of single-tenant and total income properties to 29 and 40, respectively.

The weighted average economical and physical occupancy rates of our income properties for each of the last three years on a portfolio basis are as follows:


Year	Single-Tenant Economic / Physical Occupancy	Multi-Tenant Economic / Physical Occupancy
~~2015~~	~~100% / 99%~~	~~85% / 85%~~
~~2016~~2017	100% / 100%	85% / 85%
~~2017~~2018	100% / 100%	86% / 85%
2019	100% / 100%	82% / 82%

~~Table of Contents~~

The information on lease expirations of our total income property portfolio for each of the ten years starting with ~~2018~~2020 is as follows:


Year	# of Tenant Leases Expiring	Total Square Feet of Leases Expiring	Annual Rents Expiring (1		Percentage of Gross Annual Rents Expiring (		# of Tenant Leases Expiring	Total Square Feet of Leases Expiring	Annual Rents Expiring (1)		Percentage of Gross Annual Rents Expiring (1)
2018	7	13,975	$	251,920	1.1	%
2019	11	164,526	$	2,217,220	9.2	%
2020	11	121,062	$	2,509,035	10.5	%	4	63,150	$	1,018,402	3.6	%
2021	21	149,981	$	2,309,941	9.6	%	9	84,261	$	1,173,945	4.2	%
2022	3	44,688	$	705,137	2.9	%	6	47,430	$	1,808,497	6.4	%
2023	6	95,033	$	1,959,139	8.2	%	6	60,211	$	966,982	3.4	%
2024	5	532,677	$	3,714,580	15.5	%	4	479,262	$	3,192,015	11.4	%
2025	5	265,746	$	1,680,972	7.0	%	1	5,393	$	127,055	0.5	%
2026	5	155,072	$	2,779,472	11.6	%	3	22,417	$	632,603	2.3	%
2027	2	148,544	$	1,001,923	4.2	%	6	213,853	$	3,131,301	11.1	%
2028							12	372,570	$	7,046,298	25.1	%
2029							12	190,916	$	4,055,564	14.4	%

~~(1)Annual Rents consist of the base rent to be received pursuant to each lease agreement, i.e. not on a straight-line basis.~~

⁽¹⁾

Annual Rents consist of the base rent to be received pursuant to each lease agreement, i.e. not on a straight-line basis.

The majority of leases have additional option periods beyond the original term of the lease, which typically are exercisable at the tenant’s option.

~~While no single~~We had one tenant ~~represents~~that accounted for more than 10% of our consolidated income property revenue during the year ended December 31, 2019. Wells Fargo, who occupied two single-tenant office properties located in Hillsboro, Oregon and Raleigh, North Carolina, accounted for approximately 12.5% of our consolidated revenues during the year ended December 31, 2019. The office property leased to Wells Fargo located in Hillsboro, Oregon was sold as a part of the PINE Income Property Sale Transactions on November 26, 2019. The office property leased to Wells Fargo located in Raleigh, North Carolina also represented 26% of the total square footage of our income property portfolio as of December 31, ~~2017, we~~2019. A default by this tenant would have ~~tenants~~a material adverse effect on the Company’s income properties segment and its overall results of operations. We have one other tenant, Fidelity Investments, who ~~represent a large amount~~represented over 5% of our ~~net operating income and/or~~consolidated revenues during the year ended December 31, 2019, and a large percentage of the square footage of our income property ~~portfolio. These tenants~~portfolio, but not in excess of 10%.

MANAGEMENT SERVICES

Our business plans also include ~~Wells Fargo, Lowe’s Corporation, Hilton Grand Vacations,~~generating revenue from managing PINE and ~~At Home.~~

~~REAL ESTATE OPERATIONS~~

Asthe Land JV. Pursuant to the Management Agreement, we will generate a base management fee equal to 1.5% of ~~December 31, 2017, the Company owned approximately 8,100 acres of undeveloped land in Daytona Beach, Florida, along six miles~~PINE’s total equity. The structure of the ~~west~~base fee provides us with an opportunity for our base fee to grow should PINE’s independent board members determine to raise additional equity capital in the future. We also have an opportunity to achieve additional cash flows as Manager of PINE pursuant to the terms of the incentive fee.

The Company also generates management fees as the Land JV Manager. Pursuant to the terms of the operating agreement for the Land JV, the initial amount of the management fee is $20,000 per month. The management fee is evaluated quarterly and ~~east sides of Interstate 95. Currently,~~as land sales occur in the ~~majority of this land~~Land JV, the basis for our management fee will be reduced as the management fee is used for agricultural purposes. As of February 28, 2018, approximately 75% of this acreage, or approximately 6,042 acres, is under contract to be sold. Approximately 1,100 acres of our land holdings are locatedbased on the ~~east side~~value of Interstate 95 and are generally well suited for commercial development. Approximately 7,000 acres of our land holdings are located on the west side of Interstate 95 and the majority of this land is generally well suited for residential development. Includedreal property that remains in the western land is approximately 1,100 acres, primarily an 850-acre parcel and three smaller parcels, which are located further west of Interstate 95 and a few miles north of Interstate 4 that is generally well suited for industrial purposes.

~~Real estate operations revenue consisted of the following for the years ended December 31, 2017, 2016, and 2015, respectively:~~

2017

2016

2015

Revenue Description

($000's)

($000's)

($000's)

Land Sales Revenue

$
45,472

$
11,871

$
4,276

Tomoka Town Center - Percentage of Completion Revenue

—

17,490

8,128

Revenue from Reimbursement of Infrastructure Costs

1,860

4,500

—

Impact Fee and Mitigation Credit Sales

2,126

2,220

463

Subsurface Revenue

3,048

1,802

3,003

Fill Dirt and Other Revenue

17

261

73

Total Real Estate Operations Revenue

$
52,523

$
38,144

$
15,943

~~Tomoka Town Center.~~ The Tomoka Town Center consists of approximately 235 acres of which approximately 180 acres are developable. During 2015 and 2016, land sales with a gross sales price totaling approximately $21.4 million within the Tomoka Town Center consisted of sales of approximately 99 acres to Tanger Outlets, Sam’s Club, and North American Development Group (“NADG”) (the “Tomoka Town Center Sales Agreements”). The Company performed certain infrastructure work, beginning in the fourth quarter of 2015 through completion in the fourth quarter of 2016, which required the sales price on the Tomoka Town Center Sales Agreements to be recognized on the percentage-of-completion basis. As the infrastructure work was completed in the fourth quarter of 2016, all revenue related to the Tomoka Town

~~Table of Contents~~

Center Sales Agreements had been recognized as of December 31, 2016. The timing of the remaining reimbursements for the cost of the infrastructure work which totals approximately $2.2 million is more fully described in Note 9, “Other Assets.”

Tanger Outlets completed its approximately 350,000 square foot outlet mall in November 2016. As of December 31, 2017, NADG has begun construction on its approximately 400,000 square foot retail power center.

~~During the second quarter of 2017, the Company completed the sale of approximately 19 acres to NADG (the “Third NADG~~ Land Sale”). During the fourth quarter of 2017, the Company completed the sale of approximately 27 acres to NADG (the “Fourth NADG Land Sale”). The remaining developable acreage of approximately 35 acres is currently under contract with NADG as described in the land pipeline in Note 18, “Commitment and Contingencies.”

~~Land Sales.~~ ~~During the year ended December 31, 2017, a total of approximately 1,701 acres were sold for approximately $47.0 million as described below:~~

Gross Sales

Gain

Date of

No. of

Price (1)

Price

on Sale


Buyer (or Description)

Location

Sale

Acres

($000's)

per Acre

($000's)
1

Minto Communities, LLC

West of I-95

02/10/17

1,581.0

$
27,151

$
17,000

$
20,041
2

Commercial

East of I-95

03/22/17

6.4

1,556

245,000

11
3

Commercial

East of I-95

04/05/17

27.5

3,218

117,000

2,955
4

Commercial

East of I-95

04/13/17

4.5

1,235

274,000

13
5

Commercial

West of I-95

04/25/17

30.0

2,938

98,000

627
6

Third NADG Land Sale

East of I-95

06/27/17

19.4

4,422

228,000

3,263
7

Commercial

West of I-95

10/13/17

5.1

275

54,000

239
8

Fourth NADG Land Sale

East of I-95

12/29/17

27.0

6,216

230,000

4,609

1,700.9

$
47,011

$
28,000

$
31,758

~~(1)~~The Gross Sales Price of land sales during 2017 of approximately $47.0 million above includes the infrastructure reimbursement payments received in the amount of approximately $955,000 for the Third NADG Land Sale and approximately $584,000 for the Fourth NADG Land Sale. Additionally, during 2017, approximately $321,000 was received from Minto Communities, LLC as an infrastructure reimbursement for improvements to the I-95 off ramp, which is not included in the gross sales price in the table above.

~~During the year ended December 31, 2016, a total of approximately 707.7 acres were sold for approximately $13.8 million as described below:~~

Gross Sales

Gain

Date of

No. of

Price (1)

Price

on Sale


Buyer (or Description)

Location

Sale

Acres

($000's)

per Acre

($000's)
1

Commercial / Retail

East of I-95

02/12/16

3.1

$
190

$
61,000

$
145
2

NADG - OutParcel

East of I-95

03/30/16

4.4

2,000

455,000

1,304
3

Minto Sales Center

West of I-95

09/27/16

4.5

205

46,000

126
4

Commercial / Retail

West of I-95

10/13/16

17.1

3,034

177,000

2,675
5

Commercial / Retail

East of I-95

12/22/16

74.6

830

11,000

751
6

ICI Homes

West of I-95

12/29/16

604.0

7,500

12,000

3,303

707.7

$
13,759

$
19,000

$
8,304

~~(1)~~Land Sales Revenue for 2016 is equal to the Gross Sales Price of land sales during 2016 of approximately $13,.8 million above less the $2.0 million sales price for the NADG – OutParcel, plus approximately $112,000 of incentives earned and received during 2016 related to the Distribution Center sale which closed during 2014.

JV.

Table of Contents

~~During the year ended December 31, 2015, a total of approximately 114.1 acres were sold for approximately $22.5 million as described below:~~

Gross Sales

Gain

Date of

No. of

Price (1)

Price

on Sale


Buyer (or Description)

Location

Sale

Acres

($000's)

per Acre

($000's)
1

Commercial / Retail

East of I-95

06/01/15

3.0

$
505

$
168,000

$
476
2

Commercial / Retail

Highlands County

06/17/15

0.9

250

278,000

223
3

Tanger

East of I-95

11/12/15

38.9

9,700

249,000

2,793
4

Integra Land Company

East of I-95

12/18/15

15.0

2,376

158,000

2,265
5

Sam's Club

East of I-95

12/23/15

18.1

4,500

249,000

1,279
6

NADG - First Parcel

East of I-95

12/29/15

37.3

5,168

139,000

1,421
7

Commercial / Retail

East of I-95

12/29/15

0.9

30

33,000

20

114.1

$
22,529

$
197,000

$
8,477

~~(1)~~Land Sales Revenue for 2015 is equal to the Gross Sales Price of land sales during 2015 of approximately $22.5 million above, less the aggregate $19.4 million sales price for the Tomoka Town Center Sales (Tanger, Sam’s Club, and NADG – First Parcel), plus approximately $1.03 million of incentives received and earned during 2015 related to the Distribution Center sale which closed during 2014, plus approximately $87,000 of percentage-of-completion revenue earned during 2015 for the Distribution Center Sale which closed during 2014.

As of February 28, 2018, the Company’s pipeline of potential land sales transactions, including the terms of an executed non-binding term sheet to form a joint venture with an institutional investor to establish a mitigation bank on a parcel of our land (the “Mitigation Bank”), included the following eighteen potential transactions with sixteen different buyers, representing more than 6,000 acres or approximately 75% of our land holdings:

No. of

Amount

Price

Estimated


Transaction (Buyer)

Acres

($000's)

per Acre

Timing
1

Commercial/Retail - O'Connor - East of I-95 (2)

123

$
29,250

$
238,000

'18 - '19
2

Residential (AR) - Minto Communities - West of I-95

1,614

26,500

16,000

Q4 '18
3

Residential (SF) - ICI Homes - West of I-95

1,016

21,000

21,000

'19
4

Mitigation Bank - Term Sheet - West of I-95 (1)

2,492

15,000

6,000

Q2 '18
5

Mixed-Use Retail - North American - East of I-95 (5)

35

14,362

409,000

Q4 '18
6

Commercial/Retail - Buc'ees - East of I-95 (2)

35

14,000

400,000

Q2 '18
7

Residential (Multi-Family) - East of I-95 (3)

45

5,200

116,000

Q3 '18 & '20
8

Distribution/Warehouse - VanTrust - East of I-95

71

5,000

70,000

'19
9

Commercial/Retail - East of I-95

20

4,250

213,000

Q4 '18 - '19
10

Residential (SF) - West of I-95 (4)

200

3,324

17,000

Q4 '18 & '20
11

Commercial/Distribution - VanTrust - East of I-95

26

3,215

124,000

Q4 '18 - '19
12

Specialty Grocer - East of I-95

9

2,790

310,000

Q4 '18
13

Auto Dealership - West of I-95

13

2,000

154,000

Q3 '18
14

Commercial (RV) - West of I-95

164

1,900

12,000

'19
15

Residential (SF) - ICI Homes - West of I-95

146

1,400

10,000

Q4 '18
16

Commercial/Retail - East of I-95

8

782

98,000

Q4 '18
17

Commercial/Retail - East of I-95

6

625

104,000

Q4 '18
18

Commercial/Retail - West of I-95

19

285

15,000

Q4 '18

Total (Average)

6,042

$
150,883

$
25,000

~~(1)~~The amount for the Mitigation Bank represents the amount in the term sheet for buyer’s acquisition of approximately 70% of the joint venture that owns the Mitigation Bank, with the Company retaining 30%.

~~(2)~~Land sales transactions which require the Company to incur the cost to provide the requisite mitigation credits necessary for obtaining the applicable regulatory permits for the buyer, with such costs representing either our basis in the credits that we own, or potentially up to 5% - 10% of the contract amount noted.

~~(3)~~The acres and amount include the buyer’s option to acquire approximately 19 acres for approximately $2.0 million, in addition to the base contract of approximately 26 acres for approximately $3.2 million.

~~(4)~~The acres and amount include the buyer’s option to acquire approximately 71 acres for approximately $574,000, in addition to the base contract of approximately 129 acres for approximately $2.75 million.

~~(5)Pursuant to the contract, amount includes the reimbursement of infrastructure costs incurred by the Company for Tomoka Town Center plus interest accrued as of December 31, 2017.~~

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making submissions to the planning and development departments of the City, and other permitting activities with other applicable governmental authorities, including wetlands permits from the St. John’s River Water Management District and the U.S. Army Corps of Engineers, and conducting traffic analyses with local government and the Florida Department of Transportation and negotiating other matters with Volusia County. In addition to other customary closing conditions, the majority of these transactions are conditioned upon the receipt of approvals or permits from those various governmental authorities, as well as other matters that are beyond our control. If such approvals are not obtained, the prospective buyers may have the ability to terminate their respective agreements prior to closing. As a result, there can be no assurances regarding the likelihood or timing of any one of these potential land transactions being completed or the final terms thereof, including the sales price.

Historical revenues and income from our sales of land are not indicative of future results because of the unique nature of land transactions and other factors including, but not limited to, variations in the cost basis of the owned land. A significant portion of the Company’s revenue and income in any given year may be generated through relatively few land transactions. The timing for these land transactions, from the time of preliminary discussions through contract negotiations, due diligence periods, and the closing, can last from several months to several years. Although we believe there have been recent indications of improvement in the overall economy and credit markets, we expect the overall real estate market, particularly home building, to remain inconsistent in the near term, and as a result we believe our ability to enter into land transactions will remain challenging.

~~Land Impairments.~~ As more fully described in Note 8, "Impairment of Long-Lived Assets," during the years ended December 31, 2017 and 2015 the Company did not recognize any impairments on its undeveloped land holdings. During the year ended December 31, 2016, impairment charges totaled approximately $1.0 million on the Company’s undeveloped land.

~~Beachfront Development.~~ During the year ended December 31, 2015, the Company acquired, through a real estate venture with an unaffiliated third party institutional investor, an interest in approximately six acres of vacant beachfront property located in Daytona Beach, Florida. The property was acquired for approximately $11.3 million, of which the Company contributed approximately $5.7 million. As of December 31, 2015, the real estate venture was fully consolidated as the Company determined that it was the primary beneficiary of the variable interest entity (“VIE”). On November 17, 2016, the Company acquired the unaffiliated third party’s 50% interest for approximately $4.8 million, a discount of approximately $879,000. The discount was recorded through equity on the consolidated balance sheet during the year ended December 31, 2016. The Company evaluated its interest in the six-acre vacant beachfront property for impairment and determined that no impairment was necessary as of December 31, 2016. As the Company owns the entire real estate venture as of December 31, 2017, there is no longer a consolidated VIE.

The cost basis of the six-acre vacant beachfront property asset totaled approximately $11.7 million as of December 31, 2017, which includes costs for entitlement. The beachfront property received approval of the rezoning and entitlement of the site to allow for the development of two single-tenant restaurants and also for the future potential development of up to approximately 1.2 million square feet of vertical density. In the first quarter of 2017, the Company executed a 15-year lease agreement with the operator of LandShark Bar & Grill (“LandShark”), which provided for the development by the Company of an approximately 6,264 square foot restaurant property on the parcel. The annual rent under the LandShark lease is based on a percentage of the tenant’s net operating income (“NOI”) until the Company has received its investment basis in the property and thereafter, the Company will receive a lower percentage of the tenant’s NOI during the remaining lease term. In the second quarter of 2017, the Company executed a 15-year lease agreement with Cocina 214 Restaurant & Bar (“Cocina 214”) for the second restaurant property to be developed on the parcel. The annual rent under the Cocina 214 lease is equal to the greater of $360,000 per year or a certain percentage of gross sales. The lease also provides for additional percentage rent upon the achievement of certain gross sales thresholds. The Company completed the design phase and commenced construction on the two single-tenant restaurants during the third quarter of 2017. As of December 31, 2017, the Company has incurred approximately $5.9 million of design and construction costs. See Note 18, “Commitment and Contingencies” for the total expected cost to be incurred for the development of the site and both restaurant properties. The development of the two restaurant properties was completed in time for the tenants to commence operations during January of 2018. Accordingly, during the first quarter of 2018, the total investment in the beach parcel and the construction costs of the two single-tenant properties will be classified as Income Properties, Land, Building, and Improvements, within the Property, Plant, and Equipment classification on the Company’s consolidated balance sheets.

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~~Other Real Estate Assets.~~ The Company owns impact fees with a cost basis of approximately $402,000 and mitigation credits with a cost basis of approximately $723,000, for a combined total of approximately $1.1 million as of December 31, 2017. During the year ended December 31, 2017, the Company sold mitigation credits for approximately $1.6 million, for a gain of approximately $1.3 million, or $0.15 per share, after tax. Additionally, the Company recorded the transfer of mitigation credits with a cost basis of approximately $298,000 as a charge to direct cost of revenues of real estate operations during the year ended December 31, 2017, as more fully described in Note 18, “Commitments and Contingencies.” During the years ended December 31, 2017 and 2016, the Company received cash payments of approximately $519,000 and $2.2 million, respectively, for impact fees with a cost basis that was generally of equal value.

~~Subsurface Interests.~~ As of December 31, 2017, the Company owns full or fractional subsurface oil, gas, and mineral interests underlying approximately 462,000 “surface” acres of land owned by others in 20 counties in Florida (the “Subsurface Interests”). The Company leases certain of the Subsurface Interests to mineral exploration firms for exploration. Our subsurface operations consist of revenue from the leasing of exploration rights and in some instances, additional revenues from royalties applicable to production from the leased acreage.

During the year ended December 31, 2017, the Company sold approximately 38,750 acres of subsurface interests in Osceola County, Florida for approximately $2.1 million (the "Osceola Subsurface Sale"). The gain from the Osceola Subsurface Sale totaled approximately $2.08 million, or $0.23 per share, after tax. The Company expects to utilize the proceeds from this sale to acquire an income property through the 1031 like-kind exchange structure.

During 2011, an eight-year oil exploration lease was executed covering a portion of our Subsurface Interests. On September 20, 2017, the Company amended the oil exploration lease to, among other things, extend the expiration of the original term for five additional years to the new expiration date of September 22, 2024. The lease is effectively thirteen one-year terms as the lessee has the option to terminate the lease at the end of each lease year. The lessee has exercised renewal options through lease year seven ending September 22, 2018. The terms of the lease state that the Company will receive royalty payments if production occurs, and may receive additional annual rental payments if the lease is continued in years eight through thirteen. The lease calls for annual lease payments which are recognized as revenue ratably over the respective twelve-month lease periods. In addition, non-refundable drilling penalty payments are made as required by the drilling requirements in the lease which are recognized as revenue when received.

~~Lease payments on the respective acreages and drilling penalties received through lease year seven are as follows:~~

Acreage

Lease Year

(Approximate)

Florida County

Lease Payment (1)

Drilling Penalty (1)

Lease Year 1 - 9/23/2011 - 9/22/2012

136,000

Lee and Hendry

$
913,657

$
—

Lease Year 2 - 9/23/2012 - 9/22/2013

136,000

Lee and Hendry

922,114

—

Lease Year 3 - 9/23/2013 - 9/22/2014

82,000

Hendry

3,293,000

1,000,000

Lease Year 4 - 9/23/2014 - 9/22/2015

42,000

Hendry

1,866,146

600,000

Lease Year 5 - 9/23/2015 - 9/22/2016

25,000

Hendry

1,218,838

175,000

Lease Year 6 - 9/23/2016 - 9/22/2017

15,000

Hendry

806,683

150,000

Lease Year 7 - 9/23/2017 - 9/22/2018

15,000

Hendry

806,683

50,000

Total Payments Received to Date

$
9,827,121

$
1,975,000

~~(1)~~Generally, cash payment for the Lease Payment and Drilling Penalty is received on or before the first day of the lease year. The Drilling Penalty, which is due within thirty days from the end of the prior lease year, is recorded as revenue when received, while the Lease Payment is recognized on a straight-line basis over the respective lease term. Pursuant to the amendment for the Year 7 renewal, the Lease Payment and Drilling Penalty were both received on October 11, 2017. See separate disclosure of revenue recognized per period below.

Lease income generated by the annual lease payments is recognized on a straight-line basis over the guaranteed lease term. For the years December 31, 2017, 2016, and 2015, lease income of approximately $807,000, $1.1 million, and $1.7 million was recognized, respectively. There can be no assurance that the oil exploration lease will be extended beyond the expiration of the current term of September 22, 2018 or, if extended, the terms or conditions of such extension.

During the years ended December 31, 2017, 2016, and 2015, the Company also received oil royalties from operating oil wells on 800 acres under a separate lease with a separate operator. Production volume from these oil wells was 60,287 in 2017, 50,441 barrels in 2016, and 62,745 barrels in 2015, resulting in revenues received from oil royalties of approximately $86,000, $50,000 and $68,000, respectively.

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The Company is not prohibited from selling any or all of its Subsurface Interests. The Company may release surface entry rights or other rights upon request of a surface owner for a negotiated release fee typically based on a percentage of the surface value. Should the Company complete a transaction to sell all or a portion of its Subsurface Interests or complete a release transaction, the Company may utilize the like-kind exchange structure in acquiring one or more replacement investments including income-producing properties. There were no releases of surface entry rights during the year ended December 31, 2017. Cash payments for the release of surface entry rights totaled approximately $493,000 and $995,000 during the years ended December 31, 2016 and 2015, respectively, which is included in revenue from real estate operations. During 2015, in conjunction with the release of the Company’s surface entry rights related to approximately 1,400 acres in Lee County, Florida, for a cash payment of approximately $920,000, the Company also received the 50% interest in the subsurface rights of those acres, which the Company did not previously own, for a fair value of approximately $68,000, which is also included in revenue from real estate operations.

In addition, the Company generated revenue of approximately $250,000 and $73,000 during the years ended December 31, 2016 and 2015, respectively, from fill dirt excavation agreements, with no such revenue generated during the year ended December 31, 2017.

~~GOLF OPERATIONS~~

Golf operations, which are managed by a third party, consist of the LPGA International Golf Club, a semi-private golf club consisting of two 18-hole championship golf courses, one designed by Rees Jones and the other designed by Arthur Hills, with a three-hole practice facility also designed by Rees Jones, a clubhouse facility, food and beverage operations, and a fitness facility located within the LPGA International mixed-use residential community on the west side of Interstate 95 in the City.

In July 2012, the Company entered into an agreement with the City to, among other things, amend the lease payments under its golf course lease (the “Lease Amendment”). Under the Lease Amendment, the base rent payment, which was scheduled to increase from $250,000 to $500,000 as of September 1, 2012, remained at $250,000 for the remainder of the lease term and any extensions would have been subject to an annual rate increase of 1.75% beginning September 1, 2013. On January 24, 2017, the Company acquired the approximately 690 acres of land and improvements comprising the golf courses, previously leased from the City, for approximately $1.5 million (the “Golf Course Land Purchase”). In conjunction with the Golf Course Land Purchase, the lease between the Company and the City was terminated. Therefore, during the first quarter of 2017, the Company eliminated the remaining accrued liability of approximately $2.2 million, resulting in the recognition of approximately $0.40 per share in non-cash earnings, or $0.24 per share after tax, which comprises the land lease termination in the consolidated statements of operations. The $2.2 million consisted of approximately $1.7 million which reflects the acceleration of the remaining amount of accrued rent that was no longer owed to the City as a result of the Lease Amendment, which prior to the Golf Course Land Purchase was being recognized into income over the remaining lease term which was originally to expire in 2022. The remaining approximately $500,000 reflects the amount of rent accrued pursuant to the lease, as amended, which will no longer be owed to the City due to the lease termination on January 24, 2017.

As a part of the Golf Course Land Purchase, the Company donated to the City three land parcels totaling approximately 14.3 acres located on the west side of Interstate 95 that are adjacent to the City’s Municipal Stadium. The Company had a cost basis of effectively $0 in the donated land and paid approximately $100,000 to satisfy the community development district bonds associated with the acreage. Other terms of the Golf Course Land Purchase include the following:

The Company is obligated to pay the City additional consideration in the form of an annual surcharge of $1 per golf round played each year (the “Per-Round Surcharge”) with an annual minimum Per-Round Surcharge of $70,000 and a maximum aggregate amount of the Per-Round Surcharges paid equal to $700,000. The maximum amount of $700,000 represents contingent consideration and was reflected as an increase in Golf Buildings, Improvements, and Equipment and also as an increase in Accrued and Other Liabilities on the accompany consolidated balance sheets as of December 31, 2017. The first annual payment of $70,000 was made in January 2018 leaving a remaining commitment of $630,000 as of the date of this report;

Within one year following the date of the closing of the Golf Course Land Purchase, unless extended due to weather related delays outside the Company’s control, the Company was obligated to renovate the greens on the Jones Course which renovations were completed in the third quarter of 2017; and

If the Company sells the LPGA International Golf Club within six years of the closing of the Golf Course Land Purchase, the Company will be obligated to pay the City an amount equal to 10% of the difference between the

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~~sales price, less closing costs and any other costs required to be incurred in connection with the sale, and $4.0 million.~~

COMMERCIAL LOAN INVESTMENTS

Our investments in commercial loans or similar structured finance investments, such as mezzanine loans or other subordinated debt, have been and are expected to continue to be secured by commercial or residential real estate or the borrower’s pledge of its ownership interest in the entity that owns the real estate. The first mortgage loans we invest in or originate are generally for commercial real estate located in the United States and its territories and are current or performing with either a fixed or floating rate. Some of these loans may be syndicated in either a pari-passu or senior/subordinated structure. Commercial first mortgage loans generally provide for a higher recovery rate due to their senior position in the underlying collateral. Commercial mezzanine loans are typically secured by a pledge of the borrower’s equity ownership in the underlying commercial real estate. Unlike a mortgage, a mezzanine loan is not secured by a lien on the property. An investor’s rights in a mezzanine loan are usually governed by an intercreditor agreement that provides holders with the rights to cure defaults and exercise control on certain decisions of any senior debt secured by the same commercial property.

~~On July~~2019 Commercial Loan Investment Portfolio. During the year ended December 31, ~~2017,~~2019, the Company ~~originated a $3.0~~invested approximately $18.3 million ~~first~~on three commercial loans, two were mortgage ~~loan~~notes of $8 million and $8.25 million secured by a parcel of ~~beachfront~~ land in Orlando, Florida and a full-service hotel in Austin, Texas, respectively. In addition, in connection with the ~~City~~sale of ~~Daytona Beach Shores, Florida which~~ the ~~borrower intends~~Company’s golf operations, the Company provided an approximately $2.1 million loan to ~~develop as~~the buyer, with a ~~residential condominium (the “Beach Loan”). The Beach Loan matures on August 1, 2018, includes a one-year extension option, bears a fixed~~maturity of one year and an interest rate of ~~11.00%,~~7.5%. As of December 31, 2019, the Company’s commercial loan investment portfolio included the three loans with a total remaining principal balance of approximately $18.2 million, a weighted average interest rate of approximately 11.3% and ~~requires payments~~a remaining duration to maturity of ~~interest only prior to~~approximately 0.5 years.

2018 Commercial Loan Investment Portfolio. During the year ended December 31, 2018, the Company had two loan investments totaling approximately $11.9 million, that were repaid in full at maturity. ~~At closing, a~~As of December 31, 2018, the Company had no commercial loan ~~origination fee of $60,000 was received by~~investments.

2017 Commercial Loan Investment Portfolio. During the ~~Company. Should the borrower seek to obtain financing for the development of the project, the Beach Loan would likely be paid off in connection with that financing.~~

~~On October 23,~~year ended December 31, 2017, the Company ~~sold its two commercial~~invested in a $3 million loan ~~investments secured by hotel properties~~on a parcel of land in ~~Atlanta, Georgia and Dallas, Texas. The Company sold these investments at~~Daytona Beach that was being developed into a ~~premium to par for proceeds of approximately $15.1 million on an aggregate principal value of $15.0 million. The Company utilized these proceeds to pay down the Credit Facility (hereinafter defined).~~

multi-family condominium property. As of December 31, 2017, the ~~Company owned two performing~~Company’s commercial loan ~~investments which have an aggregate outstanding~~investment portfolio included two loans with a total remaining principal balance of approximately $12.0 million. These loans are secured by real estate, or the borrower’s equity interest in real estate, located in Daytona Beach Shores, Florida and Sarasota, Florida and have an average remaining maturity of approximately 0.5 years and$11.9 million, a weighted average interest rate of 9.5%. and a remaining duration to maturity of approximately 0.5 years. During the year a $10 million mezzanine loan investment secured by a hotel located at the Dallas/Fort Worth airport in Texas and a $5 million mezzanine loan investment secured by a hotel located in downtown Atlanta, Georgia, were paid off in full.

~~AGRICULTURE AND OTHER INCOME~~LAND and INVESTMENT IN THE LAND JV

~~Effectively~~Land JV. As noted above, the direct impact of the Magnetar Land Sale is that the Company divested itself of its land holdings, but for the 6-acre Daytona Beach development land described below, and as such the occurrence of land sales, which had been a primary element of the Company’s business for virtually its entire 109-year history, has been essentially discontinued. Consequently, the operations associated with our land holdings were treated as discontinued operations and accordingly the revenues and expenses that had been presented within the Company’s real estate operations segment in prior periods were reclassified in the statement of operations for the year ended December 31, 2019 and all prior periods presented.

However, the Company is continuing to pursue land sales on the approximately 5,300 acres that formerly comprised its land holdings in its role as Manager (of the Land JV) on behalf of the JV Partners. The Company’s retained interest in the Land JV represents a notional 33.5% stake in the venture, the value of which may be realized in the form of distributions based on the timing and the amount of proceeds achieved when the land is ultimately sold by the Land JV. As of March 6, 2020, the Land JV has completed approximately $22 million in land sales since its inception in mid-October 2019 and currently has a pipeline of 10 purchase and sale agreements for potential land sale transactions representing approximately $97 million of potential proceeds to the Land JV. The 4,200 acres under contract represents approximately 84% of the total remaining land in the Land JV.

Daytona Beach Development. We may selectively acquire other real estate in Daytona Beach, Florida. We may target either vacant land or land with existing structures that we would raze and develop into additional income properties. During 2018, the Company acquired a 5-acre parcel of land with existing structures in downtown Daytona Beach, for a purchase price of approximately $2.0 million. As of December 31, 2019, the Company has also acquired other contiguous

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parcels totaling approximately 1-acre for approximately $2.1 million. Combined, these parcels represent the substantial portion of an entire city block in downtown Daytona Beach adjacent to International Speedway Boulevard, a major thoroughfare in Daytona Beach. The combined 6 acres is located in an opportunity zone and a community redevelopment area. In addition, this property is proximate to the future headquarters of Brown & Brown Inc., the sixth largest insurance broker in the U.S. and a publicly listed company that is expected to be occupied by at least 600 of their employees. We have engaged a national real estate brokerage firm to assist us in identifying a developer or investor to acquire a portion or all of the property or to contribute into a potential joint venture to redevelop the property. We are pursuing entitlements for the potential redevelopment of these parcels, along with certain other adjacent land parcels, some of which we have under contract for purchase. As of December 31, 2019, we have incurred approximately $1.1 million in raze and entitlement costs related to these parcels. Our intent for investments in the Daytona Beach area is to target opportunistic acquisitions of select catalyst sites, which are typically distressed, with the objective of short-to-medium investment horizons. We may enter into joint ventures or other partnerships to develop land we have acquired or may acquire in the future in lieu of self-developing.

Revenue from Tomoka Town Center. During 2015 and 2016, the Company completed three land sales with a gross sales price totaling approximately $21.4 million, with Tanger Outlets (“Tanger”), Sam’s Club (“Sams”), and North American Development Group (“NADG”), representing the sale of approximately 235 acres of land that is now the location of a Tanger Outlet mall, a Sam’s Club retail property and a retail power center called the Tomoka Town Center. As part of the three land sale agreements and subsequent land sales with NADG, the Company performed certain infrastructure work, which began in the fourth quarter of 2015 and was completed in the fourth quarter of 2016, for which the Company would be reimbursed for the cost of the infrastructure work. The Company received NADG’s portion of the reimbursement as NADG closed on each parcel of land included in the respective land sales contracts with the Company. Tanger and Sam’s agreed to pay their reimbursement of the infrastructure costs over a ten-year period. The reimbursements applicable to and due from Tanger and Sam’s totaled approximately $2.8 million. As of December 31, 2019, the Company has received approximately $1.1 million of the Tanger and Sam’s reimbursements. These reimbursements are included in the results of the land operations which are now reflected in discontinued operations and will be through the final payment of Tanger’s and Sam’s reimbursement obligation.

Since the transition in our ~~agriculture~~land operations occurred late in 2019, the impact of land sales for the periods prior to October 2019 are no longer germane to our financial condition, results of operations and cash flows. As such the following summarized information is provided regarding land sales activity prior to October 2019.

2019 Land Sales. During the year ended December 31, 2019, the Company completed five (5) land sales transactions, including: (i) the Magnetar Land Sale for approximately 5,300 acres of land, for total proceeds of approximately $97 million; (ii) two transactions with Unicorp Development representing approximately 23.6 acres and generating aggregate proceeds of approximately $7.1 million; (iii) the sale of approximately 38 acres for total proceeds of $710,000, and (iv) a land sale to NADG for approximately 13 acres generating proceeds of approximately $3 million. In total the Company, in 2019, sold approximately 5,400 acres generating proceeds of approximately $108 million. Including the approximately $48.9 million recognized on the retained interest in the Land JV, gains of approximately $133 million, or approximately $20.60 per share after tax, were recognized.

2018 Land Sales. During the year ended December 31, 2018, the Company completed land transactions representing approximately 2,697 acres including: (i) the sale of a 70% interest in the Mitigation Bank (hereinafter defined) that holds approximately 2,492 acres for proceeds of $15.3 million and (ii) twelve land sales totaling approximately 205 acres for aggregate proceeds of approximately $43.7 million. The twelve land sales generated gains of approximately $32.6 million, or approximately $4.44 per share, after tax.

2017 Land Sales. During the year ended December 31, 2017, the Company completed land transactions representing approximately 1,700 acres including: (i) the sale of nearly 1,600 acres to Minto Communities generating proceeds of approximately $27.2 million; (ii) two transactions with NADG of approximately 46 acres for total proceeds of approximately $10.6 million, and (iii) five other transactions representing approximately 73.5 acres that generated approximately $9.2 million of proceeds. The land sales in 2017 generated aggregate proceeds of approximately $45.5 million and gains of approximately $31.8 million, or approximately $3.51 per share, after tax.

Land Impairments. As more fully described in Note 11, "Impairment of Long-Lived Assets," during the years ended December 31, 2019, 2018 and 2017, the Company did not recognize any impairments on its undeveloped land holdings.

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Mitigation Bank. The mitigation bank transaction consists of the sale of a 70% interest in the entity that holds approximately 2,492 acres of land that has been permitted for the creation of a wetland mitigation bank (the “Mitigation Bank JV”). The purchaser of the 70% interest in the Mitigation Bank JV is comprised of certain funds and accounts managed by an investment advisor subsidiary of BlackRock, Inc. (“BlackRock”). The Company retained an approximately 30% non-controlling interest in the Mitigation Bank JV. A third-party was retained by the Mitigation Bank JV as the day-to-day manager of the Mitigation Bank property, responsible for the maintenance, generation, tracking, and other ~~income consists~~aspects of wetland mitigation credits.

The Mitigation Bank JV intends to engage in the creation and sale of both federal and state wetland mitigation credits. These credits will be created pursuant to the applicable permits that have been or will be issued to the Mitigation Bank JV from the federal and state regulatory agencies that exercise jurisdiction over the awarding of such credits, but no assurances can be given as to the ultimate issuance, marketability or value of the credits. The Mitigation Bank JV received the permit from the state regulatory agency on June 8, 2018 (the “State Permit”). The state regulatory agency may award up to 355 state credits under the State Permit. On August 6, 2018, the state regulatory agency awarded the initial 88.84 credits under the State Permit. Receipt of the remaining federal permit is anticipated to occur prior to the end of 2020.

The gain on the sale of the 70% interest in the Mitigation Bank JV totaled approximately $18.4 million and is comprised of the gain on the sale of 70% interest for proceeds of $15.3 million as well as the gain on the retained 30% interest pursuant to FASB ASC Topic 610-20, Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets. The gain is included in the Gain on Disposition of Assets in the Company’s consolidated statements of operations. As of December 31, 2018, the approximately $6.8 million Investments in Joint Ventures included on the Company’s consolidated balance sheets is comprised of the fair market value of the 30% retained interest in the Mitigation Bank JV.

The operating agreement of the Mitigation Bank JV (the “Operating Agreement”) executed in conjunction with the mitigation bank transaction stipulates that the Company shall arrange for sales of the Mitigation Bank JV’s mitigation credits to unrelated third parties totaling no less than $6 million of revenue to the Mitigation Bank JV, net of commissions, by the end of 2020, utilizing a maximum of 60 mitigation credits (the “Minimum Sales Requirement”). The Operating Agreement stipulates that if the Minimum Sales Requirement is not achieved, then BlackRock has the right, but is not required, to cause the Company to purchase the number of mitigation credits necessary to reach the Minimum Sales Requirement (the “Minimum Sales Guarantee”). The Company estimates the fair value of the Minimum Sales Guarantee to be approximately $100,000 which was recorded as a reduction in the gain on the transaction and is included in Accrued and Other Liabilities in the Company’s consolidated balance sheet as of December 31, 2018.

Additionally, the Operating Agreement provides BlackRock the right to cause the Company to purchase a maximum of 8.536 mitigation credits per quarter (the “Commitment Amount”) from the Mitigation Bank JV at a price equal to 60% of the then fair market value for mitigation credits (the “Put Right”). The Put Right is applicable even if the Mitigation Bank JV has not yet been awarded a sufficient number of mitigation credits by the applicable federal and state regulatory agencies. Further, in any quarter that BlackRock does not exercise its Put Right, the unexercised Commitment Amount for the applicable quarter may be rolled over to future calendar quarters. However, the Operating Agreement also stipulates that any amount of third-party sales of mitigation credits will reduce the Put Rights outstanding on a one-for-one basis, if the sales price of the third-party sales equals or exceeds the prices stipulated by the Put Right. Further, any sales of mitigation credits to third parties at the requisite minimum prices in a quarter that exceeds the quarterly amount of the Put Right will reduce the Put Rights in future calendar quarters on a one-for-one basis. The maximum potential of future payments for the Company pursuant to the Put Right is approximately $27 million. The Company estimates the fair value of the Put Right to be approximately $200,000, which was recorded as a reduction in the gain on the transaction and is included in Accrued and Other Liabilities in the Company’s consolidated balance sheet as of December 31, 2018. In December 2019, BlackRock exercised its Put Right and put 25 mitigation credits to the Company, which the Company purchased for approximately $1.9 million, or approximately $75,000 per credit. The credits acquired were included as an increase to Impact Fees and Mitigation Credits on the accompanying consolidated balance sheets as of December 31, 2019.

Other Real Estate Assets. The Company owns mitigation credits with a cost basis of approximately $2.3 million as of December 31, 2019. The increase in mitigation credits includes the 25 credits acquired from the Mitigation Bank during December 2019 as described in Note 6, Land and Investments in the Land JV. There were no mitigation credit sales during year ended December 31, 2019. During the year ended December 31, 2018, the Company transferred mitigation credits with a basis of approximately $124,000 to the land acquired by Buc-ee’s. During the year ended December 31, 2018, the Company sold mitigation credits for approximately $1.0 million, for a gain of approximately $882,000, or $0.12 per share, after tax. During the year ended December 31, 2017, the Company sold mitigation credits for approximately $1.6 million,

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for a gain of approximately $1.3 million, or $0.15 per share, after tax. Additionally, the Company recorded the transfer of mitigation credits with a cost basis of approximately $298,000 as a charge to direct cost of revenues of real estate operations during the year ended December 31, 2017, as more fully described in Note 21, “Commitments and Contingencies.” During the years ended December 31, 2018 and 2017, the Company received cash payments of approximately $338,000 and $519,000, respectively, for impact fees with a cost basis that was generally of equal value, with no such impact fee sales during the year ended December 31, 2019, as the balance of impact fees is only approximately $2,000. Additionally, during the year ended December 31, 2018, impact fees with a cost basis of approximately $72,000 were transferred to the beachfront restaurant leased to LandShark Bar & Grill.

Subsurface Interests. As of December 31, 2019, the Company owns full or fractional subsurface oil, gas, and mineral interests underlying approximately 455,000 “surface” acres of land owned by others in 20 counties in Florida (the “Subsurface Interests”). The revenues generated by the portfolio of subsurface interests includes the sale of subsurface acres, the leasing of subsurface acres for mineral exploration activities, and payments made to the Company, typically by the owner of the surface acres, to compensate us for releasing our ~~agricultural~~right to enter the surface acres to access our subsurface acres.

Prior to September 2019, the Company leased certain of the Subsurface Interests to a mineral exploration organization for exploration. An eight-year oil exploration lease was executed in 2011 that covered a portion of our Subsurface Interests. On September 20, 2017, the Company amended the oil exploration lease to, among other things, extend the expiration of the original term for five additional years to the new expiration date of September 22, 2024. As a result, the lease was effectively comprised of thirteen one-year terms as the lessee had the option to terminate the lease at the end of each lease year. The lessee had previously exercised renewal options through the eighth year of the lease which ended on September 22, 2019. The Lessee elected not to renew the oil exploration lease beyond September 22, 2019. During the eight years the lease was active the annual lease payments were recognized as revenue ratably over the respective twelve-month lease period. During the lease term a number of the renewals included the payment of a drilling penalty by the Lessee. The non-refundable drilling penalty payments were recognized as revenue when earned, i.e. when the amount agreed upon was paid. Lease income generated by the annual lease payments is recognized on a straight-line basis over the guaranteed lease term. For the years December 31, 2019, 2018, and 2017, lease income of approximately $598,000, approximately $807,000, and approximately $807,000 was recognized, respectively.

Lease payments on the respective acreages and drilling penalties received through lease year eight are as follows:


	Acreage
Lease Year	(Approximate)	Florida County	Lease Payment (1)		Drilling Penalty (1)
Lease Year 1 - 9/23/2011 - 9/22/2012	136,000	Lee and Hendry	$	913,657	$	—
Lease Year 2 - 9/23/2012 - 9/22/2013	136,000	Lee and Hendry		922,114		—
Lease Year 3 - 9/23/2013 - 9/22/2014	82,000	Hendry		3,293,000		1,000,000
Lease Year 4 - 9/23/2014 - 9/22/2015	42,000	Hendry		1,866,146		600,000
Lease Year 5 - 9/23/2015 - 9/22/2016	25,000	Hendry		1,218,838		175,000
Lease Year 6 - 9/23/2016 - 9/22/2017	15,000	Hendry		806,683		150,000
Lease Year 7 - 9/23/2017 - 9/22/2018	15,000	Hendry		806,683		50,000
Lease Year 8 - 9/23/2018 - 9/22/2019	15,000	Hendry		806,684		150,000
Total Payments			$	10,633,805	$	2,125,000

⁽¹⁾

Generally, cash payment for the Lease Payment and Drilling Penalty is received on or before the first day of the lease year. The Drilling Penalty, which is due within thirty days from the end of the prior lease year, is recorded as revenue when earned, i.e. when the amount is agreed upon, while the Lease Payment is recognized on a straight-line basis over the respective lease term. The oil exploration lease has not been renewed beyond September 22, 2019 and has effectively terminated.

There were no sales of subsurface acres during the years ended December 31, 2019 or 2018. During the year ended December 31, 2017, the Company sold approximately 38,750 acres of subsurface interests in Osceola County, Florida for approximately $2.1 million (the "Osceola Subsurface Sale"). The gain from the Osceola Subsurface Sale totaled approximately $2.08 million, or $0.23 per share, after tax.

During the year ended December 31, 2018, the Company completed a transaction releasing our surface entry rights on approximately 600 acres in exchange for approximately $185,000 in cash and fee title to approximately 40 additional acres in Hendry County, valued at approximately $320,000. Including the non-cash value received, the gain from the transaction totaled approximately $435,000, or $0.06 per share, after tax. Additional cash payments for the release of surface entry rights

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during 2018 totaled approximately $73,000. The revenue from the release of surface entry rights during the year ended December 31, 2017 totaled approximately $2.1 million.

During the years ended December 31, 2019, 2018, and 2017, the Company also received oil royalties from operating oil wells on 800 acres under a separate lease with a separate operator resulting in revenues received from oil royalties of approximately $42,000, $72,000, and $86,000, respectively.

The Company is not prohibited from selling any or all of its Subsurface Interests. The Company may release surface entry rights or other rights upon request of a surface owner for a negotiated release fee typically based on a percentage of the surface value. Should the Company complete a transaction to sell all or a portion of its Subsurface Interests or complete a release transaction, the Company may utilize the like-kind exchange structure in acquiring one or more replacement investments including income-producing properties. During the year ended December 31, 2018, the Company completed a transaction releasing our surface entry rights on approximately 600 acres in exchange for approximately $185,000 in cash and fee title to approximately 40 additional acres in Hendry County, valued at approximately $320,000. Including the non-cash value received, the gain from the transaction totaled approximately $435,000, or $0.06 per share, after tax. Additional cash payments for the release of surface entry rights during 2018 totaled approximately $73,000. Cash payments for the release of surface entry rights totaled approximately $104,000 during the year ended December 31, 2019, while there were no releases of surface entry rights during the year ended December 31, 2017.

GOLF OPERATIONS

The Golf Sale closed in October 2019. Prior to October 2019, the Company owned the LPGA International Golf Club (the “Club”), a semi-private golf club consisting of two 18-hole championship golf courses, a three-hole practice facility, a clubhouse facility with food and beverage operations, and a fitness facility. The Club was managed by a third party.

Prior to January 2017, the Company leased from the City of Daytona Beach, Florida (the “City”) a large portion of the land underlying the Club (the “Golf Course Lease”). On January 24, 2017, the Company acquired the approximately 690 acres of land and improvements covered by the Golf Course Lease, for approximately $1.5 million (the “Golf Course Land Purchase”). In conjunction with the Golf Course Land Purchase, the Golf Course Lease was terminated. Therefore, during the first quarter of 2017, the Company eliminated the remaining accrued liability of approximately $2.2 million, resulting in the recognition of approximately $0.40 per share in non-cash earnings, or $0.24 per share after tax, which comprises the Golf Course Lease termination in the consolidated statements of operations. The ~~Company’s agricultural lands encompass~~$2.2 million consisted of approximately ~~7,000~~$1.7 million which reflects the acceleration of the remaining amount of accrued rent that was no longer owed to the City as a result of the Lease Amendment, which prior to the Golf Course Land Purchase was being recognized into income over the remaining lease term which was originally to expire in 2022. The remaining approximately $500,000 reflects the amount of rent accrued pursuant to the Golf Course Lease, as amended, which will no longer be owed to the City due to the lease termination on January 24, 2017.

As a part of the Golf Course Land Purchase, the Company donated to the City three land parcels totaling approximately 14.3 acres located on the west side of ~~Daytona Beach, Florida. Our agricultural~~Interstate 95. The Company had a cost basis of effectively $0 in the donated land and paid approximately $100,000 to satisfy the community development district bonds associated with the acreage. As part of the Golf Course Land Purchase the Company was obligated to pay the City additional consideration in the form of an annual surcharge of $1 per golf round played at the Club each year (the “Per-Round Surcharge”) with an annual minimum Per-Round Surcharge of $70,000 and a maximum aggregate amount of the Per-Round Surcharges paid equal to $700,000. The maximum amount of $700,000 represents contingent consideration and was recorded as an increase in Golf Buildings, Improvements, and Equipment and Accrued and Other Liabilities in the accompanying consolidated balance sheets. In connection with the Golf Sale the Company paid off the remaining obligation which totaled $560,000. The Company also, as part of the Golf Course Land Purchase, was required to renovate the greens on one of the courses at the Club and such renovations were completed in the third quarter of 2017.

The Golf Course Land Purchase also required that if the Company sold the Club within six years of the closing of the Golf Course Land Purchase, the Company would be obligated to pay the City an amount equal to 10% of the difference between the sales price, less closing costs and any other costs required to be incurred in connection with the sale, and $4.0 million. Based on the sales price of the Golf Sale, the Company’s obligation under this provision terminated.

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write-down of the golf operation assets to approximately $3.1 million and the related $1.1 million impairment charge were the result of the Company’s assessment of certain triggering events, including activities related to a review of strategic alternatives for the golf operations, ~~are managed by a third-party~~occurring during the third quarter of 2018, which required an assessment of the carrying value of the golf assets comprising the Club. In the fourth quarter of 2018, the Company commenced efforts to pursue the monetization of the golf operations and ~~consist~~assets comprising the Club. Accordingly, as of ~~leasing land~~December 31, 2018 and during 2019, prior to the date of the Golf Sale, the golf assets comprising the Club were classified as held for ~~hay production~~sale in our consolidated balance sheets and ~~timber harvesting,~~the results of golf operations were similarly reclassified as ~~well as hunting leases.~~discontinued operations in our consolidated statements of income for the period presented.

COMPETITION

The real estate business generally is highly competitive. Our business plan is focused on investing in commercial real estate that produces income primarily through the leasing of assets to tenants. To identify investment opportunities in income-producing real estate assets and to achieve our investment objectives, we compete with numerous companies and organizations, both public as well as private, of varying sizes, ranging from organizations with local operations to organizations with national scale and reach, and in some cases, we compete with individual real estate investors. In all the markets in which we compete to acquire income properties, price is the principal method of competition, with transaction structure and certainty of execution also being significant considerations for potential sellers. As of December 31, 2017, our total income property portfolio, including our single-tenant and multi-tenant properties, consists of thirty-seven income properties located in the following states: (i) Arizona, (ii) California, (iii) Florida, (iv) Georgia, (v) Maryland, (vi) Massachusetts, (vii) Nevada, (viii) North Carolina, (ix) Oregon, (x) Texas, (xi) Virginia and (xii) Washington. Should we need to re-lease our single-tenant income properties or space(s) in our multi-tenant properties, we would compete with many other property owners in the local market based on, ~~amongst~~among other elements, price, location of our property, potential tenant improvements, and lease term.

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Our real estate operations are comprised primarily of ~~our~~(i) the Subsurface Interests; (ii) mitigation credits; and (iii) a six-acre parcel of land ~~holdings, which are largely used for agricultural purposes today and are substantially located~~ in ~~the City of~~downtown Daytona Beach, ~~Florida, and the Subsurface Interests.~~Florida. The parties that typically may be interested in acquiring our ~~land holdings~~mitigation credits are both residential and commercial ~~developers as well as commercial businesses.~~developers. These interested parties typically base their decision to acquire ~~land~~mitigation credits on among other things, price, location, land use or optionality of land use, ability to obtain zoning, entitlements, and permitting, and may also consider other development activities in the surrounding area.price.

Our business plan may also focus on investing in commercial real estate through the acquisition or origination of mortgage financings secured by commercial real estate. Competition for investing in commercial mortgage loans and similar financial instruments can include financial institutions such as banks, life insurance companies, institutional investors such as pension funds and other lenders including mortgage REITs, REITs, and high wealth investors. The organizations that we compete with are of varying sizes, ranging from organizations with local operations to organizations with national scale and reach. Competition from these interested parties is based on, amongst other things, pricing or rate, financing structure, and other elements of the typical terms and conditions of a real estate financing.

Our golf operations consist of the LPGA International Golf Club. The operation of LPGA International Golf Club also includes private event sales for golf events and clubhouse events. The primary competition for our golf operations comes from other private and public golf operations in the local market. Competition for our golf operation is largely based on price, service level, and product quality. We attempt to differentiate our golf operations product on the basis of the condition and quality of the courses and practice facilities, our private event capacity and capabilities, service level, the quality and experience of the food and beverage amenities and other amenities.

EMPLOYEES

At December 31, ~~2017,~~2019, the Company had ~~fourteen~~fifteen full-time employees and considers its employee relations to be satisfactory.

AVAILABLE INFORMATION

The Company’s executive offices are located at 1140 N. Williamson Blvd., Suite 140 Daytona Beach, Florida, and its telephone number is (386) 274-2202.

The Company’s website is www.ctlc.com. The Company ~~makes available~~intends to comply with the requirements of Item 5.05 of Form 8-K regarding amendments to and waivers under the code of business conduct and ethics applicable to its Chief Executive Officer, Principal Financial Officer and Principal Accounting Officer by providing such information on its website within four days after effecting any amendment to, or granting any waiver under, that code, and we will maintain such information on our website for at least twelve months. The information contained on the Company’s website does not constitute part of this Form 10-K.

On the Company’s website you can also obtain, free of charge, ~~its annual reports~~a copy of this Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the ~~Securities~~ Exchange Act of 1934, as amended, as soon as reasonably practicable, after the Company files such material electronically ~~files~~with, or ~~furnishes such materials~~furnish it to, the SEC. The Company will also provide paper copies of these filings free of charge upon a specific request in writing for such filing to the Company’s Corporate Secretary, P.O. Box 10809, Daytona Beach, Florida 32120-0809. All reports the Company files withSecurities and Exchange Commission (“Commission” or ~~furnishes to the SEC are also available free of charge via the SEC’s electronic data gathering and retrieval (“EDGAR”~~“SEC”) ~~system available through the SEC’s website at~~ ~~http://www.sec.gov.~~. The public may read and obtain a copy of any materials ~~filed by us~~the Company files electronically with the ~~SEC~~Commission at ~~the SEC’s Public Reference Room, 100 F Street, N.E., Washington, D.C. 20549. The public may obtain~~www.sec.gov.

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Additional information on the ~~operation~~Company’s website includes the guiding policies adopted by the Company, which include the Company’s Corporate Governance Principles, Code of ~~the Public Reference Room by calling the SEC at 1-800-SEC-0330.~~Business Conduct and Ethics Policy and Insider Trading Policy.

ITEM 1A. RISK FACTORS

Our business is subject to a number of significant risks. The risks described below may not be the only risks which potentially could impact our business. These additional risks include those which are unknown now or that are currently considered immaterial. If any of the circumstances, events, or developments described below actually occur to a significant degree, our business, financial condition, results of operations, and/or cash flows could be materially adversely affected, and the trading price of our common stock could decline. You should carefully consider the following risks and all the other information set forth in this Annual Report on Form 10-K, including the consolidated financial statements and the notes thereto.

~~A prolonged downturn in economic conditions, especially in Daytona Beach, Florida,~~Risks related to our business

Income Property Operations

We are subject to risks related to the ownership of commercial real estate that could ~~adversely impact~~affect the performance and value of our ~~business.~~ ~~In recent years,~~properties.

Factors beyond our control can affect the ~~collapse~~performance and value of our properties. Our core business is the ~~housing market, together with the crisis in the credit markets, resulted~~ownership of commercial properties that generate lease revenue from either a single tenant in a ~~recession in~~stand-alone property or multiple tenants occupying a single structure or multiple structures. Accordingly, our performance is subject to risks incident to the ~~local and national economy with significant levels~~ownership of ~~unemployment, shrinking gross domestic product, and drastically reduced consumer spending. During this period, potential consumers of residential~~commercial real estate, often deferred or avoided real estate purchases due to, among other factors, a lack of liquidity, the substantial costs involved, and overall uncertainty with the economy. The real estate industry is particularly vulnerable to shifts in local, regional, and national economic conditions which are outside of our control, such as short and long-term interest rates, housing demand,including:

inability to collect rents from tenants due to financial hardship, including bankruptcy;

changes in local real estate conditions in the markets where our properties are located, including the availability and demand for the properties we own;

changes in consumer trends and preferences that affect the demand for products and services offered by our tenants;

adverse changes in national, regional and local economic conditions;

inability to lease or sell properties upon expiration or termination of existing leases;

environmental risks, including the presence of hazardous or toxic substances on our properties;

the subjectivity of real estate valuations and changes in such valuations over time;

illiquidity of real estate investments, which may limit our ability to modify our portfolio promptly in response to changes in economic or other conditions;

zoning or other local regulatory restrictions, or other factors pertaining to the local government institutions which inhibit interest in the markets in which our properties are located;

changes in interest rates and the availability of financing;

competition from other real estate companies similar to ours and competition for tenants, including competition based on rental rates, age and location of properties and the quality of maintenance, insurance and management services;

acts of God, including natural disasters, which may result in uninsured losses;

acts of war or terrorism, including consequences of terrorist attacks;

changes in tenant preferences that reduce the attractiveness and marketability of our properties to tenants or cause decreases in market rental rates;

costs associated with the need to periodically repair, renovate or re-lease our properties;

increases in the cost of our operations, particularly maintenance, insurance or real estate taxes which may occur even when circumstances such as market factors and competition cause a reduction in our revenues;

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~~population growth,~~

changes in governmental laws and regulations, fiscal policies and zoning ordinances and the related costs of compliance with laws and regulations, fiscal policies and ordinances; and

commodities prices.

The occurrence of any of the risks described above may cause the performance and value of our properties to decline, which could materially and adversely affect us.

Adverse changes in U.S., global and local regions or markets that impact our tenants’ businesses may materially and adversely affect us generally and the ability of our tenants to make rental payments to us pursuant to our leases.

Our results of operations, as well as the results of operations of our tenants, are sensitive to changes in U.S., global and local regions or markets that impact our tenants’ businesses. Adverse changes or developments in U.S., global or regional economic conditions may impact our tenants’ financial condition, which may adversely impact their ability to make rental payments to us pursuant to the leases they have with us and may also impact their current or future leasing practices. Adverse economic conditions such as high unemployment levels, rising interest rates, increased tax rates and ~~job growth. Our~~increasing fuel and energy costs may have an impact on the results of operations and financial conditions of our tenants, which would likely adversely impact us. During periods of economic slowdown and declining demand for real estate, ~~operations segment~~we may experience a general decline in rents or increased rates of default under our leases. A lack of demand for rental space could adversely affect our ability to maintain our current tenants and gain new tenants, which may affect our growth, profitability and ability to pay dividends.

Our business is ~~especially sensitive~~dependent upon our tenants successfully operating their businesses, and their failure to do so could materially and adversely affect us.

Each of our properties is occupied by a single tenant or multiple tenants. Therefore, the success of our investments in these properties is materially dependent upon the performance of our tenants. The financial performance of any one of our tenants is dependent on the tenant’s individual business, its industry and, in many instances, the performance of a larger business network that the tenant may be affiliated with or operate under. The financial performance of any one of our tenants could be adversely affected by poor management, unfavorable economic conditions in ~~Florida, particularly~~general, changes in ~~Daytona Beach, where substantially all~~consumer trends and preferences that decrease demand for a tenant’s products or services or other factors over which neither they nor we have control. Our portfolio includes properties leased to tenants that operate in multiple locations, which means we own multiple properties operated by the same tenant. To the extent we own multiple properties operated by one tenant, the general failure of that single tenant or a loss or significant decline in its business could materially and adversely affect us.

At any given time, any tenant may experience a decline in its business that may weaken its operating results or the overall financial condition of individual properties or its business as a whole. Any such decline may result in our ~~land portfolio is located. While Florida has experienced improving economic conditions,~~tenant failing to make rental payments when due, declining to extend a lease upon its expiration, delaying occupancy of our property or the ~~recovery for Florida started later and has taken longer than the rest~~commencement of the ~~nation. A prolonged period of economic weakness~~lease or ~~another downturn could have a material adverse effect~~becoming insolvent or declaring bankruptcy. We depend on our tenants to operate their businesses at the properties we own in a manner which generates revenues sufficient to allow them to meet their obligations to us, including their obligations to pay rent, maintain certain insurance coverage, pay real estate taxes, make repairs and otherwise maintain our properties. The ability of our tenants to fulfill their obligations under our leases may depend, in part, upon the overall profitability of their operations. Cash flow generated by certain tenant businesses may not be sufficient for a tenant to meet its obligations to us pursuant to the applicable lease. We could be materially and adversely affected if a tenant representing a significant portion of our operating results or a number of our tenants were unable to meet their obligations to us.

Retail properties, particularly those with multiple tenants, depend on the presence of and successful operation of an anchor tenant or tenants and the failure of such tenant’s business or the loss of the anchor tenant(s) could adversely affect the overall success of our property and thereby could adversely impact our financial condition, results of operations ~~and/or~~and cash flows.

WeRetail properties, like other properties, are subject to the risk that tenants may be unable to make their lease payments or may decline to extend a lease upon its expiration. A multi-tenant property is particularly sensitive to the risk that a tenant that occupies a large area of a commercial retail property (commonly referred to as an anchor tenant) is unable to make their lease payments, does not extend their lease upon its expiration, or otherwise vacates their rented space. A lease termination by an anchor tenant or tenants could impact leases of other tenants. Other tenants may be entitled to modify the terms of their existing leases in the event of a lease termination by an anchor tenant, or the closure of the business of

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an anchor tenant that leaves its space vacant even if the anchor tenant continues to pay rent. Any such modifications or conditions could be unfavorable to us as the property owner and could decrease rents or expense recoveries. Additionally, should an anchor tenant vacate their leased space customer traffic to the property may be decreased, which could lead to decreased sales at other stores thus adversely impacting the tenant’s operations and impacting their ability to pay rent. In the event of default by a tenant or anchor store, we may experience ~~a decline~~delays and costs in enforcing our rights as landlord to recover amounts due to us under the terms of our agreements with those parties.

We are subject to risks that affect the general retail environment in the ~~fair value~~United States, such as weakness in the economy, the level of consumer spending, the adverse financial condition of large consumer retail companies and competition from discount and internet retailers, any of which could adversely affect market rents for retail space and the willingness or ability of retail tenant to lease space in our multi-tenant properties.

A significant portion of the properties in our income property portfolio are commercial properties that were developed to be occupied by retail tenants and thus we are subject to the risks that affect the retail sector generally, as well as the market for retail space. The business environment for retail operators and the market for retail space have previously been, and could again be, adversely affected by weakness in the national, regional and local economies, the level of consumer spending and consumer confidence, the adverse financial condition of some large retail companies, the consolidation of operators that occurs from time to time in the retail sector, any excess amount of retail space in a number of markets and increasing competition from discount retail operators, outlet malls, internet or e-commerce retail businesses and other online businesses. Increases in consumer spending through e-commerce channels may significantly affect our retail tenants’ ability to generate sales in their stores and could affect the way future tenants lease space. In addition, some of our ~~real estate assets or investments which~~retail tenants face competition from the expanding market for digital content and hardware. New and enhanced technologies, including new digital technologies and new web services technologies, may increase competition for certain of our retail tenants. While we devote considerable effort and resources to analyze and respond to tenant trends, preferences and consumer spending patterns, we cannot predict with certainty what future tenants will require to operate their business, what demands will be made for the build out of future retail spaces and how much revenue will be generated at traditional “brick and mortar” locations. If we are unable to anticipate and respond promptly to trends in the market, our occupancy levels and rental amounts may decline.

Any of the foregoing factors could ~~result in impairments~~adversely affect the financial condition of our retail tenants and ~~would impact~~the willingness of retail operators to lease space at our income properties. In turn, these conditions could negatively affect market rents for retail space and could materially and adversely affect our financial condition, ~~and~~ results of ~~operations.~~ ~~A decline in the fair market value of~~operations, cash flow and our ~~long-lived assets may require us~~ability to recognize an “other-than-temporary” impairment against such assets (as defined by the Financial Accounting Standards Board (“FASB”) authoritative accounting guidance) if certain conditions or circumstances relatedsatisfy our debt service obligations and to ~~an asset were to change and we were to determine that, with respect to any such asset, there was an unrealized loss~~pay distributions to the ~~fair value~~Company’s stockholders.

Competition that traditional retail tenants face from e-commerce retail sales, or the integration of ~~the asset. The fair value of our long-lived assets depends on market conditions, including estimates of future demand for these assets,~~brick and the revenues that can be generated from such applicable assets including land or an income property. If such a determination were to be made, we would recognize the estimated unrealized losses through earnings and write down the depreciated or amortized cost of such assets to a new cost basis, based on the fair value of such assets on the date they are considered to be other-than-temporarily impaired. Such impairment charges reflect non-cash losses at the time of recognition; subsequent disposition or sale of such assetsmortar stores with e-commerce retail operators, could ~~further~~adversely affect our ~~future losses or gains, as they are based on the difference between the~~business.

Our retail tenants face increasing competition from e-commerce businesses. E-commerce sales ~~price received and the adjusted depreciated or amortized cost~~continue to account for an increasing percentage of ~~such assets at the time of sale.~~

~~The most recent downturn~~retail sales in the U.S. ~~economy~~ and ~~real estate markets caused the fair value~~this trend is likely to continue. These trends may have an impact on decisions that retail businesses make regarding their utilization of ~~certain of our properties to decrease. In 2011, we wrote down the carrying value of our golf operations assets~~“brick and certain of our land assets with corresponding non-cash charges against our earnings to reflect the impaired value. In the last few years we have written down the carrying value of several small parcels of land reacquired through foreclosuremortar” stores. Changes in ~~2009 when portions of this reacquired land was under~~shopping trends as a ~~contract to be sold for a price that was less than the carrying value~~result of the ~~land. If the real estate market were to experience another decline, we may be required to take other impairment charges against our earnings for other than temporary impairments~~growth in the value of our real estate assets including our land, income properties, commercial loan investments and similar financings or other capitalized costs. Any such non-cash charges could have an adverse effect on our financial condition and results of operations.

~~Our quarterly results are subject to variability~~. We have historically derived a substantial portion of our income from transactions in our land holdings. The timing of such real estate transactions is not predictable and is generally subject to the purchaser’s ability to, among other things, obtain on a timely basis acceptable financing and approvals from local municipalities and regulatory agencies for the intended use of the land or the issuance of permits related to wetlands mitigation. As these approvals are subject to third party responses, it is not uncommon for delays to occur, which affect the timing of transaction closings ande-commerce may also impact the ~~terms~~profitability of retail operators that do not adapt to changes in market conditions. The continued growth of e-commerce sales could decrease the need for traditional retail outlets and reduce the demand for retail space and property requirements. These conditions could adversely impact our results of operations and cash flows if we are unable to meet the ~~transaction. These timing issues have caused, and may continue to cause,~~needs of our ~~operating results to vary significantly from quarter to quarter and year to year.~~tenants or if our tenants encounter financial difficulties as a result of changing market conditions.

~~Our~~A key element of our future success will depend upon, among other things, our ability to successfully execute our strategy to invest in income-producing assets. which if unsuccessful could adversely impact our financial condition, results of operations and cash flows.

There is no assurance that we will be able to continue to execute our strategy of investing in income-producing assets, including income properties and ~~possibly~~ commercial loans or similar financings secured by real estate. There is no assurance that the number of properties in our income property portfolio or the number of loans in our loan investment portfolio will expand at all or, if ~~it expands,~~they expand, at any specified rate or to any specified size. The growth in our portfolios of income-producing assets provide earnings and cash flow through the added rents or interest payments. If we continue to invest in diverse geographic markets other than the markets in which we currently own income properties or loan investments, we will be subject to risks associated with investing in new markets as those markets ~~will~~may be relatively unfamiliar to us. In addition, investments in new markets may introduce increased costs to us relating to factors including the regulatory

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environment and the local and state tax structure. Additionally, there is no assurance we will ~~or can expand our~~be able to continue to make investments in commercial loans or similar financings secured by real estate. Consequently, if we are unable to ~~acquire additional~~successfully execute our strategy of investing in income-producing assets or some or all of our investments, including in new markets, introduce increased operating costs our financial condition, results of operations, and cash flows may be adversely affected.

We operate in a highly competitive market for the acquisition of income properties and more established ~~competitors~~entities or other investors may be able to compete more effectively for acquisition opportunities than we can.

A number of entities and other investors compete with us to purchase income properties. We compete with REITs, public and private real estate focused companies, high wealth individual investors, and others. Many of our competitors are substantially larger and have considerably greater financial, technical and marketing resources than we do. Several of our public company competitors have greater access to capital, typically by raising equity or debt financing, have significant amounts of capital available and investment objectives that overlap with ours, which ~~may create~~often creates competition for acquisition opportunities. Some competitors may have

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a lower cost of ~~funds~~capital and access to funding sources that are not available to us. In addition, some of our competitors may have higher risk tolerances or different assessments of investment risk, ~~assessments,~~ which could allow them to consider a wider variety of income property acquisitions and establish more relationships than us. We cannot be assured that the competitive pressures we face will not have a material adverse effect on our business, financial condition, results of operations and therefore our cash flows. Also, because of this competition, we may not be able to take advantage of attractive acquisition opportunities from time to time, and we can offer no assurance that we will be able to identify and purchase assets that are consistent with our objectives.

If we are not successful in utilizing the like-kind exchange structure in deploying the proceeds from our land transactions or dispositions of income properties, or our like-kind exchange transactions are disqualified, our results of operations and cash flows could be adversely impacted. Our strategy of investing in income-producing properties includes the utilization, when possible, of proceeds obtained from the disposition of income properties or from land transactions, which qualify for deferral of the applicable income tax through the like-kind exchange provisions of the Internal Revenue Code. If we fail to complete a qualifying acquisition utilizing the aforementioned proceeds, or a transaction we deemed qualifying for like-kind exchange treatment is subsequently disqualified by the Internal Revenue Service, we may be subject to increased income taxes, which may adversely impact our results of operations and our cash flows.

If the provisions of section 1031 of the Internal Revenue Code regarding the like-kind exchange structure were altered substantially or eliminated, our financial position, results of operations and cash flows could be adversely impacted. A fundamental element of our strategy is investing in income-producing properties utilizing, when possible, the proceeds obtained from the disposition of our land holdings, Subsurface Interests and in some instances our income properties, which qualify for deferral of the applicable income tax through the like-kind exchange provisions of the Internal Revenue Code. If the provisions of section 1031 of the Internal Revenue Code regarding the like-kind exchange structure, including the deferral of taxes on gains related to the sale of real property such as our land holdings, Subsurface Interests and income properties, were to be altered substantially or eliminated,~~we may be subject to increased income taxes, which may have a material adverse effect on our results of operations and our cash flows.~~

We are subject to a number of risks inherent with the real estate industry and in the ownership of real estate assets or investment in financings secured by real estate, which may adversely affect our returns from our investments, our financial condition, results of operations and cash flows. Factors beyond our control can affect the performance and value of our real estate assets including our land and Subsurface Interests, income properties, investments in commercial loans or similar financings secured by real estate or other investments. Real estate assets are subject to various risks, including but not limited to the following:

~~Adverse changes in national, regional, and local economic and market conditions where our properties are located;~~

Competition from other real estate companies similar to ours and competition for tenants, including competition based on rental rates, age and location of the property and the quality of maintenance, insurance, and management services;

~~Changes in tenant preferences that reduce the attractiveness of our properties to tenants or decreases in market rental rates;~~

Zoning or other local regulatory restrictions, or other factors pertaining to the local government institutions which inhibit interest in the markets in which our land holdings or income producing assets are located;

~~Costs associated with the need to periodically repair, renovate or re-lease our properties;~~

Increases in the cost of our operations, particularly maintenance, insurance, or real estate taxes which may occur even when circumstances such as market factors and competition cause a reduction in our revenues;

~~Changes in governmental laws and regulations, fiscal policies and zoning ordinances and the related costs of compliance with laws and regulations, fiscal policies, and ordinances;~~

~~Commodities prices;~~

~~Illiquidity of real estate investments which may limit our ability to modify our income producing asset portfolio promptly in response to changes in economic or other conditions;~~

~~Acts of God, including natural disasters, which may result in uninsured losses; and~~

~~Acts of war or terrorism, including consequences of terrorist attacks.~~

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If any of these or similar events occurs, it may reduce our return from an affected real estate asset or investment which could adversely impact our financial condition, results of operations and cash flows.

The loss of revenues from our income property portfolio or certain tenants would adversely impact our results of operations and cash flows. ~~While no single~~

We had one tenant ~~represents~~that accounted for more than 10% of our consolidated income property revenue during the year ended December 31, 2019. Wells Fargo, who occupied two single-tenant office properties located in Hillsboro, Oregon and Raleigh, North Carolina, accounted for approximately 12.5% of our consolidated revenues during the year ended December 31, 2019. The office property leased to Wells Fargo located in Raleigh, North Carolina also represented 26% of the total square footage of our income property portfolio as of December 31, ~~2017, we~~2019. We have ~~tenants~~one other tenant, Fidelity Investments, who ~~represent a large amount~~represented over 5% of our ~~net operating income and/or~~consolidated revenues during the year ended December 31, 2019, and a large percentage of the square footage of our income property ~~portfolio. These tenants include Wells Fargo, Lowe’s Corporation, Hilton Grand Vacations, and At Home.~~portfolio, but not in excess of 10%. The default, financial distress, or bankruptcy of one or all of these tenants could cause substantial vacancies in two of the largest properties in our income property portfolio and reduce our revenues from our income property operations significantly, thereby adversely impacting our results of operations and cash flows. Vacancies reduce our revenue until the affected properties can be re-leased and could decrease the value of each such vacant property. Upon the expiration of the leases that are currently in place, we may not be able to re-lease a vacant property at a comparable lease rate or without incurring additional expenditures in connection with such re-leasing. If, following the loss of an income property tenant, we are unable to re-lease the income property at comparable rental rates and in a timely manner, our financial condition, results of operations and cash flows could be adversely affected.

A significant portion of the revenue we generate from our income property portfolio is concentrated in specific industry classifications and/or geographic locations and any prolonged dislocation in those industries or downturn in those geographic areas would adversely impact our results of operations and cash flows.

More than 20% of our base rent revenue during the year ended December 31, 2019 was generated from tenants in the financial services industry including Wells Fargo, Fidelity, Bank of America, and JP Morgan Chase; and

Approximately 24% and 10% of our base rent revenue during the year ended December 31, 2019 was generated from tenants located in Florida and North Carolina, respectively.

Any financial hardship and/or economic downturns in the financial industry, including a downturn similar to the financial crisis in 2007 through 2009, or in the four states noted could have an adverse effect on our results of operations and cash flows.

Certain provisions of the Company’s leases may be unenforceable.

The Company’s rights and obligations with respect to its leases are governed by written agreements with its tenants. A court could determine that one or more provisions of such an agreement are unenforceable, such as a particular remedy, a termination provision, or a provision governing the Company’s remedies for default of the tenant. If we were unable to

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enforce provisions of a lease agreement or agreements, our results of operations, financial condition, and cash flows could be adversely impacted.

We may not be able to dispose of properties we target for sale to recycle our capital.

While the Company’s strategy may include selectively selling non-core or other income-producing properties to recycle our capital, we may be unable to sell properties targeted for disposition due to adverse market or other conditions or not achieve the pricing or timing that is consistent with our expectations. This may adversely affect, among other things, the Company’s ability to deploy capital into the acquisition of other income-producing properties, the execution of our overall operating strategy and consequently our financial condition, results of operations, and cash flows.

~~Our~~We may seek to conduct development activities, including the development of new income properties or the redevelopment or renovation of existing income properties, which may cause us to experience unexpected costs and have other risks that may adversely affect our financial condition, results of operations and liquidity.

We have recently and may in the future develop new income properties. In addition, we have in recent years and may in the future redevelop, significantly renovate or otherwise invest additional capital in certain of our existing income properties to improve the assets and enhance the opportunity for increased returns on our overall investment. These various development activities, particularly the development of new income properties, is subject to a number of risks, including risks associated with construction work and risks of cost overruns due to construction delays or other factors that may increase the ~~anticipated~~expected costs of a project. Furthermore, the commencement of development projects is subject to other risks including the receipt of zoning or entitlements and other required governmental permits and authorizations. In addition, we may incur development costs in connection with projects that are ultimately not pursued to completion. Any of the development activities noted may be financed under our existing revolving credit facility (the “Credit Facility”) or through other forms of financing. If such financing is not available on acceptable terms, our development activities may not be pursued or may be curtailed. In addition, such development activities would likely reduce the available borrowing capacity on our ~~credit facility~~Credit Facility which we use for the acquisition of income properties and other operating needs. The risks associated with development activities, including but not necessarily limited to those noted, could adversely impact our financial condition, results of operations, and liquidity.

~~In certain instances,~~Management of and Investment in PINE

Our revenues include receipt of management fees and potentially incentive fees derived from our provision of management services to PINE and the loss or failure, or decline in the business or assets, of PINE could substantially reduce our revenues.

The fees we ~~may conduct certain development~~earn from providing management services to PINE could become a substantial source of our revenues. The revenues we generate from managing PINE depend in large part on the ability of PINE to raise capital to invest in real estate assets and on the positive performance of their investments and shareholder returns. The performance of PINE is subject to a number of risks and uncertainties. Therefore, our operating results and our ability to maintain and grow our revenues depends upon the ability of PINE and their significant tenants to maintain and grow their respective businesses. Our operating results and our ability to maintain and grow our revenues also depend upon the ability of PINE to maintain and grow their market capitalizations and to achieve positive shareholder returns in excess of applicable total shareholder return indexes. Reduced business activities, market capitalizations or shareholder returns, sales of assets or the failure of PINE or the termination of our management agreement with PINE could materially reduce our revenues and our profitability thereby adversely impacting our cash flows and results of operations.

Our management agreement with PINE is subject to termination for events of default or non-performance, and any such termination could have a material adverse effect on our land, including preparing a site for vertical development or completing the actual development of new income properties which may cause us to be unable to utilize the like-kind exchange structure for a subsequent sale of the land which may adversely affect our financial condition,business, results of operations and ~~cash flows.~~ Infinancial condition.

Our management with PINE may be terminated by PINE in certain circumstances. Depending upon the ~~future,~~circumstances of a termination, we may ~~perform the site work necessary for vertical development~~ or the development of new income properties on land we own. After conducting development activities on our land, including, but not limited to, either of the noted development activities, a sale of the improved land may not ~~qualify for treatment under the like-kind exchange structure. As~~be entitled to receive a ~~result, in conjunction~~termination fee. If our management agreement with ~~a land sale that does not utilize the like-kind exchange structure,~~PINE is terminated, we may be ~~subject~~unable to ~~increased income taxes, which~~replace the lost revenue. Even if we receive a termination fee upon the termination of the management agreement with PINE, we may ~~adversely~~be unable to invest the after tax proceeds from the termination fee we receive in opportunities that earn returns equal to or greater than the revenues lost as a result of the terminated management agreement. The termination of our management agreement with PINE could have a material adverse impact on our ~~financial condition,~~business, results of operations and ~~our cash flows.~~financial condition.

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We do not have significant experience managing a REIT.

In connection with PINE’s initial public offering we entered into a management agreement with PINE pursuant to which we manage the day-to-day operations of its business. We do not have significant experience managing a REIT, and our only experience managing a REIT stems from the experience of certain of our executives who previously worked for a REIT. We will be paid a management fee to manage PINE’s business and we may be paid an incentive fee which will depend on numerous factors, including our ability to make investments on behalf of PINE that generate attractive, risk-adjusted returns, and thereby result in PINE’s shareholders achieving a necessary level of return. A key element of PINE’s success will likely include its ability to raise additional equity capital to fund its goals for growth. Our successful performance as the manager of PINE will therefore depend, in part, our ability to assist PINE in raising equity capital in amounts sufficient to support PINE’s goals and on acceptable terms. Our successful performance as the manager of PINE will also depend on our ability to access financing for PINE, and on acceptable terms. There can be no assurance that we will be successful in this business, that PINE will achieve its objectives, will invest successfully in income properties and will generally operate successfully, or that we will earn fees from PINE sufficient to recover the costs we have incurred or to provide a suitable return on our investment in PINE.

Declines in the market values of our investment in PINE may adversely affect periodic reported results.

We hold a significant equity interest, approximately 22.3% as of December 31, 2019, in PINE, including the units we hold in PINE’s operating partnership. PINE is publicly traded and as such their common stock is subject to the risks associated with public equities, include, but are not limited to market risk broadly, risks associated with the REIT industry, and risks associated with the real estate industry more specifically. The public equity markets can be volatile, and the value of PINE’s share may fluctuate significantly over short periods of time. A significant decrease in the trading price of PINE’s shares could result in losses that have a material adverse effect on the value of our investment in PINE which could adversely impact our financial condition.

There are various potential conflicts of interest in our relationship with PINE, including our executive officers and/or directors who are also officers and/or directors of PINE, which could result in decisions that are not in the best interest of our stockholders.

We are subject to conflicts of interest that may exist or could arise in the future with PINE, including our executive officers and/or directors who are also directors or officers of PINE. Conflicts may include, without limitation: conflicts arising from the enforcement of agreements between us and PINE; conflicts in the amount of time that our officers and employees will spend on our affairs versus PINE's affairs; and conflicts in future transactions that we may pursue with PINE. Transactions between us and PINE would be subject to certain approvals of our directors; however, there can be no assurance that such approval will be successful in achieving terms and conditions as favorable to us as would be available from a third party. Our president and chief executive officer who is also one of directors also serves on PINE's board of directors.

Our directors and executive officers have duties to our company under applicable Florida law, and our executive officers and our directors who are also directors or officers of PINE also have duties to PINE under applicable Maryland law. Those duties may come in conflict from time to time. We have duties as the manager of PINE which may come in conflict with our duties to our stockholders from time to time. In addition, conflicts of interest may exist or could arise in the future with our duties to PINE as its manager in connection with future investment opportunities.

Management of the Land JV

A prolonged downturn in economic conditions could adversely impact our business, particularly with regard to our ability to maintain revenues from our income-producing assets and our ability to monetize parcels of land in the Land JV.

The prior economic down cycle, precipitated by crises in the credit markets, included the collapse of the housing market and a recession in the local and national economy with significant levels of unemployment, shrinking gross domestic product, and drastically reduced consumer spending. During this period, potential investors in real estate, particularly residential real estate, often deferred or avoided real estate purchases due to, among other factors, a lack of liquidity, the substantial costs involved, and overall uncertainty with the economy. The real estate industry is particularly vulnerable to shifts in local, regional, and national economic conditions which are outside of our control, such as short and long-term interest rates, housing demand, population growth, and job growth and related unemployment levels. The ability of the Land JV to sell land parcels is especially sensitive to economic conditions in Florida, particularly in Daytona Beach,

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where all of the land in the Land JV’s portfolio is located. A prolonged period of economic weakness or another downturn in the U.S. economy could have a material adverse effect on the success of the Land JV’s business and thereby our business, financial condition, results of operations, and/or cash flows could also be adversely affected.

Most of ~~our~~the Land JV’s land holdings are located in Daytona Beach, Florida and the competition in the local and regional market, the possible impact of government regulation, permitting or development limitations, and the criteria used by parties interested in acquiring land could adversely impact the ~~interest in our land~~Land JV and thereby our ability to attain value from our retained interest in the Land JV and thus our financial condition, results of operations and cash flows.

The parties typically interested in ~~our~~the land holdings of the Land JV base their decision to acquire land on, among other things, price, location, ability to rezone and entitle the land, ~~and~~ land use or optionality of land use, and ability to obtain ~~zoning, entitlements, and~~ permitting. In some instances, the aforementioned acquisition criteria or other factors may ~~make~~cause an interested party to consider other land instead of ours. In addition, parties interested in acquiring ~~our~~the land holdings of the Land JV would likely consider the impact of governmental regulations or ordinances on their ability to entitle and develop the land for their intended use and may seek incentives or similar economic considerations from one or more governmental authorities that they may not be able to obtain. These conditions may make it difficult for usthe Land JV to complete land transactions on acceptable terms or at all, which could adversely impact the success of the Land JV’s business and thereby our business, financial condition, results of operations, and/or cash flows could also be adversely affected.

Land use and environmental regulations could restrict, make costlier, or otherwise adversely impact our business.

We are and the Land JV is subject to a wide variety of federal, state, and local laws and regulations relating to land use, development and permitting, and environmental compliance obligations. Any failure to comply with these laws or regulations could result in capital or operating expenditures or the imposition of significant financial penalties or restrictions on the operations of the Land JV, of which we are the manager and in which we have a retained financial interest, that could adversely affect present and future operations of the Land JV and its ability to sell land, and thereby, our financial condition, results of operations, and cash flows.

~~The Company’s real estate investments, including our land holdings~~ Municipalities may restrict or place moratoriums on the availability of utilities, such as water and ~~income-producing assets, are generally illiquid.~~ ~~Real estate investments are relatively illiquid; therefore, it~~sewer. Additionally, development moratoriums may be ~~difficult for us~~imposed due to, ~~sell such~~among other possibilities, inadequate traffic capacity provided by existing roadways. In some areas, municipalities may enact growth control initiatives, which will restrict the number of building permits available in a given year. If municipalities in which the Land JV owns land takes these or similar actions, acquirers of the Land JV’s land assets ifmay experience delays, increasing costs, or limitations in the ~~need or desire arises, and otherwise the Company’s~~ ability to ~~make rapid adjustments~~operate in the size and content of our income property portfolio or other real estate assets in response to economic or other conditions is limited. Illiquid assets typically experience greater price volatility, as a ready market does not exist, and can be more difficult to value. In addition, validating third party pricing for illiquid assetsthose municipalities, which may be more subjective than more liquid assets. As a result, if we are required to liquidate all or a portion of certain of our real estate assets or income producing asset portfolio quickly, we may realize significantly less than the value at which we have previously recorded our assets. Further, certain expenditures necessary to operate our income property operations, real estate operations and golf operations generally do not decrease and may in fact increase in response to weakening economic conditions or other market disruptions, which expenditures may include maintenance costs, insurance costs, and in some instances, interest expense. This relationship of revenue and expenditures may result, under certain market conditions, in reduced operating results and cash flows and thereby could have an adverse ~~effect~~impact on the ~~Company’s financial condition.~~

~~Continued or increased operating losses from the golf operations may adversely impact the Company’s results of operations and cash flows.~~ ~~The Company has golf operations consisting~~success of the LPGA International Golf Club, a semi-private golf club in Daytona Beach, Florida, consisting of the following: two 18-hole golf courses, a food and beverage operation, a private event operation, and club memberships. A third party manages these operations, on behalf of the Company, and employs the personnel. Since its inception, the golf operation has generated negative cash flows. In 2011, the Company recognized an impairment of approximately $4.0 million on the long-lived assets of the golf operations. In January 2017, the Company invested an additional $1.6 million of capital in the golf operations to buy-out of the long-term land lease with the City and approximately $350,000 to renovate the greens on one of the 18-hole golf courses. The results of operations from the golf operations are subject to the typical execution risks inherent with many golf, retail and club operations including, but not limited to: maintenance, merchandising, pricing, customer service, competition, cost of food, beverage and retail products, consumer preferences and behavior, safety, compliance with various federal, state and local laws, ordinances and regulations, environmental contamination, weather conditions, or other trends in the local market. Although the negative cash flows generated by the golf operations decreased substantially, any one of these execution risk factors could negatively impact the golf operationsLand JV’s business and thereby ~~adversely impact the Company’s~~our business, financial condition, results of operations, ~~and~~and/or cash ~~flows.~~flows could also be adversely affected.

~~Competition, seasonality and market conditions relating to golf operations could adversely affect our operating results.~~ Our golf operations face competition from similar golf operations in the surrounding areas, primarily Daytona Beach and other areas of Volusia County. Any new competition from golf operations that are developed close to our existing golf operations may adversely impact the results

Commercial Loan Investments

A part of our ~~golf operations. Our golf operations are also subject to changes~~investment strategy is focused on investing in ~~market conditions, such as population trends, consumer demand and changing demographics of people playing golf, any of~~commercial loan investments which could adversely affect results of operations. In addition, our golf operations may suffer if the economy weakens, if the popularity of golf continues to decrease, or if unusual weather conditions or other factors cause a reduction in rounds played. Our golf operations are also seasonal, primarily due to the impact of the winter tourist season, Florida’s summer heat and rain, and the hurricane season. Should any of these factors impact our golf operations unfavorably, our financial condition, results of operations and cash flows would be impacted adversely.

~~The revenues from our golf operations depend on a third-party operator that we do not control.~~ We currently utilize a third-party to manage and operate our golf operations. As a result, we do not directly implement operating business decisions with respect to the operation and marketing of our golf operations and personnel decisions. For our golf operations, these decisions may concern course maintenance, membership programs, marketing programs, and employee

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matters. The amount of revenue that we generate from the golf operations is dependent on the ability of the third-party manager to maintain and seek to increase the gross receipts and manage and possibly decrease the expenses at LPGA International. If the revenues from our golf operations decline or the operating expenses increase at a rate that is inconsistent with revenues, our results of operations and our cash flows would be adversely affected, and our financial condition may be adversely impacted should we be required to recognize additional impairments on the long-lived assets of the golf operations, including our recently invested capital.

~~Our investment strategy~~ may involve credit risk.

As part of our business strategy, we have invested in commercial loans secured by commercial real estate and may in the future invest in other commercial loans or similar financings secured by real estate. Investments in commercial loans or similar financings of real estate involve credit risk with regard to the borrower, the borrower’s operations and the real estate that secures the financing. The credit risks include, but are not limited to, the ability of the borrower to execute their business plan and strategy, the ability of the borrower to sustain and/or improve the operating results generated by the collateral property, the ability of the borrower to continue as a going concern, and the risk associated with the market or industry in which the collateral property is utilized. Our evaluation of the investment opportunity in a mortgage loan or similar financing includes these elements of credit risk as well as other underwriting criteria and factors. Further, we may rely on third party resources to assist us in our investment evaluation process and otherwise in conducting customary due diligence. Our underwriting of the investment or our estimates of credit risk may not prove to be accurate, as actual results may vary from our estimates. In the event we underestimate the performance of the borrower and/or the underlying real estate which secures our commercial loan or financing, we may experience losses or unanticipated costs regarding our investment and our financial condition, results of operations, and cash flows may be adversely impacted.

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Because of competition, we may not be able to acquire commercial loans or similar financings at all or at favorable yields. We

If in the future we seek to invest in commercial loans or similar financings secured by underlying real estate, we may not be able to ~~execute our strategy of acquiring commercial loans or similar financings~~acquire such loan investments at favorable spreads over our borrowing costs. We will compete with many other investment groups including REITs, public and private investment funds, life insurance companies, commercial and investment banks and, commercial finance companies, including some of the third parties with which we expect to have relationships. In most instances the competition has greater financial capacity, are larger organizations and has a greater operating presence in the market. As a result, we may not be able to acquire commercial loans or similar financings in the future at all or at favorable spreads over our borrowing costs, which could adversely impact our results of operations and cash flows and would likely result in the need for any growth in our portfolio of income-producing assets to be achieved through the acquisition of income properties.

Debt and preferred equity investments could cause us to incur expenses, which could adversely affect our results of operations.

We ~~currently own, or~~ may own in the future investments in first mortgages, mezzanine loans, junior participations and preferred equity interests. Such investments may or may not be recourse obligations of the borrower and are not insured or guaranteed by governmental agencies or otherwise. In the event of a default under these obligations, we may have to take possession of the collateral securing these interests including through foreclosure proceedings. Borrowers may contest enforcement of foreclosure or our other remedies and may seek bankruptcy protection to potentially block our actions to enforce their obligations to us. Relatively high loan-to-value ratios and declines in the value of the underlying collateral property may prevent us from realizing an amount equal to our investment upon foreclosure or realization even if we make substantial improvements or repairs to the underlying real estate to maximize such property’s investment potential. Although we ~~maintain~~have maintained and regularly ~~evaluate~~evaluated financial reserves to properly accrue for potential future losses, our reserves would reflect management’s judgment of the probability and severity of losses and the value of the underlying collateral. We cannot be certain that our judgment will prove to be correct and that our reserves, if any, will be adequate over time to protect against future losses due to unanticipated adverse changes in the economy or events adversely affecting specific properties, assets, tenants, borrowers, industries in which our tenants and borrowers operate or markets in which our tenants and borrowers, or their properties are located. If we are unable to enforce our contractual rights, including but not limited to, taking possession of the collateral property in a foreclosure circumstance, or our reserves for credit losses prove inadequate, we could suffer losses which would have a material adverse effect on our financial condition, results of operations, and cash flows.

The mezzanine loan assets that we may acquire will involve greater risks of loss than senior loans secured by income-producing properties.

We may acquire mezzanine loans, which generally take the form of subordinated loans secured by the underlying property or loans secured by a pledge of the ownership interests of either the entity owning the property or a pledge of the ownership interests of the entity that owns the interest in the entity owning the property. These types of assets involve a higher degree of risk than senior mortgage lending secured by income-producing real property, because the loan may become unsecured as a result of foreclosure by the senior lender. In the event of a bankruptcy of the

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entity providing the pledge of its ownership interests as security, we may not have full recourse to the assets of such entity, or the assets of the entity may not be sufficient to satisfy our mezzanine loan. If a borrower defaults on our mezzanine loan or the debt that is senior to our loan, or in the event of a borrower bankruptcy, our mezzanine loan will only be satisfied after the senior debt has been satisfied. As a result, we may not recover some or all of our initial investment. In addition, mezzanine loans may have higher loan-to-value ratios than conventional mortgage loans, resulting in less equity in the property and increasing the risk of loss of principal. Significant losses related to our mezzanine loans would result in operating losses for us and could adversely impact our financial condition and cash flows.

We may invest in fixed-rate loan investments, and an increase in interest rates may adversely affect the value of these investments, which could adversely impact our financial condition, results of operations and cash flows.

Increases in interest rates may negatively affect the market value of our investments, particularly any fixed-rate commercial loans or other financings we have invested in. Generally, any fixed-rate commercial loans or other financings will be more negatively affected by rising interest rates than adjustable-rate assets. We are required to reduce the book value of our investments by the amount of any decrease in their fair value. Reductions in the fair value of our investments could decrease the amounts we may borrow to purchase additional commercial loan or similar financing investments, which could impact our ability to increase our operating results and cash flows. Furthermore, if our borrowing costs are

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rising while our interest income is fixed for the fixed-rate investments, the spread between our borrowing costs and the fixed-rate we earn on the commercial loans or similar financing investments will contract or could become negative which would adversely impact our financial condition, results of operations, and cash flows.

The commercial loans or similar financings we ~~currently own or~~ may acquire that are secured by commercial real estate typically depend on the ability of the property owner to generate income from operating the property. Failure to do so may result in delinquency and/or foreclosure.

Commercial loans are secured by commercial property and are subject to risks of delinquency and foreclosure and therefore ~~the~~ risk of loss. The ability of a borrower to repay a loan secured by an income-producing property typically is dependent primarily upon the successful operation of such property rather than upon the existence of independent income or assets of the borrower. If the net operating income of the property is reduced, the borrower’s ability to repay the loan may be impaired. In the event of any default under a commercial loan held directly by us, we will bear a risk of loss of principal to the extent of any deficiency between the value of the collateral and the principal and accrued interest of the commercial loan, which could have a material adverse effect on our financial condition, operating results and cash flows. In the event of the bankruptcy of a commercial loan borrower, the mortgage loan to such borrower will be deemed to be secured only to the extent of the value of the underlying collateral at the time of bankruptcy (as determined by the bankruptcy court), and the lien securing the loan will be subject to the avoidance powers of the bankruptcy trustee or debtor-in-possession to the extent the lien is unenforceable under state law. Foreclosure of a loan can be an expensive and lengthy process, which could have a substantial negative effect on our anticipated return on the foreclosed commercial loan. If the borrower is unable to repay a mortgage loan or similar financing our inability to foreclose on the asset in a timely manner, and/or our inability to obtain value from reselling or otherwise disposing of the asset for an amount equal to our investment basis, would adversely impact our financial condition, results of operations, and cash flows.

The activities or actions of a third-party servicer engaged to service our investment in a commercial loan or similar debt financing could adversely impact the value of our investment or our results of operations and cash flows.~~Our~~

Any future investments in first mortgages, mezzanine loans or other debt financings secured by real estate may require a third-party servicer to service the loan on our behalf and/or on behalf of third parties who have invested in some portion of the debt financing. An intended or unintended breach by the servicer with regard to their servicing of the debt financing or in their contractual obligations and fiduciary duties to us or the other holders of the debt financing could adversely impact the value of our investment or our results of operations and cash flows.

We may suffer losses when a borrower defaults on a loan and the value of the underlying collateral is less than the amount due.

If a borrower defaults on a non-recourse loan, we will only have recourse to the real estate-related assets collateralizing the loan. If the underlying collateral value is less than the loan amount, we will suffer a loss. Conversely, ~~some of our~~ commercial loans we invest in may be unsecured or ~~are~~be secured only by equity interests in the borrowing entities. These loans are subject to the risk that other lenders in the capital stack may be directly secured by the real estate assets of the borrower or may otherwise have a superior right to repayment. Upon a default, those collateralized lenders would have priority over us with respect to the proceeds of a sale of the underlying real estate. In such cases, we may lack control over the underlying asset collateralizing our loan or the underlying assets of the borrower before a default and, as a result, the value of the collateral may be reduced by acts or omissions by owners or managers of the assets. In addition, the value of

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the underlying real estate may be adversely affected by some or all of the risks referenced above that pertain to the income-producing properties that we own.

~~Some of our commercial~~Commercial loans we may invest in may be backed by individual or corporate guarantees from borrowers or their affiliates which guarantees are not secured. If the guarantees are not fully or partially secured, we typically rely on financial covenants from borrowers and guarantors which are designed to require the borrower or guarantor to maintain certain levels of creditworthiness. ~~Where~~Should we do not have recourse to specific collateral pledged to satisfy such guarantees or recourse loans, we will ~~only~~ have recourse as an unsecured creditor only to the general assets of the borrower or guarantor, some or all of which may be pledged as collateral for other lenders. There can be no assurance that a borrower or guarantor will comply with its financial covenants, or that sufficient assets will be available to pay amounts owed to us under our loans and guarantees. Because of these factors, we may suffer additional losses which could have a material adverse effect on our financial ~~performance.~~condition, operating results and cash flows.

Upon a borrower bankruptcy, we may not have full recourse to the assets of the borrower to satisfy our loan. Additionally, in some instances, our loans may be subordinate to other debt of certain borrowers. If a borrower defaults on our loan or on debt senior to our loan, or a borrower files for bankruptcy, our loan will be satisfied only after the senior

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debt receives payment. Where debt senior to our loan exists, the presence of inter-creditor arrangements may limit our ability to amend our loan documents, assign our loans, accept prepayments, exercise our remedies (through “standstill” periods), and control decisions made in bankruptcy proceedings. Bankruptcy and borrower litigation can significantly increase collection costs and the time needed for us to acquire title to the underlying collateral (if applicable), during which time the collateral and/or a borrower’s financial condition may decline in value, causing us to suffer additional losses.

If the value of collateral underlying a loan declines, or interest rates increase during the term of a loan, a borrower may not be able to obtain the necessary funds to repay our loan at maturity through refinancing because the underlying property revenue cannot satisfy the debt service coverage requirements necessary to obtain new financing. If a borrower is unable to repay our loan at maturity, we could suffer additional loss which may adversely impact our financial ~~performance.~~condition, operating results and cash flows.

As a result of any of the above factors or events, the losses we may suffer could adversely impact our financial condition, results of operations and cash flows.

Other Investments

Investments in securities of companies operating in the real estate industry, including debt and equity instruments such as corporate bonds, preferred or common stock, or convertible instruments could cause us to incur losses or other expenses which could adversely affect our financial position, results of operations, and cash flows.

We ~~have owned~~currently own and may own in the future, investments in corporate securities of companies operating in the real estate industry including debt and equity instruments such as corporate bonds, preferred or common stock, or convertible instruments. Certain of these investments may be traded on an exchange or other active market whereby the price of the underlying instrument is quoted daily and those quoted prices and thus the market value of the instrument varies during a given trading day. Certain of these investments may be traded on an exchange or market that is not deemed an active market but where the price of the investment fluctuates daily or otherwise. Adverse fluctuations in the value of these investments, whether market-generated or not, are reflected as unrealized losses on our balance sheet. We may choose to or be required to liquidate these investments in whole or in part and at prices that result in realized losses on our investment. Should we incur realized losses on liquidating these investments, our financial position, results of operations and cash flows would be adversely impacted.

General

Factors beyond our control can affect the performance and value of our real estate assets including our income properties, investments in commercial loans or similar financings secured by real estate or other investments, our Subsurface Interests, and our investment in the Land JV. Real estate assets are subject to various risks, including but not limited to the following:

Adverse changes in national, regional, and local economic and market conditions where our properties or the properties underlying a loan investment are located;

Changes in tenant preferences that reduce the attractiveness and marketability of our income properties to tenants or decreases in market rental rates;

Zoning or other local regulatory restrictions, or other factors pertaining to the local government institutions which inhibit interest in the markets in which our income-producing assets are located;

Costs associated with the need to periodically repair, renovate or re-lease our income properties;

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Changes in governmental laws and regulations, fiscal policies and zoning ordinances and the related costs of compliance with laws and regulations, fiscal policies, and ordinances;

Commodities prices;

Illiquidity of real estate investments which may limit our ability to modify our income-producing asset portfolios promptly in response to changes in economic or other conditions;

Acts of God, including natural disasters, which may result in uninsured losses; and

Acts of war or terrorism, including consequences of terrorist attacks.

The Company’s real estate investments are generally illiquid.

Real estate investments, including investments in income properties, joint ventures and subsurface interest, are relatively illiquid; therefore, it may be difficult for us to sell such assets if the need or desire arises, and otherwise the Company’s ability to make rapid adjustments in the size and content of our income property portfolio or other real estate assets in response to economic or other conditions is limited. Illiquid assets typically experience greater price volatility, as a ready market does not exist, and can be more difficult to value. In addition, validating third party pricing for illiquid assets may be more subjective than more liquid assets. As a result, if we are required to quickly liquidate all or a portion of certain of our real estate assets or income-producing assets, we may realize significantly less than the value at which we have previously recorded our assets. Further, certain expenditures necessary to operate our income property operations generally do not decrease and may in fact increase in response to weakening economic conditions or other market disruptions, which expenditures may include maintenance costs, insurance costs and, in some instances, interest expense. This relationship of revenue and expenditures may result, under certain market conditions, in declining operating results and reduced cash flows and thereby could have an adverse effect on the Company’s financial condition.

We may experience a decline in the fair value of our real estate assets or investments which could result in impairments and would impact our financial condition and results of operations.

A decline in the fair market value of our long-lived assets may require us to recognize an “other-than-temporary” impairment against such assets (as defined by the Financial Accounting Standards Board (“FASB”) authoritative accounting guidance) if certain conditions or circumstances related to an asset were to change and we were to determine that, with respect to any such asset, there was an unrealized loss to the fair value of the asset. The fair value of our long-lived assets depends on market conditions, including estimates of future demand for these assets, and the revenues that can be generated from such applicable assets including land or an income property. If such a determination were to be made, we would recognize the estimated unrealized losses through earnings and write down the depreciated or amortized cost of such assets to a new cost basis, based on the fair value of such assets on the date they are considered to be other-than-temporarily impaired. Such impairment charges reflect non-cash losses at the time of recognition; subsequent disposition or sale of such assets could further affect our future losses or gains, as they are based on the difference between the sales price received and the adjusted depreciated or amortized cost of such assets at the time of sale.

Downturns in the U.S. economy and real estate markets have at times caused the fair value of certain of our properties to decrease. If the real estate market were to experience another decline, we may be required to take write-downs against our earnings for other than temporary impairments in the value of our real estate assets including our income properties, commercial loan investments and similar financings or other capitalized costs. Any such non-cash charges could have an adverse effect on our financial condition and results of operations.

From time to time we make investments in companies over which we do not have control. Some of these companies may operate in industries that differ from our current operations, with different risks than investing in real estate.

From time to time we make debt or equity investments in other companies that we may not control or over which we may not have sole control. Although these businesses generally have a significant real estate component, some of them may operate in businesses that are different from our primary business segments. Consequently, investments in these businesses, among other risks, subject us to the operating and financial risks of industries other than real estate and to the risk that we do not have sole control over the operations of these businesses.

From time to time we may make additional investments in or acquire other entities that may subject us to similar risks. Investments in entities over which we do not have sole control, including joint ventures, present additional risks such

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as having differing objectives than our partners or the entities in which we invest, or becoming involved in disputes, or competing with those persons. In addition, we rely on the internal controls and financial reporting controls of these entities and their failure to maintain effectiveness or comply with applicable standards may adversely affect us.

If we are not successful in utilizing the like-kind exchange structure in deploying the proceeds from dispositions of income properties, or our like-kind exchange transactions are disqualified, we could incur significant taxes and our results of operations and cash flows could be adversely impacted.

Our strategy of investing in income-producing properties includes the utilization, when possible, of proceeds obtained from the disposition of income properties or from prior land transactions which qualify for deferral of the applicable income tax through the like-kind exchange provisions of the Internal Revenue Code (“Section 1031”). Land sales transactions that we completed in which we applied the provisions of Section 1031 may be disqualified for such treatment if we are deemed to have conducted activities on the land or in connection with the transaction that are inconsistent with the activities of a long-term investor such as the activities of a developer or a dealer. In addition, if we fail to complete a qualifying acquisition utilizing the aforementioned proceeds or complete the intended qualifying acquisition outside the specified period of time allowed for completing such transaction the application of the Section 1031 provisions would be disqualified. If a transaction we deemed qualifying for like-kind exchange treatment is subsequently disqualified by the Internal Revenue Service, we may be subject to increased income taxes and penalties, which would adversely impact our results of operations and our cash flows.

If the provisions of Section 1031 of the Internal Revenue Code regarding the like-kind exchange structure were altered substantially or eliminated, our financial position, results of operations and cash flows could be adversely impacted.

A fundamental element of our strategy is investing in income-producing properties, in some instances utilizing, the proceeds obtained from the disposition of our income properties and previously in our land holdings, which qualify for deferral of the applicable income tax through the Section 1031 like-kind exchange provisions of the Internal Revenue Code. If the provisions of Section 1031 of the Internal Revenue Code, including the deferral of taxes on gains related to the sale of real property such as our income properties, were to be altered substantially or eliminated,we may be subject to increased income taxes, which may have a material adverse effect on our results of operations and our cash flows.

Quarterly results may fluctuate and may not be indicative of future quarterly performance.

Our quarterly operating results could fluctuate; therefore, reliance should not be placed on past quarterly results as indicative of our performance in future quarters. Factors that could cause quarterly operating results to fluctuate include, among others, variations in the performance of our income-producing assets, market values of our investment in PINE, costs associated with debt, general economic conditions, the state of the real estate and financial markets and the degree to which we encounter competition in our markets.

Risks related to our financing

General

The Company may be unable to obtain debt or equity capital on favorable terms, if at all, or additional borrowings may impact our ~~liquidity.~~liquidity or ability to monetize any assets securing such borrowings.

In order to further our business objectives, we may seek to obtain additional debt financing or raise equity capital and may be unable to do so on favorable terms, if at all. We may obtain unsecured debt financing in addition to our ~~revolving credit facility~~Credit Facility which could decrease our borrowing capacity onunder the ~~credit facility.~~Credit Facility. Other sources of available capital may be ~~materially~~ more expensive or available under terms that are ~~materially~~ more restrictive than the Company’s existing debt capital. Any of these occurrences could adversely affect the Company’s business, financial condition, results of operations, and cash flows.

An increase in our borrowing costs would adversely affect our financial condition and results of operations.

While we have no short-term maturities in our long-term debt, should we seek to incur additional debt to help finance our acquisitions, increased interest rates would reduce the difference, or spread, that we may earn between the yield on the investments we make and the cost of the leverage we employ to finance such investments. It is possible that the spread on investments could be reduced to a point at which the profitability from investments would be significantly reduced or

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eliminated entirely. This would adversely affect our returns on our assets, and therefore adversely impact our financial condition, our results of operations, and cash flows, and could require us to liquidate certain or all of these assets.

The Company’s revolving credit facility and secured financings include certain financial and/or other covenants that could restrict our operating activities, and the failure to comply with such covenants could result in a default that accelerates the required payment

Table of ~~such debt.~~ As of December 31, 2017, the Company had approximately $70.0 million of outstanding indebtedness under the revolving credit facility and $55.0 million of secured debt. The revolving credit facility contains various restrictive covenants which include, among others, a maximum total indebtedness and limits on the repurchase of the Company’s stock and similar restrictions. In addition, the revolving credit facility contains certain financial covenants pertaining to debt service coverage ratios, maximum levels of investment in certain types of assets, the number and make-up of the properties in the borrowing base, and similar covenants typical for this type of indebtedness. The Company’s secured indebtedness generally contains covenants regarding debt service coverage ratios. The Company’s ability to meet or maintain compliance with these and other debt covenants may be dependent on the performance by the Company’s tenants under their leases. The Company’s failure to comply with certain of our debt covenants could result in a default that may, if not cured, accelerate the payment under such debt and limit the Company’s available cash flow for acquisitions, dividends, or operating costs, which would likely have a material adverse impact on the Company’s financial condition, results of operations, and cash flows. In addition, these defaults could impair the Company’s access to the debt and equity markets.Contents

Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our business to service or pay our debt.

Our ability to make scheduled payments of the principal of, to pay interest on, to pay any cash due upon conversion of, or to refinance our indebtedness, including the Company’s $75.0 million aggregate principal amount of ~~4.50%~~ Convertible Notes (the “Notes”), depends on our future operating and financial performance, which is subject to economic, financial, competitive and other factors beyond our control. Our business may not continue to generate cash flow from operations in the future sufficient to service our debt and make necessary capital expenditures. If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional equity capital on terms that may be onerous or highly dilutive. Our ability to refinance our indebtedness will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations.

Our level of indebtedness could have significant adverse consequences and our cash flow may be insufficient to meet our debt service obligations.

Our consolidated indebtedness as of December 31, 2019 was approximately $288.7 million, representing a leverage ratio of approximately 27%, net of cash and restricted cash related to like-kind exchange transactions. This consolidated indebtedness was comprised of (i) $75.0 million principal amount Notes, (ii) $53.9 in mortgage loans on various properties, and (iii) $ 159.8 million outstanding under our Credit Facility. Our level of indebtedness could have significant adverse consequences on our business and operations, including the following:

it may increase our vulnerability to changes in economic conditions (including increases in interest rates) and limit our flexibility in planning for, or reacting to, changes in our business and/or industry

we may be at a disadvantage compared to our competitors with comparatively less indebtedness;

we may be unable to hedge our debt, or such hedges may fail or expire, leaving us exposed to potentially volatile interest or currency exchange rates; and

we may be unable to refinance our indebtedness or obtain additional financing as needed or on favorable terms.

Our ability to generate sufficient cash flow determines whether we will be able to (i) meet our existing or potential future debt service obligations; (ii) refinance our existing or potential future indebtedness; and (iii) fund our operations, working capital, acquisitions, capital expenditures, and other important business uses. Our future cash flow is subject to many factors beyond our control and we cannot assure you that our business will generate sufficient cash flow from operations, or that future sources of cash will be available to us on favorable terms, to meet all of our debt service obligations and fund our other important business uses or liquidity needs. As a result, we may be forced to take other actions to meet those obligations, such as selling properties, raising equity, or delaying capital expenditures, any of which may not be feasible or could have a material adverse effect on us.

We continue to have the ability to incur debt; if we incur substantial additional debt, the higher levels of debt may affect our ability to pay the interest and principal of our debt.

Despite our current consolidated debt levels, we and our subsidiaries may incur substantial additional debt in the future (subject to the restrictions contained in our debt instruments), some of which may be secured debt. The indenture governing our Notes does not restrict our ability to incur additional indebtedness, whether secured or unsecured, or require us to maintain financial ratios or specified levels of net worth or liquidity. If we incur substantial additional indebtedness in the future, these higher levels of indebtedness may affect our ability to pay the principal of, and interest on, our outstanding debt and our creditworthiness generally.

Declines in the value of the assets in which we invest will adversely affect our financial condition and results of operations and make it costlier to finance these assets.

Generally, we use our income property investments as collateral for our financings or as the borrowing base for our Credit Facility. Any decline in their value, a significant decrease in the rent received from the portfolio, or perceived market uncertainty about the value of our income properties, could make it difficult for us to obtain or renew financing on favorable terms or at all, or maintain our compliance with terms of any financing arrangements already in place.

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Changes in the method for determining LIBOR or a replacement of LIBOR may affect the value of the financial obligations to be held or issued by us that are linked to LIBOR and could affect our results of operations or financial condition.

In July 2017, the U.K. Financial Conduct Authority announced that it intends to stop persuading or compelling banks to submit LIBOR rates after 2021. We are unable to predict the effect of any changes, any establishment of alternative reference rates or any other reforms to LIBOR or any replacement of LIBOR that may be enacted in the United Kingdom or elsewhere. Such changes, reforms or replacements relating to LIBOR could have an adverse impact on the market for or value of any LIBOR-linked securities, loans, derivatives and other financial obligations or extensions of credit held by or due to us or on our overall financial condition or results of operations.

We may utilize derivative instruments to hedge risk, which may adversely affect our borrowing cost and expose us to other risks.

The derivative instruments we may use could be in the form of interest rate swaps, interest rate caps and or interest rate collars. Interest rate swaps effectively change variable-rate debt obligations to fixed-rate debt obligations or fixed-rate debt obligations to variable-rate debt obligations. Interest rate caps limit our exposure to rising interest rates. Interest rate collars limit our exposure to rising interest rates while also limited our benefit from declining interest rates.

Our use of derivative instruments also involves the risk that a counterparty to a hedging arrangement could default on its obligation and the risk that we may have to pay certain costs, such as transaction fees or breakage costs, if a hedging arrangement is terminated by us. To limit the risk of counterparty default, we generally seek to enter into hedging arrangements with counterparties that are large, creditworthy financial institutions typically rated at least "A/A2" by S&P and Moody's, respectively.

Developing an effective strategy for dealing with alterations in interest rates is complex and any strategy aimed at managing exposures to changing interest rates would likely not be able to completely insulate us from risks associated with such fluctuations. There can be no assurance that any hedging activities will have the desired beneficial impact on our results of operations or financial condition.

Significant increases in interest rates could have an adverse effect on our operating results.

Our operating results depend in part on the difference between the income achieved from our income-producing assets and management fee income streams and the interest expense incurred in connection with our interest-bearing liabilities. Changes in the general level of interest rates prevailing in the financial markets will affect the spread between our income-producing assets and management fee income streams and our interest-bearing liabilities subject to the impact of interest rate floors and caps, as well as the amounts of floating rate assets and liabilities. Any significant compression of the spreads between income-producing assets and management fee income streams and interest-bearing liabilities could have a material adverse effect on us. While interest rates remain low by historical standards, rates have recently risen and are generally expected to rise in the coming years, although there is no certainty as to the amount by which they may rise. Interest rates are highly sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political conditions, and other factors beyond our control. In the event of a significant rising interest rate environment, rates could create a mismatch between the income we generate from our income-producing assets and management fee income streams and the interest expense incurred on our floating rate debt that could have a significant adverse effect on our financial condition, our operating results and, our cash flows. An increase in interest rates could also, among other things, reduce the value of certain of our income-producing assets and our ability to realize gains from the sale of such assets.

Our Credit Facility

The Company’s Credit Facility and secured financings include certain financial and/or other covenants that could restrict our operating activities, and the failure to comply with such covenants could result in a default that accelerates the required payment of such debt.

As of December 31, 2019, the Company had approximately $159.8 million of outstanding indebtedness under the Credit Facility and approximately $53.9 million of secured debt. The Credit Facility contains certain financial and operating covenants, including, among other things, certain coverage ratios and limitations on our ability to incur debt and limits on the repurchase of the Company’s stock and similar restrictions. In addition, the Credit Facility contains certain covenants pertaining to maximum levels of investment in certain types of assets, the number and make-up of the properties in the borrowing base, and similar covenants typical for this type of indebtedness. The Company’s secured indebtedness generally contains covenants regarding debt service coverage ratios. The Company’s ability to meet or maintain

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compliance with these and other debt covenants may be dependent on the performance of the Company’s tenants under their leases. The Company’s failure to comply with certain of our debt covenants could result in a default that may, if not cured, accelerate our payment obligations under such debt and limit the Company’s available cash flow for acquisitions, dividends, or operating costs, which would likely have a material adverse impact on the Company’s financial condition, results of operations, and cash flows. In addition, these defaults could impair the Company’s access to the debt and equity markets.

Our Convertible Notes

Certain investors in the convertible debt issuance may also invest in our common stock utilizing trading strategies which may increase the volatility in or adversely affect the trading price and liquidity of our common stock.

Investors in, and potential purchasers of, the Notes may employ, or seek to employ, a convertible arbitrage strategy with respect to the Notes. Investors that employ a convertible arbitrage strategy with respect to our convertible debt instruments typically implement that strategy by selling short the common stock underlying the Notes and dynamically adjusting their short position while they hold the Notes. Investors may also implement this strategy by entering into swaps on our common stock in lieu of or in addition to short selling our common stock. These strategies, particularly the effect short sales or equity swaps with respect to our common stock, could increase the volatility of our stock price or otherwise adversely affect the trading price of our common stock.

We may not have the liquidity or ability to raise the funds necessary to settle conversions of the Notes or purchase the Notes as required upon a fundamental change, and our future debt may contain limitations on our ability to pay cash upon a purchase or conversion of the Notes.

Following certain potential events qualifying as a fundamental change under the indenture governing the Notes, including a change in control, holders of Notes will have the right to require us to purchase their Notes for cash. A fundamental change may also constitute an event of default or a prepayment event under, and result in the acceleration of the maturity of, our then-existing indebtedness. In addition, upon conversion of the Notes, unless we elect to deliver solely shares of our common stock to settle such conversion (other than paying cash in

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lieu of delivering any fractional share), we will be required to make cash payments in respect of the Notes being converted. There is no assurance that we will have sufficient financial resources, or will be able to arrange financing, to pay the fundamental change purchase price or make cash payments upon conversion. In addition, restrictions in our then existing credit facilities or other indebtedness, if any, may not allow us to purchase the Notes upon a fundamental change or make cash payments upon conversion. Our failure to purchase the Notes upon a fundamental change or make cash payments upon conversion thereof when required would result in an event of default with respect to the Notes which could, in turn, constitute a default under the terms of our other indebtedness, if any. If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and purchase the Notes or make cash payments upon conversions thereof.

To the extent we issue shares of our common stock to satisfy all or a portion of the settlement of our Notes, conversions of the Notes will dilute the ownership interest of our existing shareholders, including holders who had previously converted their Notes into common stock.

To the extent we issue shares of our common stock to satisfy all or a portion of our conversion obligation pursuant to the Notes, the conversion of some or all of the Notes into common stock will dilute the ownership interests of our existing shareholders. Any sales in the public market of our common stock issuable upon such conversion could adversely affect prevailing market prices of our common stock. In addition, the existence of the Notes may encourage short selling by market participants because the conversion of the Notes could depress the price of our common stock.

The fundamental change purchase feature of our Notes may delay or prevent an otherwise beneficial attempt to take over our company.

The terms of the Notes require us to offer to purchase the Notes for cash in the event of a fundamental change, as defined in the indenture agreement of the Notes. A non-stock takeover of the Company may trigger the requirement that we purchase the Notes. This feature may have the effect of delaying or preventing a takeover of the Company that would otherwise be beneficial to investors.

~~The conditional conversion feature~~

Table of ~~our Notes, if triggered, may adversely affect our financial condition and operating results.~~In the event the conditional conversion feature of the Notes is triggered, holders of Notes will be entitled to convert their Notes at any time during specified periods at their option. If one or more holders elect to convert their Notes, unless we satisfy our conversion obligation by delivering solely shares of our common stock (other than cash in lieu of any fractional share), we would be required to settle all or a portion of our conversion obligation through the payment of cash, which could adversely affect our liquidity. In addition, even if holders do not elect to convert their Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.Contents

The accounting method for our Notes, which may be settled in cash, may have a material effect on our reported financial results.

Under Accounting Standards Codification (“ASC”) 470-20, Debt with Conversion and Other Options, which we refer to as ASC 470-20, an entity must separately account for the liability and equity components of the convertible debt instruments (such as the Notes) that may be settled entirely or partially in cash upon conversion in a manner that reflects the issuer’s economic interest cost. The effect of ASC 470-20 on the accounting for the Notes is that the equity component is required to be included in the additional paid-in capital section of shareholders’ equity on our consolidated balance sheet, and the value of the equity component would be treated as original issue discount for purposes of accounting for the debt component of the Notes. As a result, we will be required to record a greater amount of non-cash interest expense in current periods presented because of the amortization of the discounted carrying value of the Notes to their face amount over the term of the Notes. We will report lower net income (or greater net loss) in our financial results because ASC 470-20 requires interest to include both the current period’s amortization of the debt discount and the instrument’s coupon interest, which could adversely affect our reported or future financial results, and/or the market price of our common stock.

Convertible debt instruments (such as the Notes) that may be settled entirely or partly in cash are currently accounted for utilizing the treasury stock method if we have the ability and intent to settle in cash, the effect of which is that the shares issuable upon conversion of the Notes are not included in the calculation of diluted earnings per share except to the extent that the conversion value of the Notes exceeds their principal amount. Under the treasury stock method, for diluted earnings per share purposes, the transaction is accounted for as if the number of shares of common stock that would be necessary to settle such excess, if we elected to settle such excess in shares, are issued. We cannot be sure that we will be able to continue to demonstrate the ability or intent to settle in cash or that the accounting standards in the future will continue to permit the use of the treasury stock method. If we are unable to use the treasury stock method in accounting for the shares issuable upon conversion of the Notes, then our diluted earnings per share would be adversely affected.

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~~Declines in value of the assets in which we invest will adversely affect our financial condition~~Risks Associated with Certain Events, Environmental Issues and, ~~results of operations, and make it costlier to finance these assets.~~ Generally, we use our income property investments as collateral for our financings or as the borrowing base for our credit facility. Any decline in their value, a significant decrease in the rent received from the portfolio, or perceived market uncertainty about their value, could make it difficult for us to obtain or renew financing on favorable terms or at all, or maintain our compliance with terms of any financing arrangements already in place.Climate Change

Our ~~operations could be negatively impacted by the loss of key management personnel~~. We believe our future success depends, to a significant extent, on the efforts of each member of the Company’s senior management and our ability to attract and retain key personnel. The loss of, or our inability to replace, any member of senior management could adversely affect our operations and our ability to execute our business strategies and thereby our financial condition, results of operations and cash flows. We maintain key man life insurance on our Chief Executive Officer, but we do not have key man life insurance policies on the other members of our senior management.

The Company has a single shareholder that beneficially owns approximately 28% of the Company’s outstanding common stock and exercises the related voting rights of those shares. The significance of its investment and its recent actions could have a material adverse impact on the Company’s results of operations, cash flows, the trading price of our stock, and business operations, as well as potentially impact the investment decisions of other shareholder or interested parties. Wintergreen Advisers, LLC, an institutional investment advisory firm (“Wintergreen”), manages Wintergreen Fund (NYSE: WGRNX), a public mutual fund (the “Fund”) and other investment vehicles that, based on Wintergreen’s public statements, collectively beneficially own approximately 28% of the outstanding common stock of the Company. Based on publicly available information, in the past five years, the total value of assets under management in the Fund has decreased over 50% and as a result the Fund’s ownership of our shares has become an increasingly more significant component of the Fund and may be the largest holding of the Fund. Based on the average daily trading volume of our shares, Wintergreen would be unable to dispose of its shares within a reasonable time, even if its sales constituted the entire trading volume each day. This limits Wintergreen’s liquidity in its shares of the Company. Compliance with certain new regulatory requirements that will require disclosure of ownership and valuation of illiquid stocks may lead the Fund to liquidate some of the shares it owns in the Company. Any significant liquidation of shares by Wintergreen, depending upon the number of shares sold and the manner in which those shares are liquidated, could have an adverse impact on our stock price. The circumstances outlined above, which could lead the Fund to choose to liquidate, or be required to liquidate, some or all of its investment in the Company’s shares, could potentially impact the investment decisions and related activity of existing shareholders or other interested parties, which could adversely impact the trading price of the Company’s stock. Further, beginning in the fourth quarter of 2015 and continuing through the present, the Company has received communications from Wintergreen, and Wintergreen has made public statements which have led and will likely lead to the Company having to incur costs for financial advisory services, legal representation, accounting services, proxy advisory services and other third-party costs to address any proposals, claims, allegations or other matters contained in these communications and statements or because of other actions taken by Wintergreen. Included in Wintergreen’s activities have been a contested director election and related solicitation of proxies in conjunction with our 2017 annual shareholder meeting, in which Wintergreen sought to have four director candidates elected to our board of directors which, given the size of our board, would have given Wintergreen control of the Company. The aforementioned costs include those incurred by the Company to engage in the proxy contest last year. Such costs, while not reasonably estimable, may represent significant costs for the Company which would have an adverse impact on the Company’s financial condition, results of operations and cash flows.

The Company has several shareholders that beneficially own more than 5% of the Company’s outstanding common stock and exercise the related voting rights of those shares. Actions by these shareholders, including trading activity, could have a material adverse impact on the trading price of our stock. Certain of our shareholders, specifically several institutional investment funds, including Wintergreen, each beneficially own more than 5% of the outstanding common stock of the Company. The daily trading activity in our stock is substantially lower, on average, than the total amount of shares owned by these shareholders. Any substantial trading activity executed by these large shareholders could have an adverse impact on the trading price of the Company’s stock which may impact our ability to raise capital through equity financing, which may adversely impact our ability to execute our business plan.

~~Our~~ operations and properties could be adversely affected in the event of ~~a hurricane, earthquake,~~ natural ~~disaster,~~disasters, pandemics, or other significant ~~disruption.~~disruptions.

Our corporate headquarters and many of our properties are located in Florida, where major hurricanes have occurred. We have income properties in California where earthquakes have occurred. We have income properties in other states or regions that experience similar or other natural disasters. Depending on where

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any hurricane makes landfall, our properties in Florida could experience significant damage. Similarly, should an earthquake occur in California, our properties there could incur significant damage. In addition, the occurrence and frequency of hurricanes in Florida could also negatively impact demand for our real estate assets because of consumer perceptions of hurricane risks. In addition to hurricanes, the occurrence of other natural disasters and climate conditions in Florida and other states, such as tornadoes, floods, fires, unusually heavy or prolonged rain, droughts, and heat waves, could have an adverse effect on our ability to develop properties or realize income from our properties. In addition to the various forms of natural disasters that could impact our operations and the performance of our income producing assets, pandemics occurring throughout the world could lead to disruptions in the global economy or significant economies throughout the world which could adversely impact our tenant’s operations, their ability to pay rent and consequently our financial condition, results of operations and cash flows may be adversely impacted. If a hurricane, earthquake, natural disaster, health pandemic or other similar significant disruption occurs, we may experience disruptions to our operations and damage to our properties, which could have an adverse effect on our business, our financing condition, our results of operations, and our cash flows.

~~Uninsured losses may adversely affect the Company’s ability to pay outstanding indebtedness.~~ The Company’s income-producing properties are generally covered by comprehensive liability, fire, and extended insurance coverage, typically paid by the tenant under the triple-net and double-net lease structure. The Company’s golf operations and assets are similarly covered by the aforementioned insurance coverages. The Company believes that the insurance carried on our properties and golf assets is adequate and in accordance with industry standards. There are, however, types of losses (such as from hurricanes, earthquakes, floods or other types of natural disasters, or wars, terrorism, or other acts of violence) which may be uninsurable or the cost of insuring against these losses may not be economically justifiable. If an uninsured loss occurs or a loss exceeds policy limits, the Company could lose both its invested capital and anticipated revenues from the property, thereby reducing the Company’s cash flow, impairing the value of the income property or golf assets and adversely impacting the Company’s financial condition and results of operations.

Acts of violence, terrorist attacks or war may affect the markets in which the Company operates and adversely affect the Company’s results of operations and cash flows.

Terrorist attacks or other acts of violence may negatively affect the Company’s operations. There can be no assurance that there will not be terrorist attacks against businesses within the United States. These attacks may directly impact the Company’s physical assets or business operations or the financial condition of its tenants, lenders or other institutions with which the Company has a relationship. The United States may be engaged in armed conflict, which could have an impact on these parties. The consequences of armed conflict are unpredictable, and the Company may not be able to foresee events that could have an adverse effect on its business. More generally, the occurrence of any of these events or the threat of these events, could cause consumer confidence and spending to decrease or result in increased volatility in the United States and worldwide financial markets and economies. They also could result in or cause an economic recession in the

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United States or abroad. Any of these occurrences could have an adverse impact on the Company’s financial condition, results of operations or cash flows.

We are highly dependent on information systems and certain third-party technology service providers, and systems failures not related to cyber-attacks or similar external attacks could significantly disrupt our business, which may, in turn, negatively affect the market price of our securities and adversely impact our results of operations and cash flows. Our business is highly dependent on communications and information systems. Any failure or interruption of our systems or our networks could cause delays or other problems in our operations and communications. We rely heavily on our financial, accounting and other data processing systems. In addition, much of our information technology infrastructure is or may be managed by third parties and as such we also face the risk of operational failure, termination, or capacity constraints by any of these third parties with which we do business or that facilitate our business activities. It is difficult to determine what, if any, negative impact may directly result from any specific interruption or disruption of our networks or systems or any failure to maintain performance, reliability and security of our technological infrastructure, but significant events impacting our systems or networks could have a material adverse effect on our operating results and cash flows and negatively affect the market price of our securities.

~~Cybersecurity risks and cyber incidents could adversely affect the Company’s business and disrupt operations.~~ Cyber incidents can result from deliberate attacks or unintentional events. These incidents can include, but are not limited to, gaining unauthorized access to digital systems for purposes of misappropriating assets or sensitive information, corrupting data, or causing operational disruption. The result of these incidents could include, but are not limited to, disrupted operations, misstated financial data, liability for stolen assets or information, increased cybersecurity protection costs, litigation, and reputational damage adversely affecting customer or investor confidence. Should any such cyber incidents or similar events occur, the Company’s assets, particularly cash, could be lost and, as a result, the Company’s ability to execute its business and strategy could be impaired, thereby adversely affecting its financial condition, results of operations, and cash flows.

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~~Land use and environmental regulations could restrict, make costlier, or otherwise adversely impact our business.~~ We are subject to a wide variety of federal, state, and local laws and regulations relating to land use, and development and permitting, and environmental compliance obligations. Any failure to comply with these laws or regulations could result in capital or operating expenditures or the imposition of significant financial penalties or restrictions on our operations that could adversely affect present and future operations or our ability to sell land, and thereby, our financial condition, results of operations, and cash flows. Municipalities may restrict or place moratoriums on the availability of utilities, such as water and sewer. Additionally, development moratoriums may be imposed due to, among other possibilities, inadequate traffic capacity provided by existing roadways. In some areas, municipalities may enact growth control initiatives, which will restrict the number of building permits available in a given year. If municipalities in which we own land take these or similar actions, acquirers of our land assets may experience delays, increasing costs, or limitations in the ability to operate in those municipalities, which may have an adverse impact on our financial condition, results of operations, and cash flows.

We may encounter environmental problems which require remediation or the incurrence of significant costs to resolve, which could adversely impact our financial condition, results of operations, and cash flows.

Under various federal, state and local laws, ordinances and regulations, we may be required to investigate and clean up certain hazardous or toxic substances released on or in properties we own or operate or that we previously owned or operated, and we may be required to pay other costs relating to hazardous or toxic substances or incur costs or obligations associated with wetland areas on our land holdings. Any such liability may be imposed without regard to whether the Company’s management had knowledge, were notified or were otherwise aware of the origination of the environmental or wetland issues or were responsible for their occurrence. The presence of environmental issues or the failure to remediate properly any such losses at any of our properties ~~or on our land holdings~~ may adversely affect our ability to sell or lease those properties, or to borrow using those properties as collateral. The costs or liabilities could exceed the value of the affected real estate. The costs or liabilities associated with resolving environmental ~~or wetland~~ issues could be significant.

The uses of any of our income properties prior to our acquisition, and the building materials used in the construction of the property are among the property-specific factors that will affect how the environmental laws are applied to our properties. In general, before we acquire our income properties, independent environmental consultants are engaged to conduct Phase I environmental assessments, which generally do not involve invasive techniques such as soil or groundwater sampling. Depending on the Phase I results, we may elect to obtain Phase II environmental assessments which do involve this type of sampling. There can be no assurance that environmental liabilities have not developed since these environmental assessments were performed or that future uses or conditions (including changes in applicable environmental laws and regulations) or new information about previously unidentified historical conditions will not result in the imposition of environmental liabilities.

If we are subject to any material costs or liabilities associated with environmental, ~~or wetland issues,~~ our financial condition, results of operations and our cash flows could be adversely affected.

We are subject to certain risks associated with investing in real estate, including potential liabilities under environmental laws and risks of loss from weather conditions, man-made or natural disasters, climate change and terrorism.

Under various U.S. federal, state and local environmental laws, ordinances and regulations, a current or previous owner of real estate (including, in certain circumstances, a secured lender that succeeds to ownership or control of a property) may become liable for the costs of removal or remediation of certain hazardous or toxic substances at, on, under or in its property. Those laws typically impose cleanup responsibility and liability without regard to whether the owner or control party knew of or was responsible for the release or presence of such hazardous or toxic substances. The costs of investigation, remediation or removal of those substances may be substantial. The owner or control party of a site may be subject to common law claims by third parties based on damages and costs resulting from environmental contamination emanating from a site. Certain environmental laws also impose liability in connection with the handling of or exposure to asbestos-containing materials, pursuant to which third parties may seek recovery from owners of real properties for personal injuries associated with asbestos-containing materials. While a secured lender is not likely to be subject to these forms of environmental liability, when we foreclose on real property, we become an owner and are subject to the risks of environmental liability. Additionally, our net lease assets require our tenants to undertake the obligation for environmental compliance and indemnify us from liability with respect thereto. There can be no assurance that our tenants will have sufficient resources to satisfy their obligations to us.

Weather conditions and man-made or natural disasters such as hurricanes, tornadoes, earthquakes, floods, droughts, fires and other environmental conditions can damage properties we own. As of December 31, 2018, approximately 16% of the carrying value of our assets was located in the western and northwestern United States, geographic areas at higher risk for earthquakes. Additionally, we own properties located near the coastline and the value of our properties will potentially be subject to the risks associated with long-term effects of climate change. A significant number of our properties are located in major urban areas which, in recent years, have been high risk geographical areas for terrorism and threats of terrorism. Certain forms of terrorism including, but not limited to, nuclear, biological and chemical terrorism, political risks, environmental hazards and/or Acts of God may be deemed to fall completely outside the general coverage limits of our insurance policies or may be uninsurable or cost prohibitive to justify insuring against. Furthermore, if the U.S. Terrorism Risk Insurance Program Reauthorization Act is repealed or not extended or renewed upon its expiration, the cost for terrorism insurance coverage may increase and/or the terms, conditions, exclusions, retentions, limits and sub-limits of such insurance may be materially amended, and may effectively decrease the scope and availability of such

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insurance to the point where it is effectively unavailable. Future weather conditions, man-made or natural disasters, effects of climate change or acts of terrorism could adversely impact the demand for, and value of, our assets and could also directly impact the value of our assets through damage, destruction or loss, and could thereafter materially impact the availability or cost of insurance to protect against these events. Although we believe our owned real estate and the properties collateralizing our loan assets are adequately covered by insurance, we cannot predict at this time if we or our borrowers will be able to obtain appropriate coverage at a reasonable cost in the future, or if we will be able to continue to pass along all of the costs of insurance to our tenants. Any weather conditions, man-made or natural disasters, terrorist attack or effect of climate change, whether or not insured, could have a material adverse effect on our financial performance, liquidity and the market price of our common stock. In addition, there is a risk that one or more of our property insurers may not be able to fulfill their obligations with respect to claims payments due to a deterioration in its financial condition.

The Company’s operations and financial condition may be adversely affected by climate change, including possible changes in weather patterns, weather-related events, government policy, laws, regulations, and economic conditions.

In recent years, the assessment of the potential impact of climate change has begun to impact the activities of government authorities, the pattern of consumer behavior, and other areas that impact the business environment in the United States including, but not limited to, energy-efficiency measures, water use measures, and land-use practices. The promulgation of policies, laws or regulations relating to climate change by governmental authorities in the U.S. and the markets in which the Company owns real estate may require the Company to invest additional capital in our income properties. In addition, the impact of climate change on businesses to whom the Company seeks to lease its income properties, or that may acquire ~~its available~~ land in the Land JV, is not reasonably determinable at this time. While not generally known at this time, climate change may impact weather patterns or the occurrence of significant weather events which could impact economic activity or the value of real estate in specific markets in which the Company owns its assets. The occurrence of any of these events or conditions may adversely impact the Company’s ability to lease its income properties or the Land JV’s ability to complete land transactions with potential buyers, which would adversely impact the Company’s financial condition, results of operations, and cash flows.

Risks Associated with our Common Stock

~~Under~~Certain of our shareholders, specifically several institutional investment funds, each beneficially own more than 5% of the ~~Americans with Disabilities Act~~outstanding common stock of ~~1990, all public accommodations and commercial facilities must meet certain federal requirements related to access and use~~the Company. The daily trading activity in our stock is substantially lower, on average, than the total amount of shares owned by ~~disabled persons, compliance with~~these shareholders. Any substantial trading activity executed by these large shareholders could have an adverse impact on the trading price of the Company’s stock which may ~~be costly.~~ ~~Compliance with the ADA requirements could involve modifications~~impact our ability to our income properties or golf operations. Other federal, state and local laws may require modifications to or restrict further renovations of our income properties or golf operations. Although we believe that our income properties and golf operation facilities are sufficiently in compliance with

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current requirements, noncompliance with the ADA or related laws or regulations could result in the imposition of governmental fines or in the award to private litigants of damages against us. Costs such as these, as well as the general costs of compliance with these laws or regulations,raise capital through equity financing, which may adversely ~~affect~~impact our ~~financial condition, results of operations, and cash flows.~~

~~Compliance with proposed and recently enacted changes in securities laws and regulations increases~~ability to execute our ~~costs.~~ The Dodd-Frank Act contains many regulatory changes and calls for future rulemaking that may affect our business. The final and complete set of regulations promulgating the Dodd-Frank Act has not yet been published. We are evaluating, and will continue to evaluate, the potential impact of regulatory change under the Dodd-Frank Act and other changes in securities laws and regulations.business plan.

The market value of the Company’s ~~securities~~common stock is subject to various factors that may cause significant fluctuations or volatility.

As with other publicly-traded securities, the market price of the Company’s common stock and convertible notes depends on various factors, which may change from time to time and/or may be unrelated to the Company’s financial condition, results of operations, or cash flows and such factors may cause significant fluctuations or volatility in the market price of the Company’s ~~securities.~~common stock. These factors include, but are likely not limited to, the following:

General economic and financial market conditions including a weak economic environment;

Level and trend of interest rates;

The Company’s ability to access the capital markets to raise additional debt or equity capital;

Changes in the Company’s cash flows or results of operations;

The Company’s financial condition and performance;

Market perception of the Company compared to other real estate companies;

Market perception of the real estate sector compared to other investment sectors; and

Volume of average daily trading and the amount of the Company’s ~~shares~~common stock available to be traded.

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Other Operational Risks

Our operations could be negatively impacted by the loss of key management personnel.

We believe our future success depends, to a significant extent, on the efforts of each member of the Company’s senior management and our ability to attract and retain key personnel. The loss of, or our inability to replace, any member of senior management could adversely affect our operations and our ability to execute our business strategies and thereby our financial condition, results of operations and cash flows. We maintain key man life insurance on our Chief Executive Officer, but we do not have key man life insurance policies on the other members of our senior management.

Uninsured losses may adversely affect the Company’s ability to pay outstanding indebtedness.

The Company’s income-producing properties are generally covered by comprehensive liability, fire, and extended insurance coverage, typically paid by the tenant under the triple-net and double-net lease structure. The Company believes that the insurance carried on our properties is adequate and in accordance with industry standards. There are, however, types of losses (such as from hurricanes, earthquakes, floods or other types of natural disasters, or wars, terrorism, or other acts of violence) which may be uninsurable or the cost of insuring against these losses may not be economically justifiable. If an uninsured loss occurs or a loss exceeds policy limits, the Company could lose both its invested capital and anticipated revenues from the property, thereby reducing the Company’s cash flow, impairing the value of the impacted income properties and adversely impacting the Company’s financial condition and results of operations.

Our business is highly dependent on communications and information systems. Any failure or interruption of our systems or our networks could cause delays or other problems in our operations and communications. We rely heavily on our financial, accounting and other data processing systems. In addition, much of our information technology infrastructure is or may be managed by third parties and as such we also face the risk of operational failure, termination, or capacity constraints by any of these third parties with which we do business or that facilitate our business activities. It is difficult to determine what, if any, negative impact may directly result from any specific interruption or disruption of our networks or systems or any failure to maintain performance, reliability and security of our technological infrastructure, but significant events impacting our systems or networks could have a material adverse effect on our operating results and cash flows and negatively affect the market price of our common stock.

Cybersecurity risks and cyber incidents could adversely affect the Company’s business and disrupt operations.

Cyber incidents can result from deliberate attacks or unintentional events. These incidents can include, but are not limited to, gaining unauthorized access to digital systems for purposes of misappropriating assets or sensitive information, corrupting data, or causing operational disruption. The result of these incidents could include, but are not limited to, disrupted operations, misstated financial data, liability for stolen assets or information, increased cybersecurity protection costs, litigation, and reputational damage adversely affecting customer or investor confidence. Should any such cyber incidents or similar events occur, the Company’s assets, particularly cash, could be lost and, as a result, the Company’s ability to execute its business and strategy could be impaired, thereby adversely affecting its financial condition, results of operations, and cash flows.

We are required to make a number of judgments in applying accounting policies, and different estimates and assumptions could result in changes to our financial condition and results of operations.

Material estimates that are particularly susceptible to significant change underlie our determination of the reserve for loan losses, which is based primarily on the estimated fair value of loan collateral, as well as the valuation of real estate assets and deferred tax assets. While we have identified those accounting policies that are considered critical and have procedures in place to facilitate the associated judgments, different assumptions in the application of these policies could have a material adverse effect on our financial performance and results of operations and actual results may differ materially from our estimates.

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Changes in accounting rules will affect our financial reporting.

The Financial Accounting Standards Board ("FASB") has issued new accounting standards that will affect our financial reporting.

In June 2016, theFASB issued ASU 2016-13, Financial Instruments—Credit Losses:Measurement of Credit Losses on Financial Instruments ("ASU 2016-13") which was issued to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments held by a reporting entity. This amendment replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 is effective for interim and annual reporting periods beginning after December 15, 2019. The Company adopted the changes to ASC 326, Financial Instruments-Credit Losses on January 1, 2020 and there was no material impact on the consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases("ASU 2016-02"), and in July 2018, the FASB issued ASU 2018-11, Leases ("ASU 2018-11"), to address two requirements of ASU 2016-02. ASU 2016-02 and ASU 2018-11 are effective for interim and annual reporting periods beginning after December 15, 2018. ASU 2016-02 requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating or finance leases. For operating and finance leases, a lessee will be required to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in its statement of financial position. Lessees under operating leases will be required to recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term generally on a straight-line basis, and classify all cash payments within operating activities in its statement of cash flows. Lessees under finance leases will be required to recognize interest expense on the lease liability (under the effective interest method) and amortization expense of the right-of-use asset (generally on a straight-line basis), each reflected separately in its statement of operations. At the beginning of the period of adoption, January 1, 2019, through a cumulative-effect adjustment, the Company increased right-of use assets and lease liabilities for operating leases for which the Company is the lessee. The amount of the adjustment totaled approximately $681,000 and was reflected as an increase in Other Assets and Accrued and Other Liabilities for corporate leases totaling approximately $473,000 and an increase in Assets Held for Sale and Liabilities Held for sale for golf operations segment leases totaling approximately $208,000. There were no adjustments related to the leases for which the Company is the lessor.

Management has decided to elect the practical expedient package that allows us: (a) to not reassess whether any expired or existing contracts entered into prior to January 1, 2019 are or contain leases; (b) to not reassess the lease classification for any expired or existing leases entered into prior to January 1, 2019; and (c) to not reassess initial direct costs for any expired or existing leases entered into prior to January 1, 2019. In addition, we will elect to not record on our consolidated balance sheets leases whose term is less than 12 months at lease inception.

ASU 2018-11 amends ASU 2016-02 so that: (a) entities may elect to not recast the comparative periods presented when transitioning to ASC 842 by allowing entities to change their initial application to the beginning of the period of adoption; and (b) provides lessors with a practical expedient to not separate non-lease components from the associated lease component of the contractual payments if certain conditions are met. Management has decided to elect both of these provisions.

Changes in accounting standards could affect the comparability of our reported results with prior periods and our ability to comply with financial covenants under our debt instruments. We may also need to change our accounting systems and processes to enable us to comply with the new standards, which may be costly.

For additional information regarding new accounting standards, refer to Item 7 to our consolidated financial statements under the heading "New Accounting Pronouncements.”

Actions of the U.S. government, including the U.S. Congress, Federal Reserve, U.S. Treasury and other governmental and regulatory bodies, to stabilize or reform the financial markets, or market responses to those actions, may not achieve the intended effect and may adversely affect our business.

The U.S government, including the U.S. Congress, the Federal Reserve, the U.S Treasury and other governmental and regulatory bodies have increased their focus on the regulation of the financial industry in recent years. New or modified regulations and related regulatory guidance may have unforeseen or unintended adverse effects on the financial industry. Laws, regulations or policies, including tax laws and accounting standards and interpretations, currently affecting us may change at any time. Regulatory authorities may also change their interpretation of these statutes and regulations. Therefore, our business may also be adversely affected by future changes in laws, regulations, policies or interpretations or regulatory approaches to compliance and enforcement.

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Various legislative bodies have also considered altering the existing framework governing creditors' rights and mortgage products including legislation that would result in or allow loan modifications of various sorts. Such legislation may change the operating environment in substantial and unpredictable ways. We cannot predict whether new legislation will be enacted, and if enacted, the effect that it or any regulations would have on our activities, financial condition, or results of operations.

Under the Americans with Disabilities Act of 1990, all public accommodations and commercial facilities must meet certain federal requirements related to access and use by disabled persons, compliance with which may be costly.

Compliance with the ADA requirements could involve modifications to our income properties or the Club or golf assets. Other federal, state and local laws may require modifications to or restrict further renovations of our income properties. Although we believe that our income properties are sufficiently in compliance with current requirements, noncompliance with the ADA or related laws or regulations could result in the imposition of governmental fines or in the award to private litigants of damages against us. Costs such as these, as well as the general costs of compliance with these laws or regulations, may adversely affect our financial condition, results of operations, and cash flows.

The impact of financial reform legislation and legislation promulgated thereunder on us is uncertain.

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), enacted in 2010, instituted a wide range of reforms that will have an impact on all financial institutions. Many of the requirements called for in the Dodd-Frank Act will be implemented over time, most of which will be subject to implementing regulations over the course of several years. Many of these regulations have yet to be promulgated or are only recently promulgated. In addition, President Donald J. Trump has promised and issued several executive orders intended to relieve the financial burden created by the Dodd-Frank Act, although these executive orders only set forth several general principles to be followed by the federal agencies and do not mandate the wholesale repeal of the Dodd-Frank Act. Given the uncertainty associated with the manner in which the provisions of the Dodd-Frank Act will be implemented by the various regulatory agencies and through regulations, the full impact such requirements will have on our business, results of operations or financial condition is unclear. The changes resulting from the Dodd-Frank Act may require us to invest significant management attention and resources to evaluate and make necessary changes in order to comply with new statutory and regulatory requirements. Failure to comply with any such laws, regulations or principles, or changes thereto, may negatively impact our business, results of operations and financial condition. While we cannot predict what effect any changes in the laws or regulations or their interpretations would have on us, these changes could be materially adverse to us and our unitholders.

The Company’s failure to maintain effective internal control over financial reporting could have a material adverse effect on its business, operating results, and price of our ~~securities.~~ common stock.

Section 404 of the Sarbanes-Oxley Act of 2002 (“SOX”) as amended or modified from time to time, requires annual management assessments of the effectiveness of the Company’s internal control over financial reporting. If the Company fails to maintain the adequacy of its internal control over financial reporting, the Company may not be able to ensure that it can conclude on an ongoing basis that it has effective internal control over financial reporting and therefore would likely not be in compliance with SOX. An effective system of internal controls over financial reporting, particularly those related to revenue recognition, are necessary for the Company to prepare and produce reliable financial reports and to maintain its qualification as a public company and are important in reducing the risk of financial fraud. If the Company cannot provide reliable financial reports or prevent fraud, its business and operating results could be harmed, qualification as a public company listed on the NYSE American stock exchange could be jeopardized, investors could lose confidence in the Company’s reported financial information, and the market price of the Company’s ~~securities~~common stock could drop significantly.

If we are unable to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act or our internal control over financial reporting is not effective, the reliability of our financial statements may be questioned, and the market price of our common stock may suffer.

Section 404 of the Sarbanes-Oxley Act requires any company subject to the reporting requirements of the U.S. securities laws to do a comprehensive evaluation of its and its consolidated subsidiaries’ internal control over financial reporting. The rules governing the standards that must be met for management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation to meet the detailed standards under the rules. During the course of its testing, our management may identify material weaknesses or deficiencies which may not be remedied in time to meet the deadline imposed by the Sarbanes-Oxley Act. If our management cannot favorably assess the effectiveness of our internal control over financial reporting or our auditors

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identify material weaknesses in our internal controls, investors may lose confidence in our reported financial results and the market price of our common stock may decline.

We are subject to substantial regulation and numerous contractual obligations and internal policies, and failure to comply with these provisions could have a material adverse effect on our business, financial condition and results of operations.

We are subject to substantial regulation and numerous contractual obligations and internal policies. We are subject to regulation by the SEC, the NYSE, and other federal, state and local or international governmental bodies and agencies or self-regulatory organizations. Moreover, we are also responsible for managing or assisting with the regulatory aspects of PINE’s compliance with applicable REIT rules. The level of regulation and supervision to which we and PINE are subject varies from jurisdiction to jurisdiction and is based on the type of business activity involved. The regulations to which we and PINE are subject are extensive, complex and require substantial management time and attention. Our failure or PINE’s failure to comply with any of the regulations, contractual obligations or policies applicable to it may subject us to extensive investigations, as well as substantial penalties and reputational risk, and our business and operations could be materially adversely affected. Our lack of compliance with applicable law could result in, among other things, our inability to enforce contracts, our default under contracts (including our management agreements with PINE) and our ineligibility to contract with and receive revenue from PINE. We have numerous contractual obligations with which we must comply on a continuous basis to operate our business, the default of which could have a material adverse effect on our business and financial condition. We have established internal policies designed to ensure that we manage our business in accordance with applicable law and regulation and in accordance with our contractual obligations. These internal policies may not be effective in all regards; and, if we fail to comply with our internal policies, we could be subjected to additional risk and liability.

Employee misconduct could harm us by subjecting us to significant legal liability, reputational harm and loss of business.

There is a risk that our employees could engage in misconduct that adversely affects our business. We are subject to a number of obligations and standards arising from our business and our authority over PINE or the ventures we manage. The violation of these obligations and standards by any of our employees may adversely affect PINE or the ventures we manage and us. Our business often requires that we deal with confidential matters of great significance to PINE and the ventures we manage. If our employees improperly use or disclose confidential information, we and PINE or the ventures we manage could suffer serious harm to our and its reputation, financial position and current and future business relationships and face potentially significant litigation. It is not always possible to detect or deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in all cases. If any of our employees were to engage in or be accused of misconduct, our business and our reputation could be adversely affected. Misconduct by an employee might rise to the level of a default that would permit PINE or the ventures we manage to terminate the management agreements with us for cause and without paying a termination fee, which could materially adversely affect our business, results of operations and financial condition.

Significant legal proceedings may adversely affect our results of operations or financial condition.

We are subject to the risk of litigation, derivative claims, securities class actions, regulatory and governmental investigations and other litigation including proceedings arising from investor dissatisfaction with our operating performance. If any claims were brought against us and resulted in a finding of substantial legal liability, the finding could materially adversely affect our business, financial condition or results of operations or cause significant reputational harm to us, which could significantly adversely impact our business. Allegations of improper conduct by private litigants or regulators, regardless of veracity, may harm our reputation, and adversely impact our ability to grow our business or maintain our management of PINE or the ventures in which we have a financial interest.

The Company’s ability to pay dividends in the future is subject to many factors.

The Company has consistently paid a dividend since 1976. Payment of the Company’s dividend depends upon the Company’s financial condition, results of operations, and cash flows. The Company’s ability to continue to pay dividends may be adversely impacted if any of the events or conditions associated with the risks described in this section were to ~~occur.~~occur.

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ITEM 1B. UNRESOLVED STAFF COMMENTS

~~NONE~~None.

ITEM 2. PROPERTIES

As of December 31, ~~2017,~~2019, the Company owns the following properties: (i) ~~land holdings of approximately 8,100 acres in the Daytona Beach area of Volusia County, Florida ; (ii) twenty-six single-tenant retail~~twenty-nine buildings occupied by single-tenants located in Arizona, California, Colorado, Florida, ~~Georgia,~~ Maryland, ~~Massachusetts, Nevada,~~New Mexico, New York, North Carolina, ~~Oregon,~~ Texas, Virginia, and

~~Table of Contents~~

Washington; ~~(iii) eleven~~(ii) five multi-tenant properties located in ~~California,~~ Florida and ~~Texas four of which were self-developed and are located in Daytona Beach, Florida; and (iv)~~Texas; (iii) full or fractional subsurface oil, gas, and mineral interests ofunderlying approximately ~~462,000~~455,000 “surface acres” in 20 counties in Florida; and (iv) a six-acre parcel of land in downtown Daytona Beach, Florida. Please refer to Item 1. “Business” for a more detailed discussion of our properties.

ITEM 3. LEGAL PROCEEDINGS

From time to time, the Company may be a party to certain legal proceedings, incidental to the normal course of our business. While the outcome of the legal proceedings cannot be predicted with certainty, the Company does not expect that these proceedings will have a material effect upon our financial condition or results of operations.

On November 21, 2011, the Company, Indigo Mallard Creek LLC and Indigo Development LLC, as owners of the property leased to Harris Teeter, Inc. (“Harris Teeter”) in Charlotte, North Carolina, were served with pleadings filed in the General Court of Justice, Superior Court Division for Mecklenburg County, North Carolina, for a highway condemnation action involving this property. The proposed road modifications would impact access to the property. The Company does not believe the road modifications provided a basis for Harris Teeter to terminate ~~its~~the lease. Regardless, in January 2013, the North Carolina Department of Transportation (“NCDOT”) proposed to redesign the road modifications to keep the all access intersection open for ingress with no change to the planned limitation on egress to the right-in/right-out only. Additionally, NCDOT and the City of Charlotte proposed to build and maintain a new access road/point into the property. Construction has begun and is not expected to be completed ~~before mid-2018 to 2019.~~until 2020. Harris Teeter has expressed satisfaction with the redesigned project and indicated that it will not attempt to terminate its lease if this project is built as currently redesigned. Because the redesigned project will not be completed until ~~mid-2018 to 2019,~~2020, the condemnation case has been placed in administrative closure. As a result, the trial and mediation will not likely be scheduled until requested by the parties, most likely in ~~2019.~~2021.

ITEM 4. MINE SAFETY DISCLOSURES

Not ~~applicable~~applicable.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER REPURCHASES OF EQUITY SECURITIES

COMMON STOCK PRICES AND DIVIDENDS

The Company’s common stock trades on the NYSE American stock exchange under the symbol ~~CTO.~~“CTO”. The Company has paid dividends on a continuous basis since 1976, the year in which its initial dividends were paid. The following table summarizes aggregate annual dividends, which were paid ~~semi-annually prior to June 30, 2016 and~~ quarterly, ~~thereafter,~~ per share during the years ended December 31, ~~2016~~2019 and ~~2017:~~2018:

2017

$
0.18
2016

$
0.12


2019	$	0.44
2018	$	0.27

The level of future dividends will be subject to an ongoing review of the Company’s operating results and financial position and, among other factors, the overall economy, with an emphasis on our local real estate market and our capital needs.

Indicated below are high and low sales prices of our stock for each full quarter within the last two fiscal years. All quotations represent actual transactions.


	2017		2016		2019		2018
	High	Low	High	Low	High	Low	High	Low
	$	$	$	$	$	$	$	$
First Quarter	56.49	49.73	53.00	42.53	63.55	51.40	67.97	59.75
Second Quarter	57.90	50.51	50.41	44.48	63.74	57.33	65.87	57.81
Third Quarter	61.58	51.02	53.00	46.24	68.64	59.00	67.02	57.39
Fourth Quarter	64.31	55.65	55.80	48.65	68.40	58.56	62.90	49.23

The number of shareholders of record as of February ~~15, 2018~~28, 2020 (without regard to shares held in nominee or street name) was ~~335.~~291. Many of the Company’s shares of common stock are held by brokers and institutions on behalf of stockholders, the Company is unable to estimate the total number of stockholders represented by these record holders.

Recent Sales of Unregistered Securities

There were no unregistered sales of equity securities during the year ended December 31, ~~2017~~2019 which were not previously reported.

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Issuer Purchases of Equity Securities

The following share repurchases were made during the year ended December 31, ~~2017:~~2019:

Total Number
of Shares
Purchased

Average Price
Paid per Share

Total Number of
Shares Purchased as a Part of Publicly
Announced Plans
or Programs

Maximum Number (or
Approximate Dollar
Value) of Shares that
May Yet be Purchased
Under the Plans or
Programs

1/1/2017 - 1/31/2017

2,062

$
53.00

2,062

$
2,487,759

2/1/2017 - 2/28/2017

4,847

53.71

4,847

2,227,447

3/1/2017 - 3/31/2017

49,334

51.85

49,334

9,669,489
(1)
4/1/2017 - 4/30/2017

18,305

53.90

18,305

8,682,860

5/1/2017 - 5/31/2017

25,262

54.13

25,262

7,315,342

6/1/2017 - 6/30/2017

4,288

53.93

4,288

7,084,085

7/1/2017 - 7/31/2017

2,500

54.50

2,500

6,947,835

8/1/2017 - 8/31/2017

22,050

54.07

22,050

5,755,646

9/1/2017 - 9/30/2017

5,401

54.64

5,401

5,460,550

10/1/2017 - 10/31/2017

1,280

57.00

1,280

5,387,591

11/1/2017 - 11/30/2017

—

—

—

5,387,591

12/1/2017 - 12/31/2017

—

—

—

5,387,591

Total

135,329

$
53.27

135,329

$
5,387,591


	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as a Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares that May Yet be Purchased Under the Plans or Programs
1/1/2019 - 1/31/2019	46,136	$	57.82	46,136	$	10,000,060	(1)
2/1/2019 - 2/28/2019	1,900		59.94	1,900		9,886,169
3/1/2019 - 3/31/2019	22,672		59.56	22,672		8,535,987
4/1/2019 - 4/30/2019	381,650		57.68	381,650		4,800,969	(2)
5/1/2019 - 5/31/2019	55,951		59.81	55,951		1,455,186
6/1/2019 - 6/30/2019	24,168		59.92	24,168		7,127
7/1/2019 - 7/31/2019	—		—	—		7,127
8/1/2019 - 8/31/2019	—		—	—		7,127
9/1/2019 - 9/30/2019	—		—	—		7,127
10/1/2019 - 10/31/2019	—		—	—		7,127
11/1/2019 - 11/30/2019	78,125		64.00	78,125		5,007,127	(3)
12/1/2019 - 12/31/2019	80,500		62.10	80,500		8,077
Total	691,102	$	59.46	691,102

⁽¹⁾

In January of 2019, the Company’s Board of Directors approved an increase of $10 million to the stock repurchase program, refreshing the total program to an aggregate of $10 million. That buyback program was substantially complete as of June 30, 2019.

⁽²⁾

In April of 2019, the Company acquired 320,741 shares for approximately $18.4 million outside the Company’s $10 million buyback program. The transaction is more fully described in Note 14, “Treasury Stock.”

⁽³⁾

In November 2019, the Company’s Board of Directors approved an increase of $10 million to the stock repurchase program, refreshing the total program to an aggregate of $10 million. The current buyback program does not have an expiration date and was substantially complete as of December 31, 2019.

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STOCK PERFORMANCE GRAPH

COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN*

Among Consolidated-Tomoka Land Co., the NYSE American Composite Index, and aTwo Peer ~~Group~~Groups

The following performance graph shows a comparison of cumulative total shareholder return from a $100 investment in stock of the Company over the five-year period ending December 31, ~~2017,~~2019, with the cumulative shareholder return of the following: (i) the NYSE American Composite Index, a real estate industry index provided by Research Data Group; (ii) a peer group of companies that consists of Agree Realty, Cedar Realty Trust, ~~Farmland Partners, First Potomac, Forestar Group~~Five Point Holdings, Four Corners Property Trust Inc., ~~Griffin Industrial~~Getty Realty ~~HomeFed Corporation, J.W. Mays,~~Corp., Lexington Realty Trust, One Liberty Properties, ~~Preferred Apartment Communities,~~Rexford Industrial Realty, Inc., The St. Joe Company, Stratus Properties Inc., Tejon Ranch Company, Trinity Place Holdings, Urstadt Biddle Properties, and Whitestone REIT (collectively the “2019 Peer Group”); and (iii) a peer group of companies that consists of Agree Realty, Cedar Realty Trust, Four Corners Property Trust Inc., Farmland Partners, Getty Realty Corp., HomeFed Corporation, Lexington Realty Trust, One Liberty Properties, Stratus Properties Inc., Tejon Ranch Company, The St. Joe Company, Urstadt Biddle Properties, Wheeler REIT, and Whitestone ~~Reit~~REIT (collectively the “2017 Peer Group”); and (iii) a peer group of companies that consist of Alico Inc., Forestar Group Inc., Getty Realty Corp., Gramercy Property Trust Inc., Resource Capital Corp., Stratus Properties Inc., Tejon Ranch Company, The New Home Company Inc., The St. Joe Company, and Whitestone Reit (collectively the “2016“2018 Peer Group”). The Company adjusted its peer group in ~~2017,~~2019, and therefore the performance graph disclosures, because the Company believes the ~~2017~~2019 Peer Group better reflects a mix of public companies that is reasonably comparable to the businesses of the Company, including the investment in and operation of income-producing properties and real estate operations, including land ~~management, and Subsurface Interests.~~ ownership.


	12/12	12/13	12/14	12/15	12/16	12/17	12/14	12/15	12/16	12/17	12/18	12/19
Consolidated-Tomoka Land Co.	100.00	117.22	180.51	170.77	173.49	206.90	100.00	94.60	96.11	114.62	95.17	110.13
NYSE American	100.00	105.45	106.98	77.09	92.66	94.77	100.00	73.22	87.67	88.81	75.61	86.47
2016 Peer Group	100.00	104.55	97.23	85.58	95.17	101.84
2017 Peer Group	100.00	106.15	107.14	100.60	120.14	129.89
2018 Peer Group							100.00	91.02	118.32	122.46	115.13	142.79
2019 Peer Group							100.00	92.21	122.29	130.48	122.02	157.85

~~Table of Contents~~

ISSUER REPURCHASES OF EQUITY SECURITIES

In ~~the fourth quarter of 2015,~~early 2017, the Company ~~announced~~established a new $10 million stock repurchase program (the “$10 Million Repurchase Program”)~~. As of March 29, 2017,~~, in addition to the ~~$10 Million Repurchase Program had been completed. In the first quarter of 2017, the~~remaining approved repurchases under a prior plan totaling approximately $2.6 million. The Company ~~announced a new $10~~completed repurchases totaling approximately $7.2 million stock repurchase program (the “New $10 Million Repurchase Program”) under which approximately $4.6 million of the Company’s common stock had been repurchased as of December 31, 2017. In the aggregate, during the year ended December 31, ~~2017,~~2017. On July 18, 2018, the Company’s Board of Directors approved an increase of approximately $7.1 million to the stock repurchase program, refreshing the total program to an aggregate of $10 million (the “2018 Increase”), as the Company had completed

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repurchases prior the 2018 Increase. Including repurchases under ~~both programs,~~the 2018 Increase, the Company repurchased ~~135,329~~a total of 168,602 shares of its common stock on the open market for a total cost of approximately ~~$7.2~~$9.8 million, or an average price per share of ~~$53.27, and placed those~~$58.35, during the year ended December 31, 2018. In January 2019, the Company’s Board of Directors approved an increase of $10.0 million to the stock repurchase program, refreshing the total program to an aggregate of $10 million. As of the quarter ended September 30, 2019 the Company had repurchased 211,736 shares infor approximately $12.7 million. In April 2019 the Company’s Board approved the repurchase of a block of shares from the Company’s largest shareholder whereby the Company repurchased 320,741 shares for approximately $18.4 million, or $57.50 per share. In November 2019 the Company’s Board approved a new $10 million buyback program. During the fourth quarter of 2019 the Company repurchased 158,625 shares for approximately $10 million, or $63.04 per share. The shares of the Company’s common stock repurchased during each of the aforementioned years through the year ended December 31, 2019 were returned to the Company’s treasury.

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ITEM 6. SELECTED FINANCIAL DATA

The following table summarizes our selected historical financial information for each of the last five fiscal years. The selected financial information has been derived from our audited Consolidated Financial Statements. Additional data for fiscal years ~~2017, 2016,~~2019, 2018, and ~~2015~~2017 is included elsewhere in this report.

The following selected financial data should be read in conjunction with the Company’s Consolidated Financial Statements and Notes along with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this report.


		Fiscal Years Ended										Fiscal Years Ended
	2017		2016		2015		2014		2013		2019		2018		2017		2016		2015
		(In thousands except per share amounts)										(In thousands except per share amounts)
Summary of Operations:
Total Revenues	$	91,412	$	71,075	$	42,998	$	36,057	$	26,070	$	44,941	$	43,658	$	38,651	$	31,415	$	25,199
Total Direct Cost of Revenues		(30,452)		(25,840)		(13,768)		(12,537)		(10,855)		(7,105)		(8,761)		(8,338)		(7,765)		(4,416)
General and Administrative		(10,253)		(10,298)		(8,754)		(7,017)		(5,434)		(9,818)		(9,785)		(10,253)		(10,298)		(8,754)
Impairment Charges		—		(2,181)		(510)		(421)		(616)		—		—		—		(2,181)		(510)
Depreciation and Amortization		(12,664)		(8,195)		(5,213)		(3,490)		(2,886)		(15,797)		(15,762)		(12,315)		(7,929)		(4,950)
Gain on Disposition of Assets		—		12,759		5,517		1		—		21,977		22,035		—		12,759		5,517
Land Lease Income		2,226		—		—		—		—
Operating Income		40,269		37,320		20,270		12,593		6,279		34,198		31,385		7,745		16,001		12,086
Interest Expense, Net of Investment Income		(8,485)		(9,284)		(6,712)		(2,378)		(1,826)		(12,121)		(10,371)		(8,485)		(9,284)		(6,712)
Loss on Early Extinguishment of Debt		—		—		—		—		—
Income Tax Benefit (Expense)		9,935		(11,837)		(5,269)		(3,831)		(1,891)
Income Tax Benefit (Expense) from Continuing Operations												(5,472)		(6,025)		22,481		(3,613)		(2,114)
Income from Continuing Operations		41,719		16,199		8,289		6,384		2,562		16,605		14,989		21,741		3,104		3,260
Income from Discontinued Operations, Net of Tax		—		—		—		—		1,121
Income from Discontinued Operations (Net of Income Tax)												98,368		22,179		19,978		13,095		5,028
Net Income		41,719		16,199		8,289		6,384		3,683		114,973		37,168		41,719		16,199		8,288
Less: Net Loss Attributable to Noncontrolling Interest in Consolidated VIE		—		52		58		—		—		—		—		—		52		58
Net Income Attributable to Consolidated-Tomoka Land Co.	$	41,719	$	16,251	$	8,347	$	6,384	$	3,683	$	114,973	$	37,168	$	41,719	$	16,251	$	8,346
Basic Earnings Per Share:
Income from Continuing Operations	$	7.53	$	2.86	$	1.44	$	1.11	$	0.44
Income from Discontinued Operations, Net of Tax		—		—		—		—		0.20
Net Income	$	7.53	$	2.86	$	1.44	$	1.11	$	0.64
Diluted Earnings Per Share:
Income from Continuing Operations	$	7.48	$	2.85	$	1.43	$	1.10	$	0.44
Income from Discontinued Operations, Net of Tax		—		—		—		—		0.20
Net Income	$	7.48	$	2.85	$	1.43	$	1.10	$	0.64

Basic:
Net Income from Continuing Operations Attributable to Consolidated-Tomoka Land Co.											$	3.32	$	2.72	$	3.92	$	0.56	$	0.57
Net Income from Discontinued Operations Attributable to Consolidated-Tomoka Land Co. (Net of Income Tax)												19.71		4.04		3.61		2.30		0.87
Basic Net Income per Share											$	23.03	$	6.76	$	7.53	$	2.86	$	1.44

Diluted:
Net Income from Continuing Operations Attributable to Consolidated-Tomoka Land Co.											$	3.32	$	2.71	$	3.90	$	0.55	$	0.57
Net Income from Discontinued Operations Attributable to Consolidated-Tomoka Land Co. (Net of Income Tax)												19.68		4.01		3.58		2.30		0.86
Basic Net Income per Share											$	23.00	$	6.72	$	7.48	$	2.85	$	1.43

Dividends Paid Per Share	$	0.18	$	0.12	$	0.08	$	0.07	$	0.06	$	0.44	$	0.27	$	0.18	$	0.12	$	0.08

Summary of Financial Position:
Property, Plant, and Equipment - Net	$	347,688	$	267,611	$	257,256	$	180,789	$	147,139	$	370,591	$	368,751	$	342,628	$	267,611	$	257,256
Total Assets	$	466,130	$	408,623	$	404,354	$	275,231	$	225,325	$	703,286	$	556,330	$	466,130	$	408,623	$	404,354
Shareholders’ Equity	$	184,178	$	148,276	$	134,781	$	128,405	$	120,169	$	285,413	$	211,761	$	184,178	$	148,276	$	134,781
Long-Term Debt	$	195,816	$	166,245	$	166,797	$	102,579	$	62,368	$	287,218	$	247,625	$	195,816	$	166,245	$	166,797

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW

Forward-Looking Statements

When the Company uses any words such as “anticipate,” “assume,” “believe,” “estimate,” “expect,” “intend,” or similar expressions, the Company is making forward-looking statements. Although management believes that the expectations reflected in such forward-looking statements are based upon current expectations and reasonable assumptions, the Company’s actual results could differ materially from those set forth in the forward-looking statements. Certain factors or risks that could cause actual results or events to differ materially from those the Company anticipates or projects are described in “Item 1A. Risk Factors” of this Annual Report on Form 10-K. Given these uncertainties, readers are cautioned not to place undue reliance on such statements, which speak only as of the date of this Annual Report on Form 10-K or any document incorporated herein by reference. The Company undertakes no obligation to publicly release any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date of this Annual Report on Form 10-K.

~~OVERVIEW~~Recent Developments Impacting our Business

During the fourth quarter of 2019, the Company completed the following transactions that were transformational to the Company and its operating results for the year ended December 31, 2019 and meaningful to its ongoing operations in the periods subsequent to December 31, 2019:

Land JV Transaction

On October 16, 2019, the Company completed the sale of a controlling interest in its wholly-owned subsidiary, Crisp39 SPV LLC to affiliates of Magnetar Capital LLC (the “Magnetar Land Sale”); (i) Flacto, LLC (“Flacto”); (ii) Magnetar Longhorn Fund LP (“Longhorn”); and (iii) Magnetar Structured Credit Fund, LP (“Magnetar SCF” and collectively with Flacto and Longhorn, the “Magnetar Investors”) pursuant to an Interest Purchase Agreement (the “Purchase Agreement”), for $97 million. Crisp39 SPV LLC holds the approximately 5,300 acres of undeveloped land in Daytona Beach, Florida (the “Land JV”). Following the closing of the Purchase Agreement, the Magnetar Investors collectively own a notional 66.50% equity interest in the Land JV, and the Company owns a notional 33.50% equity interest in the Land JV (collectively, the Company and the Magnetar Investors are herein referred to as the “JV Partners”). The transaction resulted in a gain of approximately $78.6 million, or approximately $12.21 per share, after tax, on the sale of the 66.50% equity interest in the Land JV and a non-cash gain of approximately $48.9 million on the Company’s retained interest in the Land JV, or approximately $7.59 per share, after tax.

The Company serves as the manager (the “Manager”) of the Land JV and is responsible for day-to-day operations at the direction of the JV Partners. All major decisions and certain other actions must be approved by the unanimous consent of the JV Partners (the “Unanimous Actions”). Unanimous Actions include the approval of pricing for all land parcels in the Land JV; approval of contracts for the sale of land that contain material revisions to the standard purchase contract of the Land JV; entry into any lease agreement affiliated with the Land JV; entering into listing or brokerage agreements; approval and amendment of the Land JV’s operating budget; obtaining financing for the Land JV; admission of additional members; and dispositions of the Land JV’s real property for amounts less than market value. Pursuant to the Limited Liability Agreement of the Land JV will pay the Manager a management fee in the initial amount of $20,000 per month, which amount will be evaluated on a quarterly basis and reduced based on the value of real property that remains in the Land JV.

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Alpine Income Property Trust, Inc. (NYSE: PINE)

On November 26, 2019, as part of the initial public offering (the “IPO”) of Alpine Income Property Trust, Inc. (“PINE”) on the New York Stock Exchange, the Company and certain of its affiliates entered into purchase and sale agreements with PINE and Alpine Income Property OP, LP (the “PINE OP”), pursuant to which the Company and such affiliates sold, and PINE or the PINE OP purchased, 15 properties for aggregate cash consideration of $125.9 million (collectively, the “Purchase and Sale Transaction”). In addition, the Company and certain of its affiliates entered into contribution agreements with the PINE OP, pursuant to which the Company and such affiliates contributed to the PINE OP five properties (the “Contributed Properties”) for an aggregate of 1,223,854 OP units of the PINE OP (the “OP Units”), which have an initial value of approximately $23.3 million (the “Contribution Transaction”), and collectively with the Purchase and Sale Transaction, (the “PINE Income Property Sale Transactions”). The PINE Income Property Sale Transactions resulted in a gain of approximately $1.0 million, or approximately $0.16 per share, after tax.

Concurrently with the PINE Income Property Sale Transactions, the Company purchased 394,737 shares of PINE common stock for a total purchase price of $7.5 million (the “Private Placement”). Also, on November 26, 2019, the Company purchased 421,053 shares of PINE common stock in the IPO for a total purchase price of $8.0 million (the “IPO Purchase” and together with the Private Placement, the “Equity Transactions”). Including the Company’s investment in PINE as a result of receiving 1,223,854 OP Units, the Company owns, in the aggregate, approximately 2.04 million shares of PINE common stock, or approximately 22.3% of PINE’s total shares outstanding.

In addition to the PINE Income Property Sale Transactions, the PINE IPO was significant for the Company and our business because concurrent with the PINE IPO, the Company entered into a management agreement with PINE (the “Management Agreement”) pursuant to which the Company is responsible for managing, operating, and administering the day-to-day operations, business and affairs of PINE, subject to the direction and supervision of PINE’s board of directors (the “PINE Board”) and in accordance with the investment guidelines approved and monitored by the PINE Board. Pursuant to the Management Agreement, PINE agreed to pay the Company a base management fee equal to 0.375% per quarter (or 1.5% annually) of PINE’s “total equity” (as defined in the Management Agreement) calculated and payable in cash, quarterly in arrears. Based on the equity raised in PINE’s IPO and the Private Placement, the initial base management fee would approximate $2.6 million. In addition, we have the ability to earn an incentive fee based on PINE’s shareholders achieving an annual return that exceeds an 8% annual hurdle, subject to a high-water mark price. The amount of the incentive fee would equal 15% of the amount by which the PINE shareholders annual return exceeds 8% in any given year. The initial term of the Management Agreement is five (5) years and the Management Agreement cannot be terminated by either party during the initial term except for certain definitive events which pertain primarily to our default or lack of performance. We also entered into an exclusivity and right of first offer agreement (the “Exclusivity and ROFO Agreement”) with PINE at the date of its IPO. Pursuant to the Exclusivity and ROFO Agreement the Company agreed not to invest in single-tenant net lease income properties, with limited exceptions. Further, the Company agreed to provide PINE with a right of first offer should the Company decided to sell any of its remaining portfolio of single-tenant net leased income properties in the future.

Golf Operations

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Our Business

We are a diversified real estate operating ~~company. We~~company that was founded in 1910. As of December 31, 2019, we own and manage, ~~thirty-seven~~sometimes utilizing third-party property management companies, thirty-four commercial real estate properties in ~~twelve~~eleven states in the United ~~States. As of December 31, 2017, we owned twenty-six single-tenant and eleven multi-tenant income-producing properties~~States, with ~~over 2.1~~approximately 1.8 million square feet of gross leasable space. ~~We also own and manage a~~These thirty-four properties in our portfolio ~~of undeveloped land totaling approximately 8,100 acres in the City of Daytona Beach, Florida (the “City”). As~~comprise our income property operations segment.

In addition to our income property portfolio, as of December 31, ~~2017,~~2019, or business included the following:

Management Services:

A fee-based management business that is engaged in managing PINE and the Land JV, see Note 5, “Related Party Management Services Business”.

Commercial Loan Investments:

A portfolio of commercial loan investments.

Real Estate Operations:

A portfolio of mineral interests consisting of approximately 455,000 subsurface acres in 20 counties in the state of Florida and a portfolio of mitigation credits;

A retained interest in the Land JV which is seeking to sell approximately 5,300 acres of undeveloped land in Daytona Beach, Florida; and

Our business also includes, as outlined above, our investment in PINE of approximately $38.8 million resulting from the Equity Transactions, or approximately 22.3% of the PINE’s outstanding equity, including the OP Units which are exchangeable into common stock of PINE on a one-for-one basis, at PINE’s election. Our investment in PINE should generate investment income through the dividends distributed by PINE. In addition to the dividends we ~~had two~~receive from PINE, our investment in PINE may benefit from any appreciation in PINE’s stock price, although no assurances can be provided that such appreciation will occur, the amount by which our investment will increase in value, or the timing thereof. Any dividends received from PINE are included in Investment Income on the accompanying statement of operations.

Prior to 2019, the Company operated in four primary business segments: income properties, commercial loan investments, ~~including a variable-rate B-Note representing a secondary tranche in a commercial mortgage loan~~real estate operations, and ~~a fixed-rate first mortgage loan. We have~~golf operations. During the fourth quarter of 2018, the Company commenced efforts to monetize the golf operations ~~which consist~~and accordingly, as of December 31, 2018, the ~~LPGA International Golf Club, which is managed by a third party. We also lease some of our land~~golf assets and liabilities related to the golf operations were classified as held for ~~nineteen billboards, have agricultural operations that are managed by a third party, which consist of leasing land for hay production, timber harvesting,~~sale in the accompanying consolidated balance sheets and ~~hunting leases, and own and manage Subsurface Interests (hereinafter defined). The~~the results of ~~our agricultural and subsurface leasing~~golf operations ~~are included~~were classified as discontinued operations in ~~Agriculture and Other Income and Real Estate Operations, respectively, in our~~the accompanying consolidated statements of ~~operations.~~

~~Subsequent to~~income for all years presented. The golf operations segment, although discontinued in 2018, held assets as of December 31, 2018. Accordingly, the identifiable assets and liabilities have been disclosed separately as discontinued golf operations for the years presented.

As a result of the significant transactions during the fourth quarter of 2019, including the Land JV transaction, the PINE Income Property Sale Transactions, and the Golf Sale, the Company’s segment structure has been modified to more closely align with the continuing operations of the Company. The Company now operates in four primary business segments: income properties, management services, commercial loan investments, and real estate operations. The new management services segment consists of the revenue generated from managing PINE and the Land JV. The management services segment had no assets as of December 31, 2019, 2018, or 2017. The real estate operations segment previously included land sales from the Daytona Beach land portfolio as well as revenue and expenses related to the sale of mitigation credits and subsurface operations. Upon the completion of the Land JV transaction in the fourth quarter of 2019, the real estate operations related to land sales have been classified as discontinued operations in the accompanying consolidated statements of income for the years ended December 31, 2019, 2018, and 2017 and ~~prior~~the continuing real estate operations segment remaining consists of subsurface operations and mitigation credit sales. The identifiable assets and liabilities related to the ~~date~~discontinued real estate operations have been separately disclosed as discontinued real estate operations for the years presented.

Table of ~~this report,~~Contents

The following is a summary of financial information regarding the ~~Company completed two self-developed~~Company’s business segments (amounts in thousands) for the years ended December 31:


	2019		2018		2017
Revenues of each segment are as follows:
Income Properties	$	41,956	$	40,076	$	31,407
Management Services		304		—		—
Commercial Loan Investments		1,829		616		2,053
Real Estate Operations		852		2,966		5,191
Total Revenues	$	44,941	$	43,658	$	38,651
Operating income from Continuing Operations before income tax for each segment is as follows:
Income Properties	$	34,956	$	31,906	$	24,489
Management Services		304		—		—
Commercial Loan Investments		1,829		616		2,053
Real Estate Operations		748		2,375		3,770
General and Corporate Expense		(9,818)		(9,785)		(10,253)
Depreciation and Amortization		(15,797)		(15,762)		(12,314)
Gain on Disposition of Assets		21,977		22,035		—
Total Operating Income	$	34,199	$	31,385	$	7,745
Identifiable assets of each segment are as follows:
Income Properties	$	464,285	$	492,094	$	388,603
Commercial Loan Investments		35,742		—		11,964
Real Estate Operations		65,555		14,316		4,416
Discontinued Real Estate Operations		833		20,972		38,880
Discontinued Golf Operations		—		4,462		6,262
Corporate and Other (1)		136,871		24,486		16,005
Total Assets	$	703,286	$	556,330	$	466,130

⁽¹⁾

Corporate and Other assets includes all other corporate assets, including cash, restricted cash, and investment securities.

BUSINESS PLAN

Our business plan going forward is primarily focused on investing in income-producing real estate, primarily multi-tenant commercial retail properties occupied by retail or office tenants. We may also self-develop multi-tenant income properties, as we have done in the past. We may also invest in commercial loans or similar financings secured by commercial real estate. Our investment in multi-tenant income properties, and possibly single-tenant net lease ~~restaurant properties~~assets that fall outside our Exclusivity and ROFO agreement with PINE, may utilize proceeds from the sale of an income property currently in our portfolio and because our tax basis in property likely carries a tax basis from the low-basis land parcel we sold to by the existing property, we may seek to have the sale of the existing income property qualify for income tax deferral through the like-kind exchange provisions under Section 1031 of the Internal Revenue Code. The low tax basis in our income property portfolio is the result of us having acquired the original land primarily in the early part of our 100 plus year history. Utilizing the like-kind exchange structure allows us to continue to defer the related income taxes on the original gains from the land sales and possibly the gains achieved on the sale of the original replacement property or properties. Generally, in order to utilize the like-kind exchange structure, we are prohibited from engaging in activities that are typically indicative of the developer of an income property or a ~~6-acre beachfront parcel~~dealer in ~~Daytona Beach, Florida~~income property sales. Our approach in investing in income-producing real estate is to use leverage, when appropriate or necessary, to fund our acquisitions and ~~acquired a newly constructed commercial building located~~to help achieve our business objectives. Our use of leverage in ~~Aspen, Colorado under a twenty-year master lease~~acquiring income-producing real estate is intended to ~~a single tenant, bringing the number of single-tenant and total~~provide positive returns relative to our borrowing costs. We believe this enhances our Company’s income-generating real estate asset base while keeping us cash flow positive.

Our investment strategy seeks to acquire income properties, primarily multi-tenants, which will continue to 29broaden the credit base of our lease tenants, diversify our income property portfolio geographically, with an emphasis on major markets and ~~40, respectively.~~growth markets in the U.S., and diversify the type of income-producing property. We may selectively choose to complete the development of an income property investment.

~~Income Property Operations.~~

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Proceeds from completed sales of income properties supply us with investible capital. Our access to sources of debt financing, particularly our borrowing capacity under our Credit Facility, also provide a source of capital for our investment strategy. Our strategy is to utilize leverage, when appropriate and necessary, and potentially proceeds from sales of income properties, the disposition or payoffs of our commercial loan investments, and certain transactions involving our Subsurface Interests, to acquire income properties. We may also acquire or originate commercial loan investments, invest in securities of real estate companies, or make other shorter-term investments. Our targeted investment classes may include the following:

Multi-tenant office and retail properties in major metropolitan areas and growth markets, typically stabilized;

Purchase or origination of ground leases, that are compliant with our commitments under the Exclusivity and ROFO agreement;

Self-developed properties comprised of select office, flex, industrial, and retail;

Joint venture development using land owned by the Land JV;

Origination or purchase of commercial loan investments with loan terms of 1-10 years with strong risk-adjusted yields secured by property types to include hotel, office, retail, residential, land and industrial;

Select regional area investments using Company market knowledge and expertise to earn strong risk-adjusted yields; and

Real estate-related investment securities, including commercial mortgage-backed securities, preferred or common stock, and corporate bonds.

Our investments in income-producing properties are typically subject to long-term leases. For multi-tenant properties, each tenant typically pays its proportionate share of the aforementioned operating expenses of the property, although for such properties we typically incur additional costs for property management services. Single-tenant leases are typically in the form of triple or double net leases and ground leases. Triple-net leases generally require the tenant to pay property operating expenses such as real estate taxes, insurance, assessments and other governmental fees, utilities, repairs and maintenance, and capital expenditures.

INCOME PROPERTIES

Our strategy for investing in income-producing properties is focused on factors including, but not limited to, long-term real estate fundamentals and target markets, including major markets or those markets experiencing significant economic growth. We employ a methodology for evaluating targeted investments in income-producing properties which includes an evaluation of: (i) the attributes of the real estate (e.g. location, market demographics, comparable properties in the market, etc.); (ii) an evaluation of the existing ~~tenant~~tenant(s) (e.g. credit-worthiness, property level sales, tenant rent levels compared to the market, etc.); (iii) other market-specific conditions (e.g. tenant industry, job and population growth in the market, local economy, etc.); and (iv) considerations relating to the ~~Company's~~Company’s business and strategy (e.g. strategic fit of the asset type, property management needs, alignment with the ~~Company's~~Company’s 1031 like-kind exchange structure, etc.).

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Tenant Description	Tenant Type	Property Location	Date of Acquisition	Property Square-Feet	Property Acres	Purchase Price		Percentage Leased		Remaining Lease Term at Acquisition Date (in years)
Hobby Lobby Stores, Inc.	Single-Tenant	Winston-Salem, NC	05/16/19	55,000	7.6	$	8,075,000		100%	10.9
24 Hour Fitness USA, Inc.	Single-Tenant	Falls Church, VA	05/23/19	46,000	3.1		21,250,000		100%	8.6
Walgreen Co.	Single-Tenant	Birmingham, AL	06/05/19	14,516	2.1		5,500,000		100%	9.8
Family Dollar Stores of Massachusetts, Inc.	Single-Tenant	Lynn, MA	06/07/19	9,228	0.7		2,100,000		100%	4.8
Walgreen Co.	Single-Tenant	Albany, GA	06/21/19	14,770	3.6		3,634,000		100%	13.6
Carpenter Hotel (1)	Single-Tenant	Austin, TX	07/05/19	N/A	1.4		16,250,000		100%	99.1
General Dynamics Corporation	Single-Tenant	Reston, VA	07/12/19	64,319	3.0		18,600,000		100%	9.9
Live Nation Entertainment, Inc.	Single-Tenant	East Troy, WI	08/30/19	N/A	158.3		7,500,000		100%	10.6
Party City Corporation	Single-Tenant	Oceanside, NY	09/24/19	15,500	1.2		7,120,000		100%	10.2
Burlington Stores, Inc.	Single-Tenant	N. Richland Hills, TX	10/28/19	70,891	5.3		11,940,000		100%	9.3
The Strand	Multi-Tenant	Jacksonville, FL	12/09/19	212,402	52.0		62,701,000		95%	9.5
	Total / Weighted Average			502,626		$	164,670,000			18.4

~~Additionally, on April 7, 2017, rent commenced on the 15-year~~(1)The ground lease with ~~24 Hour Fitness,~~The Carpenter Hotel includes two tenant repurchase options. Pursuant to FASB ASC Topic 842, Leases, the ~~anchor tenant at The Grove at Winter Park located~~$16.25 million investment has been recorded in ~~Winter Park, Florida. The~~the accompanying consolidated balance sheet as of December 31, 2019 as a commercial loan investment. See Note 4, “Commercial Loan Investments”.

In addition to the 20 single-tenant net lease ~~is for~~properties sold to PINE in November 2019, the Company completed the sale of four other income properties during the year ended December 31, 2019. In February 2019, the Company sold its approximately ~~40,000 square feet, or 36% of the 112,000~~59,000 square foot multi-tenant retail ~~center. As~~property located in Sarasota, Florida that was anchored by a Whole Foods Market grocery store, for approximately $24.6 million. In May 2019, the Company sold its approximately 112,000 square foot retail strip center, anchored by a 24-Hour Fitness, for approximately $18.3 million. In June 2019, the Company sold its approximately 76,000 square foot multi-tenant office property in Santa Clara, California for approximately $37 million. And finally, in August of ~~December 31, 2017,~~2019, the ~~multi-tenant retail center~~Company sold its property that was subject to a ground lease with WaWa for approximately ~~63% leased~~$2.8 million. In aggregate, the four dispositions generated approximately $82.6 million in proceeds with ~~eleven different tenants including 24 Hour Fitness.~~gains recognized of approximately $20.8 million, or approximately $3.06 per share, after tax.

As part of our overall strategy for investing in income-producing ~~investments,~~properties, we have self-developed properties, including five ~~of our~~ multi-tenant office properties, all of which are located in Daytona Beach, ~~Florida,~~Florida. We sold one these properties in 2016 and the four of which we still own as of December 31, 2017. The first self-developed property, located at the northeast corner of LPGA and Williamson Boulevards in Daytona Beach, Florida, is an approximately 22,000 square foot, two-story, building, known as the Concierge Office Building, which was approximately 91% leased as of December 31, 2017. The second twoother properties known as the Mason Commerce Center, consists of two buildings totaling approximately 31,000 square-feet (15,360 each), which were 100% leased as of December 31, 2017. During the year ended December 31, 2014, construction was completed on two additional properties, known as the Williamson Business Park, which are adjacent to the Mason Commerce Center. One of the two 15,360 square-foot Williamson Business Park buildings was sold in April 2016. The remaining Williamson Business Park building was approximately 50% leased and 100% occupied as of December 31, 2017 as the Company now occupies the remaining 50% of the property as its new corporate office.March 26, 2018.

We also self-developed two single-tenant net lease restaurant properties on a 6-acre beachfront parcel in Daytona Beach, Florida. The development was completed in January of ~~2018; therefore, during the first quarter of~~ 2018 ~~we will add these two properties~~and rent commenced from both tenants pursuant to ~~our income property portfolio.~~their separate leases. On a limited basis, we have acquired and may continue to selectively acquire other real estate, either vacant land or land with existing structures, that we would demolish and develop into additional income properties, possibly in the downtown and beachside areas of Daytona Beach, Florida. Through December 31, 2019, we invested approximately $5.2 million to acquire approximately 6.0 acres in downtown Daytona Beach that is located in an opportunity zone. Specifically, our investments in the Daytona Beach area would target opportunistic acquisitions of select catalyst sites, which are typically distressed, with an objective of having short investment horizons. Should we pursue such acquisitions, we may seek to partner with developers to develop these sites rather than self-develop the properties.

~~Real Estate Operations.~~ As2019. In part, as a result of ~~December 31, 2017,~~entering into the ~~Company owned approximately 8,100 acres~~Exclusivity and ROFO Agreement, our income property investment strategy will be focused primarily on multi-tenant retail and office properties. We may pursue this strategy, in part, by monetizing certain of ~~undeveloped land in Daytona Beach, Florida, along six miles of the west and east sides of Interstate 95. Currently, the majority of this~~our

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~~land is used for agricultural purposes.~~ single-tenant properties, and should we do so, we would seek to utilize the 1031 like-kind exchange structure to preserve the tax-deferred gain on the original transaction(s) that pertains to the replacement asset.

As of ~~February 28, 2018, approximately 75%~~December 31, 2019, the Company owned twenty-nine single-tenant and five multi-tenant income properties in eleven states. Following is a summary of ~~this acreage, or approximately 6,042 acres, is under contract to be sold. Approximately 1,100 acres~~these properties:


Tenant	City	State	Area (Square Feet)	Year Built
24 Hour Fitness USA, Inc.	Falls Church	VA	46,000	2012
Aspen Development	Aspen	CO	19,596	2015
Bank of America	Monterey	CA	32,692	1982
Wawa (formerly Barnes & Noble)	Daytona Beach	FL	—	Under Construction
Big Lots	Phoenix	AZ	34,512	2000
Big Lots	Germantown	MD	25,589	2000
Burlington Stores, Inc.	N. Richland Hills	TX	70,891	1993
Carpenter Hotel	Austin	TX	—	1949/2018
Carrabba's Italian Grill	Austin	TX	6,528	1994
Chase Bank	Jacksonville	FL	3,614	2017
Chuy's Restaurant & Bar	Jacksonville	FL	7,950	2017
Crabby's Restaurant (formerly Cocina 214)	Daytona Beach	FL	5,780	2018
CVS	Dallas	TX	10,340	2016
Fidelity Investments (affiliate of)	Albuquerque	NM	210,067	2009
Firebirds Wood Fired Grill	Jacksonville	FL	6,948	2017
General Dynamics Corporation	Reston	VA	64,319	1984/2018
Harris Teeter	Charlotte	NC	45,089	1993
LandShark Bar & Grill	Daytona Beach	FL	6,264	2018
Lowe’s Corporation	Katy	TX	131,644	1997
Macaroni Grill	Arlington	TX	8,123	1993
Moe's Southwest Grill	Jacksonville	FL	3,111	2017
Outback Steakhouse	Austin	TX	6,176	1994
PDQ	Jacksonville	FL	3,366	2017
Party City Corporation	Oceanside	NY	15,500	1999/2014
Rite Aid Corp.	Renton	WA	16,280	2006
Staples	Sarasota	FL	18,120	2012
Walgreens	Clermont	FL	13,650	2003
Wawa	Jacksonville	FL	6,267	2017
Wells Fargo	Raleigh	NC	450,393	1996/1997
29 Single-Tenant Properties			1,268,809
7-Eleven	Dallas	TX	4,685	1973
World of Beer/Fuzzy's Taco Shop	Brandon	FL	6,715	2006
Riverside Avenue	Jacksonville	FL	136,856	2003
Westcliff Shopping Center	Fort Worth	TX	136,185	1954
The Strand	Jacksonville	FL	212,402	2017/2018
5 Multi-Tenant Properties			496,843
Total 34 Properties			1,765,652

The weighted average economical and physical occupancy rates of our ~~land holdings are located on the east side of Interstate 95 and are generally well suited~~income properties for commercial development. Approximately 7,000 acres of our land holdings are located on the west side of Interstate 95 and the majority of this land is generally well suited for residential development. Included in the western land is approximately 1,100 acres, primarily an 850-acre parcel and three smaller parcels, which are located further west of Interstate 95 and a few miles north of Interstate 4 that is generally well suited for industrial purposes.

~~Real estate operations revenue consisted~~each of the ~~following for the~~last three years ~~ended December 31, 2017, 2016, and 2015, respectively:~~on a portfolio basis are as follows:


Year	Single-Tenant Economic / Physical Occupancy	Multi-Tenant Economic / Physical Occupancy
2017	100% / 100%	85% / 85%
2018	100% / 100%	86% / 85%
2019	100% / 100%	82% / 82%

For several years preceding the significant downturn in the U.S. economy in 2008, the Company’s land transaction activity had been reasonably strong. During 2009, however, land transactions decreased significantly, and in fiscal years 2010 and 2011, effectively no contracts for land transactions were entered into and no land transactions were closed. We believe the trend in Company revenues and income from real estate operations during this period were consistent with the overall trend of the national and local economies and the real estate markets in general. In the last several years, certain of the mass transit routes serving the Daytona Beach area, including both Interstate 95 and Interstate 4, have been widened or otherwise improved and in some instances are currently under construction to improve overpasses and expand the number of traffic lanes. We believe these improvements have or will benefit Company owned land and may have a positive impact on future activity of our land assets. Since 2012, the trend in entering into land transaction contracts and closing land transactions has improved markedly, as evidenced by the following summary (note the total proceeds listed below represents the gross sales price in the year the land transaction closed and is not meant to represent the revenue recognized during the year due to the timing of percentage-of-completion revenue recognition and incentive revenue on certain land transactions):

No. of

Total Proceeds
Year

Acres

($ in millions)
2012

16.6

$
0.6
2013

11.7

$
3.0
2014

99.7

$
8.8
2015

114.1

$
22.5
2016

707.7

$
13.8
2017

1,700.9

$
47.0

Historical revenues and income from our sales of land are not indicative of future results because of the unique nature of land transactions and other factors including, but not limited to, variations in the cost basis of the owned land. A significant portion of the Company’s revenue and income in any given year may be generated through relatively few land transactions. The timing for these land transactions, from the time of preliminary discussions through contract negotiations, due diligence and inspection periods, and the closing, can last from several months to several years. Although we believe there have been recent indications of improvement in the overall economy and credit markets, we expect the overall real estate market, particularly home building, to remain inconsistent in the near term, and as a result we believe our ability to enter into land transactions will remain challenging.

~~Pipeline. For a description of our land which is currently under contract, see the land pipeline in Note 18, "Commitment and Contingencies."~~

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~~Land Impairments.~~ ~~As more fully described in Note 8, "Impairment~~The information on lease expirations of Long-Lived Assets," during the years ended December 31, 2017 and 2015 the Company did not recognize any impairments on its undeveloped land holdings. During the year ended December 31, 2016, impairment charges totaled approximately $1.0 million on the Company’s undeveloped land.


Year	# of Tenant Leases Expiring	Total Square Feet of Leases Expiring	Annual Rents Expiring (1)		Percentage of Gross Annual Rents Expiring (1)
2020	4	63,150	$	1,018,402	3.6	%
2021	9	84,261	$	1,173,945	4.2	%
2022	6	47,430	$	1,808,497	6.4	%
2023	6	60,211	$	966,982	3.4	%
2024	4	479,262	$	3,192,015	11.4	%
2025	1	5,393	$	127,055	0.5	%
2026	3	22,417	$	632,603	2.3	%
2027	6	213,853	$	3,131,301	11.1	%
2028	12	372,570	$	7,046,298	25.1	%
2029	12	190,916	$	4,055,564	14.4	%

(1)

Annual Rents consist of the base rent to be received pursuant to each lease agreement, i.e. not on a straight-line basis.

The majority of leases have additional option periods beyond the ~~Company acquired~~original term of the ~~unaffiliated third party’s 50% interest~~lease, which typically are exercisable at the tenant’s option.

We had one tenant that accounted for ~~approximately $4.8 million, a discount~~more than 10% of ~~approximately $879,000. The discount was recorded through equity on the~~our consolidated ~~balance sheet~~income property revenue during the year ended December 31, 2016. The Company evaluated its interest in the six-acre vacant beachfront property for impairment and determined that no impairment was necessary as of December 31, 2016. As the Company owns the entire real estate venture as of December 31, 2017, there is no longer a consolidated VIE.

The cost basis of the six-acre vacant beachfront property asset totaled approximately $11.7 million as of December 31, 2017, which includes costs for entitlement. The beachfront property received approval of the rezoning and entitlement of the site to allow for the development of two restaurants and also for the future potential development of up to approximately 1.2 million square feet of vertical density. In the first quarter of 2017, the Company executed a 15-year lease agreement with the operator of LandShark Bar & Grill (“LandShark”), which provided for the development by the Company of an approximately 6,264 square foot restaurant property on the parcel. The annual rent under the LandShark lease is based on a percentage of the tenant’s net operating income (“NOI”) until the Company has received its investment basis in the property and thereafter, the Company will receive a lower percentage of the tenant’s NOI during the remaining lease term. In the second quarter of 2017, the Company executed a 15-year lease agreement with Cocina 214 Restaurant & Bar (“Cocina 214”) for the second restaurant property to be developed on the parcel. The annual rent under the Cocina 214 lease is equal to the greater of $360,000 per year or a certain percentage of gross sales. The lease also provides for additional percentage rent upon the achievement of certain gross sales thresholds. The Company completed the design phase and commenced construction on the2019. Wells Fargo, who occupied two single-tenant ~~restaurants during the third quarter of 2017. As of December 31, 2017, the Company has incurred approximately $5.9 million of design~~office properties located in Hillsboro, Oregon and construction costs. See Note 18, “Commitment and Contingencies” for the total expected cost to be incurred for the development of the site and both restaurant properties. The development of the two restaurant properties was completed in time for the tenants to commence operations during January of 2018. Accordingly, during the first quarter of 2018, the total investment in the beach parcel and the construction costs of the two single-tenant properties will be classified as Income Properties, Land, Building, and Improvements, within the Property, Plant, and Equipment classification on the Company’s consolidated balance sheets.

~~Other Real Estate Assets~~. The Company owns impact fees with a cost basis of approximately $402,000 and mitigation credits with a cost basis of approximately $723,000, for a combined total of approximately $1.1 million as of December 31, 2017. During the year ended December 31, 2017, the Company sold mitigation creditsRaleigh, North Carolina, accounted for approximately ~~$1.6 million, for a gain~~12.5% of approximately $1.3 million, or $0.15 per share, after tax. Additionally, the Company recorded the transfer of mitigation credits with a cost basis of approximately $298,000 as a charge to direct cost ofour consolidated revenues ~~of real estate operations~~ during the year ended December 31, ~~2017,~~2019. The office property leased to Wells Fargo located in Hillsboro, Oregon was sold as ~~more fully described~~a part of the PINE Income Property Sale Transactions on November 26, 2019. The office property leased to Wells Fargo located in ~~Note 18, “Commitments and Contingencies.” During~~Raleigh, North Carolina also represented 26% of the ~~years ended December 31, 2017 and 2016, the Company received cash payments~~total square footage of ~~approximately $519,000 and $2.2 million, respectively, for impact fees with a cost basis that was generally of equal value.~~

~~Subsurface Interests. As~~our income property portfolio as of December 31, ~~2017,~~2019. A default by this tenant would have a material adverse effect on the ~~Company owns full or fractional subsurface oil, gas,~~Company’s income properties segment and ~~mineral interests underlying approximately 462,000 “surface” acres~~its overall results of land owned by others in 20 counties in Florida (the “Subsurface Interests”). The Company leases certain of the Subsurface Interests to mineral exploration firms for exploration. Our subsurface operations consist of revenue from the leasing of exploration rights and in some instances, additional revenues from royalties applicable to production from the leased acreage.

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~~During 2011, an eight-year oil exploration lease was executed covering a portion~~operations. We have one other tenant, Fidelity Investments, who represented over 5% of our Subsurface Interests. On September 20, 2017, the Company amended the oil exploration lease to, among other things, extend the expiration of the original term for five additional years to the new expiration date of September 22, 2024. The lease is effectively thirteen one-year terms as the lessee has the option to terminate the lease at the end of each lease year. The lessee has exercised renewal options through lease year seven ending September 22, 2018. The terms of the lease state that the Company will receive royalty payments if production occurs, and may receive additional annual rental payments if the lease is continued in years eight through thirteen. The lease calls for annual lease payments which are recognized as revenue ratably over the respective twelve-month lease periods. In addition, non-refundable drilling penalty payments are made as required by the drilling requirements in the lease which are recognized as revenue when received.

~~Lease payments on the respective acreages and drilling penalties received through lease year six are as follows:~~

During the years ended December 31, 2017, 2016, and 2015, the Company also received oil royalties from operating oil wells on 800 acres under a separate lease with a separate operator. Production volume from these oil wells was 60,287 in 2017, 50,441 barrels in 2016, and 62,745 barrels in 2015, resulting inconsolidated revenues ~~received from oil royalties of approximately $86,000, $50,000 and $68,000, respectively.~~

MANAGEMENT SERVICES BUSINESS

Our business plans also include generating revenue from ~~real estate operations. During 2015, in conjunction with~~managing PINE and the ~~release~~Land JV. Pursuant to the Management Agreement, we will generate a base management fee equal to 1.5% of PINE’s total equity. The structure of the ~~Company’s surface entry rights related~~base fee provides us with an opportunity for our base fee to ~~approximately 1,400 acres in Lee County, Florida, for a cash payment of approximately $920,000, the Company also received the 50% interest~~grow should PINE’s independent board members determine to raise additional equity capital in the ~~subsurface rights~~future. We also have an opportunity to achieve additional cash flows as Manager of ~~those acres, which the Company did not previously own, for a fair value of approximately $68,000, which is also included in revenue from real estate operations.~~

~~Golf Operations.~~ Golf operations, which are managed by a third party, consist of the LPGA International Golf Club, a semi-private golf club consisting of two 18-hole championship golf courses, one designed by Rees Jones and the other designed by Arthur Hills, with a three-hole practice facility also designed by Rees Jones, a clubhouse facility, food and

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~~beverage operations, and a fitness facility located within the LPGA International mixed-use residential community on the west side of Interstate 95 in the City.~~

In July 2012, the Company entered into an agreement with the City to, among other things, amend the lease payments under its golf course lease (the “Lease Amendment”). Under the Lease Amendment, the base rent payment, which was scheduled to increase from $250,000 to $500,000 as of September 1, 2012, remained at $250,000 for the remainder of the lease term and any extensions would have been subject to an annual rate increase of 1.75% beginning September 1, 2013. On January 24, 2017, the Company acquired the approximately 690 acres of land and improvements comprising the golf courses, previously leased from the City, for approximately $1.5 million (the “Golf Course Land Purchase”). In conjunction with the Golf Course Land Purchase, the lease between the Company and the City was terminated. Therefore, during the first quarter of 2017, the Company eliminated the remaining accrued liability of approximately $2.2 million, resulting in the recognition of approximately $0.40 per share in non-cash earnings, or $0.24 per share after tax, which comprises the land lease termination in the consolidated statements of operations. The $2.2 million consisted of approximately $1.7 million which reflects the acceleration of the remaining amount of accrued rent that was no longer owed to the City as a result of the Lease Amendment, which prior to the Golf Course Land Purchase was being recognized into income over the remaining lease term which was originally to expire in 2022. The remaining approximately $500,000 reflects the amount of rent accruedPINE pursuant to the ~~lease, as amended, which will no longer be owed to the City due to the lease termination on January 24, 2017.~~

The Company also generates management fees as the Land ~~Purchase include~~JV Manager. Pursuant to the ~~following:~~terms of the operating agreement for the Land JV, the initial amount of the management fee is $20,000 per month. The management fee is evaluated quarterly and as land sales occur in the Land JV, the basis for our management fee will be reduced as the management fee is based on the value of real property that remains in the Land JV.

COMMERCIAL LOAN INVESTMENTS

Within one year following the date of the closing of the Golf Course Land Purchase, unless extended due to weather related delays outside the Company’s control, the Company is obligated to renovate the greens on the Jones Course which renovations were completed in the third quarter of 2017; and

If the Company sells the LPGA International Golf Club within six years of the closing of the Golf Course Land Purchase, the Company is obligated to pay the City an amount equal to 10% of the difference between the sales price, less closing costs and any other costs required to be incurred in connection with the sale, and $4.0 million.

~~Commercial Loan Investments.~~Our investments in commercial loans or similar structured finance investments, such as mezzanine loans or other subordinated debt, have been and are expected to continue to be secured by commercial or residential real estate or the borrower’s pledge of its ownership interest in the entity that owns the real estate. The first mortgage loans we invest in or originate are generally for commercial real estate located in the United States and its territories and are current or performing with either a fixed or floating rate. Some of these loans may be syndicated in either a pari-passu or senior/subordinated structure. Commercial first mortgage loans generally provide for a higher recovery rate due to their senior position in the underlying collateral. Commercial mezzanine loans are typically secured by a pledge of the borrower’s equity ownership in the underlying commercial real estate. Unlike a mortgage, a mezzanine loan is not secured

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by a lien on the property. An investor’s rights in a mezzanine loan are usually governed by an intercreditor agreement that provides holders with the rights to cure defaults and exercise control on certain decisions of any senior debt secured by the same commercial property.

~~On July~~2019 Commercial Loan Investment Portfolio. During the year ended December 31, ~~2017,~~2019, the Company ~~originated a $3.0~~invested approximately $18.3 million ~~first~~on three commercial loans, two were mortgage ~~loan~~notes of $8 million and $8.25 million secured by a parcel of ~~beachfront~~land in Orlando, Florida and a full-service hotel in Austin, Texas, respectively. In addition, in connection with the sale of the Company’s golf operations, the Company provided an approximately $2.1 million loan to the buyer, with a maturity of one year and an interest rate of 7.5%. As of December 31, 2019, the Company’s commercial loan investment portfolio included the three loans with a total remaining principal balance of approximately $18.2 million, a weighted average interest rate of approximately 11.3% and a remaining duration to maturity of approximately 0.5 years.

2018 Commercial Loan Investment Portfolio. During the year ended December 31, 2018, the Company had two loan investments totaling approximately $11.9 million, that were repaid in full at maturity. As of December 31, 2018, the Company had no commercial loan investments.

2017 Commercial Loan Investment Portfolio. During the year ended December 31, 2017, the Company invested in a $3 million loan on a parcel of land in Daytona Beach that was being developed into a multi-family condominium property. As of December 31, 2017, the Company’s commercial loan investment portfolio included two loans with a total remaining principal balance of approximately $11.9 million, a weighted average interest rate of 9.5% and a remaining duration to maturity of approximately 0.5 years. During the year a $10 million mezzanine loan investment secured by a hotel located at the Dallas/Fort Worth airport in Texas and a $5 million mezzanine loan investment secured by a hotel located in downtown Atlanta, Georgia, were paid off in full.

LAND and INVESTMENT IN THE LAND JV

Land JV. As noted above, the direct impact of the Magnetar Land Sale is that the Company divested itself of its land holdings, but for the 6-acre Daytona Beach development land described below, and as such the occurrence of land sales, which had been a primary element of the Company’s business for virtually its entire 109-year history, has been essentially discontinued. Consequently, the operations associated with our land holdings were treated as discontinued operations and accordingly the revenues and expenses that had been presented within the Company’s real estate operations segment in prior periods were reclassified in the statement of operations for the year ended December 31, 2019 and all prior periods presented.

Daytona Beach ~~Shores, Florida~~Development. We may selectively acquire other real estate in Daytona Beach, Florida. We may target either vacant land or land with existing structures that we would raze and develop into additional income properties. During 2018, the Company acquired a 5-acre parcel of land with existing structures in downtown Daytona Beach, for a purchase price of approximately $2.0 million. As of December 31, 2019, the Company has also acquired other contiguous parcels totaling approximately 1-acre for approximately $2.1 million. Combined, these parcels represent the substantial portion of an entire city block in downtown Daytona Beach adjacent to International Speedway Boulevard, a major thoroughfare in Daytona Beach. The combined 6 acres is located in an opportunity zone and a community redevelopment area. In addition, this property is proximate to the future headquarters of Brown & Brown Inc., the sixth largest insurance broker in the U.S. and a publicly listed company that is expected to be occupied by at least 600 of their employees. We have engaged a national real estate brokerage firm to assist us in identifying a developer or investor to acquire a portion or all of the property or to contribute into a potential joint venture to redevelop the property. We are pursuing entitlements for the potential redevelopment of these parcels, along with certain other adjacent land parcels, some of which we have under contract for purchase. As of December 31, 2019, we have incurred approximately $1.1 million in raze and entitlement costs related to these parcels. Our intent for investments in the Daytona Beach area is to target opportunistic acquisitions

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of select catalyst sites, which are typically distressed, with the objective of short-to-medium investment horizons. We may enter into joint ventures or other partnerships to develop land we have acquired or may acquire in the future in lieu of self-developing.

Revenue from Tomoka Town Center. During 2015 and 2016, the Company completed three land sales with a gross sales price totaling approximately $21.4 million, with Tanger Outlets (“Tanger”), Sam’s Club (“Sams”), and North American Development Group (“NADG”), representing the sale of approximately 235 acres of land that is now the location of a Tanger Outlet mall, a Sam’s Club retail property and a retail power center called the Tomoka Town Center. As part of the three land sale agreements and subsequent land sales with NADG, the Company performed certain infrastructure work, which began in the fourth quarter of 2015 and was completed in the fourth quarter of 2016, for which the ~~borrower intends~~Company would be reimbursed for the cost of the infrastructure work. The Company received NADG’s portion of the reimbursement as NADG closed on each parcel of land included in the respective land sales contracts with the Company. Tanger and Sam’s agreed to ~~develop as~~pay their reimbursement of the infrastructure costs over a ~~residential condominium~~ten-year period. The reimbursements applicable to and due from Tanger and Sam’s totaled approximately $2.8 million. As of December 31, 2019, the Company has received approximately $1.1 million of the Tanger and Sam’s reimbursements. These reimbursements are included in the results of the land operations which are now reflected in discontinued operations and will be through the final payment of Tanger’s and Sam’s reimbursement obligation.

Since the transition in our land operations occurred late in 2019, the impact of land sales for the periods prior to October 2019 are no longer germane to our financial condition, results of operations and cash flows. As such the following summarized information is provided regarding land sales activity prior to October 2019.

Mitigation Bank. The mitigation bank transaction consists of the sale of a 70% interest in the entity that holds approximately 2,492 acres of land that has been permitted for the creation of a wetland mitigation bank (the ~~“Beach Loan”~~“Mitigation Bank JV”). The ~~Beach Loan matures on August 1, 2018, includes a one-year extension option, bears a fixed~~purchaser of the 70% interest ~~rate~~in the Mitigation Bank JV is comprised of ~~11.00%,~~certain funds and ~~requires payments~~accounts managed by an investment advisor subsidiary of BlackRock, Inc. (“BlackRock”). The Company retained an approximately 30% non-controlling interest ~~only prior to maturity. At closing, a loan origination fee of $60,000~~in the Mitigation Bank JV. A third-party was ~~received~~retained by the ~~Company. Should~~Mitigation Bank JV as the ~~borrower seek to obtain financing~~day-to-day manager of the Mitigation Bank property, responsible for the ~~development~~maintenance, generation, tracking, and other aspects of ~~the project, the Beach Loan would likely be paid off in connection with that financing.~~wetland mitigation credits.

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The Mitigation Bank JV intends to engage in the creation and sale of both federal and state wetland mitigation credits. These credits will be created pursuant to the applicable permits that have been or will be issued to the Mitigation Bank JV from the federal and state regulatory agencies that exercise jurisdiction over the awarding of such credits, but no assurances can be given as to the ultimate issuance, marketability or value of the credits. The Mitigation Bank JV received the permit from the state regulatory agency on June 8, 2018 (the “State Permit”). The state regulatory agency may award up to 355 state credits under the State Permit. On ~~October 23, 2017,~~August 6, 2018, the state regulatory agency awarded the initial 88.84 credits under the State Permit. Receipt of the remaining federal permit is anticipated to occur prior to the end of 2020.

The gain on the sale of the 70% interest in the Mitigation Bank totaled approximately $18.4 million and is comprised of the gain on the sale of 70% interest for proceeds of $15.3 million as well as the gain on the retained 30% interest pursuant to FASB ASC Topic 610-20, Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets. The gain is included in the Gain on Disposition of Assets in the Company’s consolidated statements of operations. As of December 31, 2018, the approximately $6.8 million Investments in Joint Ventures included on the Company’s consolidated balance sheets is comprised of the fair market value of the 30% retained interest in the Mitigation Bank JV.

Other Real Estate Assets. The Company owns mitigation credits with a cost basis of approximately $2.3 million as of December 31, 2019. The increase in mitigation credits includes the 25 credits acquired from the Mitigation Bank during December 2019 as described in Note 6, Land and Investments in the Land JV. There were no mitigation credit sales during the year ended December 31, 2019. During the year ended December 31, 2018, the Company transferred mitigation credits with a basis of approximately $124,000 to the land acquired by Buc-ee’s. During the year ended December 31, 2018, the Company sold ~~its two commercial loan investments secured by hotel properties in Atlanta, Georgia and Dallas, Texas. The Company sold these investments at~~mitigation credits for approximately $1.0 million, for a ~~premium to par for proceeds~~gain of approximately ~~$15.1 million on an aggregate principal value of $15.0 million. The Company utilized these proceeds to pay down~~$882,000, or $0.12 per share, after tax. During the ~~Credit Facility (hereinafter defined).~~

~~As of~~year ended December 31, 2017, the Company ~~owned two performing commercial loan investments which have an aggregate outstanding principal~~sold mitigation credits for approximately $1.6 million, for a gain of approximately $1.3 million, or $0.15 per share, after tax. Additionally, the Company recorded the transfer of mitigation credits with a cost basis of approximately $298,000 as a charge to direct cost of revenues of real estate operations during the year ended December 31, 2017, as more fully described in Note 21, “Commitments and Contingencies.” During the years ended December 31, 2018 and 2017, the Company received cash payments of approximately $338,000 and $519,000, respectively, for impact fees with a cost basis that was generally of equal value, with no such impact fee sales during the year ended December 31, 2019, as the balance of impact fees is only approximately ~~$12.0 million. These loans are secured by real estate, or~~$2,000. Additionally, during the ~~borrower’s equity interest in real estate, located in Daytona Beach Shores, Florida and Sarasota, Florida and have an average remaining maturity~~year ended December 31, 2018, impact fees with a cost basis of approximately ~~0.5 years~~$72,000 were transferred to the beachfront restaurant leased to LandShark Bar & Grill.

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Subsurface Interests. As of December 31, 2019, the Company owns full or fractional subsurface oil, gas, and ~~a weighted average interest rate~~mineral interests underlying approximately 455,000 “surface” acres of ~~9.5%~~land owned by others in 20 counties in Florida (the “Subsurface Interests”).

~~Agriculture and Other Income.~~ ~~Effectively all of our agriculture and other income consists of~~ The revenues generated by the portfolio of subsurface interests includes the sale of subsurface acres, the leasing of subsurface acres for mineral exploration activities, and payments made to the Company, typically by the owner of the surface acres, to compensate us for releasing our ~~agricultural~~right to enter the surface acres to access our subsurface acres.

Lease payments on the respective acreages and drilling penalties received through lease year eight are as follows:


	Acreage
Lease Year	(Approximate)	Florida County	Lease Payment (1)		Drilling Penalty (1)
Lease Year 1 - 9/23/2011 - 9/22/2012	136,000	Lee and Hendry	$	913,657	$	—
Lease Year 2 - 9/23/2012 - 9/22/2013	136,000	Lee and Hendry		922,114		—
Lease Year 3 - 9/23/2013 - 9/22/2014	82,000	Hendry		3,293,000		1,000,000
Lease Year 4 - 9/23/2014 - 9/22/2015	42,000	Hendry		1,866,146		600,000
Lease Year 5 - 9/23/2015 - 9/22/2016	25,000	Hendry		1,218,838		175,000
Lease Year 6 - 9/23/2016 - 9/22/2017	15,000	Hendry		806,683		150,000
Lease Year 7 - 9/23/2017 - 9/22/2018	15,000	Hendry		806,683		50,000
Lease Year 8 - 9/23/2018 - 9/22/2019	15,000	Hendry		806,684		150,000
Total Payments			$	10,633,805	$	2,125,000

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The Company is not prohibited from selling any or all of its Subsurface Interests. The Company may release surface entry rights or other rights upon request of a surface owner for a negotiated release fee typically based on a percentage of the surface value. Should the Company complete a transaction to sell all or a portion of its Subsurface Interests or complete a release transaction, the Company may utilize the like-kind exchange structure in acquiring one or more replacement investments including income-producing properties. During the year ended December 31, 2018, the Company completed a transaction releasing our surface entry rights on approximately 600 acres in exchange for approximately $185,000 in cash and fee title to approximately 40 additional acres in Hendry County, valued at approximately $320,000. Including the non-cash value received, the gain from the transaction totaled approximately $435,000, or $0.06 per share, after tax. Additional cash payments for the release of surface entry rights during 2018 totaled approximately $73,000. Cash payments for the release of surface entry rights totaled approximately $104,000 during the year ended December 31, 2019, while there were no releases of surface entry rights during the year ended December 31, 2017.

GOLF OPERATIONS

Prior to January 2017, the Company leased from the City of Daytona Beach, FL (the “City”) a large portion of the land underlying the Club (the “Golf Course Lease”). On January 24, 2017, the Company acquired the approximately 690 acres of land and improvements covered by the Golf Course Lease, for approximately $1.5 million (the “Golf Course Land Purchase”). In conjunction with the Golf Course Land Purchase, the Golf Course Lease was terminated. Therefore, during the first quarter of 2017, the Company eliminated the remaining accrued liability of approximately $2.2 million, resulting in the recognition of approximately $0.40 per share in non-cash earnings, or $0.24 per share after tax, which comprises the Golf Course Lease termination in the consolidated statements of operations. The ~~Company’s agricultural lands encompass~~$2.2 million consisted of approximately ~~7,000~~$1.7 million which reflects the acceleration of the remaining amount of accrued rent that was no longer owed to the City as a result of the Lease Amendment, which prior to the Golf Course Land Purchase was being recognized into income over the remaining lease term which was originally to expire in 2022. The remaining approximately $500,000 reflects the amount of rent accrued pursuant to the Golf Course Lease, as amended, which will no longer be owed to the City due to the lease termination on January 24, 2017.

During the year ended December 31, 2018, the Company wrote down the value of the golf assets comprising the Club, which resulted in a corresponding impairment charge of approximately $1.1 million, or $0.15 per share, after tax. The write-down of the golf operation assets to approximately $3.1 million and the related $1.1 million impairment charge were the result of the Company’s assessment of certain triggering events, including activities related to a review of strategic alternatives for the golf operations, ~~are managed by a third-party~~occurring during the third quarter of 2018, which required an assessment of the carrying value of the golf assets comprising the Club. In the fourth quarter of 2018, the Company commenced efforts to pursue the monetization of the golf operations and ~~consist~~assets comprising the Club. Accordingly, as of ~~leasing land~~December 31, 2018 and during 2019, prior to the date of the Golf Sale, the golf assets comprising the Club were classified as held for ~~hay production~~sale in our consolidated balance sheets and ~~timber harvesting,~~the results of golf operations were similarly reclassified as ~~well as hunting leases.~~discontinued operations in our consolidated statements of income for the period presented.

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SUMMARY OF OPERATING RESULTS FOR YEAR ENDED DECEMBER 31, ~~2017~~2019 COMPARED TO DECEMBER 31, ~~2016~~2018

REVENUE

Total revenue for the year ended December 31, ~~2017~~2019 is presented in the following summary and indicates the changes as compared to the year ended December 31, ~~2016:~~2018:


	Revenue for		Increase (Decrease)				Revenue for the		Increase (Decrease)
	Year Ended		Vs. Same Period		Vs. Same Period		Year Ended		Vs. Same Period		Vs. Same Period
	12/31/2017		in 2016		in 2016		12/31/2019		in 2018		in 2018
Operating Segment	($000's)		($000's)		(%)		($000's)		($000's)		(%)
Income Properties	$	31,407	$	6,314		25%	$	41,956	$	1,880		5%
Interest Income from Commercial Loan Investments		2,053		(535)		-21%
Management Services								304		304		100%
Commercial Loan Investments								1,829		1,213		197%
Real Estate Operations		52,522		14,378		38%		852		(2,114)		-71%
Golf Operations		5,095		(95)		-2%
Agriculture & Other Income		335		275		458%
Total Revenue	$	91,412	$	20,337		29%	$	44,941	$	1,283		3%

Total revenue for the year ended December 31, ~~2017~~2019 increased to approximately ~~$91.4~~$44.9 million, compared to approximately ~~$71.1~~$43.7 million during the same period in ~~2016,~~2018. The slight increase in total revenue reflects the net impact of an increase in revenue from our income property operations of approximately ~~$20.3~~$1.88 million, ~~or 29%. This increase was primarily~~which is the result of an increase in revenue of approximately $8.5 million from acquisitions during the year and a decrease relating to our dispositions of income properties during the year ended December 31, 2019 which totaled approximately $5.3 million. In addition, our revenues increased by approximately $300,000 in connection with the management fees we earned from PINE during its initial stub period of operations (from November 26, 2019 through December 31, 2019) and total revenues increased by approximately $1.2 million based on the increase in revenue generated by our commercial loan portfolio. These increases were offset by a decrease of approximately $2.1 million in the revenue we generated from our real estate operations segment, which does not include any results of the land sales we achieved in 2019, which pertains to the termination of the subsurface lease as well as a decrease of approximately $1.3 million in impact fee and the income property operations as outlined in the following tables, offset by reduced revenues from our commercial loan investments resulting from the loan sales previously noted totaling approximately $535,000:mitigation credit sales.


	Revenue for the		Increase (Decrease)
	Year Ended		Vs. Same Period
	12/31/2019		in 2018
Income Property Operations Revenue	($000's)		($000's)
Revenue from Recent Acquisitions	$	11,124	$	8,529
Revenue from Recent Dispositions		9,138		(5,260)
Revenue from Remaining Portfolio		19,311		(1,433)
Accretion of Above Market/Below Market Intangibles		2,383		44
Total Income Property Operations Revenue	$	41,956	$	1,880


	Revenue for the		Increase (Decrease)
	Year Ended		Vs. Same Period
	12/31/2019		in 2018
Real Estate Operations Revenue	($000's)		($000's)
Impact Fee and Mitigation Credit Sales	$	—	$	(1,338)
Subsurface Revenue		748		(877)
Other Revenue		104		101
Total Real Estate Operations Revenue	$	852	$	(2,114)

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Revenue for

Increase (Decrease)

Year Ended

Vs. Same Period

12/31/2017

in 2016
Real Estate Operations Revenue

($000's)

($000's)
Land Sales Revenue

$
45,471

$
33,600
Tomoka Town Center - Percentage of Completion Revenue

—

(17,490)
Revenue from Reimbursement of Infrastructure Costs

1,860

(2,640)
Impact Fee and Mitigation Credit Sales

2,126

(94)
Subsurface Revenue

3,048

1,246
Fill Dirt and Other Revenue

17

(244)
Total Real Estate Operations Revenue

$
52,522

$
14,378

Revenue for

Increase (Decrease)

Year Ended

Vs. Same Period

12/31/2017

in 2016
Income Property Operations Revenue

($000's)

($000's)
Revenue from Q4 2016 and YTD 2017 Acquisitions

$
6,417

$
5,768
Revenue from The Grove at Winter Park

451

354
Revenue from Remaining Portfolio

22,345

238
Accretion of Above Market/Below Market Intangibles

2,194

(46)
Total Income Property Operations Revenue

$
31,407

$
6,314

NET INCOME

Net income and basic net income per share for the years ended December 31, ~~2017~~2019 and ~~2016,~~2018, and as compared to the same period in ~~2016,~~2018, was as follows:

Increase (Decrease)

Year Ended

Year Ended

Vs. Same Period

Vs. Same Period

12/31/2017

12/31/2016

in 2016

in 2016
Net Income (1) (2)

$
41,719,424

$
16,251,248

$
25,468,176

157%
Basic Earnings Per Share (1) (2)

$
7.53

$
2.86

$
4.67

163%


					Increase (Decrease)
	Year Ended		Year Ended		Vs. Same Period		Vs. Same Period
	12/31/2019		12/31/2018		in 2018		in 2018
Net Income from Continuing Operations ($000's)	$	16,605	$	14,989	$	1,616		11%
Income from Discontinued Operations (Net of Income Tax) ($000's)	$	98,368	$	22,179	$	76,189		344%
Net Income ($000's)	$	114,973	$	37,168	$	77,805		209%
Basic Net Income from Continuing Operations Per Share	$	3.32	$	2.72	$	0.60		22%
Basic Net Income from Discontinued Operations Per Share	$	19.71	$	4.04	$	15.67		388%
Basic Net Income Per Share	$	23.03	$	6.76	$	16.27		241%

~~(1)~~The year ended December 31, 2017 includes net income of approximately $22.2 million and basic earnings per share of $4.02 in non-cash earnings for the adjustment of deferred tax liabilities and deferred tax assets to reflect the new federal income tax rate of 21% from 35%.

~~(2)~~The year ended December 31, 2017 includes net income of approximately $2.2 million and basic earnings per share of $0.24 in non-cash earnings for the elimination of the accrued liability associated with the straight-line accounting for the land lease which was terminated as part of the acquisition of the LPGA International golf course land.

Our above results for the year ended December 31, 2017, excluding the impact of the approximately $22.2 million non-cash adjustment for the new tax law and approximately $2.2 million of non-cash earnings related to the transaction to acquire the land underlying our golf operations and resulting lease termination,2019, as compared to the same period in ~~2016,~~2018, reflected the following significant operating elements in addition to the impacts on revenues described above:

The approximately $127.5 million gain on the sale of the controlling interest in the wholly-owned subsidiary that held the Company’s land holdings of approximately 5,300 acres, for $97 million which resulted in a gain of approximately $78.6 million, or approximately $12.21 per share, after tax, on the land sale and a non-cash gain of approximately $48.9 million on the Company’s retained interest in the Land JV, or approximately $7.59 per share, after tax;

A decrease in direct cost of revenues of approximately $1.7 million primarily reflecting the decrease of approximately $1.2 million in the direct cost of revenues of the income property operations segment reflecting the income property disposition during 2019; and

Increased interest expense of approximately $2.0 million resulting from increased borrowings under our credit facility.

INCOME PROPERTIES

Revenues and operating income from our income property operations totaled approximately $42.0 million and $35.0 million, respectively, during the year ended December 31, 2019, compared to total revenue and operating income of approximately $40.1 million and $31.9 million, respectively, for the year ended December 31, 2018. The direct costs of revenues for our income property operations totaled approximately $7.0 million and $8.2 million for the years ended December 31, 2019 and 2018, respectively. The increase in revenues of approximately $1.9 million, or 5%, during the year ended December 31, 2019 reflects our expanded portfolio of income properties including increases of approximately $8.5 million due to recent acquisitions, offset by the decrease of approximately $5.3 million related to properties we sold during 2019. Revenue from our income properties during years ended December 31, 2019 and 2018 also includes approximately $2.4 million in revenue from the accretion of the below-market lease intangible, of which a significant portion is attributable to the property located in Raleigh, North Carolina, leased to Wells Fargo (“Wells Fargo Raleigh”). Our increased operating income from our income property operations reflects increased rent revenues and a decrease of approximately $1.2 million in our direct costs of revenues which was primarily comprised of approximately $215,000 in increased operating expenses related to our recent acquisitions, offset by the reduction in operating expenses related to the recent PINE Income Property Sale Transactions and Multi-Tenant Dispositions.

MANAGEMENT SERVICES

Revenue from our management services totaled approximately $0.3 million during the year ended December 31, 2019 with none recognized during the year ended December 31, 2018. During the year ended December 31, 2019, the Company earned management services revenue from PINE of approximately $254,000 which represents the initial stub period of PINE’s operations from November 26, 2019 to December 31, 2019 and approximately $50,000 from the Land JV which represents the initial stub period of the Land JV’s operations from October 16, 2019 to December 31, 2019.

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COMMERCIAL LOAN INVESTMENTS

Interest income from our commercial loan investments totaled approximately $1.8 million and $616,000 during the years ended December 31, 2019 and 2018, respectively. The increase is primarily attributable to investment in three commercial loans during 2019 totaling approximately $18.3 million and with a weighted-average interest rate of 11.3%.

REAL ESTATE OPERATIONS

During the year ended December 31, 2019, operating income from real estate operations was approximately $748,000 on revenues totaling approximately $852,000. During the year ended December 31, 2018, operating income was approximately $2.4 million on revenues totaling approximately $3.0 million. The decrease in revenue of approximately $2.1 million and operating income of approximately $1.6 million is primarily attributable to the decrease in the subsurface revenue and impact fee and mitigation credit sales revenue of approximately $877,000 and $1.3 million, respectively. The decrease of approximately $486,000 in direct costs of real estate operations is primarily the result of the reduction of cost basis in the impact fees and the mitigation credits sold in December 31, 2018.

GENERAL AND ADMINISTRATIVE AND OTHER CORPORATE EXPENSES

Total general and administrative expenses for the year ended December 31, 2019 is presented in the following summary and indicates the changes as compared to the year ended December 31, 2018:


	G&A Expense		(Increase) Decrease
	Year Ended		Vs. Same Period		Vs. Same Period
	12/31/2019		in 2018		in 2018
General and Administrative Expenses	($000's)		($000's)		(%)
Recurring General and Administrative Expenses	$	6,668	$	(149)		-2%
Non-Cash Stock Compensation		2,688		(765)		-40%
Shareholder, Proxy Matter and Alpine Costs		462		881		65%
Total General and Administrative Expenses	$	9,818	$	(33)		0%

General and administrative expenses totaled approximately $9.8 million for the years ended December 31, 2019 and 2018, respectively. While total general and administrative expenses for the year in 2019 were relatively flat compared to the same period in 2018, recurring general and administrative expense increased approximately $149,000 while the costs associated with certain shareholder matters was down approximately $881,000. Non-cash stock compensation increased by approximately $765,000 which was due to the Company’s third year of performance share awards and a grant of stock to our directors in January of 2019.

GAINS ON DISPOSITION OF ASSETS AND IMPAIRMENT CHARGES

We recognized gains on dispositions of approximately $22 million for the year ended December 31, 2019 which was approximately the same amount we recognized on gains from dispositions in the same period of 2018.

The gains recognized for the year ended December 31, 2019 included the gain of approximately $1.0 million we recognized from the sale of 20 single-tenant net lease properties to PINE in November 2019. In addition, the Company completed the sale of four other income properties during the year ended December 31, 2019. In February 2019, the Company sold its approximately 59,000 square foot multi-tenant retail property located in Sarasota, Florida that was anchored by a Whole Foods Market grocery store, for approximately $24.6 million. In May 2019, the Company sold its approximately 112,000 square foot retail strip center, anchored by a 24-Hour Fitness, for approximately $18.3 million. In June 2019 the Company sold its approximately 76,000 square foot two-tenant office property in Santa Clara, California for approximately $37 million. And finally, in August of 2019, the Company sold its property that was subject to a ground lease with WaWa for approximately $2.8 million. In aggregate, the four dispositions generated approximately $82.6 million in proceeds with gains recognized of approximately $20.8 million, or approximately $3.06 per share, after tax.

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DISCONTINUED REAL ESTATE OPERATIONS


	Revenue for the		Increase (Decrease)
	Year Ended		Vs. Same Period		Vs. Same Period
	12/31/2019		in 2018		in 2018
Real Estate Operations Revenue	($000's)		($000's)		(%)
Land Sales Revenue	$	10,975	$	(30,477)		-74%
Revenue from Reimbursement of Infrastructure Costs		—		(1,556)		-100%
Agriculture		68		45		196%
Total Real Estate Operations Revenue	$	11,043	$	(31,988)		-74%

On October 16, 2019, the Company completed the Magnetar Land Sale, pursuant to the Purchase Agreement, for $97 million. The transaction resulted in a gain of approximately $127.5 million, which was comprised of a gain of approximately $78.6 million, or approximately $12.21 per share, after tax, on the land sale and a non-cash gain of approximately $48.9 million on the Company’s retained interest in the Land JV, or approximately $7.59 per share, after tax. The Magnetar Land Sale resulted in the Company effectively exiting the business of selling land, a major component of its business, and accordingly the Company determined that the portion of its real estate operations segment pertaining to land sales should be classified as a discontinued operation and therefore all components of the real estate operations associated with land sales should be appropriately reclassified in the statement of operations for all periods presented.

With regard to the revenue and direct cost of revenues for the year ended December 31, 2019 as compared to the same period in 2018 the decreases are attributable to the land sales transactions completed in 2019. In the year ended December 31, 2019 we closed five (5) land sales transactions, excluding the Magnetar Land Sale, generating proceeds of approximately $11.0 million and the recognition of the cost basis in the land plus closing costs of approximately $5.3 million. In the year ended December 31, 2018 we closed twelve (12) land sales transactions, excluding the Mitigation Bank transaction, generating proceeds of approximately $42.9 million and the recognition of the cost basis in the land plus closing costs of approximately $8.1 million

DISCONTINUED GOLF OPERATIONS

Revenues from golf operations totaled approximately $4.1 million and $4.9 million for the years ended December 31, 2019 and 2018, respectively. The total direct cost of golf operations revenues totaled approximately $5.3 million and $5.8 million for the years ended December 31, 2019 and 2018, respectively. As a result of treating the golf operations as a discontinued operation as of December 31, 2018, the Company did not recognize any deprecation or amortization expense for the year ended December 31, 2019. The Company’s golf operations had a net operating loss of approximately $1.2 million and approximately $906,000 during the years ended December 31, 2019 and 2018, respectively, an increase in operating results of approximately $260,000.

INTEREST EXPENSE

Interest expense totaled approximately $12.5 million and $10.4 million for the years ended December 31, 2019 and 2018, respectively. The increase of approximately $2.0 million is primarily the result of increased borrowings under the Company’s Credit Facility generally for income property acquisitions and our stock buyback program.

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SUMMARY OF OPERATING RESULTS FOR YEAR ENDED DECEMBER 31, 2018 COMPARED TO DECEMBER 31, 2017

REVENUE

Total revenue for the year ended December 31, 2018 is presented in the following summary and indicates the changes as compared to the year ended December 31, 2017:


	Revenue for the		Increase (Decrease)
	Year Ended		Vs. Same Period		Vs. Same Period
	12/31/2018		in 2017		in 2017
Operating Segment	($000's)		($000's)		(%)
Income Properties	$	40,076	$	8,669		28%
Management Services		—		—		0%
Commercial Loan Investments		616		(1,437)		-70%
Real Estate Operations		2,966		(2,225)		-43%
Total Revenue	$	43,658	$	5,007		13%

Total revenue for the year ended December 31, 2018 increased to approximately $43.7 million, compared to approximately $38.7 million during the same period in 2017. The year-over-year revenue increased by approximately $5.0 million which was primarily the result of the increases from our income property operations revenue offset by the decreases in our real estate operations revenue as outlined in the following tables, as well as a decrease in commercial loan investment revenue:


	Revenue for the		Increase (Decrease)
	Year Ended		Vs. Same Period
	12/31/2018		in 2017
Income Property Operations Revenue	($000's)		($000's)
Revenue from Recent Acquisitions	$	12,211	$	9,021
Revenue from Recent Dispositions		350		(920)
Revenue from Remaining Portfolio		25,176		423
Accretion of Above Market/Below Market Intangibles		2,339		145
Total Income Property Operations Revenue	$	40,076	$	8,669


	Revenue for the		Increase (Decrease)
	Year Ended		Vs. Same Period
	12/31/2018		in 2017
Real Estate Operations Revenue	($000's)		($000's)
Impact Fee and Mitigation Credit Sales	$	1,338	$	(788)
Subsurface Revenue		1,625		(1,423)
Other Revenue		3		(14)
Total Real Estate Operations Revenue	$	2,966	$	(2,225)

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NET INCOME

Net income and basic net income per share for the years ended December 31, 2018 and 2017, and as compared to the same period in 2017, was as follows:


					Increase (Decrease)
	Year Ended		Year Ended		Vs. Same Period		Vs. Same Period
	12/31/2018		12/31/2017		in 2017		in 2017
Net Income from Continuing Operations ($000's)	$	14,989	$	21,741	$	(6,752)		-31%
Income from Discontinued Operations (Net of Income Tax) ($000's)	$	22,179	$	19,978	$	2,201		11%
Net Income ($000's)	$	37,168	$	41,719	$	(4,551)		-11%
Basic Net Income from Continuing Operations Per Share	$	2.72	$	3.92	$	(1.20)		-31%
Basic Net Income from Discontinued Operations Per Share	$	4.04	$	3.61	$	0.43		12%
Basic Net Income Per Share	$	6.76	$	7.53	$	(0.77)		-10%

Our above results for the year ended December 31, 2018, as compared to the same period in 2017, reflected the following significant operating elements in addition to the impacts on revenues described above:

An increase in direct cost of revenues of approximately ~~$4.6 million~~$423,000 primarily ~~related to (i)~~reflecting the ~~increase~~impact of the larger impact and mitigation credit sales during the year ended December 31, 2017, for a decrease of approximately $829,000 in the direct cost of revenues ~~for the~~of real estate operations, ~~of approximately $3.5 million related entirely to the cost basis of the increased land sales and associated transaction costs~~partially offset by ~~reduced costs associated with lower impact fee and mitigation credit sales; and (ii)~~ an increase of approximately ~~$1.7~~$1.3 million in the operating costs of the income property operations segment reflecting the larger income property ~~portfolio~~;portfolio;

The impairment charge on the golf assets comprising the Club, which is included in income from discontinued operations, during the year ended December 31, 2018 of approximately $1.1 million, or $0.15 per share, after tax, based on the Company’s estimated fair market value of the property of approximately $3.1 million;

The approximately $22.0 million gain on disposition of assets recognized during the year ended December 31, 2018, consisting of (i) the approximately $18.4 million gain on the Mitigation Bank transaction, comprised of (a) the gain on the sale of the 70% interest for proceeds of $15.3 million and (b) the gain on the 30% retained interest, and (ii) the approximately $3.7 million gain on the Self-Developed Properties Sale, with no such gains on disposition of assets recognized during the same period in 2017;

Income of approximately $2.2 million, which is included in income from discontinued operations, recognized during the year ended December 31, 2017 in connection with the Company’s purchase from the City of the fee interest in the 690 acres comprising the golf courses at the Club, which purchase resulted in the termination of the Golf Course Lease affiliated with the golf operations and triggered an elimination of the previously recognized straight-line rent under the Golf Course Lease;

Increased interest expense of approximately $1.9 million resulting from increased borrowings under our credit facility; and

An increase in depreciation and amortization of approximately ~~$4.5~~$3.4 million resulting from the growth in our income property ~~portfolio; and~~

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Income of approximately $12.8 million recognized in 2016 in connection with the Company’s disposition of a portfolio of 14 income properties and other dispositions of income properties offset by the recognition of approximately $2.2 million in impairment charges during the year ended December 31, 2016.portfolio.

INCOME PROPERTIES

Revenues and operating income from our income property operations totaled approximately ~~$31.4~~$40.1 million and ~~$24.5~~$31.9 million, respectively, during the year ended December 31, ~~2017,~~2018, compared to total revenue and operating income of approximately ~~$25.1~~$31.4 million and ~~$19.9~~$24.5 million, respectively, for the year ended December 31, ~~2016.~~2017. The direct costs of revenues for our income property operations totaled approximately ~~$6.9~~$8.2 million and ~~$5.2~~$6.9 million for the years ended December 31, ~~2017~~2018 and ~~2016,~~2017, respectively. The increase in revenues of approximately ~~$6.3~~$8.7 million, or ~~25%~~28%, during the year ended December 31, ~~2017~~2018 reflects our expanded portfolio of income properties including increases of approximately ~~$5.8~~$7.1 million due to ~~our~~ recent acquisitions, ~~in the last quarter of 2016 and the year ended December 31, 2017,~~ and an increase of approximately ~~$354,000~~$2.0 million in revenue generated by the lease-up of The Grove and the rent from our ~~multi-tenant property, The Grove at Winter Park~~two self-developed single-tenant beachfront restaurant properties that opened in ~~Winter Park, Florida.~~January 2018 (the “Beachfront Restaurants”), offset by the decrease of approximately $920,000 related to the recent Self-

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Developed Properties Sale. Revenue from our income properties during ~~the year~~years ended December 31, ~~2017~~2018 and ~~2016~~2017 also includes approximately $2.4 million and $2.2 million, respectively, in revenue from the accretion of the below-market lease intangible, of which a significant portion is ~~primarily~~ attributable to the ~~Wells Fargo~~ property located in Raleigh, North ~~Carolina.~~Carolina, leased to Wells Fargo (“Wells Fargo Raleigh”). Our increased operating income from our income property operations reflects ~~the aforementioned~~ increased rent revenues offset by an increase of approximately ~~$1.7~~$1.3 million in our direct costs of revenues ~~largely~~which was primarily comprised of approximately $769,000 in increased operating expenses related to our recent acquisitions and increased costs associated with The Grove and the Beachfront Restaurants, offset by the reduction in operating expenses related to the recent ~~acquisitions mentioned above.~~Self-Developed Properties Sale.

~~REAL ESTATE OPERATIONS~~MANAGEMENT SERVICES

During the year ended December 31, 2017, operating income from real estate operations was approximately $35.0 million on revenues totaling approximately $52.5 million. During the year ended December 31, 2016, operating income was approximately $23.3 million on revenues totaling approximately $38.1 million. The increase in revenue of approximately $14.4 million2018 and operating income of approximately $11.8 million is primarily attributable to the revenue totaling approximately $47.0 million recognized for the land sales completed in 2017, including the sale of approximately 1,581 acres to Minto Communities for approximately $27.2 million, which closed in the first quarter of 2017, the ~~third~~Company did not have management services arrangements and fourth land sales transactions completed with NADG for approximately $10.6 million, which closed in the second and fourth quarters of 2017, the land sale to VanTrust of approximately 28 acres for approximately $3.2 million, which also closed in the second quarter of 2017, as well as the $2.1 million sale of subsurface interests that closed during the third quarter of 2017. The increased revenues in 2017 reflects the impact of the 2017 land sales offset by the revenue recognized utilizing percentage of completion during the year ended December 31, 2016 on the sales within the Tomoka Town Center which closed during the fourth quarter of 2015 and the first quarter of 2016 of approximately $17.5 million. The increase in 2017 of approximately $2.6 million in direct costs of real estate operations is primarily the result of the increase of approximately $2.6 million in the cost basis and approximately $936,000 in closing and other costs recognized during 2017 related to the land sales closed during the year, offset by a decrease in basis related to impact fees of which approximately $1.7 million more were sold during the year ended December 31, 2016 than December 31, 2017.did not generate management services income.

~~GOLF OPERATIONS~~

Revenues from golf operations totaled approximately $5.1 million and $5.2 million for the years ended December 31, 2017 and 2016, respectively. The total direct cost of golf operations revenues totaled approximately $6.0 million and $5.6 million for the years ended December 31, 2017 and 2016, respectively. The Company’s golf operations had a net operating loss of approximately $864,000 and approximately $397,000 during the years ended December 31, 2017 and 2016, respectively, a decrease in operating results of approximately $467,000. The primary reason for the decline in revenues and related operating results was that one of the two 18-hole golf courses was closed during the entire third quarter of 2017 for the renovation of the greens.

~~INTEREST INCOME FROM~~ COMMERCIAL LOAN INVESTMENTS

Interest income from our commercial loan investments totaled approximately ~~$2.1 million~~$616,000 and ~~$2.6~~$2.1 million during the years ended December 31, ~~2017~~2018 and ~~2016,~~2017, respectively. The decrease is primarily attributable to the sale of the Company’s two mezzanine loans in October 2017. With the payoff of the approximately ~~$466,000~~$9.0 million B-Note at its maturity in June 2018 and the payoff of ~~revenue generated in~~ the ~~first six months of 2016 from the~~$3.0 million fixed rate first mortgage loan ~~secured by the leasehold~~at its maturity in August 2018, no interest ~~in a hotel in San Juan, Puerto Rico that~~income was ~~repaid during the latter part of the second quarter of 2016. The decrease is also attributable to the two mezzanine loans that were sold~~earned during the fourth quarter of ~~2017, for a decrease in year-over-year revenue~~2018 as the Company holds no commercial loan investments as of December 31, 2018.

REAL ESTATE OPERATIONS

During the year ended December 31, 2018, operating income from real estate operations was approximately ~~$288,000. These decreases were partially offset by~~$2.4 million on revenues totaling approximately $3.0 million. During the ~~increase of approximately $166,000 in revenue~~

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generated by the $3.0 million first mortgage loan originated in July 2017, as well as an increase in interest from our remaining variable rate loan due to the increase in LIBOR during the latter half of 2017.

~~AGRICULTURE AND OTHER INCOME~~

~~For the years~~year ended December 31, 2017, operating income was approximately $3.8 million on revenues totaling approximately $5.2 million. The decrease in revenue of approximately $2.2 million is primarily attributable to a decrease in surface entry releases of approximately $1.5 million as well as decreases in mitigation credit and ~~2016,~~impact fee sales of a combined approximately $0.8 million. The decrease in operating income of approximately $1.4 million is attributable to the aforementioned decrease in revenues ~~from agriculture~~offset by a decrease in direct costs of revenues of approximately $0.8 million which is primarily the result of the decrease in mitigation credit and ~~other income totaled approximately $335,000 and $59,000, respectively, with the increase~~impact fee cost basis due to ~~a timber harvesting contract during 2017 that generated approximately $290,000~~the decrease in revenue. For the years ended December 31, 2017 and 2016, the direct cost of revenues totaled approximately $96,000 and $167,000, respectively, an improvement of approximately $71,000, which reflects reduced payroll for this segment.those sales.

GENERAL AND ADMINISTRATIVE AND OTHER CORPORATE EXPENSES

Total general and administrative expenses for the year ended December 31, ~~2017~~2018 is presented in the following summary and indicates the changes as compared to the year ended December 31, ~~2016:~~2017:


	G&A Expense		Decrease (Increase)		G&A Expense		(Increase) Decrease
	Year Ended		Vs. Same Period		Year Ended		Vs. Same Period		Vs. Same Period
	12/31/2017		in 2016		12/31/2018		in 2017		in 2017
General and Administrative Expenses	($000's)		($000's)		($000's)		($000's)		(%)
Recurring General and Administrative Expenses	$	7,293	$	(1,265)	$	6,898	$	395		5%
Non-Cash Stock Compensation		1,437		1,742		1,684		(247)		-17%
Shareholder and Proxy Matter Legal and Related Costs		1,523		(432)		1,203		320		21%
Total General and Administrative Expenses	$	10,253	$	45	$	9,785	$	468		5%

General and administrative expenses totaled approximately $9.8 million and $10.3 million for the years ended December 31, 2018 and 2017, ~~and 2016. Although the total expense was relatively flat year-over-year, non-cash stock compensation expense decreased by approximately $1.7 million, which in part,~~respectively. The net decrease is ~~due~~primarily related to the ~~accelerated stock compensation expense of approximately $1.6 million recognized~~decrease in ~~the first quarter of 2016 relating to certain stock awards that were permanently surrendered. The decreased stock compensation expense was~~shareholder related costs as well as recurring costs, offset by an increase in legal and other costs of approximately $1.2 million which were specifically related to the Company’s proxy contest in connection with the 2017 Annual Meeting of Shareholders, offset by the decrease in legal costs of approximately $780,000 related to the investigations conducted in connection with certain claims made by Wintergreen that were determined to be without merit. The remaining increase was primarily related to an increase in professional fees for other advisory services as well as fees incurred with respect to a potential REIT conversion.

~~INTEREST EXPENSE~~

Interest expense totaled approximately $8.5 million and $8.8 million for the years ended December 31, 2017 and 2016, respectively. The higher interest expense for 2016, reflects the $23.1 million loan that was outstanding for the majority of 2016 on the portfolio of 14 income properties that were sold during September of 2016. Additionally, during the year ended December 31, 2017, approximately $215,000 in interest was capitalized related primarily to the tenant improvements at The Grove at Winter Park property and the construction of the two single-tenant beachfront restaurants, with no interest being capitalized during the year ended December 31, 2016. Also included in interest expense in the consolidated financial statements is the amortization of loan costs incurred in connection with the Company’s long-term debt and the amortization of the discount on the convertible debt.

non-cash stock compensation costs.

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~~SUMMARY~~GAINS ON DISPOSITION OF ~~OPERATING RESULTS FOR YEAR ENDED DECEMBER 31, 2016 COMPARED TO DECEMBER 31, 2015~~ASSETS AND IMPAIRMENT CHARGES

~~REVENUE~~

~~Total revenue for~~During the year ended December 31, ~~2016 is presented~~2018, the Company completed the sale of a 70% interest in the ~~following summary~~Mitigation Bank that holds approximately 2,492 acres of land for proceeds of $15.3 million. The gain on the sale totaled approximately $18.4 million and ~~indicates the changes as compared to the year ended December 31, 2015:~~

Revenue for

Increase (Decrease)

Year Ended

Vs. Same Period

Vs. Same Period

12/31/2016

in 2015

in 2015
Operating Segment

($000's)

($000's)

(%)
Income Properties

$
25,093

$
6,051

32%
Interest Income from Commercial Loan Investments

2,588

(103)

-4%
Real Estate Operations

38,144

22,201

139%
Golf Operations

5,190

(53)

-1%
Agriculture & Other Income

60

(19)

-25%
Total Revenue

$
71,075

$
28,077

19%

Total revenue for the year ended December 31, 2016 increased approximately $28.1 million to approximately $71.1 million, as compared to approximately $43.0 million during the same period in 2015. This increase was primarily the resultis comprised of the ~~following elements~~gain on the sale of ~~our Real Estate Operations segment and our Income Property Operations, respectively:~~

Revenue for

Increase (Decrease)

Year Ended

Vs. Same Period

12/31/2016

in 2015
Real Estate Operations Revenue

($000's)

($000's)
Land Sales Revenue

$
11,871

$
7,595
Tomoka Town Center - Percentage of Completion Revenue

17,490

9,362
Revenue from Reimbursement of Infrastructure Costs

4,500

4,500
Impact Fee and Mitigation Credit Sales

2,220

1,757
Subsurface Revenue

1,802

(1,201)
Fill Dirt and Other Revenue

261

188
Total Real Estate Operations Revenue

$
38,144

$
22,201

Revenue for

Increase (Decrease)

Year Ended

Vs. Same Period

12/31/2016

in 2015
Income Property Operations Revenue

($000's)

($000's)
Wells Fargo/Riverside Acquisitions

$
7,022

$
5,029
Accretion of Above Market (Below Market) Intangibles

2,240

2,081
Q4 2016 Acquisitions

649

649
Revenue from Remaining Portfolio (Includes Impact of 2016 Dispositions)

15,182

(1,708)
Total Income Property Operations Revenue

$
25,093

$
6,051

~~NET INCOME~~

~~Net income~~the 70% interest for ~~the year ended December 31, 2016 was approximately $16.3~~proceeds of $15.3 million compared to approximately $8.3 million in the same period in 2015. Net income per share for the year ended December 31, 2016 was $2.86 per share, as compared to $1.44 per share during the same period in 2015, an increase of $1.42 per share.

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Our results for the year ended December 31, 2016 reflected our increased revenues of approximately $28.1 million as described above, offset by the associated increase in direct cost of revenues of approximately $12.1 million with such increase substantially related to the increase in the direct cost of revenues for our real estate operations of approximately $10.6 million, which primarily reflects the cost basis for our increased land sales revenue during the year, as well as the ~~following other elements~~gain on the 30% interest retained.

Four income properties were disposed of ~~our operating results:~~

~~Gains on the disposition of income properties of approximately $12.8 million which includes the approximate $11.4 million from the completed Portfolio Sale;~~

An increase in our general and administrative expenses of approximately $1.5 million primarily due to the net increase in non-cash stock compensation expense of approximately $992,000, which consists of an increase of approximately $~~1.6 million related to the acceleration of non-cash stock compensation expense in connection with the cancellation of certain grants in the first quarter of 2016~~ ~~offset by a decrease in recurring stock compensation expense of approximately $657,000,~~and approximately $1.4 million in charges associated with legal, accounting, and director meeting fees to address certain shareholder matters, offset by reduced expense for accruals for environmental matters of approximately $662,000;

~~An increase in depreciation and amortization of nearly $3.0 million resulting from the growth in our income property portfolio;~~

~~Increased interest expense of approximately $1.8 million primarily reflecting a full year of interest on our convertible notes issuance;~~

A decrease in our investment income of approximately $739,000 which primarily is the result of a loss recognized in the first quarter of 2016 related to the disposition of certain investment securities; and

The recognition of increased impairment charges of approximately $1.7 million whereby the total impairment charges were approximately $2.2 million which related to charges of approximately $1.2 million in connection with the sales of income properties in Sebring, Florida and Altamonte Springs, Florida which were sold in April and September 2016, respectively, and impairment charges recognized on certain land sales contracts of approximately $1.0 million in 2016.

~~INCOME PROPERTIES~~

~~Revenues and operating income from our income property operations totaled approximately $25.1 million and $19.9 million, respectively,~~ during the year ended December 31, ~~2016, compared~~2018. On March 26, 2018, the Company sold its four self-developed, multi-tenant office properties located in Daytona Beach, Florida, for approximately $11.4 million (the “Self-Developed Properties Sale”). The sale included the 22,012 square-foot Concierge office building, the 30,720 square-foot Mason Commerce Center comprised of two office buildings, and the 15,360 square-foot Williamson Business Park office building. The gain on the sale totaled approximately $3.7 million, or approximately $0.49 per share, after tax. The Company utilized the proceeds to ~~total revenue and income~~fund a portion of ~~approximately $19.0 million and $15.4 million, for~~ the ~~year ended December 31, 2015. The direct costs of revenues for our~~previously acquired income property ~~operations totaled approximately $5.2 million~~located near Portland, Oregon, leased to Wells Fargo, through a reverse 1031 like-kind exchange structure. No income properties were disposed of during the year ended December 31, ~~2016, compared to approximately $3.7 million for~~2017.

There were no impairment charges included in continuing operations during the ~~year~~years ended December 31, 2015. The 31.8% increase in revenues reflects the impact of a full year of revenue from the income-producing properties acquired in 2015, particularly the Wells Fargo single-tenant office property and the 245 Riverside property which represented approximately $5.0 million of the increase, the impact of our acquisitions in 2016, particularly the 3600 Peterson office property in the fourth quarter which represented approximately $591,000 of the increase, offset by the reduced rental income related to the dispositions of 19 single-tenant income properties during 2016. In addition, our revenues increased by approximately $2.1 million in connection with the recognition of non-cash revenue attributable to the accretion of the above and below market lease intangibles. Our operating income from our income property operations increased 29.3%, which reflects the aforementioned increased revenues offset by an increase of approximately $1.5 million in our direct costs of revenues which was primarily due to an increase in costs associated with the impact of a full year of expense from the income-producing properties acquired in 2015, particularly the Wells Fargo single-tenant office property and the 245 Riverside property which represented approximately $1.5 million of the increase, offset by reduced operating costs at our multi-tenant property in Winter Park, The Grove, that totaled approximately $194,000.2018 or 2017.

DISCONTINUED REAL ESTATE OPERATIONS


	Revenue for the		Increase (Decrease)
	Year Ended		Vs. Same Period		Vs. Same Period
	12/31/2018		in 2017		in 2017
Real Estate Operations Revenue	($000's)		($000's)		(%)
Land Sales Revenue	$	41,452	$	(4,019)		-9%
Revenue from Reimbursement of Infrastructure Costs		1,556		(304)		-16%
Agriculture		23		(312)		-93%
Total Real Estate Operations Revenue	$	43,031	$	(4,635)		-10%

DISCONTINUED GOLF OPERATIONS

During the year ended December 31, ~~2016, operating income from real estate operations was approximately $23.3 million on revenues totaling approximately $38.1 million, as compared to operating income~~2018, the Company wrote down the value of the golf assets comprising the Club, which resulted in a corresponding impairment charge of approximately ~~$11.7~~$1.1 million, ~~on revenues totaling~~or $0.15 per share, after tax. The write-down of the golf operation assets to approximately ~~$15.9~~$3.1 million and the related $1.1 million impairment charge were the result of the Company’s assessment of certain triggering events, including activities related to a review of strategic alternatives for the golf operations, occurring during the third quarter of 2018, which required an assessment of the carrying value of the golf assets comprising the Club. In the fourth quarter of 2018, the Company commenced efforts to pursue the monetization of the golf operations and assets comprising the Club. Accordingly, as of December 31, 2018 and 2017, the golf assets comprising the Club have been classified as held for sale in the accompanying consolidated balance sheets and the results of golf operations have been classified as discontinued operations in the accompanying consolidated statements of income for the years ended December 31, 2018, 2017, and 2016. During the year ended December 31, ~~2015. Revenues in 2016 include~~2018, the loss from golf operations, excluding capital expenditures, totaled approximately ~~$17.5 million in revenue recognized on a percentage-of-completion basis for land transactions that closed in~~$906,000. Should the fourth quarter of 2015 and first quarter of 2016, and $4.5 million in revenue recognized in connection with the reimbursement of certain infrastructure costs we incurred related to those land transactions. In addition, revenues include

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approximately $11.9 million from six land transactions of approximately 707.7 acres, and approximately $1.8 million in revenue from our subsurface operations, consisting of approximately $1.3 million from the lease of Subsurface Interests, including approximately $150,000 received as a non-refundable drilling penalty, and approximately $493,000 in surface entry release revenue. Our revenues also benefited from approximately $2.2 million inCompany complete the sale of ~~impact fees and revenue from a fill dirt contract of $250,000. The direct costs of revenues for our real estate operations for~~ the year ended December 31, 2016 and 2015 totaled approximately $14.9 million and $4.3 million, respectively. The increase of approximately $10.6 million is due primarily to the recognition of cost basis for the land sales recognized using percentage-of-completion accounting and the larger amount of land sales in 2016. The operating income for our real estate operations in 2016 reflects the aforementioned net impact of our land sales and the revenue recognized on a percentage-of-completion basis.

~~GOLF OPERATIONS~~

~~The Company’s~~ golf operations, ~~incurred a loss of approximately $397,000 during the year ended December 31, 2016, representing an increase of $47,000 compared to the loss of approximately $350,000 in the same period in 2015.~~ it could favorably impact cash flows.

Revenues from golf operations totaled approximately ~~$5.2~~$4.9 million and $5.1 million for the years ended December 31, ~~2016~~2018 and ~~2015.~~2017, respectively. The total direct cost of golf operations revenues totaled approximately ~~$5.6~~$5.8 million and $6.0 million for the years ended December 31, ~~2016~~2018 and ~~2015.~~2017, respectively. The Company’s golf operations ~~experienced~~had a ~~6.8% increase in membership but~~net operating loss of approximately $906,000 and approximately $864,000 during the ~~golf operations experienced~~years ended December 31, 2018 and 2017, respectively, a decrease in ~~rounds played~~operating results of approximately ~~3.4% and a reduction in the average rate per round played of approximately 6.5%. In addition, the net margin from the food and beverage operations were off approximately $106,000 year-over-year.~~$43,000.

INTEREST ~~INCOME FROM COMMERCIAL LOAN INVESTMENTS~~EXPENSE

Interest ~~income from commercial loan investments~~expense totaled approximately ~~$2.6~~$10.4 million and ~~$2.7~~$8.5 million for the years ended December 31, ~~2016~~2018 and ~~2015, respectively, a decrease of approximately $103,000 or 3.8%.~~2017, respectively. The decrease in interest income in 2016 reflects the increased interest from our commercial loan investments with a variable rate of interest offset by the impact of a fixed-rate development loan originated during 2014 that was repaid in 2015.

~~AGRICULTURE AND OTHER INCOME~~

For the year ended December 31, 2016, revenues from our agriculture operations and other income, totaled approximately $59,000, compared to approximately $79,000 during the same period in 2015. For the year ended December 31, 2016, the direct costs of revenues totaled approximately $167,000, compared to approximately $227,000 during the same period in 2015 reflecting a decrease primarily attributable to the elimination of payroll associated with this segment.

~~GENERAL AND ADMINISTRATIVE AND OTHER CORPORATE EXPENSES~~

~~Total general and administrative expenses for the year ended December 31, 2016 is presented in the following summary and indicates the changes as compared to the year ended December 31, 2015:~~

G&A Expense

Decrease (Increase)

Year Ended

Vs. Same Period

12/31/2016

in 2015

General and Administrative Expenses

($000's)

($000's)

Recurring General and Administrative Expenses

$
5,535

$
(302)

Non-Cash Stock Compensation

3,179

(993)

Environmental Reserves

—

917

Other Non-Recurring G&A

199

1

Non-Recurring Payroll (Severance)

—

127

Shareholder Matter Legal and Related Costs

1,385

(1,294)

Total General and Administrative Expenses

$
10,298

$
(1,544)

~~General and administrative expenses totaled approximately $10.3 million and approximately $8.8 million for the years ended December 31, 2016 and 2015, respectively, an~~ increase of approximately ~~$1.5 million. The increase includes approximately $1.2~~$1.9 million ~~in costs~~is primarily the result of increased borrowings under the Company’s Credit Facility for ~~legal representation, accounting and audit fees, and director fee expenses related to communications received from our largest shareholder and approximately $200,000 in costs associated with our~~recent acquisitions.

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Strategic Review process. In addition, the increase includes approximately $992,000 in stock compensation expense, which consists of an increase of approximately $1.6 million related to the acceleration of non-cash stock compensation expense in connection with the cancellation of certain grants in the first quarter of 2016 offset by a decrease in recurring stock compensation expense of approximately $657,000. The increased costs were partially offset by a decrease of approximately $662,000 in costs that were incurred during 2015 related to certain environmental reserves accrued.

~~INTEREST EXPENSE~~

Interest expense totaled approximately $8.8 million and $6.9 million for the years ended December 31, 2016 and 2015, respectively. The higher interest expense for 2016, reflects the full year impact of the $75.0 million convertible debt issuance during the first quarter of 2015 offset by our pay down of the credit facility of approximately $4.0 million. Also included in interest expense in the consolidated financial statements is the amortization of loan costs incurred in connection with the Company’s long-term debt and the amortization of the discount on the convertible debt.

LIQUIDITY AND CAPITAL RESOURCES

Cash totaled approximately ~~$6.6~~$6.5 million at December 31, ~~2017, with restricted~~2019. Restricted cash oftotaled approximately ~~$6.5~~$128.4 million at December 31, 2019 of which approximately ~~$5.6~~$125.7 million of cash is being held in multiple separate escrow accounts to be reinvested through the like-kind exchange structure into other income properties; approximately $746,000 is being held in an entitlement and interest reserve for the $8.0 million first mortgage loan originated in June 2019, approximately $275,000 is being held in an interest and real estate tax reserve for the $8.3 million first mortgage originated in July 2019, approximately $156,000 is being held in an escrow account related to a land transaction which closed in February 2017; approximately $261,000 is being held in a capital replacement reserve account in connection with our financing of six income properties with Wells Fargo Bank, NA (“Wells Fargo”); and approximately $1.3 million is being held ~~for investments utilizing~~in a general tenant improvement reserve account with Wells Fargo in connection with our financing of the ~~tax-deferred like-kind exchange structure, as well as certain escrows related~~property located in Raleigh, NC leased to ~~tenant improvements, reserves for property taxes and insurance required by our secured debt, and for escrow accounts related to certain land transactions.~~Wells Fargo.

Our total cash balance at December 31, ~~2017, reflects~~2019, reflected cash ~~flow~~flows provided by our operating activities totaling approximately $16.4 million during the year ended December 31, 2019, compared to the prior year’s cash flows provided by operating activities totaling approximately ~~$57.5~~$47.8 million in ~~2017 compared to~~ the ~~prior year, which totaled approximately $14.3 million, an increase of approximately $43.2 million. In addition to the increase~~same period in our net income of approximately $25.5 million, the increase in our cash flow provided by operations was due to increased depreciation and amortization of approximately $4.5 million, certain balance sheet adjustments including the decrease in our land by approximately $12.1 million reflecting our increased land sales during 2017, and the absence of a change in our deferred revenue in 2017 versus the reduction of approximately $12.8 million in 2016. A large component of the increase in net income was the result of the non-cash decrease in the total deferred income tax liability,2018, a decrease of approximately ~~$20.6 million, which was~~$31.4 million. The decrease is primarily the result of ~~the reduction~~a decrease in the ~~federal corporate tax rate~~volume of land sales during 2019 prior to the Land JV as compared to 2018. Cash proceeds from ~~35%~~land sales totaled approximately $10.6 million during the year ended December 31, 2019 compared to ~~21%.~~approximately $40.8 million during the year ended December 31, 2018, a decrease of approximately $30.2 million.

Our cash flows ~~used in~~provided by investing activities totaled approximately ~~$79.2~~$103.1 million for the year ended December 31, ~~2017, an increase~~2019, compared to cash flows used in investing activities of approximately $55.8 million versus 2016. In 2017 we deployed approximately $97.6 million of investment capital including $94.6 million of income property acquisitions and improvements and nearly $3.0 million in an investment in a mortgage loan. This compares with the deployment of approximately $92.6 million in 2016 to acquire income properties and an approximately $4.8 million investment in land related to our purchase of the remaining 50% interest in the beach parcel. The investments in 2017 were offset by $15.0 million in principal payments received on our loan investments which relates to the sale of our two mezzanine loans. In 2016, the deployment of capital was offset by proceeds from the sale of a portfolio of 14 income properties and 5 other income properties totaling approximately $49.2 million, proceeds from the sale of investment securities which totaled approximately $6.3 million, and principal payments received on our loan investments totaling approximately $14.3 million.

~~Our cash flows provided by financing activities totaled approximately $20.5~~$77.9 million for the year ended December 31, ~~2017,~~2018, an increase of approximately ~~$7.6~~$181.0 million. The increase is primarily the result of an increase in cash provided by the sale of income properties and the sale of equity interests in joint ventures, totaling approximately $196.5 million ~~versus 2016. Net~~and $80.8 million, respectively. These increases were partially offset by the increase in cash outflows for income property acquisitions, commercial loan investments, and the acquisition of investment securities, totaling approximately $41.3 million, $34.3 million, and $15.5 million, respectively.

Our cash flows used in financing activities totaled approximately $5.8 million for the year ended December 31, 2019, compared to cash flows provided by financing activities of approximately $38.7 million for the year ended December 31, 2018, a decrease of approximately $44.5 million. The decrease in cash provided by financing activities is primarily related to the increased level of stock buybacks during 2019 which totaled approximately $41.1 million, an increase of approximately $31.3 million from the same period in 2018. Additionally, net borrowings on ~~our credit facility~~the Credit Facility totaled approximately ~~$28.4~~$38.4 million during 2019, which was a decrease of approximately $11.9 million from the same period in ~~2017 versus approximately $21.0 million in 2016, an increase in~~2018 when we had net borrowings of approximately ~~$7.4~~$50.3 million. Our net borrowings in 2017 included a draw on our credit facility to repay the $7.3 million permanent financing on the two properties leased to Hilton Grand Vacations in Orlando, Florida (the “Hilton Properties”) which was scheduled to mature in 2018. In addition, the proceeds we received from the exercise of stock options increased by approximately $1.0 million in 2017 compared to 2016.

Long-term debt, at face value, totaled approximately ~~$200.0~~$288.7 million at December 31, ~~2017,~~2019, representing an increase of approximately ~~$28.4~~$38.4 million from the balance of approximately ~~$171.6~~$250.3 million at December 31, ~~2016.~~2018. The increase in the long-term debt was due primarily to the net draws on our credit facility of approximately ~~$35.7 million, offset by the repayment of the $7.3 million first mortgage loan that was secured by our Hilton Properties.~~

$39.1 million.

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As of December 31, ~~2017,~~2018, the Company’s outstanding indebtedness, at face value, was as follows:

Face

Maturity

Interest

Face

Maturity

Interest

Value Debt

Date

Rate

Value Debt

Date

Rate

Credit Facility

70,000,000

September 2021

30 ‑day LIBOR
plus 1.50% -2.20%

159,845,349

May 2023

30 ‑day LIBOR
plus 1.35% -1.95%

Mortgage Note Payable (originated with Wells Fargo) (1)

30,000,000

October 2034

4.330%

30,000,000

October 2034

4.330%

Mortgage Note Payable (originated with Wells Fargo) (2)

25,000,000

April 2021

30 ‑day LIBOR
plus 1.90%

23,884,373

April 2021

30 ‑day LIBOR
plus 1.90%

4.50% Convertible Senior Notes due 2020, net of discount

75,000,000

March 2020

4.500%

75,000,000

March 2020

4.500%

Total Long-Term Face Value Debt

200,000,000

288,729,722

(1)Secured by the Company’s interest in six income properties. The mortgage loan carries a fixed rate of 4.33% per annum during the first ten years of the term, and requires payments of interest only during the first ten years of the loan. After the tenth anniversary of the effective date of the loan, the cash flows, as defined in the related loan agreement, generated by the underlying six income properties must be used to pay down the principal balance of the loan until paid off or until the loan matures. The loan is fully pre-payable after the tenth anniversary of the effective date of the loan.

(2)Secured by the Company’s income property leased to Wells Fargo located in Raleigh, North Carolina. The mortgage loan has a 5-year term with two years interest only, and interest and a 25-year amortization for the balance of the term. The mortgage loan bears a variable rate of interest based on the 30-day LIBOR plus a rate of 190 basis points. The interest rate for this mortgage loan has been fixed through the use of an interest rate swap that fixed the rate at 3.17%. The mortgage loan can be prepaid at any time subject to the termination of the interest rate swap. Amortization of the principal balance began in May 2018.

Credit Facility. The Company’s revolving credit facility (the “Credit Facility”), with Bank of Montreal (“BMO”) serving as the administrative agent for the lenders thereunder, is unsecured with regard to our income property portfolio but is guaranteed by certain wholly-owned subsidiaries of the Company. The Credit Facility bank group is led by BMO and also includes Wells Fargo and Branch Banking & Trust Company. On September 7, 2017, the Company executed the second amendment and restatement of the Credit Facility (the ~~“Revolver~~“2017 Amended Credit Facility”).

On May 24, 2019, the Company executed the Second Amendment to the 2017 Amended Credit Facility (the “Second Revolver Amendment”). ~~Pursuant to the Revolver Amendment, the Credit Facility matures on September 7, 2021, with the ability to extend the term for 1 year.~~

As a result of the Second Revolver Amendment, the Credit Facility has a total borrowing capacity of ~~$100.0~~$200.0 million with the ability to increase that capacity up to ~~$150.0~~$300.0 million during the ~~term.~~term, subject to lender approval. The Credit Facility provides the lenders with a security interest in the equity of the Company subsidiaries that own the properties included in the borrowing base. The indebtedness outstanding under the Credit Facility accrues interest at a rate ranging from the 30-day LIBOR plus ~~150~~135 basis points to the 30-day LIBOR plus ~~220~~195 basis points based on the total balance outstanding under the Credit Facility as a percentage of the total asset value of the Company, as defined in the 2017 Amended Credit ~~Facility.~~Facility, as amended by the Second Revolver Amendment. The Credit Facility also accrues a fee of 15 to 25 basis points for any unused portion of the borrowing capacity based on whether the unused portion is greater or less than 50% of the total borrowing capacity. Pursuant to the Second Revolver Amendment, the Credit Facility matures on May 24, 2023, with the ability to extend the term for 1 year.

On November 26, 2019, the Company entered into the Third Amendment to the Second Amended and Restated Credit Agreement (the “Third Revolver Amendment”), which further amends the 2017 Amended Credit Facility. The Third Revolver Amendment included, among other things, an adjustment of certain financial maintenance covenants, including a temporary reduction of the minimum fixed charge coverage ratio to allow the Company to redeploy the proceeds received from the PINE Income Property Sale Transactions, and an increase in the maximum amount the Company may invest in stock and stock equivalents of real estate investment trusts to allow the Company to invest in the common stock and operating partnership units of PINE.

At December 31, ~~2017,~~2019, the current commitment level under the Credit Facility was ~~$100.0~~$200.0 million. The available borrowing capacity under the Credit Facility was approximately ~~$30.0~~$40.2 million, based on the level of borrowing base assets. As of December 31, ~~2017,~~2019, the Credit Facility had a ~~$70.0~~$159.8 million balance. During the first quarter of 2018, the Company expanded the commitment under its Credit Facility to $130.0 million, providing an additional capacity of approximately $60.0 million, based on the outstanding balance ~~as of December 31, 2017 of approximately $70.0 million.~~outstanding.

The Credit Facility is subject to customary restrictive covenants including, but not limited to, limitations on the Company’s ability to: (a) incur indebtedness; (b) make certain investments; (c) incur certain liens; (d) engage in certain affiliate transactions; and (e) engage in certain major transactions such as mergers. In addition, the Company is subject to various financial maintenance covenants including, but not limited to, a maximum indebtedness ratio, a maximum secured indebtedness ratio, and a minimum fixed charge coverage ratio. The Credit Facility also contains affirmative covenants

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and events of default including, but not limited to, a cross default to the Company’s other indebtedness and upon the occurrence of a change in control. The Company’s failure to comply with these covenants or the occurrence of an event of default could result in acceleration of the Company’s debt and other financial obligations under the Credit Facility.

Mortgage Notes Payable. In addition to the Credit Facility, the Company has certain other borrowings, as noted in the table above, all of which are non-recourse. ~~The Mortgage Note Payable originated with UBS Real Estate Securities, Inc. for $7.3 million was repaid during the year ended December 31, 2017.~~

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Convertible Debt. The Company’s $75.0 million aggregate principal amount of 4.50% Convertible Notes ~~will~~(the “2020 Notes”) were scheduled to mature on March 15, 2020. Based on multiple increases in the Company’s quarterly dividends since the 2020 ~~unless earlier purchased or converted. The initial~~Notes were issued in March 2015, the conversion rate was ~~14.5136~~equal to 14.6813 shares of common stock for each $1,000 principal amount of ~~Convertible~~ Notes, which represented an adjusted conversion price of approximately $68.11 per share of common stock.

On February 3, 2020, the Company closed privately negotiated exchange agreements with certain holders of its outstanding 2020 Notes pursuant to which the Company issued $57.4 million principal amount of 3.875% Convertible Senior Notes due 2025 (the “2025 Notes”) in exchange for $57.4 million principal amount of the 2020 Notes (collectively the “Private Exchanges”). In addition, the Company closed a privately negotiated purchase agreement with an investor and issued approximately $17.6 million principal amount of the 2025 Notes (the “Private Placement,” and together with the Private Exchanges, the “Transactions”). The Company used approximately $5.9 million of the proceeds from the Private Placement to repurchase approximately $5.9 million of the 2020 Notes. As a result of the Transactions there is a total of $75 million of outstanding 2025 Notes.

In exchange for issuing the 2025 Notes pursuant to the Private Exchanges, the Company received and cancelled the exchanged 2020 Notes. The $11.7 million of net proceeds from the Private Placement will be used to redeem at maturity on March 15, 2020 approximately $11.7 million of the aggregate principal amount of the 2020 Notes that remain outstanding.

The 2025 Notes represent senior unsecured obligations of the Company and pay interest semi-annually in arrears on each April 15th and October 15th, commencing on April 15, 2020, at a rate of 3.875% per annum. The 2025 Notes mature on April 15, 2025 and may not be redeemed by the Company prior to the maturity date. The conversion rate for the 2025 Notes is initially 12.7910 shares of the Company’s common stock per $1,000 of principal of the 2025 Notes (equivalent to an initial conversion price of approximately ~~$68.90~~$78.18 per share of ~~common stock. Since July of 2016, when~~ the Company’s ~~Board of Directors implemented a quarterly dividend in place~~common stock). The initial conversion price of the ~~previous semi-annual dividend,~~2025 Notes represents a premium of approximately 20% to the $65.15 closing sale price of the Company’s common stock on the NYSE American on January 29, 2020. The 2025 Notes are convertible into cash, common stock or a combination thereof, subject to various conditions, at the Company’s option. Should certain corporate transactions or events occur prior to the stated maturity date, the Company will increase the conversion rate ~~has been adjusted~~for a holder that elects to convert its 2025 Notes in connection with each successive quarterly dividend and is currently, after the fourth quarter 2017 dividend, equal to 14.5515 shares of common stock for each $1,000 principal amount of Convertible Notes, which represents an adjusted conversion price of approximately $68.72 per share of common stock.such corporate transaction or event.

The conversion rate is subject to adjustment in certain circumstances. Holders may not surrender their ~~Convertible~~2025 Notes for conversion prior to December 15, ~~2019,~~2024 except upon the occurrence of certain conditions relating to the closing sale price of the Company’s common stock, the trading price per $1,000 principal amount of ~~Convertible~~2025 Notes, or specified corporate events including a change in control of the Company. The Company may not redeem the ~~Convertible~~2025 Notes prior to the stated maturity date and no sinking fund is provided for the ~~Convertible~~2025 Notes. The ~~Convertible~~2025 Notes are convertible, at the election of the Company, into solely cash, solely shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock. The Company intends to settle the ~~Convertible~~2025 Notes in cash upon conversion, with any excess conversion value to be settled in shares of our common stock. In accordance with GAAP, the ~~Convertible~~2025 Notes ~~are~~will be accounted for as a liability with a separate equity component recorded for the conversion option. A liability ~~was~~will be recorded for the ~~Convertible~~2025 Notes on the issuance date at fair value based on a discounted cash flow analysis using current market rates for debt instruments with similar terms. The difference between the initial proceeds from the ~~Convertible~~2025 Notes and the estimated fair value of the debt instruments ~~resulted~~will result in a debt discount, with an offset recorded to additional paid-in capital representing the equity component. ~~The discount on the Convertible Notes was approximately $6.1 million at issuance, which represents the cash discount paid~~

Table of approximately $2.6 million and the approximate $3.5 million attributable to the value of the conversion option recorded in equity, which is being amortized into interest expense through the maturity date of the Convertible Notes. As of December 31, 2017, the unamortized debt discount of our Convertible Notes was approximately $2.9 million.Contents

Acquisitions and Investments. As noted previously, the Company ~~invested approximately $79.8 million to acquire six~~acquired ten single-tenant income properties ~~during the year ended December 31, 2017.~~and one multi-tenant income property, for an aggregate purchase price of approximately $164.7 million. These acquisitions included the following:


Tenant Description	Tenant Type	Property Location	Date of Acquisition	Property Square-Feet	Property Acres	Purchase Price		Percentage Leased		Remaining Lease Term at Acquisition Date (in years)
Hobby Lobby Stores, Inc.	Single-Tenant	Winston-Salem, NC	05/16/19	55,000	7.6	$	8,075,000		100%	10.9
24 Hour Fitness USA, Inc.	Single-Tenant	Falls Church, VA	05/23/19	46,000	3.1		21,250,000		100%	8.6
Walgreen Co.	Single-Tenant	Birmingham, AL	06/05/19	14,516	2.1		5,500,000		100%	9.8
Family Dollar Stores of Massachusetts, Inc.	Single-Tenant	Lynn, MA	06/07/19	9,228	0.7		2,100,000		100%	4.8
Walgreen Co.	Single-Tenant	Albany, GA	06/21/19	14,770	3.6		3,634,000		100%	13.6
Carpenter Hotel (1)	Single-Tenant	Austin, TX	07/05/19	N/A	1.4		16,250,000		100%	99.1
General Dynamics Corporation	Single-Tenant	Reston, VA	07/12/19	64,319	3.0		18,600,000		100%	9.9
Live Nation Entertainment, Inc.	Single-Tenant	East Troy, WI	08/30/19	N/A	158.3		7,500,000		100%	10.6
Party City Corporation	Single-Tenant	Oceanside, NY	09/24/19	15,500	1.2		7,120,000		100%	10.2
Burlington Stores, Inc.	Single-Tenant	N. Richland Hills, TX	10/28/19	70,891	5.3		11,940,000		100%	9.3
The Strand	Multi-Tenant	Jacksonville, FL	12/09/19	212,402	52.0		62,701,000		95%	9.5
	Total / Weighted Average			502,626		$	164,670,000			18.4

(1)In conjunction with the acquisition of the property in Aspen, Colorado, the master tenant contributed approximately $1.5 million of the purchase price, resulting in a net cash investment by the Company of approximately $26.5 million. The $1.5 million purchase price contribution is reflected as deferred revenue and will be accreted into income property rental revenue over the term of the lease.

We are targeting investments between approximately ~~$80.0~~$160.0 million to ~~$120.0~~$210.0 million in income-producing properties during ~~2018. We currently are not planning to make investments in commercial loans secured by commercial real estate in 2018.~~2019. We expect to fund our acquisitions utilizing available capacity under our credit facility, cash from operations, proceeds from ~~land sales transactions, possibly~~ the dispositions of income properties, and potentially the sale of all or a portion of our Subsurface ~~Interests, each~~Interests. We expect dispositions of ~~which we expect~~income properties and subsurface interests will qualify under the like-kind exchange deferred-tax structure, and additional financing sources.

Dispositions. ~~There were no~~In addition to the 20 single-tenant net lease properties sold to PINE in November 2019, the Company completed the sale of four other income ~~property dispositions~~properties during the year ended December 31, ~~2017.~~2019. In February 2019, the Company sold its approximately 59,000 square foot multi-tenant retail property located in Sarasota, Florida that was anchored by a Whole Foods Market grocery store, for approximately $24.6 million. In May 2019, the Company sold its approximately 112,000 square foot retail strip center, anchored by a 24-Hour Fitness, for approximately $18.3 million. In June 2019 the Company sold its approximately 76,000 square foot two-tenant office property in Santa Clara, California for approximately $37 million. And finally, in August of 2019, the Company sold its property that was subject to a ground lease with WaWa for approximately $2.8 million. In aggregate, the four dispositions generated approximately $82.6 million in proceeds with gains recognized of approximately $20.8 million, or approximately $3.06 per share, after tax.

~~Capital Expenditures.~~Contractual Commitments. In conjunction with the Company’s sale of approximately 3.4 acres of land to RaceTrac in December 2013, the Company agreed to reimburse RaceTrac for a portion of the costs for road improvements and the other costs associated with bringing multiple ingress/egress points to the entire 23 acre Williamson Crossing site, including the Company’s remaining 19.6 acres. The estimated cost for the improvements equals approximately $1.26 million, and the Company’s commitment is to reimburse RaceTrac in an amount equal to the lesser of 77.5% of the actual costs or $976,500. The Company’s commitment to fund the improvement costs benefiting the remaining Company land within

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Williamson Crossing can be paid over five years utilizing proceeds from sales of the remaining land or at the end of the fifth year. In 2013, the Company deposited $283,500 of cash in escrow related to the improvements, which is classified as restricted cash in the consolidated balance sheets. The total amount in escrow as of December 31, 2017 was approximately $288,000, including accrued interest. Accordingly, as of December 31, 2017, the remaining maximum commitment is approximately $689,000.

In conjunction with the Company’s sale of approximately 18.1 acres of land to an affiliate of Sam’s Club (“Sam’s”) in December 2015, the Company agreed to reimburse Sam’s for a portion of their construction costs applicable to adjacent outparcels retained by the Company. As a result, in December 2015, the Company deposited $125,000 of cash in escrow related to construction work which remains classified as restricted cash in the consolidated balance sheets. The total amount in escrow as of December 31, 2017 was approximately $125,000, including accrued interest. Accordingly, the Company’s maximum commitment related to the construction work benefitting the outparcels adjacent to Sam’s land parcel is approximately $125,000, to be paid from escrow upon completion.

In conjunction with the Company’s development of two single-tenant income properties, both restaurants, on the beach parcel as described in Note 4, “Land and Subsurface Interests,” the Company executed multiple contracts with third-parties to perform the work necessary to prepare the site, construct the restaurants, and acquire the related furniture and equipment. Pursuant to the leases with the tenants of the two restaurant properties, LandShark and Cocina 214, and based on the Company’s current cost estimates, the total estimated cost to improve the land and develop the income properties is approximately $6.7 million. Through December 31, 2017, the Company has incurred approximately $5.9 million of the total estimated cost, which is included in Construction in Progress on the Company’s consolidated balance sheets, leaving a remaining commitment of approximately $858,000. The development of the two restaurant properties was completed in time for the tenants to commence operations during January of 2018. Accordingly, during the first quarter of 2018, the total investment in the beach parcel and the construction costs of the two single-tenant properties will be classified as Income Properties, Land, Building, and Improvements, within the Property, Plant, and Equipment classification on the Company’s consolidated balance sheets.

In conjunction with the extension of the leases with Hilton Grand Vacations executed during the fourth quarter of 2017, the Company is obligated to fund the Income Property Lease Incentive to Hilton Grand Vacations, as described in Note 9, “Other Assets” in the amount of approximately $2.7 million as of December 31, 2017. This payment was made during January 2018.

In connection with the ~~Golf Course Land Purchase, each year~~acquisition of The Strand property located in Jacksonville, FL on December 9, 2019, the Company ~~is obligated to pay the City additional consideration in the amount~~received a credit of ~~an annual surcharge of $1 per golf round played (the “Per-Round Surcharge”) with an annual minimum Per-Round Surcharge of $70,000 and~~approximately $450,000 for a ~~maximum aggregate amount~~tenant improvement allowance for one of the ~~Per-Round Surcharges paid equal to $700,000.~~tenants of The ~~maximum~~Strand. Accordingly, this amount ~~of $700,000 represents contingent consideration and has been recorded as an increase~~is included in ~~Golf Buildings, Improvements, and Equipment and~~ Accrued and Other Liabilities in the ~~accompany~~accompanying consolidated balance sheets as of December 31, ~~2017. The first annual payment~~2019. Subsequent to December 31, 2019, the improvements were completed by the tenant and the Company funded the $450,000.

In connection with the Daytona Beach Development, the Company has executed agreements for the demolition of ~~$70,000 was made in January 2018 leaving a remaining commitment of $630,000~~certain existing structures, which commitments totaled approximately $316,000 as of ~~the date of this report.~~December 31, 2019.

Other Matters. In connection with a certain land sale contract to which the Company is a party, the purchaser’s pursuit of customary development entitlements gave rise to an inquiry by federal regulatory agencies regarding prior agricultural activities by the Company on such land. During the second quarter of 2015, we received a written information request regarding such activities. We submitted a written response to the information request along with supporting documentation. During the fourth quarter of 2015, based on discussions with the agency, a penalty related to this matter was deemed probable, and accordingly the estimated penalty of $187,500 was accrued as of December 31, 2015, for which payment was made during the quarter ended September 30, 2016. Also, during the fourth quarter of 2015, the agency advised the Company that the resolution to the inquiry would likely require the Company to incur costs associated with wetlands restoration relating to approximately 148.4 acres of the Company’s land. At December 31, 2015, the Company’s third-party environmental engineers estimated the cost for such restoration activities to range from approximately $1.7 million to approximately $1.9 million. Accordingly, as of December 31, 2015, the Company accrued an obligation of approximately $1.7 million, representing the low end of the estimated range of possible restoration costs, and included such estimated costs on the consolidated balance sheets as an increase in the basis of our land and development costs

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associated with those and benefitting surrounding acres. As of June 30, 2016, the final proposal from the Company’s third-party environmental engineer was received reflecting a total cost of approximately $2.0 million. Accordingly, an increase in the accrual of approximately $300,000 was made during the second quarter of 2016. During the first quarter of 2019, the Company received a revised estimate for completion of the restoration work for which the adjusted final total cost was approximately $2.4 million. Accordingly, an increase in the accrual of approximately $361,000 was recorded during the first quarter of 2019. The Company has funded approximately ~~$1.3~~$2.3 million of the total ~~$2.0~~$2.4 million of estimated costs through December 31, ~~2017.~~2019, leaving a remaining accrual of approximately $121,000. The Company believes there is at least a reasonable possibility that the estimated remaining liability of approximately ~~$708,000~~$121,000 could change within one year of

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the date of the consolidated financial statements, which in turn could have a material impact on the Company’s consolidated balance sheets and future cash flows. The Company evaluates its estimates on an ongoing basis; however, actual results may differ from those estimates.

During the first quarter of 2017, the Company completed the sale of approximately 1,581 acres of land to Minto Communities LLC which acreage represents a portion of the Company’s remaining ~~$708,000~~$430,000 obligation. Accordingly, the Company deposited $423,000 of cash in escrow to secure performance on the obligation. The funds in escrow can be drawn upon completion of certain milestones including completion of restoration and annual required monitoring. The first such milestone was achieved during the fourth quarter of 2017 and $189,500 of the escrow was refunded. The second milestone related to the completion of the first-year maintenance and monitoring was achieved during the first quarter of 2019 and $77,833 of the escrow was refunded leaving an escrow balance of approximately ~~$234,000~~$156,000 as of December 31, ~~2017.~~2019. Additionally, resolution of the regulatory matter required the Company to apply for an additional permit pertaining to an additional approximately 54.66 acres, which permit may require mitigation activities which the Company anticipates could be satisfied through the utilization of existing mitigation credits owned by the Company or the acquisition of mitigation credits. Resolution of this matter allowed the Company to obtain certain permits from the applicable federal or state regulatory agencies needed in connection with the closing of the land sale contract that gave rise to this matter. As of June 30, 2017, the Company determined that approximately 36 mitigation credits were required to be utilized, which represents approximately $298,000 in cost basis of the Company’s mitigation credits. Accordingly, the Company transferred the mitigation credits through a charge to direct cost of revenues of real estate operations during the three months ended June 30, 2017, thereby resolving the required mitigation activities related to the approximately 54.66 acres. In addition, in connection with other land sale contracts to which the Company is or may become a party, the pursuit of customary development entitlements by the potential purchasers may require the Company to utilize or acquire mitigation credits for the purpose of obtaining certain permits from the applicable federal or state regulatory agencies. Any costs incurred in connection with utilizing or acquiring such credits would be incorporated into the basis of the land under contract. No amounts related to such potential future costs have been accrued as of December 31, ~~2017.~~2019.

As of December 31, ~~2017,~~2019, we have no other contractual requirements to make capital expenditures.

During the period from the fourth quarter of 2015 through the first quarter of 2016, the Company received communications from Wintergreen Advisers, LLC (“Wintergreen”), some of which have been filed publicly. In investigating Wintergreen’s allegations contained in certain of these communications, in pursuing the strategic alternatives process suggested by Wintergreen, and in engaging in a proxy contest in 2017, the Company has incurred costs of approximately $3.0 million, to date, through December 31, 2017. Approximately $1.6 million of the approximately $3.0 million was incurred during the year ended December 31, 2017, of which approximately $1.2 million is specifically for legal representation and third party costs related to the proxy contest. None of Wintergreen’s allegations, which included allegations regarding inadequate disclosure and other wrong-doing by the Company and its directors and officers, were found to have any basis or merit.

We believe we will have sufficient liquidity to fund our operations, capital requirements, maintenance, and debt service requirements over the next twelve months and into the foreseeable future, with cash on hand, cash flow from our operations and approximately ~~$30.0~~$40.1 million of available capacity on the existing ~~$100.0~~$200.0 million Credit Facility, based on our current borrowing base of income properties, as of December 31, ~~2017. During the first quarter of 2018,~~2019.

In early 2017, the Company expanded the commitment under its Credit Facility to $130.0 million, providing an additional capacity of approximately $60.0 million, based on the outstanding balance as of December 31, 2017 of approximately $70.0 million.

~~In the fourth quarter of 2015, the Company announced~~established a new $10 million stock repurchase program (the “$10 Million Repurchase Program”)~~. As of March 29, 2017,~~, in addition to the ~~$10 Million Repurchase Program had been completed. In the first quarter of 2017, the~~remaining approved repurchases under a prior plan totaling approximately $2.6 million. The Company ~~announced a new $10~~completed repurchases totaling approximately $7.2 million stock repurchase program (the “New $10 Million Repurchase Program”) under which approximately $4.6 million of the Company’s common stock had been repurchased as of December 31, 2017. In the aggregate, during the year ended December 31, ~~2017,~~2017. On July 18, 2018, the Company’s Board of Directors approved an increase of approximately $7.1 million to the stock repurchase program, refreshing the total program to an aggregate of $10 million (the “2018 Increase”), as the Company had completed repurchases prior the 2018 Increase. Including repurchases under ~~both programs,~~the 2018 Increase, the Company repurchased ~~135,329~~a total of 168,602 shares of its common stock on the open market for a total cost of approximately ~~$7.2~~$9.8 million, or an average price per share of ~~$53.27, and placed those~~$58.35, during the year ended December 31, 2018. In January 2019, the Company’s Board of Directors approved an increase of $10.0 million to the stock repurchase program, refreshing the total program to an aggregate of $10 million. As of the quarter ended September 30, 2019 the Company had repurchased 211,736 shares infor approximately $12.7 million. In April 2019 the Company’s Board approved the repurchase of a block of shares from the Company’s largest shareholder whereby the Company repurchased 320,741 shares for approximately $18.4 million, or $57.50 per share. In November 2019 the Company’s Board approved a new $10 million buyback program. During the fourth quarter of 2019 the Company repurchased 158,625 shares for approximately $10 million, or $63.04 per share. The shares of the Company’s common stock repurchased during each of the aforementioned years through the year ended December 31, 2019 were returned to the Company’s treasury.

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Our Board of Directors and management consistently review the allocation of capital with the goal of providing the best long-term return for our shareholders. These reviews consider various alternatives, including increasing or decreasing regular dividends, repurchasing ~~stock,~~the Company’s securities, and retaining funds for reinvestment. Annually, the Board reviews our business plan and corporate strategies, and makes adjustments as circumstances warrant. Management’s focus is to continue our strategy to diversify our portfolio by redeploying proceeds from like-kind exchange transactions and utilizing our Credit Facility

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to increase our portfolio of income-producing properties, providing stabilized cash flows with ~~good~~strong risk-adjusted returns primarily in larger metropolitan areas and growth markets.

CONTRACTUAL OBLIGATIONS AND COMMITMENTS

We have various contractual obligations, which are recorded as liabilities in our consolidated financial statements. Other items, such as certain development obligations, are not recognized as liabilities in our consolidated financial statements, but are required to be disclosed.

The following table summarizes our significant contractual obligations and commercial commitments on an undiscounted basis at December 31, ~~2017,~~2019, and the future periods in which such obligations are expected to be settled in cash. In addition, the table reflects the timing of principal and interest payments on outstanding borrowings.

PAYMENT DUE BY PERIOD


Contractual Obligations	Total	Less Than 1 Year	1-3 Years	3-5 Years	More Than 5 Years	Total	Less Than 1 Year	1-3 Years	3-5 Years	More Than 5 Years
	$	$	$	$	$	$	$	$	$	$
Long-Term Debt Obligations	200,000,000	—	75,000,000	95,000,000	30,000,000	288,729,722	75,000,000	23,884,373	159,845,349	30,000,000
Operating Leases Obligations	374,567	150,689	218,138	5,740	—	400,610	126,540	241,332	32,738	—
Construction and Other Commitments	5,394,171	4,826,537	567,634	—	—	205,774	102,887	102,887	—	—
Total	205,768,738	4,977,226	75,785,772	95,005,740	30,000,000	289,336,106	75,229,427	24,228,592	159,878,087	30,000,000

CRITICAL ACCOUNTING POLICIES

The consolidated condensed financial statements included in this Annual Report are prepared in conformity with U.S. generally accepted accounting principles (“GAAP”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses. The development and selection of these critical accounting policies have been determined by management and the related disclosures have been reviewed with the Audit Committee of the Board of Directors of the Company. Actual results could differ from those estimates.

Our significant accounting policies are more fully described in Note 1 “Summary of Significant Accounting Policies” to the consolidated financial statements included in Item 8, “Financial Statements and Supplementary Data” in this Annual Report on Form 10-K; however, the most critical accounting policies, which involve the use of estimates and assumptions as to future uncertainties and, therefore, may result in actual amounts that differ from estimates, are as follows:

Use of Estimates in the Preparation of Financial Statements. The preparation of financial statements in conformity with ~~U.S. generally accepted accounting principles~~GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Because of the ~~fluctuating~~variability in market conditions that ~~currently exist~~have occurred in the ~~Florida and~~ national real estate markets, and the volatility and uncertainty in the financial and credit markets, it is possible that the estimates and assumptions, most notably those related to the Company’s investment in income properties and commercial loans, could change materially during the time span associated with the continued volatility of the real estate and financial markets or as a result of a significant dislocation in those markets.

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Purchase Accounting for Acquisitions of Real Estate Subject to a Lease.In accordance with the FASB guidance on business combinations, the fair value of the real estate acquired with in-place leases is allocated to the acquired tangible assets, consisting of land, building and tenant improvements, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, the value of in-place leases, and the value of leasing costs, based in each case on their relative fair values.

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The fair value of the tangible assets of an acquired leased property is determined by valuing the property as if it were vacant, and the “as-if-vacant” value is then allocated to land, building and tenant improvements based on the determination of the fair values of these assets.

In allocating the fair value of the identified intangible assets and liabilities of an acquired property, above-market and below-market in-place lease values are recorded as other assets or liabilities based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases, and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining term of the lease, including the probability of renewal periods. The capitalized above-market lease values are amortized as a reduction of rental income over the remaining terms of the respective leases. The capitalized below-market lease values are amortized as an increase to rental income over the initial term unless the Company believes that it is likely that the tenant will renew the option whereby the Company amortizes the value attributable to the renewal over the renewal period.

The aggregate value of other acquired intangible assets, consisting of in-place leases, is measured by the excess of (i) the purchase price paid for a property after adjusting existing in-place leases to market rental rates over (ii) the estimated fair value of the property as-if-vacant, determined as set forth above. The value of in-place leases exclusive of the value of above-market and below-market in-place leases is amortized to expense over the remaining non-cancelable periods of the respective leases. If a lease were to be terminated prior to its stated expiration, all unamortized amounts relating to that lease would be written off. The value of tenant relationships is reviewed on individual transactions to determine if future value was derived from the acquisition.

Prior to October 1, 2016, the Company determined that income property purchases subject to a lease, whether that lease is in-place or originated at the time of acquisition, qualify as a business combination, and acquisition costs are expensed in the period the transaction closes. In January 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-01, “Business Combinations” which clarified the definition of a business. Pursuant to ASU 2017-01, the acquisition of an income property subject to a lease no longer qualifies as a business combination, but rather determined to be an asset acquisition. The Company early adopted ASU 2017-01 effective October 1, 2016 on a prospective basis. Accordingly, for income property acquisitions during the fourth quarter of 2016, acquisition costs have been capitalized.

Income Property Leases. The rental of the Company’s income properties are classified as operating leases. The Company recognizes lease income on these properties on a straight-line basis over the term of the lease.

Land and Development Costs. The carrying value of land and development includes the initial acquisition costs of land, improvements thereto, and other costs incidental to the acquisition or development of land. Subsurface Interests (hereinafter defined) and capitalized costs relating to timber and hay operations are also included in land and development costs. These costs are allocated to properties on a relative sales value basis and are charged to costs of sales as specific properties are sold. Due to the nature of the business, land and development costs have been classified as an operating activity on the consolidated statements of cash flows.

Sales of Real Estate. Gains and losses on sales of real estate are accounted for as required by ~~the Topic of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)~~ FASB ASC Topic ~~976-605-25, Accounting for Sales of Real Estate.~~606, Revenue from Contracts with Customers. The Company recognizes revenue from the ~~sale~~sales of real estate ~~at the time the sale is consummated, unless the property is sold on a deferred payment plan and the initial payment does not meet established criteria, or~~when the Company ~~retains some form of continuing involvement~~transfers the promised goods and/or services in the ~~property.~~contract based on the transaction price allocated to the performance obligations within the contract. As market information becomes available, real estate cost basis is analyzed and recorded at the lower of cost or market.

Long-Lived Assets. The Company follows FASB ASC Topic 360-10, Property, Plant, and Equipment in conducting its impairment analyses. The Company reviews the recoverability of long-lived assets, including land and development costs, real estate held for sale, and property, plant, and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Examples of situations considered to be triggering events include: a substantial decline in operating cash flows during the period, a current or projected loss from operations, an income property not fully leased or leased at rates that are less than current market rates, and any other quantitative or qualitative events deemed significant by our management. Long-lived assets are evaluated for impairment

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by using an undiscounted cash flow approach, which considers future estimated capital expenditures. Impairment of long-lived assets is measured at fair value less cost to sell.

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Stock-Based Compensation. Prior to 2010, the Company maintained a stock option plan (the “2001 Plan”) pursuant to which 500,000 shares of the Company’s common stock were available to be issued. The 2001 Plan was approved at the April 25, 2001 shareholders’ meeting and expired in April 2011, with no new option shares issued after that date. Under the 2001 Plan, the option exercise price equaled the average of the high and low stock market price on the date of grant. The options generally vested over five years and expired after ten years. In connection with the grant of non-qualified options, a stock appreciation right for each share covered by the option could also be granted. The stock appreciation right entitled the optionee to receive a supplemental payment, which could be paid in whole or in part in cash or in shares of common stock equal to a portion of the spread between the exercise price and the fair market value of the underlying share at the time of exercise. The expenses associated with stock options and stock appreciation rights were recognized over their requisite service period.

Both the Company’s stock options and stock appreciation rights awarded under the 2001 Plan were liability classified awards and were required to be remeasured to fair value at each balance sheet date until the award was settled, as required by applicable provisions of FASB ASC Topic, Share-Based Payments. See Note 18, “Stock-Based Compensation.”

At the Annual Meeting of Shareholders of the Company held on April 28, 2010, the Company’s shareholders approved the Consolidated-Tomoka Land Co. 2010 Equity Incentive Plan (the ~~“2010~~“Original 2010 Plan”). The Original 2010 Plan replaced the Company’s 2001 Plan. At the Annual Meeting of Shareholders of the Company held on April 24, 2013, the Company’s shareholders approved an amendment and restatement of the entire Original 2010 Plan, which among other things, incorporated claw back provisions and clarified language regarding the shares available subsequent to forfeiture of any awards of restricted shares. At the Annual Meeting of Shareholders of the Company held on April 23, 2014, the Company’s shareholders approved an amendment to the Original 2010 Plan increasing the number of shares authorized for issuance by 240,000 shares, bringing the total number of shares authorized for issuance to 450,000. At the Annual Meeting of Shareholders of the Company held on April 25, 2018, the Company’s shareholders approved the Second Amended and Restated 2010 Equity Incentive Plan (the “2010 Plan”) which, among other things, increased the number of shares available thereunder to 720,000. Awards under the 2010 Plan may be in the form of stock options, stock appreciation rights, restricted shares, restricted share units, performance shares, and performance units. Employees of the Company and its subsidiaries and non-employee directors may be selected by the Compensation Committee to receive awards under the 2010 Plan. The maximum number of shares of which stock awards may be granted under the 2010 Plan is ~~450,000~~702,000 shares. No participant may receive awards during any one calendar year representing more than 50,000 shares of common stock. In no event will the number of shares of common stock issued under the plan upon the exercise of incentive stock options exceed ~~450,000~~720,000 shares. These limits are subject to adjustments by the Compensation Committee as provided in the 2010 Plan for stock splits, stock dividends, recapitalizations, and other similar transactions or events. The 2010 Plan currently provides that it will expire on the tenth anniversary of the date that it was adopted by the Board, and that no awards will be granted under the plan after that date.

All non-qualified stock option awards, restricted share awards, and performance share awards granted under the 2010 ~~plan~~Plan were determined to be equity-based awards under FASB ASC Topic, Share-Based ~~Payments.~~Payments.

The Company used the Black-Scholes valuation pricing model to determine the fair value of its non-qualified stock option awards. The determination of the fair value of the awards is affected by the stock price as well as assumptions regarding a number of other variables. These variables include expected stock price volatility over the term of the awards, annual dividends, and a risk-free interest rate assumption.

The Company used a Monte Carlo simulation pricing model to determine the fair value and vesting period of the restricted share awards. The determination of the fair value of market condition-based awards is affected by the stock price as well as assumptions regarding a number of other variables. These variables include expected stock price volatility over the requisite performance term of awards, the performance of the Company’s stock price, annual dividends, and a risk-free interest rate assumption. Compensation cost is recognized regardless of the achievement of the market conditions, provided the requisite service period is met.

~~Income Taxes.~~ The Company uses the asset and liability method to account for income taxes. Deferred income taxes result primarily from the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, see Note 19, “Income Taxes.” In June 2006, the FASB issued additional guidance, which clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements included in income taxes. The interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be

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taken in a tax return. The interpretation also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. In accordance with FASB guidance included in income taxes, the Company has analyzed its various federal and state filing positions and believes that its income tax filing positions and deductions are well documented and supported. Additionally, the Company believes that its accruals for tax liabilities are adequate. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to the FASB guidance.

New Accounting Pronouncements. Refer to Note 1, “Summary of Significant Accounting Policies” to the consolidated financial statements included in Item 8, “Financial Statements and Supplementary Data” in this Annual Report on Form 10-K.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The principal market risk (i.e. the risk of loss arising from adverse changes in market rates and prices), to which we are exposed is interest rate risk relating to our debt. We may utilize overnight sweep accounts and short-term investments as a means to minimize the interest rate risk. We do not believe that interest rate risk related to cash equivalents and short-term investments, if any, is material due to the nature of the investments.

We are primarily exposed to interest rate risk relating to our own debt ~~primarily~~ in connection with ~~the Credit Facility,~~our credit facility, as this facility carries a variable rate of interest. Our borrowings on ~~the Credit Facility~~our $200.0 million revolving credit facility bear a variable rate of interest based on the 30-day LIBOR plus a rate of between ~~150~~.35 basis points and ~~220~~195 basis points based on our level of borrowing as a percentage of our total asset ~~value calculated pursuant to the Credit Facility.~~value. As of December 31, ~~2017,~~2019, the outstanding balance on our ~~Credit Facility~~credit facility was ~~$70.0~~approximately $159.8 million. A hypothetical change in the interest rate of 100 basis points (i.e., 1%) would affect our financial position, results of operations, and cash flows by approximately ~~$700,000, or $0.09 per share, after tax.~~$1.6 million. The ~~$25.0~~$23.9 million

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mortgage loan which closed on April 15, 2016, bears a variable rate of interest based on the 30-day LIBOR plus a rate of 190 basis points. The interest rate for this mortgage loan has been fixed through the use of an interest rate swap that fixed the rate at 3.17%. By virtue of fixing the variable rate, our exposure to changes in interest rates is minimal but for the impact on Other Comprehensive Income. Management’s objective is to limit the impact of interest rate changes on earnings and cash flows and to manage our overall borrowing costs.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Company’s Consolidated Financial Statements appear beginning on page F-1 of this report. See Item 15 of this report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

There have been no disagreements with our accountants on accounting and financial disclosures.

ITEM 9A. CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

As of the end of the period covered by this report, an evaluation, as required by rules 13(a)-15 and 15(d)-15 of the Securities Exchange Act of 1934 (the “Exchange Act”) was carried out under the supervision and with the participation of the Company’s management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the Exchange Act). Based on that evaluation, the CEO and CFO have concluded that the design and operation of the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms, and to provide reasonable assurance that information required to be disclosed by the Company in such reports is accumulated and communicated to the Company’s management, including its CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

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MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Company’s executive offices are located at 1140 N. Williamson Blvd., Suite 140 Daytona Beach, Florida, and its telephone number is (386) 274-2202.

The Company’s website is located at www.ctlc.com. The Company intends to comply with the requirements of Item 5.05 of Form 8-K regarding amendments to and waivers under the code of business conduct and ethics applicable to its Chief Executive Officer, Principal Financial Officer and Principal Accounting Officer by providing such information on its website within four days after effecting any amendment to, or granting any waiver under, that code, and we will maintain such information on our website for at least twelve months. The information contained on the Company’s website does not constitute part of this Form 10-K.

On the Company’s website you can also obtain, free of charge, a copy of this Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act of 1934, as amended, as soon as reasonably practicable, after the Company files such material electronically with, or furnish it to, the Securities and Exchange Commission (“Commission” or “SEC”). The public may read and obtain a copy of any materials the Company files electronically with the Commission at www.sec.gov.

Additional information on the Company’s website includes the guiding policies adopted by the Company, which include the Company’s Corporate Governance Principles, Code of Business Conduct and Ethics Policy and Insider Trading Policy.

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In May 2013, the Internal Control – Integrated Framework (the “2013 Framework”) was released by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). The 2013 Framework updates and formalizes the principles embedded in the original Internal Control-Integrated Framework issued in 1992 (the “1992 Framework”), incorporates business and operating environment changes over the past two decades, and improves the original 1992 Framework’s ease of use and application.

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, ~~2017.~~2019. In conducting this assessment, it used the criteria set forth by COSO in the 2013 Framework. Based on management’s assessment and those criteria, management believes that the Company has maintained effective internal control over financial reporting as of December 31, ~~2017.~~2019. The audit report, of Grant Thornton LLP, the Company’s independent registered public accounting firm, ~~that audited~~on the effectiveness of our internal control over financial ~~statements~~reporting as of December 31, 2019, is included in this Annual Report on Form 10-K and is incorporated herein as Item 15.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) of the Exchange Act) during the fourth fiscal quarter covered by this report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

The information required to be set forth herein, except for the information included under the heading “Executive Officers of the Registrant” below, iswill be included in the Company’s definitive proxy statement for its ~~2018~~2020 annual shareholders’ meeting to be filed with the SEC within 120 days after the end of the registrant’s fiscal year ended December 31, ~~2017~~2019 (the “Proxy Statement”), which sections are incorporated herein by reference.

EXECUTIVE OFFICERS OF THE REGISTRANT

The executive officers of the Company, their ages at December 31, ~~2017,~~2019, their business experience during the past five years, and the year first elected as an executive officer of the Company are as follows:

John P. Albright, ~~52,~~54, president and chief executive officer of the Company since August 1, 2011. Prior to joining the Company, Mr. Albright was the Co-Head and Managing Director of Archon Capital, a Goldman Sachs Company located in Irving, Texas. Prior to that, he was the Executive Director, Merchant Banking-Investment Management for Morgan Stanley. Prior to Morgan Stanley, Mr. Albright was Managing Director and Officer of Crescent Real Estate Equities, a publicly traded REIT, based in Fort Worth, Texas. His experience involves various aspects of investment, lending, and development of commercial properties, as well as real estate investment banking.

Mark E. Patten, ~~54,~~56, senior vice president and chief financial officer of the Company since April 16, 2012. Prior to joining the Company, Mr. Patten served as the executive vice president and chief financial officer of SolarBlue LLC, a developer of alternative energy solutions located in Orlando, Florida. Prior to that, he was executive vice president and chief financial officer of Legacy Healthcare Properties Trust Inc. in 2010 and held the same positions with Simply Self Storage from August 2007 to May 2010. Prior to those positions, he served as senior vice president and chief accounting officer of CNL Hotels & Resorts, Inc., a public non-traded lodging REIT, from January 2004 until the sale of the company in April 2007. Mr. Patten began his career at KPMG where he spent twelve years and was named a partner in 1997.

~~Table of Contents~~

Daniel E. Smith, ~~52,~~54, senior vice president, general counsel and corporate secretary of the Company since October 22, 2014. Mr. Smith most recently served as Vice President-Hospitality and Vice President and Associate General Counsel at Goldman Sachs & Co. Prior to that, he spent ten years at Crescent Real Estate Equities, a publicly traded REIT, based in Fort Worth, Texas, where he held several positions in the legal department, most recently Senior Vice President and General Counsel.

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Steven R. Greathouse, ~~39,~~41, senior vice president, investments of the Company since January 3, 2012. Mr. Greathouse most recently served as the Director of Finance at N3 Real Estate, a single-tenant triple net property developer. Prior to that, he was a Senior Associate, Merchant Banking-Investment Management for Morgan Stanley and Crescent Real Estate Equities, a publicly traded REIT, based in Fort Worth, Texas.

Each of our executive officers are elected annually as provided in the Company’s Bylaws.

ITEM 11. EXECUTIVE COMPENSATION

The information required to be set forth herein iswill be included in the Proxy Statement, which sections are incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The ~~other~~ information required to be set forth herein iswill be included in the Proxy Statement, which sections are incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required to be set forth herein iswill be included in the Proxy Statement, which sections are incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required to be set forth herein iswill be included in the Proxy Statement, which section is incorporated herein by reference.

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PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

1. FINANCIAL STATEMENTS

The following financial statements are filed as part of this report:

	Page No.

Reports of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets as of December 31, ~~2017~~2019 and ~~2016~~2018	F-4
Consolidated Statements of Operations for the three years ended December 31, ~~2017, 2016,~~2019, 2018, and ~~2015~~2017	F-5
Consolidated Statements of Comprehensive Income for the three years ended December 31, ~~2017, 2016,~~2019, 2018, and ~~2015~~2017	F-6
Consolidated Statements of Shareholders’ Equity for the three years ended December 31, ~~2017, 2016,~~2019, 2018 and ~~2015~~2017	F-7
Consolidated Statements of Cash Flows for the three years ended December 31, ~~2017, 2016,~~2019, 2018, and ~~2015~~2017	F-8
Notes to Consolidated Financial Statements for the three years ended December 31, ~~2017, 2016,~~2019, 2018, and ~~2015~~2017	F-10

2. FINANCIAL STATEMENT SCHEDULES

Included in Part IV on Form 10-K:

Schedule III—Real Estate and Accumulated Depreciation

Schedule IV – Mortgage Loans on Real Estate

Other schedules are omitted because of the absence of conditions under which they are required, materiality, or because the required information is given in the financial statements or notes thereof.

3. EXHIBITS

See Exhibit Index on page 5877 of this Annual Report on Form 10-K.

ITEM 16. FORM 10-K SUMMARY

Not applicable

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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

EXHIBITS

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED December 31, ~~2017~~2019

COMMISSION FILE NO. 001-11350

CONSOLIDATED-TOMOKA LAND CO.

(Exact name of registrant as specified in the charter)

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EXHIBIT INDEX


(3.1)		Amended and Restated Articles of Incorporation of Consolidated-Tomoka Land Co., dated October ~~26, 2011,~~26,2011, filed as Exhibit 3.1 to the registrant’s current report on Form 8-K filed October 28, 2011, and incorporated herein by reference.

(3.2)		Amended and Restated Bylaws of Consolidated-Tomoka Land Co., dated April 26, 2016, filed as Exhibit 3.2 to the registrant’s quarterly report on Form 10-Q filed May 3, 2016, and incorporated herein by reference.

(4.1)		Indenture related to the 4.50% Convertible Senior Notes due 2020, dated as of March 11, 2015, among Consolidated-Tomoka Land Co. and U.S. Bank National Association as trustee, filed as Exhibit 4.1 with the registrant’s current report on Form 8-K on March 12, 2015, and incorporated herein by reference.

(4.2)		Form of 4.50% Convertible Senior Notes due 2020, included with Exhibit 4.1 with the registrant’s current report on Form 8-K on March 12, 2015, and incorporated herein by reference.

10(4.3)		Registration Rights Agreement between Alpine Income Property Trust, Inc. and Consolidated-Tomoka Land Co. filed as Exhibit 4.21 to the registrant’s Current Report on Form 8-K as filed on November 27, 2019, and incorporated herein by reference.

(4.4)		Indenture related to the 3.875% Convertible Senior Notes due 2025, dated as of February 3, 2020, among Consolidated-Tomoka Land Co. and U.S. Bank National Association as trustee, filed as Exhibit 4.1 with the registrant’s current report on Form 8-K on February 6, 2020, and incorporated herein by reference.

(4.5)		Form of 3.875% Convertible Senior Notes due 2025, included with Exhibit 4.3 with the registrant’s current report on Form 8-K on February 6, 2020, and incorporated herein by reference.

*(4.6)		Description of the Registrant’s Securities (filed herewith).

		Material Contracts:

(10.1)		The Consolidated-Tomoka Land Co. 2001 Stock Option Plan, effective April 25, 2001, filed with the registrant’s Registration Statement on Form S-8 filed on June 20, 2001, and incorporated herein by reference (File No. 333-63400).

~~(10.2)~~		Lease Agreement dated August 28, 1997, between the City of Daytona Beach and Indigo International Inc., a wholly owned subsidiary of Consolidated-Tomoka Land Co., filed with the registrant’s Annual Report on Form 10-K for the year ended December 31, 1997, and incorporated herein by reference.

~~(10.3)~~(10.2)		Lease Amendment dated July 25, 2012, between the City of Daytona Beach and Indigo International LLC, a wholly owned subsidiary of Consolidated-Tomoka Land Co., filed as Exhibit 10.1 to this registrant’s current report on Form 8-K filed July 26, 2012, and incorporated by reference.

~~(10.4)~~(10.3)		Development Agreement dated August 18, 1997, between the City of Daytona Beach and Indigo International Inc., a wholly owned subsidiary of Consolidated-Tomoka Land Co., filed with the registrant’s Annual Report on Form 10-K for the year ended December 31, 1997, and incorporated herein by reference.

*~~(10.5)~~		Form of Stock Option and SAR Agreement under the Consolidated-Tomoka Land Co. 2001 Stock Option Plan filed with the registrant’s Annual Report on Form 10-K for the year ended December 31, 2006, and incorporated herein by reference.

*(10.6)(10.4)		Consolidated-Tomoka Land Co. Amended and Restated 2010 Equity Incentive Plan, filed as Appendix A to the registrant’s Proxy Statement for the 2013 Annual Meeting of Shareholders, filed March 22, 2013, and incorporated herein by reference.

*~~(10.7)~~(10.5)		Form of Restricted Share Award Agreement under the Consolidated-Tomoka Land Co. 2010 Equity Incentive Plan, filed with the registrant’s Annual Report on Form 10-K for the year ended December 31, 2010, and incorporated herein by reference.

*~~(10.8)~~(10.6)		Consolidated-Tomoka Land Co. Annual Cash Bonus Plan, amended and adopted July 22, 2015, filed as Exhibit 10.1 to the registrant’s current report on Form 8-K on July 28, 2015, and incorporated herein by reference.

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*~~(10.9)~~(10.7)		Employment Agreement between Consolidated-Tomoka Land Co. and John P. Albright entered into June 30, 2011, filed as Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed July 6, 2011, and incorporated herein by reference.

*~~(10.10)~~(10.8)		Nonqualified Stock Option Award Agreement between Consolidated-Tomoka Land Co. and John P. Albright, dated August 1, 2011, filed as Exhibit 10.2 to the registrant’s Current report on Form 8-K filed July 6, 2011, and incorporated herein by reference.

*~~(10.11)~~(10.9)		Restricted Share Award Agreement between Consolidated-Tomoka Land Co. and John P. Albright, dated August 1, 2011, filed as Exhibit 10.3 to the registrant’s current report Form 8-K filed July 6, 2011, and incorporated herein by reference.

*~~(10.12)~~(10.10)		Employment Agreement between Consolidated-Tomoka Land Co. and Mark E. Patten entered into April 16, 2012, filed at Exhibit 10.1 to the registrant’s current report on Form 8-K filed April 16, 2012, and incorporated herein by reference.

*~~(10.13)~~(10.11)		Nonqualified Stock Option Award Agreement between Consolidated-Tomoka Land Co. and Mark E. Patten, dated April 16, 2012, filed as Exhibit 10.2 to the registrant’s current report on Form 8-K filed April 16, 2012, and incorporated by reference.

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*~~(10.14)~~(10.12)		Restricted Share Award Agreement between Consolidated-Tomoka Land Co. and Mark E. Patten, dated April 16, 2012, filed as Exhibit 10.3 to registrant’s current report Form 8-K filed April 16, 2012, and incorporated herein by reference.

*(10.15)		Separation Agreement between Bruce W. Teeters and Consolidated-Tomoka Land Co., dated April 19, 2012, filed as Exhibit 10.1 to the registrant’s current report Form 8-K filed April 19, 2012, and incorporated herein by reference.

~~(10.16)~~		Credit Agreement between Consolidated-Tomoka Land Co. and Bank of Montreal dated February 27, 2012, filed as Exhibit 10.1 to the registrant’s current report Form 8K filed March 1, 2012, and incorporated by reference.

~~(10.17)~~		Loan Agreement between Bluebird Metrowest Orlando LLC and UBS Real Estate Securities, Inc. dated February 22, 2013, filed with the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, and incorporated herein by reference.

~~(10.18)~~		Loan Agreement between Consolidated-Tomoka Land Co. and affiliates of Consolidated-Tomoka Land Co. set forth therein, as borrowers, and Bank of America, N.A. dated March 8, 2013, filed with the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, and incorporated herein by reference.

~~(10.19)~~(10.13)		Amendment to the Credit Agreement between Consolidated-Tomoka Land Co. and Bank of Montreal dated March 29, 2013, filed with the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, and incorporated herein by reference.

~~(10.20)~~(10.14)		Amendment to the Credit Agreement between Consolidated-Tomoka Land Co. and Bank of Montreal dated August 1, 2014, filed with the registrant’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2014, and incorporated herein by reference.

~~(10.21)~~(10.15)		Loan Agreement between the Company and the affiliates of the Company set forth therein, as borrowers, and Wells Fargo Bank, National Association dated September 30, 2014, filed with the registrant’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2014, and incorporated herein by reference.

*~~(10.22)~~(10.16)		Employment Agreement between Consolidated-Tomoka Land Co. and Daniel E. Smith entered into October 22, 2014, filed with the registrant’s Annual Report on Form 10-K for the year ended December 31, 2014, and incorporated herein by reference.

~~(10.23)~~(10.17)		Amended and Restated Credit Agreement by and among Consolidated-Tomoka Land Co., as Borrower, the subsidiaries of Consolidated-Tomoka Land Co. party thereto, as Guarantors, the financial institutions party thereto, as Lenders, Bank of Montreal, as Administrative Agent, Swing Line Lender and L/C Issuer, Wells Fargo Bank, National Association as Syndication Agent, and Branch Banking and Trust Company, as Documentation Agent, dated April 20, 2015, filed as Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed May 15, 2015, and incorporated herein by reference.

~~(10.24)~~(10.18)		Consent and First Amendment to Amended and Restated Credit Agreement by and among Consolidated-Tomoka Land Co., as Borrower, the subsidiaries of Consolidated-Tomoka Land Co. party thereto, as Guarantors, the financial institutions party thereto, as Lenders, Bank of Montreal, as Administrative Agent, Wells Fargo Bank, National Association as Syndication Agent, and Branch Banking and Trust Company, as Documentation Agent, dated March 21, 2016, filed as Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed March 28, 2016, and incorporated herein by reference.

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~~(10.25)~~		Purchase and Sale Agreement by and between Consolidated-Tomoka Land Co. and SBMC Mesmer, L.P. for the sale of a portfolio of 14 single-tenant income properties, dated March 28, 2016, filed with the registrant’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2016, and incorporated herein by reference.

~~(10.26)~~		Purchase and Sale Agreement by and between Consolidated-Tomoka Land Co., and Land Venture Partners, LLC for the sale of the Company’s subsurface interests, dated April 13, 2016, filed as Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed April 18, 2016 and incorporated herein by reference.

~~(10.27)~~(10.19)		Second Amendment to the Amended and Restated Credit Agreement with Bank of Montreal and the other lenders thereunder, with Bank of Montreal acting as Administrative Agent, dated April 13, 2016, filed as Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed April 19, 2016, and incorporated herein by reference.

~~(10.28)~~*(10.20)		Consolidated-Tomoka Land Co. 2017 Executive Annual Cash Incentive Plan, dated February 22, 2017, filed with the registrant’s Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2018, and incorporated herein by reference.

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*(10.21)	~~(10.29)~~	Form of February 27, 2019 Non-Employee Director Stock Award Agreement, filed as Exhibit 10.31 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2018, and incorporated herein by reference.

*(10.22)		Form of February 3, 2017 Performance Share Award Agreement, filed as Exhibit 10.29 to the registrant’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2017, and incorporated herein by reference.

*(10.23)		Form of February 24, 2020 Performance Share Award Agreement (filed herewith).

(10.24)		Second Amended and Restated Credit Agreement, which supersedes the Company’s existing Amended and Restated Credit Agreement, with Bank of Montreal (“BMO”) and the other lenders thereunder, with BMO acting as Administrative Agent, dated September 7, 2017, filed as Exhibit 10.1 to the registrant’s Current Report on Form 8-K as filed on September 13, 2017, and incorporated herein by reference.

(10.25)		Second Amendment to Second Amended and Restated Credit Agreement Dated May 24, 2019, filed as Exhibit 10.1 to the registrant’s Current Report on Form 8-K as filed on June 3, 2019, and incorporated herein by reference.

(10.26)		Third Amendment to Second Amended and Restated Credit Agreement Dated November 26, 2019 filed as Exhibit 10.1 to the registrant’s Current Report on Form 8-K as filed on November 27, 2019, and incorporated herein by reference.

(10.27)		Management Agreement among Alpine Income Property Trust, Inc., Alpine Income Property OP, LP and Alpine Income Property Manager, LLC filed as Exhibit 10.2 to the registrant’s Current Report on Form 8-K as filed on November 27, 2019, and incorporated herein by reference.

(10.28)		Exclusivity and Right of First Offer Agreement between Alpine Income Property Trust, Inc. and Consolidated-Tomoka Land Co. filed as Exhibit 10.3 to the registrant’s Current Report on Form 8-K as filed on November 27, 2019, and incorporated herein by reference.

(10.29)		Tax Protection Agreement among Alpine Income Property Trust, Inc., Alpine Income Property Trust OP, LP, Consolidated-Tomoka Land Co. and Indigo Group Ltd. filed as Exhibit 10.4 to the registrant’s Current Report on Form 8-K as filed on November 27, 2019, and incorporated herein by reference.

(10.30)		~~Form~~Interest Purchase Agreement, dated as of ~~February 3, 2017 Performance Share Award Agreement,~~October 15, 2019, by and among Consolidated-Tomoka Land Co., Flacto, LLC, Magnetar Longhorn Fund LP and Magnetar Structured Credit Fund, LP. filed as Exhibit ~~10.29~~10.1 to the registrant’s ~~Quarterly~~Current Report on Form ~~10-Q for the quarterly period ended March 31, 2017,~~8-K/A as filed on October 22, 2019, and incorporated herein by reference.

(10.31)		Amended and Restated Limited Liability Company Agreement of Crisp39 SPV LLC, dated as of October 15, 2019, by and among Consolidated-Tomoka Land Co., Flacto, LLC, Magnetar Longhorn Fund LP and Magnetar Structured Credit Fund, LP. filed as Exhibit 10.2 to the registrant’s Current Report on Form 8-K/A as filed on October 22, 2019, and incorporated herein by reference.

***(10.32)		Purchase and Sale Agreement, dated October 29, 2019 by and between Consolidated-Tomoka Land Co. and PGP Jacksonville TC, LLC for the purchase of the property known as The Strand located in Jacksonville, Florida (filed herewith).

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***(10.33)		Purchase and Sale Agreement, dated December 23, 2019 by and between Consolidated-Tomoka Land Co., Vestar CTC Chandler, L.L.C. and Vestar CTC Chandler Phase 2, L.L.C. for the purchase of the property known as the Crossroads Towne Center located in Chandler, Arizona (filed herewith).

(21)		Subsidiaries of the Registrant.

(23.1)		Consent of Independent Registered Public Accounting Firm.

** (31.1)		Certification furnished pursuant to Section 302 of Sarbanes-Oxley Act of 2002.

** (31.2)		Certification furnished pursuant to Section 302 of Sarbanes-Oxley Act of 2002.

** (32.1)		Certification pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

** (32.2)		Certification pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(101.1)		The following materials from Consolidated-Tomoka Land Co. Annual Report on Form 10-K for the period ended December 31, 2019, are formatted in Extensible Business Reporting Language: (i) consolidated balance sheets, (ii) consolidated statements of comprehensive income, (iii) consolidated statements of stockholders' equity (iv) consolidated statements of cash flows, and (v) notes to consolidated financial statements.


101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		XBRL Taxonomy Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

*- Management Contract or Compensatory Plan or Arrangement

** - In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

*** - Certain information has been excluded because the information is both (i) not material and (ii) would likely cause competitive harm to the Registrant if publicly disclosed.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	CONSOLIDATED-TOMOKA LAND CO. (Registrant)

~~February 28, 2018~~March 6, 2020	By:	/S/ JOHN P. ALBRIGHT
		John P. Albright
		President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

~~February 28, 2018~~March 6, 2020	President and Chief Executive Officer (Principal Executive Officer), and Director	/S/ JOHN P. ALBRIGHT

~~February 28, 2018~~March 6, 2020	Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)	/S/ MARK E. PATTEN

~~February 28, 2018~~March 6, 2020	Chairman of the Board, Director	/S/ LAURA M. FRANKLIN
~~February 28, 2018~~March 6, 2020	Director	/S/ ~~JOHN J. ALLEN~~GEORGE R. BROKAW
~~February 28, 2018~~March 6, 2020	Director	/S/ R. BLAKESLEE GABLE
March 6, 2020	Director	/S/ CHRISTOPHER W. HAGA
~~February 28, 2018~~March 6, 2020	Director	/S/ WILLIAM L. OLIVARI
~~February 28, 2018~~March 6, 2020	Director	/S/ HOWARD C. SERKIN
~~February 28, 2018~~March 6, 2020	Director	/S/ THOMAS P. WARLOW, III
~~February 28, 2018~~March 6, 2020	Director	/S/ CASEY R. WOLD

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CONSOLIDATED-TOMOKA LAND CO.

INDEX TO FINANCIAL STATEMENTS


Reports of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets as of December 31, ~~2017~~2019 and ~~2016~~2018	F-4
Consolidated Statements of Operations for the three years ended December 31, ~~2017, 2016,~~2019, 2018, and ~~2015~~2017	F-5
Consolidated Statements of Comprehensive Income for the three years ended December 31, ~~2017, 2016,~~2019, 2018, and ~~2015~~2017	F-6
Consolidated Statements of Shareholders’ Equity for the three years ended December 31, ~~2017, 2016,~~2019, 2018, and ~~2015~~2017	F-7
Consolidated Statements of Cash Flows for the three years ended December 31, ~~2017, 2016,~~2019, 2018, and ~~2015~~2017	F-8
Notes to Consolidated Financial Statements for the three years ended December 31, ~~2017, 2016,~~2019, 2018, and ~~2015~~2017	F-10

F-1

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Report of Independent Registered Public Accounting Firm

Board of Directors and Shareholders

Consolidated-Tomoka Land Co.:

Opinion on the financial statements

We have audited the accompanying consolidated balance sheets of Consolidated-Tomoka Land Co. (a Florida corporation) and subsidiaries (the “Company”) as of December 31, ~~2017~~2019 and ~~2016,~~2018, the related consolidated statements of operations, comprehensive income, changes in shareholders’ equity, and cash flows for each of the three years in the period ended December 31, ~~2017,~~2019, and the related notes and financial statement schedules included under Item 15(a) (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, ~~2017~~2019 and ~~2016,~~2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, ~~2017,~~2019, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, ~~2017,~~2019, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated ~~February 28, 2018~~March 6, 2020 expressed an unqualified opinion.

Basis for opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our ~~opinion.~~opinion


/s/ Grant Thornton LLP

We have served as the Company’s auditor since 2012. Jacksonville, Florida
~~February 28, 2018~~March 6, 2020

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Report of Independent Registered Public Accounting Firm

Board of Directors and Shareholders

Consolidated-Tomoka Land Co.:

Opinion on internal control over financial reporting

We have audited the internal control over financial reporting of Consolidated-Tomoka Land ~~Co.~~ Company (a Florida corporation) and subsidiaries (the “Company”) as of December 31, ~~2017,~~2019, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ~~(COSO)~~(“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, ~~2017,~~2019, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, ~~2017,~~2019, and our report dated ~~February 28, 2018~~March 6, 2020 expressed an unqualified opinion on those financial statements.

Basis for opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying ~~management’s report.~~Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and limitations of internal control over financial reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


/s/ Grant Thornton LLP

Jacksonville, Florida
~~February 28, 2018~~March 6, 2020

F-3

Table of Contents

CONSOLIDATED-TOMOKA LAND CO.

CONSOLIDATED BALANCE SHEETS



	December 31, 2017		December 31, 2016		December 31, 2019		December 31, 2018
ASSETS
Property, Plant, and Equipment:
Income Properties, Land, Buildings, and Improvements	$	358,130,350	$	274,334,139	$	392,841,899	$	392,520,783
Golf Buildings, Improvements, and Equipment		6,617,396		3,528,194
Other Furnishings and Equipment		715,042		1,032,911		733,165		728,817
Construction in Progress		6,005,397		5,267,676		24,788		19,384
Total Property, Plant, and Equipment		371,468,185		284,162,920		393,599,852		393,268,984
Less, Accumulated Depreciation and Amortization		(23,779,780)		(16,552,077)		(23,008,382)		(24,518,215)
Property, Plant, and Equipment—Net		347,688,405		267,610,843		370,591,470		368,750,769
Land and Development Costs		39,477,697		51,955,278		6,732,291		5,624,845
Intangible Lease Assets—Net		38,758,059		34,725,822		49,022,178		43,555,445
Impact Fee and Mitigation Credits		1,125,269		2,322,906
Assets Held for Sale—See Note 23						833,167		96,838,264
Investment in Joint Ventures						55,736,668		6,788,034
Investment in Alpine Income Property Trust Inc.						38,814,425		—
Mitigation Credits						2,322,596		462,040
Commercial Loan Investments		11,925,699		23,960,467		34,625,173		—
Cash and Cash Equivalents		6,559,409		7,779,562		6,474,637		2,310,489
Restricted Cash		6,508,131		9,855,469		128,430,049		18,889,509
Refundable Income Taxes		1,116,580		943,991		—		225,024
Other Assets		12,971,129		9,469,088
Other Assets—See Note 12						9,703,549		12,885,453
Total Assets	$	466,130,378	$	408,623,426	$	703,286,203	$	556,329,872
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Accounts Payable	$	1,880,516	$	1,518,105	$	1,385,739	$	1,036,547
Accrued and Other Liabilities		10,160,526		8,667,897
Deferred Revenue		2,030,459		1,991,666
Intangible Lease Liabilities - Net		29,770,441		30,518,051
Accrued Stock-Based Compensation		—		42,092
Accrued and Other Liabilities—See Note 17						5,687,192		5,197,884
Deferred Revenue—See Note 18						5,830,720		6,370,284
Intangible Lease Liabilities—Net						26,198,248		27,390,350
Liabilities Held for Sale—See Note 23						831,320		2,178,616
Income Taxes Payable						439,086		—
Deferred Income Taxes—Net		42,293,864		51,364,572		90,282,173		54,769,907
Long-Term Debt		195,816,364		166,245,201		287,218,303		247,624,811
Total Liabilities		281,952,170		260,347,584		417,872,781		344,568,399
Commitments and Contingencies - See Note 18
Commitments and Contingencies—See Note 21
Shareholders’ Equity:
Shareholders' Equity:
Common Stock – 25,000,000 shares authorized; $1 par value, 6,030,990 shares issued and 5,584,335 shares outstanding at December 31, 2017; 6,021,564 shares issued and 5,710,238 shares outstanding at December 31, 2016		5,963,850		5,914,560
Treasury Stock – 446,655 shares at December 31, 2017; 311,326 shares at December 31, 2016		(22,507,760)		(15,298,306)
Common Stock – 25,000,000 shares authorized; $1 par value, 6,076,813 shares issued and 4,770,454 shares outstanding at December 31, 2019; 6,052,209 shares issued and 5,436,952 shares outstanding at December 31, 2018						6,017,218		5,995,257
Treasury Stock – 1,306,359 shares at December 31, 2019 and 615,257 shares at December 31, 2018						(73,440,714)		(32,345,002)
Additional Paid-In Capital		22,735,228		20,511,388		26,689,795		24,326,778
Retained Earnings		177,614,274		136,892,311		326,073,199		213,297,897
Accumulated Other Comprehensive Income		372,616		255,889		73,924		486,543
Total Shareholders’ Equity		184,178,208		148,275,842		285,413,422		211,761,473
Total Liabilities and Shareholders’ Equity	$	466,130,378	$	408,623,426	$	703,286,203	$	556,329,872

The accompanying notes are an integral part of these consolidated financial statements.

F-4

Table of Contents

~~CONSOLIDATED TOMOKA~~CONSOLIDATED-TOMOKA LAND CO.

CONSOLIDATED STATEMENTS OF OPERATIONS


	Year Ended						Year Ended
	December 31,		December 31,		December 31,		December 31,		December 31,		December 31,
	2017		2016		2015		2019		2018		2017
Revenues
Income Properties	$	31,406,930	$	25,092,484	$	19,041,111	$	41,955,414	$	40,075,731	$	31,406,930
Interest Income from Commercial Loan Investments		2,052,689		2,588,235		2,691,385
Management Services								304,553		—		—
Commercial Loan Investments								1,829,015		615,728		2,052,689
Real Estate Operations		52,522,555		38,144,347		15,942,894		852,264		2,966,429		5,190,951
Golf Operations		5,095,313		5,190,394		5,243,485
Agriculture and Other Income		334,804		59,401		78,805
Total Revenues		91,412,291		71,074,861		42,997,680		44,941,246		43,657,888		38,650,570
Direct Cost of Revenues
Income Properties		(6,917,743)		(5,204,863)		(3,655,935)		(7,000,001)		(8,170,083)		(6,917,743)
Real Estate Operations		(17,480,197)		(14,881,311)		(4,292,524)		(104,666)		(591,380)		(1,420,562)
Golf Operations		(5,958,888)		(5,587,077)		(5,593,085)
Agriculture and Other Income		(96,149)		(166,769)		(226,554)
Total Direct Cost of Revenues		(30,452,977)		(25,840,020)		(13,768,098)		(7,104,667)		(8,761,463)		(8,338,305)
General and Administrative Expenses		(10,252,610)		(10,297,877)		(8,753,779)		(9,818,075)		(9,785,370)		(10,252,610)
Impairment Charges		—		(2,180,730)		(510,041)
Depreciation and Amortization		(12,663,959)		(8,195,417)		(5,212,897)		(15,797,278)		(15,761,523)		(12,314,700)
Total Operating Expenses								(32,720,020)		(34,308,356)		(30,905,615)
Gain on Disposition of Assets		38		12,758,770		5,516,444		21,977,465		22,035,666		38
Land Lease Income		2,226,526		—		—
Total Operating Expenses		(51,142,982)		(33,755,274)		(22,728,371)
Operating Income		40,269,309		37,319,587		20,269,309
Investment Income (Loss)		37,985		(529,981)		208,879
Total Operating Income								34,198,691		31,385,198		7,744,993
Investment Income								344,843		52,221		37,985
Interest Expense		(8,523,136)		(8,753,338)		(6,919,767)		(12,466,062)		(10,423,286)		(8,523,136)
Income Before Income Tax Benefit (Expense)		31,784,158		28,036,268		13,558,421
Income Tax Benefit (Expense)		9,935,266		(11,836,854)		(5,269,104)
Income (Loss) from Continuing Operations Before Income Tax Expense								22,077,472		21,014,133		(740,158)
Income Tax Benefit (Expense) from Continuing Operations								(5,472,178)		(6,025,148)		22,481,523
Net Income from Continuing Operations								16,605,294		14,988,985		21,741,365
Income from Discontinued Operations (Net of Income Tax)—See Note 23								98,367,564		22,178,805		19,978,059
Net Income		41,719,424		16,199,414		8,289,317	$	114,972,858	$	37,167,790	$	41,719,424
Less: Net Loss Attributable to Noncontrolling Interest in Consolidated VIE		—		51,834		57,849
Net Income Attributable to Consolidated-Tomoka Land Co.	$	41,719,424	$	16,251,248	$	8,347,166

Per Share Information- See Note 10:
Per Share Information—See Note 13:
Basic
Net Income Attributable to Consolidated-Tomoka Land Co.	$	7.53	$	2.86	$	1.44
Net Income from Continuing Operations							$	3.32	$	2.72	$	3.92
Net Income from Discontinued Operations (Net of Income Tax)								19.71		4.04		3.61
Basic Net Income per Share							$	23.03	$	6.76	$	7.53
Diluted
Net Income Attributable to Consolidated-Tomoka Land Co.	$	7.48	$	2.85	$	1.43
Net Income from Continuing Operations							$	3.32	$	2.71	$	3.90
Net Income from Discontinued Operations (Net of Income Tax)								19.68		4.01		3.58
Diluted Net Income per Share							$	23.00	$	6.72	$	7.48

Dividends Declared and Paid	$	0.18	$	0.12	$	0.08	$	0.44	$	0.27	$	0.18

The accompanying notes are an integral part of these consolidated financial statements.

F-5

Table of Contents

CONSOLIDATED-TOMOKA LAND CO.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Year Ended


December 31,
2017

December 31,
2016

December 31,
2015

Net Income Attributable to Consolidated-Tomoka Land Co.

$
41,719,424

$
16,251,248

$
8,347,166

Other Comprehensive Income

Realized Loss (Gain) on Investment Securities Sold (Net of Income Tax of $-0-, $222,025, and $61,738, respectively)

—

353,542

(101,451)

Unrealized Gain (Loss) on Investment Securities (Net of Income Tax of $-0-, $210,652, and $414,962, respectively)

—

335,429

(660,761)

Cash Flow Hedging Derivative - Interest Rate Swap (Net of Income Tax of $73,304, $160,701, and $-0-, respectively)

116,727

255,889

—

Total Other Comprehensive Income (Loss), Net of Income Tax

116,727

944,860

(762,212)

Total Comprehensive Income

$
41,836,151

$
17,196,108

$
7,584,954


	Year Ended
	December 31, 2019		December 31, 2018		December 31, 2017
Net Income	$	114,972,858	$	37,167,790	$	41,719,424
Other Comprehensive Income (Loss)
Cash Flow Hedging Derivative - Interest Rate Swap (Net of Tax of $(140,082), $11,431 and $73,304, respectively)		(412,619)		113,927		116,727
Total Other Comprehensive Income (Loss), Net of Income Tax		(412,619)		113,927		116,727
Total Comprehensive Income	$	114,560,239	$	37,281,717	$	41,836,151

The accompanying notes are an integral part of these consolidated financial statements.

F-6

Table of Contents

CONSOLIDATED-TOMOKA LAND CO.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY


									Accumulated
					Additional				Other
	Common		Treasury		Paid-In		Retained		Comprehensive		Shareholders’
	Stock		Stock		Capital		Earnings		Income (Loss)		Equity
Balance January 1, 2017	$	5,914,560	$	(15,298,306)	$	20,511,388	$	136,892,311	$	255,889	$	148,275,842
Net Income		—		—		—		41,719,424		—		41,719,424
Stock Repurchase		—		(7,209,454)		—		—		—		(7,209,454)
Exercise of Stock Options		28,527		—		1,056,406		—		—		1,084,933
Vested Restricted Stock		18,930		—		(413,184)		—		—		(394,254)
Stock Issuance		1,833		—		101,303		—		—		103,136
Stock Compensation Expense from Restricted Stock Grants and Equity Classified Stock Options		—		—		1,479,315		—		—		1,479,315
Cash Dividends ($0.18 per share)		—		—		—		(997,461)		—		(997,461)
Other Comprehensive Income, Net of Income Tax		—		—		—		—		116,727		116,727
Balance December 31, 2017		5,963,850		(22,507,760)		22,735,228		177,614,274		372,616		184,178,208
Net Income		—		—		—		37,167,790		—		37,167,790
Stock Repurchase		—		(9,837,242)		—		—		—		(9,837,242)
Exercise of Stock Options		8,520		—		189,849		—		—		198,369
Vested Restricted Stock		19,065		—		(517,439)		—		—		(498,374)
Stock Issuance		3,822		—		234,890		—		—		238,712
Stock Compensation Expense from Restricted Stock Grants and Equity Classified Stock Options		—		—		1,684,250		—		—		1,684,250
Cash Dividends ($0.27 per share)		—		—		—		(1,484,167)		—		(1,484,167)
Other Comprehensive Income, Net of Income Tax		—		—		—		—		113,927		113,927
Balance December 31, 2018		5,995,257		(32,345,002)		24,326,778		213,297,897		486,543		211,761,473
Net Income		—		—		—		114,972,858		—		114,972,858
Stock Repurchase		—		(41,095,712)		—		—		—		(41,095,712)
Vested Restricted Stock		12,957		—		(316,272)		—		—		(303,315)
Stock Issuance		9,004		—		522,910		—		—		531,914
Stock Compensation Expense from Restricted Stock Grants and Equity Classified Stock Options		—		—		2,156,379		—		—		2,156,379
Cash Dividends ($0.44 per share)		—		—		—		(2,197,556)		—		(2,197,556)
Other Comprehensive Loss, Net of Income Tax		—		—		—		—		(412,619)		(412,619)
Balance December 31, 2019	$	6,017,218	$	(73,440,714)	$	26,689,795	$	326,073,199	$	73,924	$	285,413,422

Consolidated-Tomoka Land Co. Shareholders

Total

Consolidated-

Accumulated

Tomoka

Noncontrolling

Additional

Other

Land Co.

Interest in

Total

Common

Treasury

Paid-In

Retained

Comprehensive

Shareholders’

Consolidated

Shareholders'


Stock

Stock

Capital

Earnings

Income (Loss)

Equity

VIE

Equity

Balance January 1, 2015

$
5,862,063

$
(1,381,566)

$
11,289,846

$
112,561,115

$
73,241

$
128,404,699

$
—

$
128,404,699

Net Income (Loss)

—

—

—

8,347,166

—

8,347,166

(57,849)

8,289,317

Contributions from Noncontrolling Interest in
Consolidated VIE

—

—

—

—

—

—

5,664,787

5,664,787

Stock Repurchase

—

(6,484,844)

—

—

—

(6,484,844)

—

(6,484,844)

Equity Component of Convertible Debt

—

—

2,130,002

—

—

2,130,002

—

2,130,002

Exercise of Stock Options

33,455

—

1,062,405

—

—

1,095,860

—

1,095,860

Vested Restricted Stock

5,348

—

(25,509)

—

—

(20,161)

—

(20,161)

Stock Issuance

644

—

34,258

—

—

34,902

—

34,902

Stock Compensation Expense from Restricted
Stock Grants and Equity Classified Stock Options

—

—

2,500,255

—

—

2,500,255

—

2,500,255

Cash Dividends ($0.08 per share)

—

—

—

(464,279)

—

(464,279)

—

(464,279)

Other Comprehensive Loss, Net of Income Tax

—

—

—

—

(762,212)

(762,212)

—

(762,212)

Balance December 31, 2015

5,901,510

(7,866,410)

16,991,257

120,444,002

(688,971)

134,781,388

5,606,938

140,388,326

Net Income (Loss)

—

—

—

16,251,248

—

16,251,248

(51,834)

16,199,414

Contributions from Noncontrolling Interest in
Consolidated VIE

—

—

—

—

—

—

102,844

102,844

Acquisition of Noncontrolling Interest

—

—

—

879,158

—

879,158

(5,657,948)

(4,778,790)

Stock Repurchase

—

(7,431,896)

—

—

—

(7,431,896)

—

(7,431,896)

Exercise of Stock Options

3,350

—

413,577

—

—

416,927

—

416,927

Vested Restricted Stock

8,884

—

(205,090)

—

—

(196,206)

—

(196,206)

Stock Issuance

816

—

39,299

—

—

40,115

—

40,115

Stock Compensation Expense from Restricted Stock
Grants and Equity Classified Stock Options

—

—

3,272,345

—

—

3,272,345

—

3,272,345

Cash Dividends ($0.12 per share)

—

—

—

(682,097)

—

(682,097)

—

(682,097)

Other Comprehensive Income, Net of Income Tax

—

—

—

—

944,860

944,860

—

944,860

Balance December 31, 2016

5,914,560

(15,298,306)

20,511,388

136,892,311

255,889

148,275,842

—

148,275,842

Net Income

—

—

—

41,719,424

—

41,719,424

—

41,719,424

Stock Repurchase

—

(7,209,454)

—

—

—

(7,209,454)

—

(7,209,454)

Exercise of Stock Options

28,527

—

1,056,406

—

—

1,084,933

—

1,084,933

Vested Restricted Stock

18,930

—

(413,184)

—

—

(394,254)

—

(394,254)

Stock Issuance

1,833

—

101,303

—

—

103,136

—

103,136

Stock Compensation Expense from Restricted Stock
Grants and Equity Classified Stock Options

—

—

1,479,315

—

—

1,479,315

—

1,479,315

Cash Dividends ($0.18 per share)

—

—

—

(997,461)

—

(997,461)

—

(997,461)

Other Comprehensive Income, Net of Income Tax

—

—

—

—

116,727

116,727

—

116,727

Balance December 31, 2017

$
5,963,850

$
(22,507,760)

$
22,735,228

$
177,614,274

$
372,616

$
184,178,208

$
—

$
184,178,208

The accompanying notes are an integral part of these consolidated financial statements.

F-7

Table of Contents

CONSOLIDATED-TOMOKA LAND CO.

CONSOLIDATED STATEMENTS OF CASH FLOWS


	Year Ended						Year Ended
	December 31,		December 31,		December 31,		December 31,		December 31,		December 31,
	2017		2016		2015		2019		2018		2017
Cash Flow from Operating Activities:
Net Income	$	41,719,424	$	16,199,414	$	8,289,317	$	114,972,858	$	37,167,790	$	41,719,424
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation and Amortization		12,663,959		8,195,417		5,212,897		15,797,278		16,135,502		12,663,959
Amortization of Intangible Liabilities to Income Property Revenue		(2,193,957)		(2,240,008)		(158,599)		(2,382,874)		(2,338,531)		(2,193,957)
Loan Cost Amortization		509,263		828,075		365,860		443,902		495,438		509,263
Amortization of Discount on Convertible Debt		1,194,714		1,120,859		852,368		1,357,347		1,273,436		1,194,714
Amortization of Discount on Debt Securities within Investment Securities		—		—		(6,555)
Gain on Disposition of Property, Plant, and Equipment and Intangible Assets		(38)		(12,758,770)		(5,516,444)		(3,295,601)		(3,650,858)		(38)
Impairment Charges		—		2,180,730		510,041
Gain on Disposition of Assets Held for Sale								(18,696,914)		—		—
Gain on Sale of Equity Interest in Joint Ventures								(127,518,231)		(18,384,808)		—
Impairment Charge								—		1,119,362		—
Discount Accretion on Commercial Loan Investments								—		(34,768)		—
Accretion of Commercial Loan Origination Fees		(25,232)		(164,893)		(74,781)		(134,780)		—		(25,232)
Amortization of Fees on Acquisition of Commercial Loan Investments		—		36,382		3,618
Discount on Commercial Loan Investment Payoff		—		217,500		—
Realized Loss (Gain) on Investment Securities		—		575,567		(163,189)
Impairment Charge on Investment Securities		—		—		59,553
Non-Cash Imputed Interest on Commercial Loan Investment								(193,943)		—		—
Deferred Income Taxes		(8,953,981)		11,658,864		4,627,019		35,099,647		12,589,970		(8,953,981)
Unrealized Gain on Investment Securities								(61,195)		—		—
Non-Cash Compensation		1,437,223		3,178,883		2,186,408		2,688,292		1,684,250		1,437,223
Decrease (Increase) in Assets:
Refundable Income Taxes		(172,589)		(85,520)		(591,191)		225,024		891,556		(172,589)
Assets Held for Sale								3,892,476		—		—
Land and Development Costs		12,477,581		422,020		(4,005,182)		(1,107,446)		5,477,221		12,477,581
Impact Fees and Mitigation Credits		1,197,637		2,231,321		641,537		(1,860,556)		663,229		1,197,637
Other Assets		(3,502,041)		(4,128,648)		(3,497,262)		(3,503,744)		(522,436)		(3,502,041)
Increase (Decrease) in Liabilities:
Accounts Payable		362,411		(416,312)		1,075,192		349,192		(630,667)		362,411
Accrued and Other Liabilities		792,629		(29,492)		3,373,508		489,308		(4,357,411)		792,629
Deferred Revenue		38,793		(12,732,944)		12,006,067		(539,564)		245,219		38,793
Liabilities Held for Sale								(49,470)		—		—
Income Taxes Payable								439,086		—		—
Net Cash Provided By Operating Activities		57,545,796		14,288,445		25,190,182		16,410,092		47,823,494		57,545,796
Cash Flow from Investing Activities:
Acquisition of Property, Plant, and Equipment and Intangible Lease Assets and Liabilities		(94,627,373)		(42,623,497)		(2,398,915)		(150,704,654)		(109,394,481)		(94,627,373)
Acquisition of Property, Plant, and Equipment and Intangible Lease Assets and Liabilities through Business Combinations		—		(49,926,604)		(76,034,452)
Acquisition of Commercial Loan Investments		(2,940,000)		—		(15,253,628)		(34,296,450)		—		(2,940,000)
Acquisition of Land		—		(4,778,790)		(5,664,787)		—		(4,702,243)		—
Decrease (Increase) in Restricted Cash		3,347,338		4,205,054		(9,620,425)
Proceeds from Sale of Investment Securities		—		6,252,362		4,751,987
Proceeds from Sale of Put Options		—		—		92,902
Cash Contribution for Interest in Joint Venture								(83,972)		(2,137,018)		—
Proceeds from Disposition of Property, Plant, and Equipment, Net, and Assets Held for Sale								207,551,807		11,077,525		—
Proceeds from Sale of Equity Interests in Joint Ventures								96,132,204		15,300,000		—
Principal Payments Received on Commercial Loan Investments								—		11,960,467		15,000,000
Acquisition of Investment Securities		—		—		(10,763,038)		(15,500,000)		—		—
Proceeds from Disposition of Property, Plant, and Equipment		—		49,170,314		23,493,205
Principal Payments Received on Commercial Loan Investments		15,000,000		14,282,500		7,200,909
Net Cash Used In Investing Activities		(79,220,035)		(23,418,661)		(84,196,242)
Net Cash Provided By (Used In) Investing Activities								103,098,935		(77,895,750)		(82,567,373)
Cash Flow from Financing Activities:
Proceeds from Long-Term Debt		63,500,000		70,050,000		137,675,000		141,500,000		106,300,000		63,500,000
Payments on Long-Term Debt		(35,100,000)		(49,050,000)		(70,540,011)		(103,073,325)		(55,996,954)		(35,100,000)
Cash Paid for Loan Fees		(532,814)		(400,586)		—		(634,431)		(263,473)		(532,814)
Cash Proceeds from Exercise of Stock Options and Stock Issuance		1,188,069		157,197		1,019,837		—		437,081		1,188,069
Contributions from Noncontrolling Interest in Consolidated VIE		—		102,844		—
Cash Used to Purchase Common Stock		(7,209,454)		(7,431,896)		(6,484,844)		(41,095,712)		(9,837,242)		(7,209,454)
Cash from Excess Tax Benefit (Expense) from Vesting of Restricted Stock		—		299,845		(20,161)
Cash Paid for Vesting of Restricted Stock		(394,254)		(196,206)		—		(303,315)		(498,374)		(394,254)
Dividends Paid		(997,461)		(682,097)		(464,279)		(2,197,556)		(1,484,167)		(997,461)
Net Cash Provided By Financing Activities		20,454,086		12,849,101		61,185,542
Net Cash Provided By (Used In) Financing Activities								(5,804,339)		38,656,871		20,454,086
Net Increase (Decrease) in Cash		(1,220,153)		3,718,885		2,179,482		113,704,688		8,584,615		(4,567,491)
Cash, Beginning of Year		7,779,562		4,060,677		1,881,195		21,199,998		12,615,383		17,182,874
Cash, End of Period	$	6,559,409	$	7,779,562	$	4,060,677	$	134,904,686	$	21,199,998	$	12,615,383


Reconciliation of Cash to the Consolidated Balance Sheets:
Cash and Cash Equivalents	$	6,474,637	$	2,310,489	$	6,107,252
Restricted Cash		128,430,049		18,889,509		6,508,131
Total Cash as of December 31, 2019, 2018, and 2017, respectively	$	134,904,686	$	21,199,998	$	12,615,383

The accompanying notes are an integral part of these consolidated financial statements.

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Supplemental Disclosure of Cash Flows:

Total interest paid during the years ended December 31, ~~2017, 2016,~~2019, 2018, and ~~2015~~2017 was approximately ~~$7.1~~$10.8 million, ~~$6.8~~$8.4 million, and ~~$4.7~~$7.1 million respectively. Interest paid included capitalized interest of approximately $215,000 during the year ended December 31, 2017, with no interest capitalized during the years ended December 31, ~~2016~~2019 or ~~2015.~~2018.

Income taxes totaling approximately ~~$334,000, $510,000,~~$2.5 million, $323,000, and ~~$1.2 million~~$334,000 were paid during the years ended December 31, ~~2017, 2016,~~2019, 2018, and ~~2015,~~2017, respectively. Additionally, income taxes totaling approximately ~~$958,000~~$687,000, $204,000 and ~~$133,000~~$958,000 were refunded during the years ended December 31, 2019, 2018, and 2017, ~~and 2016, respectively, with no amounts being refunded during~~respectively.

During the year ended December 31, ~~2015.~~2019, in connection with the Land JV transaction (hereinafter defined in Note 6, “Land and Investments in the Land JV”), the Company recognized a gain totaling approximately $127.5 million. The non-cash components of the gain totaled approximately $48.9 million and were reflected as an increase in the Investment in Joint Ventures of approximately $48.9 million on the accompanying consolidated balance sheets as of December 31, 2019.

InDuring the year ended December 31, 2019, the Company contributed five single tenant properties to Alpine Income Property Trust, Inc. (NYSE: PINE) in exchange for 1,223,854 operating units (“OP Units”) in PINE’s partnership. The OP Units had an initial value of approximately $23.3 million based on PINE’s public offering price of $19.00 per share. This non-cash transaction was reflected as an increase in Investment in Alpine Income Property Trust, Inc. of approximately $23.3 million with decreases in Intangible Assets, Property Plant and Equipment, and Intangible Liabilities of approximately $3.1 million, $20.8 million, and $452,000, respectively, on the accompanying consolidated balance sheets as of December 31, 2019.

During the year ended December 31, 2018, in connection with the Mitigation Bank transaction (hereinafter defined in Note 6, “Land and Investments in the Land JV”), the Company recognized a gain totaling approximately $18.4 million. The non-cash components of the gain totaled approximately $5.1 million and were reflected as an increase in the Investment in Joint Ventures of approximately $6.8 million, an increase in Accrued and Other Liabilities of approximately $300,000, and a decrease in Land and Development Costs of approximately $1.3 million on the accompanying consolidated balance sheets as of December 31, 2018.

During the year ended December 31, 2018, in connection with the acquisition of the property in Aspen, Colorado, the tenant contributed $1.5 million of the $28.0 million purchase price at closing on February 21, 2018. The $1.5 million purchase contribution was reflected as an increase in Income Property, Land, Buildings, and Improvements and Deferred Revenue on the accompanying consolidated balance sheets as of December 31, 2018.

During the year ended December 31, 2018, in connection with the construction of the beachfront restaurant leased to Cocina 214 Restaurant & Bar in Daytona Beach, Florida, the tenant contributed approximately $1.9 million of the building and tenant improvements owned by the Company through direct payments to various third-party construction vendors. The approximately $1.9 million asset contribution was reflected as an increase in Income Property, Land, Buildings, and Improvements and Deferred Revenue on the accompanying consolidated balance sheets as of December 31, 2018.

During the year ended December 31, 2017, in connection with the Golf Course Land Purchase (hereinafter defined), each year the Company is obligated to pay the City of Daytona Beach, Florida (the “City”) an annual surcharge of $1 per golf round played (the “Per-Round Surcharge”) with an annual minimum Per-Round Surcharge of $70,000 and a maximum aggregate amount of the Per-Round Surcharge paid equal to $700,000. The maximum amount of $700,000 represents contingent consideration and was reflected as an increase in Golf Buildings, Improvements, and Equipment and also as an increase in Accrued and Other Liabilities on the ~~accompany~~accompanying consolidated balance sheets as of December 31, 2017. In connection with LPGA Golf Course Sale (hereinafter defined), the Company repaid the City the amount that was due of approximately $560,000, therefore, there is no remaining liability as of December 31, 2019.

~~During~~Discontinued operations provided approximately $6.5 million, $36.8 million, and $43.3 million of the net cash provided by operating activities for the years ended December 31, 2019, 2018, and 2017, respectively. Additionally, discontinued operations accounted for approximately $98.4 million of the net cash provided by investing activities for the year ended December 31, ~~2016, the Company closed on the Portfolio Sale (hereinafter defined). The sales price on the Portfolio Sale was approximately $51.6 million, of which approximately $23.1 million was not received in~~2019, while there were no cash at closing; rather the buyer assumed the Company’s $23.1 million mortgage loan secured by the Portfolio Sale properties. The non-cash transaction was reflected on the consolidated balance sheets as a decrease in long-term debt of approximately $23.1 million.

~~During the year ended December 31, 2015, in connection with the issuance of the Company’s $75.0 million convertible senior notes due 2020, approximately $2.1 million of the issuance was allocated~~flows from investing activities related to ~~the equity component~~discontinued operations for the conversion option. This non-cash allocation was reflected on the consolidated balance sheets as a decrease in long-term debt of approximately $3.4 and an increase in deferred income taxes of approximately $1.3 million.

During the year ended December 31, 2015, the Company acquired an interest in approximately six acres of vacant beachfront property in Daytona Beach, Florida through a real estate venture with an unaffiliated third party institutional investor for approximately $5.7 million. The approximate $5.7 million contribution by the third party was reflected as a non-cash increase in Land and Development Costs and Shareholders’ Equity attributable to the Noncontrolling Interest in Consolidated VIE in the accompanying consolidated balance sheet. During the year ended December 31, 2016, the Company acquired the Noncontrolling Interest from the unaffiliated third party for approximately $4.8 million, a discount of approximately $879,000. The discount was reflected as a non-cash increase in Retained Earnings in the accompanying consolidated balance sheets.

During the year ended December 31, 2015, the Company accrued approximately $1.7 million for an obligation representing the low end of the estimated range of possible wetlands restoration costs on approximately 148.4 acres. During the year ended December 31, 2016, an additional accrual of approximately $325,000 was made. These non-cash accruals were reflected on the consolidated balance sheets as an increase in the Land and Development Costs and an increase in Accrued and Other Liabilities. During the years ended December 31, ~~2017~~2018 and ~~2016, approximately $381,000 and $935,000 was spent related to the wetlands restoration accrual,~~2017, respectively.

During the years ended December 31, 2015, the Company received a 50% interest in the subsurface rights of approximately 1,400 acres in Lee County, Florida, valued at approximately $68,000. This non-cash transaction was reflected on the consolidated balance sheets as an increase in Land and Development Costs and on the consolidated statements of operations as an increase in revenue from real estate operations.

During the years ended December 31, 2017, 2016, and 2015 non-cash compensation includes a reduction in the value of accrued stock-based compensation of approximately $42,000, $93,000, $314,000, respectively. This portion of non-cash compensation was reflected on the consolidated balance sheets as a decrease in accrued stock-based compensation and on the consolidated statements of operations as a decrease in general and administrative expenses.

The accompanying notes are an integral part of these consolidated statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, ~~2017, 2016,~~2019, 2018, and ~~2015~~2017

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

The terms “us,” “we,” “our,” and “the Company” as used in this report refer to Consolidated-Tomoka Land Co. together with our consolidated subsidiaries.

We are a diversified real estate operating company. WeAs of December 31, 2019, we own and manage, ~~thirty-seven~~sometimes utilizing third-party property management companies, thirty-four commercial real estate properties in ~~twelve~~eleven states in the United ~~States. As of December 31, 2017, we owned twenty-six single-tenant and eleven multi-tenant income-producing properties~~States, with ~~over 2.1~~approximately 1.8 million square feet of gross leasable space. WeThese thirty-four properties in our portfolio comprise our income property operations segment.

In addition to our income property portfolio, as of December 31, 2019, or business included the following:

Management Services:

A fee-based management business that is engaged in managing Alpine Income Property Trust, Inc. (“PINE”) and the entity that holds the approximately 5,300 acres of undeveloped land in Daytona Beach, Florida (the “Land JV”), see Note 5, “Related Party Management Services Business”.

Commercial Loan Investments:

A portfolio of commercial loan investments.

Real Estate Operations:

A portfolio of mineral interests consisting of approximately 455,000 subsurface acres in 20 counties in the state of Florida and a portfolio of mitigation credits;

A retained interest in the Land JV which is seeking to sell approximately 5,300 acres of undeveloped land in Daytona Beach, Florida; and

Our business also ~~own~~includes, as outlined above, our investment in PINE of approximately $38.8 million, or approximately 22.3% of the PINE’s outstanding equity, including the OP Units which are exchangeable into common stock of PINE on a one-for-one basis, at PINE’s election. Our investment in PINE should generate investment income through the dividends distributed by PINE. In addition to the dividends we receive from PINE, our investment in PINE may benefit from any appreciation in PINE’s stock price, although no assurances can be provided that such appreciation will occur, the amount by which our investment will increase in value, or the timing thereof. Any dividends received from PINE are included in Investment Income on the accompanying statement of operations.

Discontinued Operations. The Company reports the historical financial position and ~~manage~~results of operations of disposed businesses as discontinued operations when it has no continuing interest in the business. On October 16, 2019, the Company sold a ~~portfolio~~controlling interest in its wholly owned subsidiary that held the approximately 5,300 acres of undeveloped land totaling approximately 8,100 acres in the City of Daytona Beach, Florida (the “City”). As of December 31, 2017, we had two commercial loan investments including a variable-rate B-Note representing a secondary tranche in a commercial mortgage loan and a fixed-rate first mortgage loan. We have golf operations which consist of the LPGA International Golf Club, which is managed by a third party. We also lease some of our land for nineteen billboards, have agricultural operations that are managed by a third party, which consist of leasing land for hay production, timber harvesting, and hunting leases, and own and manage Subsurface Interests (hereinafter defined). The results of our agricultural and subsurface leasing operations are included in Agriculture and Other Income and Real Estate Operations, respectively, in our consolidated statements of operations.

~~Subsequent to December 31, 2017, and prior to the date of this report, the Company completed two self-developed single-tenant net lease restaurant properties on a 6-acre beachfront parcel~~ in Daytona Beach, ~~Florida~~Florida. On October 17, 2019, the Company sold its interest in the LPGA golf operations. For all periods presented herein, the Company has reported the historical financial position and ~~acquired a newly constructed commercial building located in Aspen, Colorado under a twenty-year master lease~~the results of operations related to ~~a single tenant, bringing~~ the ~~number~~Land JV and the golf operations as discontinued operations (see Note 23). The cash flows related to discontinued operations have been disclosed.

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Table of ~~single-tenant and total income properties to 29 and 40, respectively.~~Contents

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, and other entities in which we have a controlling interest. Any real estate entities or properties included in the consolidated financial statements have been consolidated only for the periods that such entities or properties were owned or under control by us. All significant inter-company balances and transactions have been eliminated in the consolidated financial statements. ~~Noncontrolling~~The Company has retained interests in ~~consolidated pass-through~~the Land JV and the Mitigation Bank JV, as well as an equity investment in PINE. The Company has concluded that these entities are ~~recognized before income taxes.~~variable interest entities of which the Company is not the primary beneficiary and as a result, these entities are not consolidated.

USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Because of the fluctuating market conditions that currently exist in the Florida and national real estate markets, and the volatility and uncertainty in the financial and credit markets, it is possible that the estimates and assumptions, most notably those related to the Company’s investment in income properties, ~~and commercial loans,~~ could change materially during the time span associated with the continued volatility of the real estate and financial markets or as a result of a significant dislocation in those markets.

RECENTLY ISSUED ACCOUNTING STANDARDS

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, which amends its guidance on the measurement of credit losses on financial instruments. The amendments in this update are effective for annual reporting periods beginning after December 31, 2019. ASU 2016-13 affects entities holding financial assets that are not accounted for at fair value through net income, including but not limited to, loans, trade receivables, and net investments in leases. The Company adopted the changes to Accounting Standards Codification (“ASC”) 326, Financial Instruments-Credit Losses on January 1, 2020 and there was no material impact on the consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, which amends its guidance on the recognition and reporting of revenue from contracts with customers. In April 2016, the FASB ASC issued Topic 606, Revenue from Contracts with Customers. The amendments in this update are effective for annual reporting periods beginning after December 15, 2017. The Company completed its evaluation of the provisions during the year ended December 31, 2017 and determined there was no impact on the Company’s revenue recognition within the consolidated financial statements. All required disclosures relating to FASB ASC Topic 606 have been implemented herein as required by the standard. The Company adopted FASB ASC Topic 606 effective January 1, 2018 utilizing the modified retrospective method.

In January 2016, the FASB issued ASU 2016-01, relating to the recognition and measurement of financial assets and financial liabilities. The amendments in this update are effective for annual reporting periods beginning after December 15, 2017. The Company adopted ASU 2016-01 effective January 1, 2018 and determined there was no material impact on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, which requires entities to recognize assets and liabilities that arise from financing and operating leases and to classify those finance and operating lease payments in the financing or operating sections, respectively, of the statement of cash flows pursuant to FASB ASC Topic 842, Leases. The amendments in this update are effective for annual reporting periods beginning after December 15, 2018.

The Company implemented ASC 842 effective January 1, 2019 and has elected to follow the practical expedients and accounting policies below:

The Company, as lessee and as lessor, will not reassess (i) whether any expired or existing contracts are or contain leases (ii) lease classification for any expired or existing leases or (iii) initial direct costs for any expired or existing leases.

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The Company, as lessee, will not apply the recognition requirements of ASC 842 to short-term (twelve months or less) leases. Instead, the Company, as lessee, will recognize the lease payments in profit or loss on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred. As of the date of this report, the Company has no such short-term leases.

The Company, as lessor, will not separate nonlease components from lease components and, instead, will account for each separate lease component and the nonlease components associated with that lease as a single component if the nonlease components otherwise would be accounted for under ASC Topic 606. The primary reason for this election is related to instances where common area maintenance is, or may be, a component of base rent within a lease agreement.

At the beginning of the period of adoption, January 1, 2019, through a cumulative-effect adjustment, the Company increased right-of use assets and lease liabilities for operating leases for which the Company is the lessee. The amount of the adjustment totaled approximately $681,000 and was reflected as an increase in Other Assets and Accrued and Other Liabilities for corporate leases totaling approximately $473,000 and an increase in Assets Held for Sale and Liabilities Held for sale for golf operations segment leases totaling approximately $208,000. There were no adjustments related to the leases for which the Company is the lessor.

In August 2016, the FASB issued ASU 2016-15, which clarifies the appropriate classification of certain cash receipts and payments in the statement of cash flows. The amendments in this update are effective for annual reporting periods beginning after December 15, 2017. The Company adopted ASU 2016-15 effective January 1, 2018 and determined there was no material impact on its consolidated financial statements.

In November 2016, the FASB issued ASU 2016-18, which addresses diversity in the classification and presentation of changes in restricted cash in the statement of cash flows as operating, investing, or financing activities. The Company adopted ASU 2016-18 effective January 1, 2018 and has classified the changes in restricted cash between operating, investing, and financing in the consolidated statements of cash flows as applicable per the new guidance.

In February 2018, the FASB issued ASU 2018-02, which amends the guidance allowing for a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act effective January 1, 2018 (the “2018 Tax Cuts and Jobs Act”). The amendments in this update are effective for annual reporting periods beginning after December 15, 2018. The Company implemented ASU 2018-02 effective January 1, 2019 and there were no such reclassifications related to the Tax Cuts and Jobs Act.

RECLASSIFICATIONS

Certain items in the prior period’s consolidated statements of operations have been reclassified to conform to the presentation as of and for the year ended December 31, 2019. Specifically, in the fourth quarter of 2019, the Company completed the sale of its remaining land holdings through the Land JV transaction. Accordingly, the results of the real estate operations related to land sales have been classified as discontinued operations in the accompanying consolidated statements of income for the years ended December 31, 2019, 2018, and 2017. Additionally, the identifiable assets and liabilities related to the discontinued real estate operations were reclassified as assets and liabilities held for sale as of December 31, 2019 and 2018.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents includes cash on hand, bank demand accounts, and money market accounts having original maturities of 90 days or less. The Company’s bank balances as of December 31, ~~2017~~2019 include certain amounts over the Federal Deposit Insurance Corporation limits.

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RESTRICTED CASH

Restricted cash totaled approximately ~~$6.5~~$128.4 million at December 31, ~~2017~~2019 of which approximately ~~$5.6~~$125.7 million of cash is being held in multiple separate escrow accounts to be reinvested through the like-kind exchange structure into other income properties; approximately ~~$646,000~~$746,000 is being held in ~~three separate~~an entitlement and interest reserve for the $8.0 million first mortgage loan originated in June 2019, approximately $275,000 is being held in an interest and real estate tax reserve for the $8.3 million first mortgage originated in July 2019, approximately $156,000 is being held in an escrow ~~accounts~~account related to ~~three~~a separate land ~~transactions of~~transaction which ~~one~~ closed in ~~each of December 2013, December 2015, and~~ February 2017; approximately ~~$127,000~~$261,000 is being held in a ~~reserve for interest and property taxes for the $3.0 million first mortgage loan investment originated in July 2017; and approximately $160,000 is being held in a~~ capital

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replacement reserve account in connection with our financing of six income properties with Wells Fargo Bank, NA (“Wells Fargo”); and approximately $1.3 million is being held in a general tenant improvement reserve account with Wells Fargo in connection with our financing of the property located in Raleigh, NC leased to Wells Fargo.

INVESTMENT SECURITIES

In accordance with ~~the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)~~FASB ASC Topic 320, Investments – Debt and Equity Securities and pursuant to ASU 2016-01, effective January 1, 2018, the Company’s investments in ~~debt and~~ equity securities (“Investment Securities”) ~~have been determined to be classified as available-for-sale. Available-for-sale securities~~ are carried at fair value in the consolidated balance sheets, with the unrealized gains and losses recognized in net ~~of income tax, reported in other comprehensive~~ income.

~~Realized~~ The unrealized gains and losses ~~and declines in value judged to be other-than-temporary related to equity securities,~~ are included in investment income in the consolidated statements of operations. With respect to debt securities, when the fair value of a debt security classified as available-for-sale is less than its cost, management assesses whether or not: (i) it has the intent to sell the security or (ii) it is more likely than not that the Company will be required to sell the security before its anticipated recovery. If either of these conditions are met, the Company must recognize an other-than-temporary impairment through earnings for the differences between the debt security’s cost basis and its fair value, and such amount is included in investment income in the consolidated statements of operations. There were no other-than-temporary impairments during the years ended December 31, 2017 or 2016, respectively. As of and for the year ended December 31, 2015, an other-than-temporary impairment was deemed to exist on a portion of the Company’s equity securities resulting in an impairment charge of approximately $60,000 which is included as a reduction in investment income in the consolidated statements of operations. The Company completed the disposition of its remaining position in Investment Securities during the year ended December 31, 2016 resulting in a loss of approximately $576,000. There were no Investment Securities remaining as of December 31, 2017 or 2016.

The cost of Investment Securities sold, if any, is based on the specific identification method. Interest and dividends on Investment Securities ~~classified as available-for-sale~~ are included in investment income in the consolidated statements of operations.

The fair value of the Company’s available-for-sale equity securities was measured quarterly, on a recurring basis, using Level 1 inputs, or quoted prices for identical, actively traded assets. The fair value of the Company’s available-for-sale debt securities was measured quarterly, on a recurring basis, using Level 2 inputs.

DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITY

Interest Rate Swap. During the year ended December 31, 2016, in conjunction with the variable-rate mortgage loan secured by our property located in Raleigh, North Carolina leased to Wells Fargo, ~~Bank, NA (“Wells Fargo”),~~ the Company entered into an interest rate swap to fix the interest rate (the “Interest Rate Swap”). The Company accounts for its cash flow hedging derivative in accordance with FASB ASC Topic 815-20, Derivatives and ~~Hedging.~~Hedging. Depending upon the hedge’s value at each balance sheet date, the derivative is included in either Other Assets or Accrued and Other Liabilities on the consolidated balance sheet at its fair value. On the date the Interest Rate Swap was entered into, the Company designated the derivative as a hedge of the variability of cash flows to be paid related to the recognized long-term debt liability.

The Company formally documented the relationship between the hedging instrument and the hedged item, as well as its risk-management objective and strategy for undertaking the hedge transaction. At the hedge’s inception, the Company formally assessed whether the derivative that is used in hedging the transaction is highly effective in offsetting changes in cash flows of the hedged item. As the terms of the Interest Rate Swap and the associated debt are identical, the Interest Rate Swap qualifies for the shortcut method, therefore, it is assumed that there is no hedge ineffectiveness throughout the entire term of the Interest Rate Swap.

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Changes in fair value of the Interest Rate Swap that are highly effective and designated and qualified as a cash-flow hedge are recorded in other comprehensive income and loss, until earnings are affected by the variability in cash flows of the designated hedged item.

~~Put Options.~~ There were no derivatives outstanding as of December 31, 2017, 2016, or 2015. There were certain derivatives outstanding as of September 30, 2015 which were exercised during the quarter ended December 31, 2015. These derivatives were not designated as hedging instruments and, accordingly, the changes in fair value (i.e. gains or losses) were recorded in the consolidated statements of operations through investment income. The fair value of the Company’s derivatives not designated as hedging instruments are measured quarterly, on a recurring basis, using Level 2 inputs. The Company’s derivatives exercised during the year ended December 31, 2015 were for put options sold related to common stock investments included in the investment securities asset category; see Note 5, “Investment Securities.” The liability for the fair market value of the put options sold was included on the consolidated balance sheet in Accrued and Other Liabilities prior to their execution.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts of the Company’s financial assets and liabilities including cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and accrued and other liabilities at December 31, ~~2017~~2019 and ~~2016,~~2018, approximate fair value because of the short maturity of these instruments. The carrying amount of the Company’s investments in variable rate commercial loans approximates fair value at December 31, 2017 and 2016, since the floating rates of the loans reasonably approximate current market rates for notes with similar risks and maturities. The carrying value of the Company’s credit facility approximates current market rates for revolving credit arrangements with similar risks and maturities. The face value of the Company’s fixed rate commercial loan ~~investment,~~investments held as of December 31, 2019 and the mortgage notes and convertible debt isheld as of December 31, 2019 and 2018 are measured at fair value based on current market rates for financial instruments with similar risks and maturities. See Note 6,9, “Fair Value of Financial Instruments.”

FAIR VALUE MEASUREMENTS

The Company’s estimates of fair value of financial and non-financial assets and liabilities based on the framework established ~~in the fair value accounting guidance.~~by GAAP. The framework specifies a hierarchy of valuation inputs which was established to increase consistency, clarity and comparability in fair value measurements and related disclosures. ~~The guidance~~GAAP describes a fair value hierarchy based upon three levels of inputs that may be used to measure fair value, two of which are considered observable and one that is considered unobservable. The following describes the three levels:

Level 1 – Valuation is based upon quoted prices in active markets for identical assets or liabilities.

Level 2 – Valuation is based upon inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs

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that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include option pricing models, discounted cash flow models and similar techniques.

~~CLASSIFICATION OF COMMERCIAL LOAN INVESTMENTS~~

Loans held for investment are stated at the principal amount outstanding and include the unamortized deferred loan fees offset by any unaccreted purchase discounts and origination fees, if applicable. Loans held for sale are classified separately and stated at the lower of cost or fair value once a decision has been made to sell loans not previously for sale.

~~COMMERCIAL LOAN INVESTMENT IMPAIRMENT~~

For each of the Company’s commercial loans held for investment, the Company evaluates the performance of the collateral property and the financial and operating capabilities of the borrower/guarantor, in part to assess whether any deterioration in the credit has occurred, and for possible impairment of the loan. Impairment would reflect the Company’s determination that it is probable that all amounts due according to the contractual terms of the loan would not be collected. Impairment is measured based on the present value of the expected future cash flows from the loan discounted at the effective rate of the loan or the fair value of the collateral. Upon measurement of impairment, the Company would record

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an allowance to reduce the carrying value of the loan with a corresponding recognition of loss in the results of operations. Significant exercise of judgment is required in determining impairment, including assumptions regarding the estimate of expected future cash flows, collectability of the loan, the value of the underlying collateral and other provisions including guarantees. The Company has determined that, as of December 31, 2017 and 2016, no allowance for impairment was required.

RECOGNITION OF INTEREST INCOME FROM COMMERCIAL LOAN INVESTMENTS

Interest income on commercial loan investments includes interest payments made by the borrower and the accretion of purchase discounts and loan origination fees, offset by the amortization of loan costs. Interest payments are accrued based on the actual coupon rate and the outstanding principal balance and purchase discounts and loan origination fees are accreted into income using the effective yield method, adjusted for prepayments.

~~IMPACT FEES AND~~ MITIGATION CREDITS

~~Impact fees and mitigation~~Mitigation credits are stated at historical cost. As these assets are sold, the related revenues and cost basis are reported as revenues from, and direct costs of, real estate operations, respectively, in the consolidated statements of operations.

ACCOUNTS RECEIVABLE

Accounts receivable related to income properties, which are classified in Other Assets on the consolidated balance sheets, primarily ~~consist~~consists of tenant reimbursable expenses. Receivables related to the tenant reimbursable expenses totaled approximately ~~$895,000~~$533,000 and ~~$125,000~~$628,000 as of December 31, ~~2017~~2019 and ~~2016,~~2018, respectively.

Accounts receivable related to real estate operations, which are classified in ~~other assets~~Other Assets on the consolidated balance sheets, totaled approximately ~~$2.2~~$1.6 million and ~~$3.8~~$1.8 million as of December 31, ~~2017~~2019 and ~~2016,~~2018, respectively. The accounts receivable as of December 31, ~~2017~~2019 and ~~2016~~2018 are primarily related to the reimbursement of certain infrastructure costs completed by the Company in conjunction with two land sale transactions that closed during the fourth quarter of 2015 as more fully described in Note 9,12, “Other Assets.”

Trade accounts receivable primarily ~~consist~~consists of receivables related to golf operations, which ~~are~~were classified in ~~other assets~~Assets Held for Sale on the consolidated balance ~~sheets.~~sheets as of December 31, 2018 and thereafter until the sale of the golf operations during the fourth quarter of 2019. Trade accounts receivable related to golf operations, which primarily ~~consist~~consists of membership and event receivables, totaled approximately ~~$349,000 and $326,000~~$290,000 as of December 31, ~~2017~~2018. As of December 31, 2019, approximately $549,000 is due from the buyer of the golf operations for the rounds surcharge the Company paid to the City, as further described in Note 23, “Assets Held for Sale and ~~2016, respectively.~~Discontinued Operations.”

The collectability of the aforementioned receivables is determined based on a review of specifically identified accounts using judgments. As of December 31, ~~2017~~2019 and ~~2016, no~~2018, the Company recorded an allowance for doubtful accounts of approximately $14,000 and $185,000, respectively. During the third quarter of 2019, approximately $250,000 of previously recorded allowance for doubtful accounts related to a single income property; Cocina 214 Restaurant & Bar (“Cocina 214”), located in Daytona Beach, Florida, was ~~required.~~reversed as the previously uncollected rent totaling approximately $0.3 million was paid in accordance with the termination agreement executed in July 2019. The termination payment is more fully described in Note 3, “Income Properties.”

PURCHASE ACCOUNTING FOR ACQUISITIONS OF REAL ESTATE SUBJECT TO A LEASE

In accordance with the FASB guidance on business combinations, the fair value of the real estate acquired with in-place leases is allocated to the acquired tangible assets, consisting of land, building and tenant improvements, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, the value of in-place leases, and the value of leasing costs, based in each case on their relative fair values.

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income over the initial term unless the Company believes that it is likely that the tenant will renew the option whereby the Company amortizes the value attributable to the renewal over the renewal period.

Prior to October 1, 2016, the Company determined that income property purchases subject to a lease, whether that lease is in-place or originated at the time of acquisition, qualify as a business combination, and acquisition costs are expensed in the period the transaction closes. In January 2017, the FASB issued ~~Accounting Standards Update (“ASU”)~~ASU 2017-01, Business Combinations which clarified the definition of a business. Pursuant to ASU 2017-01, the acquisition of an income property subject to a lease ~~no longer qualifies~~does not qualify as a business combination, but rather ~~determined to be~~is an asset acquisition. ~~The~~Accordingly, the Company ~~early adopted ASU 2017-01 effective October 1, 2016 on a prospective basis. Accordingly,~~capitalizes acquisition costs for income property ~~acquisitions during the fourth quarter of 2016 and during 2017, acquisition costs have been capitalized.~~acquisitions.

LAND AND DEVELOPMENT COSTS

The carrying value of land and development includes the initial acquisition costs of land, improvements thereto, and other costs incidental to the acquisition or development of land. Subsurface Interests (hereinafter defined) and capitalized costs relating to timber and hay operations are also included in land and development costs. These costs are allocated to properties on a relative sales value basis and are charged to costs of sales as specific properties are sold. Due to the nature of the business, land and development costs have been classified as an operating activity on the consolidated statements of cash flows.

~~SALE~~SALES OF REAL ESTATE

Gains and losses on sales of real estate are accounted for as required by FASB ASC Topic ~~976-605-25, Accounting for Sales of Real Estate.~~606, Revenue from Contracts with Customers. The Company recognizes revenue from the ~~sale~~sales of real estate ~~at the time the sale is consummated, unless the property is sold on a deferred payment plan and the initial payment does not meet established criteria, or~~when the Company ~~retains some form of continuing involvement~~transfers the promised goods and/or services in the ~~property.~~contract based on the transaction price allocated to the performance obligations within the contract. As market information becomes available, real estate cost basis is analyzed and recorded at the lower of cost or market.

PROPERTY, PLANT, AND EQUIPMENT

Property, plant, and equipment are stated at cost, less accumulated depreciation and amortization. Such properties are depreciated on a straight-line basis over their estimated useful lives. Renewals and betterments are capitalized to property accounts. The cost of maintenance and repairs is expensed as incurred. The cost of property retired or otherwise disposed of, and the related accumulated depreciation or amortization, are removed from the accounts, and any resulting gain or loss is recorded in the consolidated statement of operations. The amount of depreciation of property, plant, and equipment, exclusive of amortization related to intangible assets, recognized for the years ended December 31, ~~2017, 2016,~~2019, 2018, and ~~2015,~~2017, was approximately ~~$7.9~~$9.9 million, ~~$5.5~~$10.3 million, and ~~$3.5~~$7.9 million respectively. Interest of approximately $215,000 was capitalized to construction in progress during 2017, respectively with no interest capitalized in ~~2016~~2019 or ~~2015.~~2018.

The range of estimated useful lives for property, plant, and equipment is as follows:


Golf Buildings and Improvements	10	-	43	Years	10	-	43	Years
Golf Equipment	3	-	10	Years	3	-	10	Years
Income Properties Buildings and Improvements	5	-	55	Years	5	-	55	Years
Other Furnishings and Equipment	3	-	10	Years	3	-	20	Years
Agriculture Equipment	10	-	20	Years

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LONG-LIVED ASSETS

The Company follows FASB ASC Topic 360-10, Property, Plant, and Equipment in conducting its impairment analyses. The Company reviews the recoverability of long-lived assets, including land and development costs, real estate held for sale, and property, plant, and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Examples of situations considered to be triggering events include: a substantial decline in operating cash flows during the period, a current or projected loss from operations, an income property not fully leased or leased at rates that are less than current market rates, and any other quantitative or qualitative events deemed significant by our management. Long-lived assets are evaluated for impairment by using an undiscounted cash flow approach, which considers future estimated capital expenditures. Impairment of long-lived assets is measured at fair value less cost to sell.

INCOME PROPERTY LEASES

The rental of the Company’s income properties are classified as operating leases. The Company recognizes lease income on these properties on a straight-line basis over the term of the lease.

OPERATING LEASE EXPENSE

The Company leases property and equipment, which are classified as operating leases. The Company recognizes lease expense on a straight-line basis over the term of the lease.

GOLF OPERATIONS

The Company ~~operates~~previously owned the LPGA International Golf Club (the “Club”), which consists of two 18-hole golf courses and a 3-hole practice facility, a clubhouse facility, including food and beverage operations, and a fitness center. Revenues from this operation, including greens fees, cart rentals, merchandise, and food and beverage sales, are recognized at the time of ~~sale.~~sale pursuant to FASB ASC Topic 606, Revenue from Contracts with Customers. Initiation fees and membership dues are recognized over the life of the membership, pursuant to FASB ASC Topic 606, Revenue from Contracts with Customers, which is generally twelve months.

OTHER REAL ESTATE INTERESTS

From time to time, the Company will release surface orentry rights related to subsurface ~~entry rights~~acres owned by the Company upon request of the surface owner. The Company recognizes revenue from the release at the time the transaction is consummated, unless the ~~property~~right is released under a deferred payment plan and the initial payment does not meet the criteria established under FASB ASC Topic ~~976-605-25, Accounting for Sales of Real Estate, the Company retains some form of continuing involvement in the property, or the transaction does not meet other requirements.~~606, Revenue from Contracts with Customers.

STOCK-BASED COMPENSATION

Prior to 2010, the Company maintained a stock option plan (the “2001 Plan”) pursuant to which 500,000 shares of the Company’s common stock were available to be issued. The 2001 Plan was approved at the April 25, 2001 shareholders’ meeting and expired in April 2011, with no new option shares issued after that date. Under the 2001 Plan, the option exercise price equaled the average of the high and low stock market price on the date of grant. The options generally vested over five years and expired after ten years. In connection with the grant of non-qualified options, a stock appreciation right for each share covered by the option could also be granted. The stock appreciation right entitled the optionee to receive a supplemental payment, which could be paid in whole or in part in cash or in shares of common stock equal to a portion of the spread between the exercise price and the fair market value of the underlying share at the time of exercise. The expenses associated with stock options and stock appreciation rights were recognized over their requisite service period.

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shareholders approved an amendment and restatement of the entire Original 2010 Plan, which among other things, incorporated claw back provisions and clarified language regarding the shares available subsequent to forfeiture of any awards of restricted shares. At the Annual Meeting of Shareholders of the Company held on April 23, 2014, the Company’s shareholders approved an amendment to the Original 2010 Plan increasing the number of shares authorized for issuance by 240,000 shares, bringing the total number of shares authorized for issuance to 450,000. At the Annual Meeting of Shareholders of the Company held on April 25, 2018, the Company’s shareholders approved the Second Amended and Restated 2010 Equity Incentive Plan (the “2010 Plan”) which, among other things, increased the number of shares available thereunder to 720,000. Awards under the 2010 Plan may be in the form of stock options, stock appreciation rights, restricted shares, restricted share units, performance shares, and performance units. Employees of the Company and its subsidiaries and non-employee directors may be selected by the Compensation Committee to receive awards under the

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2010 Plan. The maximum number of shares of which stock awards may be granted under the 2010 Plan is ~~450,000~~702,000 shares. No participant may receive awards during any one calendar year representing more than 50,000 shares of common stock. In no event will the number of shares of common stock issued under the plan upon the exercise of incentive stock options exceed ~~450,000~~720,000 shares. These limits are subject to adjustments by the Compensation Committee as provided in the 2010 Plan for stock splits, stock dividends, recapitalizations, and other similar transactions or events. The 2010 Plan currently provides that it will expire on the tenth anniversary of the date that it was adopted by the Board, and that no awards will be granted under the plan after that date.

INCOME TAXES

The Company uses the asset and liability method to account for income taxes. Deferred income taxes result primarily from the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, see Note ~~17,~~20, “Income Taxes.” In June 2006, the FASB issued additional guidance, which clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements included in income taxes. The interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The interpretation also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. In accordance with FASB guidance included in income taxes, the Company has analyzed its various federal and state filing positions and believes that its income tax filing positions and deductions are well documented and supported. Additionally, the Company believes that its accruals for tax liabilities are adequate. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to the FASB guidance.

EARNINGS PER COMMON SHARE

Basic earnings per common share is computed by dividing net income by the weighted average number of shares outstanding. Diluted earnings per common share are based on the assumption of the conversion of stock options using the treasury stock method at average cost for the year, see Note ~~10,~~13, “Common Stock and Earnings Per Share.”

CONCENTRATION OF CREDIT RISK

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents.

Approximately ~~29%~~24% of the Company’s income property portfolio, based on square footage, and prior to December 31, 2019, all of the Company’s land holdings, golf operations, agriculture operations, and Subsurface Interests (hereinafter defined) are in the State of

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~~Table~~ Florida. During the year ended December 31, 2019, the Company’s remaining land holdings, and its golf operations were sold, thereby significantly reducing the concentration of ~~Contents~~

assets in the State of Florida. Uncertainty of the duration of a prolonged real estate and economic downturn could have an adverse impact on the Company’s real estate values.

~~Due to the continuing diversification of our income property~~We had one tenant mix, significant revenues from our real estate operations, and the addition of new revenue sources including the interest income from commercial loan investments, on a revenue basis, none of the Company’s income property tenants individuallythat accounted for more than 10% of our consolidated income property revenue during the years ended December 31, 2019 and 2018. Wells Fargo, who occupied two single-tenant office properties located in Hillsboro, Oregon and Raleigh, North Carolina, accounted for approximately 12.5%, 13.5%, and 15.3% of our consolidated revenues during the years ended December 31, 2019, 2018, and 2017, ~~2016, or 2015.~~respectively.

~~RECENTLY ISSUED ACCOUNTING STANDARDS~~

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In May 2014, the FASB issued ASU 2014-09, which amends its guidance on the recognition and reporting of revenue from contracts with customers. The amendments in this update are effective for annual reporting periods beginning after December 15, 2017. NOTE 2. REVENUE RECOGNITION

The Company completed its evaluation of the provisions during the three months ended September 30, 2017 and has determined there will be no material impact on the Company’s revenue recognition within the consolidated financial statements. All required disclosures relating to ASU 2014-09 will be implemented ~~as required by the standard. The Company adopted ASU 2014-09~~FASB ASC Topic 606, Revenue from Contracts with Customers effective January 1, 2018 utilizing the modified retrospective method.

~~In January 2016,~~The following table summarizes the ~~FASB issued ASU 2016-01, relating to~~Company’s revenue from continuing operations by segment, major good and/or service, and the related timing of revenue recognition ~~and measurement of financial assets and financial liabilities. The amendments in this update are effective~~ for ~~annual reporting periods beginning after~~the year ended December ~~15, 2017. The Company adopted ASU 2016-01 effective January 1, 2018 and has determined there will be no material impact on its consolidated financial statements.~~31, 2019:

In February 2016, the FASB issued ASU 2016-02, which requires entities to recognize assets and liabilities that arise from financing and operating leases and to classify those finance and operating lease payments in the financing or operating sections, respectively, of the statement of cash flows. The amendments in this update are effective for annual reporting periods beginning after December 15, 2018. The Company is currently evaluating the provisions to determine the potential impact, if any, the adoption will have on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, which amends certain aspects of the stock-based compensation guidance. The amendments in this update are effective for annual reporting periods beginning after December 15, 2016. The Company adopted ASU 2016-09 effective January 1, 2017.

In August 2016, the FASB issued ASU 2016-15, which clarifies the appropriate classification of certain cash receipts and payments in the statement of cash flows. The amendments in this update are effective for annual reporting periods beginning after December 15, 2017. The Company adopted ASU 2016-15 effective January 1, 2018 and has determined there will be no material impact on its consolidated financial statements.

In November 2016, the FASB issued ASU 2016-18, which addresses diversity in the classification and presentation of changes in restricted cash in the statement of cash flows as operating, investing, or financing activities. The Company is currently evaluating the provisions to determine the potential impact, if any, the adoption will have on its consolidated statements of cash flows. The Company adopted ASU 2016-18 effective January 1, 2018 and will classify the changes in restricted cash between operating, investing, and financing in the consolidated statements of cash flows as applicable per the new guidance.

In February 2018, the FASB issued ASU 2018-02, which amends the guidance allowing for a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. The amendments in this update are effective for annual reporting periods beginning after December 15, 2018. The Company is currently evaluating the provisions to determine the potential impact, if any, the adoption will have on its consolidated financial statements.




		Income Properties		Management Fee Income		Commercial Loan Investments		Real Estate Operations		Total Revenues
		($000's)		($000's)		($000's)		($000's)		($000's)
Major Good / Service:
	Lease Revenue - Base Rent	$	35,109	$	—	$	—	$	—	$	35,109
	Lease Revenue - CAM		1,422		—		—		—		1,422
	Lease Revenue - Reimbursements		2,759		—		—		—		2,759
	Lease Revenue - Billboards		243		—		—		—		243
	Above / Below Market Lease Accretion		2,382		—		—		—		2,382
	Contributed Leased Assets Accretion		217		—		—		—		217
	Lease Incentive Amortization		(277)		—		—		—		(277)
	Management Fee Income		—		304		—		—		304
	Commercial Loan Investments		—		—		1,829		—		1,829
	Impact Fee and Mitigation Credit Sales		—		—		—		—		—
	Subsurface Lease Revenue		—		—		—		598		598
	Subsurface Revenue - Other		—		—		—		150		150
	Fill Dirt and Other Revenue		—		—		—		104		104
	Timber Sales Revenue		—		—		—		—		—
	Interest and Other Revenue		101		—		—		—		101
	Total Revenues	$	41,956	$	304	$	1,829	$	852	$	44,941

Timing of Revenue Recognition:
	Asset/Good Transferred at a Point in Time	$	—	$	—	$	��	$	254	$	254
	Services Transferred Over Time		101		304		—		—		405
	Over Lease Term		41,855		—		—		598		42,453
	Commercial Loan Investment Related Revenue		—		—		1,829		—		1,829
	Total Revenues	$	41,956	$	304	$	1,829	$	852	$	44,941

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The following table summarizes the Company’s revenue from continuing operations by segment, major good and/or service, and the related timing of revenue recognition for the year ended December 31, 2018:


		Income Properties		Commercial Loan Investments		Real Estate Operations		Total Revenues
		($000's)		($000's)		($000's)		($000's)
Major Good / Service:
	Lease Revenue - Base Rent	$	31,587	$	—	$	—	$	31,587
	Lease Revenue - CAM		2,905		—		—		2,905
	Lease Revenue - Reimbursements		2,934		—		—		2,934
	Lease Revenue - Billboards		250		—		—		250
	Above / Below Market Lease Accretion		2,339		—		—		2,339
	Contributed Leased Assets Accretion		218		—		—		218
	Lease Incentive Amortization		(302)		—		—		(302)
	Commercial Loan Investments		—		616		—		616
	Impact Fee and Mitigation Credit Sales		—		—		1,338		1,338
	Subsurface Lease Revenue		—		—		957		957
	Subsurface Revenue - Other		—		—		668		668
	Fill Dirt and Other Revenue		—		—		3		3
	Interest and Other Revenue		145		—		—		145
	Total Revenues	$	40,076	$	616	$	2,966	$	43,658

Timing of Revenue Recognition:
	Asset/Good Transferred at a Point in Time	$	—	$	—	$	2,009	$	2,009
	Services Transferred Over Time		145		—		—		145
	Over Lease Term		39,931		—		957		40,888
	Commercial Loan Investment Related Revenue		—		616		—		616
	Total Revenues	$	40,076	$	616	$	2,966	$	43,658

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		Income Properties		Commercial Loan Investments		Real Estate Operations		Total Revenues
		($000's)		($000's)		($000's)		($000's)
Major Good / Service:
	Lease Revenue - Base Rent	$	24,650	$	—	$	—	$	24,650
	Lease Revenue - CAM		2,208		—		—		2,208
	Lease Revenue - Reimbursements		2,125		—		—		2,125
	Lease Revenue - Billboards		251		—		—		251
	Above / Below Market Lease Accretion		2,194		—		—		2,194
	Lease Incentive Amortization		(50)		—		—		(50)
	Commercial Loan Investments		—		2,053		—		2,053
	Impact Fee and Mitigation Credit Sales		—		—		2,126		2,126
	Subsurface Lease Revenue		—		—		856		856
	Subsurface Revenue - Other		—		—		2,192		2,192
	Fill Dirt and Other Revenue		—		—		17		17
	Interest and Other Revenue		29		—		—		29
	Total Revenues	$	31,407	$	2,053	$	5,191	$	38,651

Timing of Revenue Recognition:
	Asset/Good Transferred at a Point in Time	$	—	$	—	$	4,335	$	4,335
	Services Transferred Over Time		29		—		—		29
	Over Lease Term		31,378		—		856		32,234
	Commercial Loan Investment Related Revenue		—		2,053		—		2,053
	Total Revenues	$	31,407	$	2,053	$	5,191	$	38,651

NOTE 3. INCOME PROPERTIES

Leasing revenue consists of long-term rental revenue from retail, office, and commercial income properties, and billboards, which is recognized as earned, using the straight-line method over the life of each lease. Lease payments below include straight-line base rental revenue as well as the non-cash accretion of above and below market lease amortization.

The components of leasing revenue are as follows:


	Year Ended December 31,
	2019		2018		2017
	($000's)		($000's)		($000's)
Leasing Revenue
Lease Payments	$	37,431	$	33,842	$	26,794
Variable Lease Payments		4,525		6,234		4,613
Total Leasing Revenue	$	41,956	$	40,076	$	31,407

Minimum future base rental revenue on non-cancelable leases subsequent to December 31, 2019, for the next five years ended December 31 are summarized as follows:


Year Ending December 31,	Amounts ($000's)
2020	$	25,698
2021		24,979
2022		24,074
2023		23,343
2024		23,069
2025 and thereafter (cumulative)		174,852
Total	$	296,015

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~~NOTE 2. INCOME PROPERTIES~~2019 Activity. During the year ended December 31, 2019, the Company acquired ten single-tenant income properties and one multi-tenant income property, for an aggregate purchase price of approximately $164.7 million, or an aggregate acquisition cost of approximately $165.7 million including capitalized acquisition costs. Based on independent third-party purchase price allocation valuations, of the total acquisition cost, approximately $45.6 million was allocated to land, approximately $83.5 million was allocated to buildings and improvements, approximately $23.4 million was allocated to intangible assets pertaining to the in-place lease value, leasing fees and above market lease value, and approximately $3.1 million was allocated to intangible liabilities for the below market lease value. The remaining approximately $16.3 million was classified as a commercial loan investment as described below and in Note 4, “Commercial Loan Investments.” The weighted average amortization period for the intangible assets and liabilities was approximately 9.7 years at acquisition. The properties acquired during the year ended December 31, 2019 are described below:


Tenant Description	Tenant Type	Property Location	Date of Acquisition	Property Square-Feet	Property Acres	Purchase Price		Percentage Leased		Remaining Lease Term at Acquisition Date (in years)
Hobby Lobby Stores, Inc.	Single-Tenant	Winston-Salem, NC	05/16/19	55,000	7.6	$	8,075,000		100%	10.9
24 Hour Fitness USA, Inc.	Single-Tenant	Falls Church, VA	05/23/19	46,000	3.1		21,250,000		100%	8.6
Walgreen Co.	Single-Tenant	Birmingham, AL	06/05/19	14,516	2.1		5,500,000		100%	9.8
Family Dollar Stores of Massachusetts, Inc.	Single-Tenant	Lynn, MA	06/07/19	9,228	0.7		2,100,000		100%	4.8
Walgreen Co.	Single-Tenant	Albany, GA	06/21/19	14,770	3.6		3,634,000		100%	13.6
Carpenter Hotel (1)	Single-Tenant	Austin, TX	07/05/19	N/A	1.4		16,250,000		100%	99.1
General Dynamics Corporation	Single-Tenant	Reston, VA	07/12/19	64,319	3.0		18,600,000		100%	9.9
Live Nation Entertainment, Inc.	Single-Tenant	East Troy, WI	08/30/19	N/A	158.3		7,500,000		100%	10.6
Party City Corporation	Single-Tenant	Oceanside, NY	09/24/19	15,500	1.2		7,120,000		100%	10.2
Burlington Stores, Inc.	Single-Tenant	N. Richland Hills, TX	10/28/19	70,891	5.3		11,940,000		100%	9.3
The Strand	Multi-Tenant	Jacksonville, FL	12/09/19	212,402	52.0		62,701,000		95%	9.5
	Total / Weighted Average			502,626		$	164,670,000			18.4

2019 Dispositions. Twenty-one single-tenant income properties were disposed of during the year ended December 31, 2019 as follows:

On November 26, 2019, as part of the initial public offering (the “IPO”) of PINE, the Company sold or contributed 20 single-tenant net-leased income properties to Alpine and its operating partnership (the “Alpine OP”) for aggregate cash consideration of approximately $125.9 million for 15 of the properties and an aggregate of 1,223,854 units of the Alpine OP (“OP Units”) for 5 of the properties, with the OP Units having an initial value of approximately $23.3 million, based on Alpine’s IPO price, resulting in a gain of approximately $1.0 million, or approximately $0.16 per share after tax (the “PINE Income Property Sale Transactions”).

In addition to investing in Alpine by way of receipt of the OP Units, the Company invested $15.5 million of cash in Alpine at its IPO, receiving 815,790 shares of Alpine’s common stock. In aggregate, the Company owns approximately 2.04 million shares of Alpine, or approximately 22.3% of its total shares outstanding.

On August 7, 2019, the Company sold its 1.56-acre outparcel subject to a ground lease with Wawa located in Winter Park, Florida for approximately $2.8 million (the “Wawa Sale”). The property is an outparcel to the Grove at Winter Park which the Company sold in May 2019. The gain on the Wawa Sale totaled approximately $2.1 million, or approximately $0.33 per share, after tax.

Additionally, three multi-tenant income properties, which were classified in Assets Held for Sale as of December 31, 2018, were disposed of during the year ended December 31, 2019 (the “Multi-Tenant Dispositions”) as described below. The Multi-Tenant Dispositions continue the Company’s objective of transitioning the income property portfolio to primarily single-tenant net lease properties.

On June 24, 2019, the Company sold its approximately 76,000 square foot multi-tenant retail property located in Santa Clara, California for approximately $37.0 million (the “Peterson Sale”). The gain on the Peterson Sale totaled approximately $9.0 million, or approximately $1.36 per share, after tax.

On May 23, 2019, the Company sold its approximately 112,000 square foot multi-tenant retail property, anchored by a 24 Hour Fitness, located in Winter Park, Florida for approximately $18.3 million (the “Grove Sale”). The gain on the Grove Sale totaled approximately $2.8 million, or approximately $0.42 per share, after tax.

On February 21, 2019, the Company sold its approximately 59,000 square foot multi-tenant retail property, anchored by a Whole Foods Market retail store, located in Sarasota, Florida for approximately $24.6 million (the “Whole Foods Sale”). The gain on the Whole Foods Sale totaled approximately $6.9 million, or approximately $0.96 per share, after tax.

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2019 Leasing Activity. On July 16, 2019, the Company entered into a lease termination agreement (the “Termination Agreement”) with Cocina 214, the tenant of one of the Company’s beachfront restaurant properties located in Daytona Beach, Florida. Pursuant to the Termination Agreement, the Company agreed to fund Cocina 214 approximately $1.0 million of their original contribution towards the completion of the building and tenant improvements and other personal property as described in Note 18, “Deferred Revenue.” Additionally, pursuant to the Termination Agreement, the Company collected the balance of unpaid rent of approximately $0.3 million that was due through the date Cocina 214 vacated the property. Accordingly, the Company made a net payment to Cocina 214 of approximately $693,000 in August 2019 (the “Termination Payment”).

On July 18, 2019, the Company entered into a lease agreement with Broken Hook, LLC to operate the beachfront restaurant as Crabby’s Oceanside Daytona Beach (the “Crabby’s Lease”). The Crabby’s Lease commenced on August 4, 2019 with rent commencing on August 26, 2019 and has an original lease term of ten years with four five-year renewal options.

2018 Activity. During the year ended December 31, 2018, the Company acquired eleven single-tenant income properties, for an aggregate purchase price of approximately $106.6 million, or an aggregate acquisition cost of approximately $107.8 million including capitalized acquisition costs. Based on independent third-party purchase price allocation valuations, of the total acquisition cost, approximately $47.9 million was allocated to land, approximately $45.6 million was allocated to buildings and improvements, approximately $15.6 million was allocated to intangible assets pertaining to the in-place lease value, leasing fees and above market lease value, and approximately $1.3 million was allocated to intangible liabilities for the below market lease value. The weighted average amortization period for the intangible assets and liabilities was approximately 13.2 years at acquisition.

Four income properties were disposed of during the year ended December 31, 2018. On March 26, 2018, the Company sold its four self-developed, multi-tenant office properties located in Daytona Beach, Florida, for approximately $11.4 million (the “Self-Developed Properties Sale��). The sale included the 22,012 square-foot Concierge office building, the 30,720 square-foot Mason Commerce Center comprised of two office buildings, and the 15,360 square-foot Williamson Business Park office building. The gain on the sale totaled approximately $3.7 million, or approximately $0.49 per share, after tax. The Company utilized the proceeds to fund a portion of the previously acquired income property located near Portland, Oregon, leased to Wells Fargo, through a reverse 1031 like-kind exchange structure. As part of the transaction, the Company entered into a lease of its approximately 7,600 square-foot office space in Williamson Business Park for approximately 5 years at a market rental rate.

2017 Activity. During the year ended December 31, 2017, the Company acquired four single-tenant income properties and two multi-tenant income properties, for an aggregate purchase price of approximately $79.8 million, or an aggregate acquisition cost of approximately $80.6 million including capitalized acquisition costs. Based on independent third-party purchase price allocation valuations, of the total acquisition cost, approximately $28.0 million was allocated to land, approximately $45.2 million was allocated to buildings and improvements, approximately $9.3 million was allocated to intangible assets pertaining to the in-place lease value, leasing fees and above market lease value, and approximately $1.9 million was allocated to intangible liabilities for the below market lease value. The weighted average amortization period for the intangible assets and liabilities was approximately 8.9 years at acquisition. ~~The properties acquired during the year ended December 31, 2017 are described below:~~

No income properties were disposed of during the year ended December 31, 2017.

On April 7, 2017, rent commenced on the 15-year lease with 24 Hour Fitness, the anchor tenant at The Grove at Winter Park located in Winter Park, Florida. The lease is for approximately 40,000 square feet, or 36% of the 112,000 square foot multi-tenant retail center. As of December 31, 2017, the multi-tenant retail center was approximately 63% leased with eleven different tenants including 24 Hour Fitness.

~~2016 Activity.~~ During the year ended December 31, 2016, the Company acquired ten income properties, seven single-tenant and three multi-tenant, at an aggregate purchase price of approximately $86.7 million. Based on independent third-party purchase price allocation valuations, of the total acquisition cost, approximately $40.4 million was allocated to land, approximately $27.4 million was allocated to buildings and improvements, approximately $20.0 million was allocated to intangible assets pertaining to the in-place lease value and above-market lease value, and approximately $1.1 million was allocated to intangible liabilities pertaining to the below-market lease value. The weighted average amortization period for the intangible assets and liabilities was approximately 14.3 years at the time of acquisition. Nineteen income properties were disposed of during the year ended December 31, 2016 for an aggregate sales price of approximately $74.3 million. Aggregate gains on 2016 dispositions were approximately $12.8 million, while impairments on disposals were approximately $1.2 million.

~~2015 Activity.~~ During the year ended December 31, 2015, the Company acquired four income properties, two single-tenant, one multi-tenant, and one vacant outparcel adjacent to one of our multi-tenant properties, at an aggregate acquisition cost of approximately $76.5 million, for an aggregate purchase price of approximately $76.4 million. Based on the finalization of independent third-party purchase price allocation valuations completed during 2015, of the total acquisition cost, approximately $17.1 million was allocated to land, approximately $78.9 million was allocated to buildings and improvements, approximately $12.1 million was allocated to intangible assets pertaining to the in-place lease value and above-market lease value, and approximately $31.6 million was allocated to intangible liabilities pertaining to the below-market lease value. The weighted average amortization period for the intangible assets and liabilities was approximately 15.7 years at the time of acquisition. Six income properties were disposed of during the year ended December 31, 2015, for an aggregate sales price of approximately $24.3 million. Aggregate gains on 2015 dispositions were approximately $5.5 million, while impairments on disposals were approximately $510,000.

~~F-18~~

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NOTE 3.4. COMMERCIAL LOAN INVESTMENTS

Our investments in commercial loans or similar structured finance investments, such as mezzanine loans or other subordinated debt, have been and are expected to continue to be secured by commercial or residential real estate or the borrower’s pledge of its ownership interest in the entity that owns the real estate. The first mortgage loans we invest in or originate are generally for commercial real estate located in the United States and its territories, and are current or performing with either a fixed or floating rate. Some of these loans may be syndicated in either a pari-passu or senior/subordinated structure. Commercial first mortgage loans generally provide for a higher recovery rate due to their senior position in the underlying collateral. Commercial mezzanine loans are typically secured by a pledge of the borrower’s equity ownership in the underlying commercial real estate. Unlike a mortgage, a mezzanine loan is not secured by a lien on the property. An investor’s rights in a mezzanine loan are usually governed by an intercreditor agreement that provides holders with the rights to cure defaults and exercise control on certain decisions of any senior debt secured by the same commercial property.

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On July ~~31, 2017,~~5, 2019, the Company originated ~~a $3.0~~an approximately $8.3 million first mortgage loan secured by ~~a parcel of beachfront land~~the leasehold interest in the ~~City~~Carpenter Hotel in Austin, Texas. The loan is interest-only with a term of ~~Daytona Beach Shores, Florida which the borrower intends to develop as a residential condominium (the “Beach Loan”). The Beach Loan matures on August 1, 2018, includes a~~ one-year ~~extension option, bears~~with a fixed interest rate of ~~11.00%, and requires payments of interest only prior to maturity. At closing, a loan~~11.50%. The Company received an origination fee of ~~$60,000 was~~1%, or $82,500.

On July 5, 2019, the Company acquired approximately 1.4 acres of land under the Carpenter Hotel in Austin, Texas (the “Carpenter Purchase”), for approximately $16.25 million. Separately, the Company entered into a new 99-year ground lease (the “Ground Lease”) whereby the Company leased back the land to the seller. The Ground Lease includes annual escalations and certain future repurchase rights. Pursuant to FASB ASC Topic 842, Leases, due to the future repurchase rights, the Ground Lease does not qualify for treatment as a property purchase and has been accounted for on the consolidated balance sheets as a commercial loan investment (the “Ground Lease Loan”). The Company has imputed interest on the Ground Lease Loan which is being recognized as interest income on commercial loan investments in the Company’s consolidated statements of operations.

On June 14, 2019, the Company originated an $8.0 million first mortgage bridge loan secured by 72 acres of land in Orlando, Florida. The loan is interest-only with a term of one-year with two 1-year extensions with a fixed interest rate of 12.00%. The Company received ~~by the Company. Should the borrower seek to obtain financing for the development~~an origination fee of ~~the project, the Beach Loan would likely be paid off in connection with that financing.~~2%, or $160,000.

On October ~~23, 2017,~~17, 2019, the Company ~~sold its two commercial~~originated an approximately $2.1 million first mortgage loan ~~investments~~ secured by ~~hotel properties in Atlanta, Georgia and Dallas, Texas.~~the LPGA golf assets which were sold on October 17, 2019. The ~~Company sold these investments at~~loan is interest-only with a ~~premium to par for proceeds~~term of ~~approximately $15.1 million on an aggregate principal value of $15.0 million. The Company utilized these proceeds to pay down the Credit Facility (hereinafter defined).~~

~~As of December 31, 2017, the Company owned~~one-year with two performing commercial loan investments which have an aggregate outstanding principal balance of approximately $12.0 million. These loans are secured by real estate, or the borrower’s equity interest in real estate, located in Daytona Beach Shores, Florida and Sarasota, Florida and have an average remaining maturity of approximately 0.5 years andsix-month extensions with a ~~weighted average~~fixed interest rate of ~~9.5%~~7.50%. The Company received an origination fee of 1.5%, or approximately $31,000.

The Company’s commercial loan investment portfolio was comprised of the following at December 31, ~~2017:~~2019:

Date of

Maturity

Original Face

Current Face

Carrying

Description

Investment

Date

Amount

Amount

Value

Coupon Rate

B-Note – Retail Shopping Center, Sarasota, FL

May 2014

June 2018

$
8,960,467

$
8,960,467

$
8,960,467

30 ‑day LIBOR
plus 7.50%

First Mortgage – Land Parcel, Daytona Beach, FL

July 2017

July 2018

3,000,000

3,000,000

2,965,232

11.00%

Total

$
11,960,467

$
11,960,467

$
11,925,699


	Date of	Maturity	Original Face		Current Face		Carrying
Description	Investment	Date	Amount		Amount		Value		Coupon Rate
First Mortgage – 72-Acre Land Parcel, Orlando, FL	June 2019	June 2020	$	8,000,000	$	8,000,000	$	7,927,869	12.00%
Mortgage Note – 400 Josephine Street, Austin, TX	July 2019	July 2020		8,250,000		8,250,000		8,207,964	11.50%
Ground Lease Loan – 400 Josephine Street, Austin, TX	July 2019	N/A		16,250,000		16,250,000		16,443,942	N/A
LPGA Buyer Loan – Daytona Beach, FL	Oct 2019	Oct 2020		2,070,000		2,070,000		2,045,398	7.50%
			$	34,570,000	$	34,570,000	$	34,625,173

The carrying value of the commercial loan investment ~~as of~~portfolio at December 31, ~~2017~~2019 consisted of the following:


	Total
Current Face Amount	$	~~11,960,467~~	34,570,000
~~Unamortized Fees~~Imputed Interest over Rent Payments Received on Ground Lease Loan		—	193,943
Unaccreted Origination Fees		~~(34,768)~~	(138,770)
Total Commercial Loan Investments	$	~~11,925,699~~	34,625,173

~~No commercial loan investments were classified as held for sale as~~As of December 31, ~~2017.~~2018, the Company had no commercial loan investments.

NOTE 5. RELATED PARTY MANAGEMENT SERVICES BUSINESS

PINE. Pursuant to the Company’s management agreement with PINE, (the “Management Agreement”), we will generate a base management fee equal to 1.5% of PINE’s total equity. The structure of the base fee provides us with an opportunity for our base fee to grow should PINE’s independent board members determine to raise additional equity capital in the future. We also have an opportunity to achieve additional cash flows as Manager of PINE pursuant to the terms of the incentive fee.

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Table of Contents

~~The Company’s commercial loan investment portfolio was comprised of~~During the ~~following at~~year ended December 31, ~~2016:~~

Date of

Maturity

Original Face

Current Face

Carrying

Description

Investment

Date

Amount

Amount

Value

Coupon Rate

Mezz – Hotel – Atlanta, GA

January 2014

February 2019

$
5,000,000

$
5,000,000

$
5,000,000

12.00%

B-Note – Retail Shopping Center, Sarasota, FL

May 2014

June 2017

8,960,467

8,960,467

8,960,467

30 day LIBOR
plus 7.50%

Mezz – Hotel, Dallas, TX

September 2014

September 2017

10,000,000

10,000,000

10,000,000

30 day LIBOR
plus 7.25%

Total

$
23,960,467

$
23,960,467

$
23,960,467

2019, the Company earned management fee revenue from PINE of approximately $254,000 which represents the initial stub period of PINE’s operations from November 26, 2019 to December 31, 2019 and is included in management services in the accompanying consolidated statements of operations. Dividends received totaled approximately $118,000 for the year ended December 31, 2019 and are included in investment income in the accompanying consolidated statements of operations.

The ~~carrying value of~~following table represents amounts due from PINE to the ~~commercial loan investment portfolio~~Company as of December 31, ~~2016 was equal~~2019:


Description	Amounts ($000's)
Management Services Fee due from PINE	$	254
Dividend Receivable on OP Units		71
Other		56
Total	$	381

Land JV. Pursuant to the ~~face amount. No commercial loan investments were classified~~terms of the operating agreement for the Land JV, the initial amount of the management fee is $20,000 per month. The management fee is evaluated quarterly and as ~~held~~land sales occur in the Land JV, the basis for ~~sale~~our management fee will be reduced as the management fee is based on the value of real property that remains in the Land JV. During the year ended December 31, ~~2016.~~2019, the Company earned management fee revenue from the Land JV of approximately $50,000 which represents the initial stub period of the Land JV’s operations from October 16, 2019 to December 31, 2019 and is included in management services in the accompanying consolidated statements of operations.

NOTE 4.6. LAND AND ~~DEVELOPMENT COSTS AND SUBSURFACE INTERESTS~~INVESTMENT IN THE LAND JV

Land and development costs at December 31, 2019 and 2018 were as follows:


	December 31,
	2019		2018
Land and Development Costs	$	6,068,810	$	5,001,795
Land, Timber, and Subsurface Interests		663,481		623,050
Total Land and Development Costs	$	6,732,291	$	5,624,845

As of December 31, ~~2017,~~2018, the Company owned approximately ~~8,100~~5,400 acres of undeveloped land in Daytona Beach, Florida, along six miles of the west and east sides of Interstate 95. ~~Currently,~~The significant decrease in land and development costs above is primarily the ~~majority~~result of ~~this~~the Company’s completion of the sale of a controlling interest in its wholly-owned subsidiary, Crisp39 SPV LLC to affiliates of Magnetar Capital LLC (the “Magnetar Investors”) (the “Magnetar Land Sale”) on October 16, 2019, pursuant to an Interest Purchase Agreement (the “Purchase Agreement”) for proceeds of approximately $97.0 million. Crisp39 SPV LLC holds the approximately 5,300 acres of undeveloped land ~~is used for agricultural purposes.~~ in Daytona Beach, Florida (the “Land JV”).

As a result of ~~February 28, 2018,~~the closing of the Purchase Agreement, the Magnetar Investors collectively own a notional 66.50% equity interest in the Land JV, and the Company owns a notional 33.50% equity interest in the Land JV (collectively the Company and the Magnetar Investors are herein referred to as the “JV Partners”). The transaction resulted in a gain of approximately ~~75% of this acreage,~~$78.6 million, or approximately ~~6,042 acres,~~$12.21 per share, after tax, on the sale of the 66.50% equity interest in the Land JV and a non-cash gain of approximately $48.9 million on the Company’s retained interest in the Land JV, or approximately $7.59 per share, after tax.

The direct impact of the Magnetar Land Sale is ~~under contract to be sold. Approximately 1,100 acres~~that the Company divested itself of its land holdings, but for the 6-acre Daytona Beach development land described below, and as such the occurrence of land sales, which had been a primary element of the Company’s business for virtually its entire 109-year history, has been essentially discontinued. Consequently, the operations associated with our land holdings ~~are located~~were treated as discontinued operations and accordingly the revenues and expenses that had been presented within the Company’s real estate operations segment in prior periods were reclassified in the statement of operations for the year ended December 31, 2019 and all prior periods presented.

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Table of Contents

However, the Company is continuing to pursue land sales on the ~~east side~~approximately 5,300 acres that formerly comprised its land holdings in its role as Manager (of the Land JV) on behalf of ~~Interstate 95~~the JV Partners. The Company’s retained interest in the Land JV represents a notional 33.5% stake in the venture, the value of which may be realized in the form of distributions based on the timing and ~~are generally well suited~~the amount of proceeds achieved when the land is ultimately sold by the Land JV. As of March 6, 2020, the Land JV has completed approximately $22 million in land sales since its inception in mid-October 2019 and currently has a pipeline of 10 purchase and sale agreements for ~~commercial development. Approximately 7,000~~potential land sale transactions representing approximately $97 million of potential proceeds to the Land JV. The 4,200 acres under contract represents approximately 84% of the total remaining land in the Land JV.

The Company will serve as the initial manager of the Land JV and is responsible for day-to-day operations at the direction of the JV Partners. All major decisions and certain other actions that can be made by the Manager must be approved by the unanimous consent of the JV Partners (the “Unanimous Actions”). Unanimous Actions include such matters as the approval of pricing for all land parcels in the Land JV; approval of contracts for the sale of land that contain material revisions to the standard purchase contract of the Land JV; entry into any lease agreement affiliated with the Land JV; entering into listing or brokerage agreements; approval and amendment of the Land JV’s operating budget; obtaining financing for the Land JV; admission of additional members; and dispositions of the Land JV’s real property for amounts less than market value. Pursuant to the LLC Agreement the Land JV will pay the Manager a management fee in the initial amount of $20,000 per month, which amount will be evaluated on a quarterly basis and reduced based on the value of real property that remains in the Land JV.

Real Estate Operations – Discontinued Operations

Since the transition in our land ~~holdings~~operations occurred late in 2019, the impact of land sales for the periods prior to October 2019 are ~~located on~~no longer germane to our financial condition, results of operations and cash flows. As such the ~~west side of Interstate 95 and the majority of this~~following summarized information is provided regarding land is generally well suited for residential development. Included in the western land is approximately 1,100 acres, primarily an 850-acre parcel and three smaller parcels, which are located further west of Interstate 95 and a few miles north of Interstate 4 that is generally well suited for industrial purposes.sales activity prior to October 2019.

~~Land and development costs at December 31, 2017 and 2016, are summarized as follows:~~

December 31,

2017

2016

Land and Development Costs

$
32,625,857

$
39,681,558

Land, Timber, and Subsurface Interests

6,851,840

12,273,720

Total Land and Development Costs

$
39,477,697

$
51,955,278

~~Real~~Revenue from discontinued real estate operations ~~revenue~~ consisted of the following for the years ended December 31, ~~2017, 2016,~~2019, 2018, and ~~2015, respectively:~~2017:


	2019		2018		2017
Revenue Description	($000's)		($000's)		($000's)
Land Sales Revenue	$	10,975	$	41,452	$	45,471
Revenue from Reimbursement of Infrastructure Costs		—		1,556		1,860
Agriculture		68		23		335
Total Real Estate Operations Revenue - Discontinued Operations	$	11,043	$	43,031	$	47,666

~~Tomoka Town Center.~~2019 Land Sales. ~~The Tomoka Town Center consists~~During the year ended December 31, 2019, the Company completed five land sales transactions, including: (i) the Magnetar Land Sale for approximately 5,300 acres of land, for total proceeds of approximately ~~235~~$97.0 million; (ii) two transactions with Unicorp Development representing approximately 23.6 acres ~~of which approximately 180 acres are developable. During 2015~~ and ~~2016, land sales with a gross sales price totaling approximately $21.4 million within the Tomoka Town Center consisted of sales~~generating aggregate proceeds of approximately 99 acres to Tanger Outlets, Sam’s Club, and North American Development Group (“NADG”) (the “Tomoka Town Center Sales Agreements”). The Company performed certain infrastructure work, beginning in the fourth quarter of 2015 through completion in the fourth quarter of 2016, which required the sales price on the Tomoka Town Center Sales Agreements to be recognized on the percentage-of-completion basis. As the infrastructure work was completed in the fourth quarter of 2016, all revenue related to the Tomoka Town Center Sales Agreements had been recognized as of December 31, 2016. The timing of the remaining reimbursements for the cost of the infrastructure work which totals approximately $2.2 million is more fully described in Note 9, “Other Assets.”

~~F-20~~

~~Table of Contents~~

~~During the second quarter of 2017, the Company completed~~$7.1 million; (iii) the sale of approximately 1938 acres for total proceeds of $710,000, and (iv) a land sale to NADG ~~(the “Third NADG~~for approximately 13 acres generating proceeds of approximately $3 million. In total the Company, in 2019, sold approximately 5,400 acres generating proceeds of approximately $108 million. Including the approximately $48.9 million recognized on the retained interest in the Land ~~Sale”).~~ JV, resulting in gains of approximately $133 million, or approximately $20.60 per share after tax, were recognized.

2018 Land Sales. During the ~~fourth quarter of 2017,~~year ended December 31, 2018, the Company completed land transactions representing approximately 2,697 acres including: (i) the sale of a 70% interest in the Mitigation Bank (hereinafter defined) that holds approximately 272,492 acres ~~to NADG (the “Fourth NADG Land Sale”). The remaining developable acreage~~for proceeds of $15.3 million and (ii) twelve land sales totaling approximately 205 acres for aggregate proceeds of approximately ~~35 acres is currently under contract with NADG as described in the~~$43.7 million. The twelve land ~~pipeline in Note 18, “Commitment and Contingencies.”~~sales generated gains of approximately $32.6 million, or approximately $4.44 per share, after tax.

2017 Land Sales. During the year ended December 31, 2017, ~~a total~~the Company completed land transactions representing approximately 1,700 acres including: (i) the sale of nearly 1,600 acres to Minto Communities generating proceeds of approximately ~~1,701~~$27.2 million; (ii) two transactions with NADG of approximately 46 acres ~~were sold~~ for total proceeds of approximately ~~$47.0~~$10.6 million, ~~as described below:~~

~~(1)~~and (iii) five other transactions representing approximately 73.5 acres that generated approximately $9.2 million of proceeds. The ~~Gross Sales Price of~~ land sales ~~during~~in 2017 generated aggregate proceeds of approximately ~~$47.0~~$45.5 million ~~above includes the infrastructure reimbursement payments received in the amount~~and gains of approximately ~~$955,000 for the Third NADG Land Sale and~~$31.8 million, or approximately $584,000 for the Fourth NADG Land Sale. Additionally, during 2017, approximately $321,000 was received from Minto Communities, LLC as an infrastructure reimbursement for improvements to the I-95 off ramp, which is not included in the gross sales price in the table above.$3.51 per share, after tax.

~~During the year ended December 31, 2016, a total of approximately 707.7 acres were sold for approximately $13.8 million as described below:~~

~~(1)~~Land Sales Revenue for 2016 is equal to the Gross Sales Price of land sales during 2016 of approximately $13.8 million above, less the $2.0 million sales price for the NADG – OutParcel, plus approximately $112,000 of incentives earned and received during 2016 related to the Distribution Center sale which closed during 2014.

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Table of Contents

~~During the year ended December 31, 2015, a total of approximately 114.1 acres were sold for approximately $22.5 million as described below:~~

~~Pipeline.~~ ~~For a description of our land which is currently under contract, see the land pipeline in Note 18, “Commitment and Contingencies.”~~

Land Impairments. As more fully described in Note 8,11, "Impairment of Long-Lived Assets," during the years ended December 31, ~~2017~~2019, 2018, and ~~2015~~2017, the Company did not recognize any impairments on its undeveloped land holdings. ~~During~~

Real Estate Operations – Continuing

Revenue from continuing real estate operations consisted of the ~~year~~following for the years ended December 31, ~~2016, impairment charges totaled approximately $1.0 million on the Company’s undeveloped land.~~ 2019, 2018, and 2017:


	2019		2018		2017
Revenue Description	($000's)		($000's)		($000's)
Impact Fee and Mitigation Credit Sales		—		1,338		2,126
Subsurface Revenue		748		1,625		3,048
Fill Dirt and Other Revenue		104		3		17
Total Real Estate Operations Revenue - Continuing Operations	$	852	$	2,966	$	5,191

~~Beachfront~~Daytona Beach Development. During ~~the year ended December 31, 2015,~~2018, the Company acquired ~~through~~ a ~~real estate venture~~5-acre parcel of land with ~~an unaffiliated third party institutional investor, an interest~~existing structures in ~~approximately six acres of vacant beachfront property located in~~downtown Daytona Beach, ~~Florida. The property was acquired~~ for a purchase price of approximately ~~$11.3 million, of which the Company contributed approximately $5.7~~$2.0 million. As of December 31, ~~2015,~~2019, the Company had also acquired other contiguous parcels totaling approximately 1-acre for approximately $2.1 million. Combined, these parcels represent the substantial portion of an entire city block in downtown Daytona Beach adjacent to International Speedway Boulevard, a major thoroughfare in Daytona Beach. We have engaged a national real estate ~~venture was fully consolidated as the Company determined that it was the primary beneficiary~~brokerage firm to assist us in identifying a developer or investor to acquire a portion or all of the ~~variable interest entity (“VIE”). On November 17, 2016,~~property or to contribute into a potential joint venture to redevelop the Company acquired the unaffiliated third party’s 50% interest for approximately $4.8 million, a discount of approximately $879,000. The discount was recorded through equity on the consolidated balance sheet during the year ended December 31, 2016. The Company evaluated its interest in the six-acre vacant beachfront property for impairment and determined that no impairment was necessary as of December 31, 2016. As the Company owns the entire real estate venture as of December 31, 2017, there is no longer a consolidated VIE.

The cost basis of the six-acre vacant beachfront property asset totaled approximately $11.7 million as of December 31, 2017, which includes costs for entitlement. The beachfront property received approval of the rezoning and entitlement of the site to allowproperty. We are pursuing entitlements for the ~~development~~potential redevelopment of ~~two restaurants and also~~these parcels, along with certain other adjacent land parcels, some of which we have under contract for the future potential development of up to approximately 1.2 million square feet of vertical density. In the first quarter of 2017, the Company executed a 15-year lease agreement with the operator of LandShark Bar & Grill (“LandShark”), which provided for the development by the Company of an approximately 6,264 square foot restaurant property on the parcel. The annual rent under the LandShark lease is based on a percentage of the tenant’s net operating income (“NOI”) until the Company has received its investment basis in the property and thereafter, the Company will receive a lower percentage of the tenant’s NOI during the remaining lease term. In the second quarter of 2017, the Company executed a 15-year lease agreement with Cocina 214 Restaurant & Bar (“Cocina 214”), for the second restaurant property to be developed on the parcel. The annual rent under the Cocina 214 lease is equal to the greater of $360,000 per year or a certain percentage of gross sales. The lease also provides for additional percentage rent upon the achievement of certain gross sales thresholds. The Company completed the design phase and commenced construction on the two single-tenant restaurants during the third quarter of 2017.purchase. As of December 31, ~~2017, the Company has~~2019, we have incurred approximately ~~$5.9~~$1.1 million ~~of design~~in raze and ~~construction costs. See Note 18, “Commitment and Contingencies” for the total expected cost~~entitlement costs related to be incurred for the development of the site and both restaurant properties. The development of the two restaurant properties was completed in time for the tenants to commence operations during January of 2018. Accordingly, during the first quarter of 2018, the total investment in the beach parcel

~~F-22~~

~~Table of Contents~~

and the construction costs of the two single-tenant properties will be classified as Income Properties, Land, Building, and Improvements, within the Property, Plant, and Equipment classification on the Company’s consolidated balance sheets.these parcels.

Other Real Estate Assets. The Company owns ~~impact fees with a cost basis of approximately $402,000 and~~ mitigation credits with a cost basis of approximately ~~$723,000, for a combined total of approximately $1.1~~$2.3 million as of December 31, ~~2017.~~2019. The increase in mitigation credits includes the 25 credits acquired from the Mitigation Bank during December 2019 as described in Note 7, Investment in Joint Ventures. There were no mitigation credit sales during the year ended December 31, 2019. During the year ended December 31, 2018, the Company transferred mitigation credits with a basis of approximately $124,000 to the land acquired by Buc-ee’s. During the year ended December 31, 2018, the Company sold mitigation credits for approximately $1.0 million, for a gain of approximately $882,000, or $0.12 per share, after tax. During the year ended December 31, 2017, the Company sold mitigation credits for approximately $1.6 million, for a gain of approximately $1.3 million, or $0.15 per share, after tax. Additionally, the Company recorded the transfer of mitigation credits with a cost basis of approximately $298,000 as a charge to direct cost of revenues of real estate operations during the year ended December 31, 2017, as more fully described in Note ~~18,~~21, “Commitments and Contingencies.” During the years ended December 31, ~~2017~~2018 and ~~2016,~~2017, the Company received cash payments of approximately ~~$519,000~~$338,000 and ~~$2.2 million,~~$519,000, respectively, for impact fees with a cost basis that was generally of equal ~~value.~~value, with no such impact fee sales during the year ended December 31, 2019 as the balance of impact fees is only approximately $2,000. Additionally, during the year ended December 31, 2018, impact fees with a cost basis of approximately $72,000 were transferred to the beachfront restaurant leased to LandShark Bar & Grill.

Subsurface Interests. As of December 31, ~~2017,~~2019, the Company owns full or fractional subsurface oil, gas, and mineral interests underlying approximately ~~462,000~~455,000 “surface” acres of land owned by others in 20 counties in Florida (the “Subsurface Interests”). The Company leases certain of the Subsurface Interests to mineral exploration firms for exploration. Our subsurface operations consist of revenue from the leasing of exploration rights and in some instances, additional revenues from royalties applicable to production from the leased acreage.

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agreed upon was paid. Lease income generated by the annual lease payments is recognized on a straight-line basis over the guaranteed lease term. For the years December 31, 2019, 2018, and 2017, lease income of approximately $598,000, approximately $807,000, and approximately $807,000 was recognized, respectively.

Lease payments on the respective acreages and drilling penalties received through lease year eight are as follows:


	Acreage
Lease Year	(Approximate)	Florida County	Lease Payment (1)		Drilling Penalty (1)
Lease Year 1 - 9/23/2011 - 9/22/2012	136,000	Lee and Hendry	$	913,657	$	—
Lease Year 2 - 9/23/2012 - 9/22/2013	136,000	Lee and Hendry		922,114		—
Lease Year 3 - 9/23/2013 - 9/22/2014	82,000	Hendry		3,293,000		1,000,000
Lease Year 4 - 9/23/2014 - 9/22/2015	42,000	Hendry		1,866,146		600,000
Lease Year 5 - 9/23/2015 - 9/22/2016	25,000	Hendry		1,218,838		175,000
Lease Year 6 - 9/23/2016 - 9/22/2017	15,000	Hendry		806,683		150,000
Lease Year 7 - 9/23/2017 - 9/22/2018	15,000	Hendry		806,683		50,000
Lease Year 8 - 9/23/2018 - 9/22/2019	15,000	Hendry		806,684		150,000
Total Payments			$	10,633,805	$	2,125,000

(1)Generally, cash payment for the Lease Payment and Drilling Penalty is received on or before the first day of the lease year. The Drilling Penalty, which is due within thirty days from the end of the prior lease year, is recorded as revenue when earned, i.e. when the amount is agreed upon, while the Lease Payment is recognized on a straight-line basis over the respective lease term. The oil exploration lease has not been renewed beyond September 22, 2019 and has effectively terminated.

~~Lease payments on the respective acreages and drilling penalties received through lease year seven are as follows:~~

⁽¹⁾

Generally, cash payment for the Lease Payment and Drilling Penalty is received on or before the first day of the lease year. The Drilling Penalty, which is due within thirty days from the end of the prior lease year, is recorded as revenue when received, while the Lease Payment is recognized on a straight-line basis over the respective lease term. Pursuant to the amendment for the Year 7 renewal, the Lease Payment and Drilling Penalty were both received on October 11, 2017. See separate disclosure of revenue recognized per period below.

~~F-23~~

~~Table of Contents~~

During the years ended December 31, ~~2017, 2016,~~2019, 2018, and ~~2015,~~2017, the Company also received oil royalties from operating oil wells on 800 acres under a separate lease with a separate operator. Production volume from these oil wells ~~was 60,287 in 2017, 50,441 barrels in 2016, and 62,745 barrels in 2015, resulting~~resulted in revenues received from oil royalties of approximately ~~$86,000, $50,000~~$42,000, $72,000, and ~~$68,000,~~$86,000, respectively.

The Company is not prohibited from selling any or all of its Subsurface Interests. The Company may release surface entry rights or other rights upon request of a surface owner for a negotiated release fee typically based on a percentage of the surface value. Should the Company complete a transaction to sell all or a portion of its Subsurface Interests or complete a release transaction, the Company may utilize the like-kind exchange structure in acquiring one or more replacement investments including income-producing properties. ~~There~~During the year ended December 31, 2018, the Company completed a transaction releasing our surface entry rights on approximately 600 acres in exchange for approximately $185,000 in cash and fee title to approximately 40 additional acres in Hendry County, valued at approximately $320,000. Including the non-cash value received, the gain from the transaction totaled approximately $435,000, or $0.06 per share, after tax. Additional cash payments for the release of surface entry rights during 2018 totaled approximately $73,000. Cash payments for the release of surface entry rights totaled approximately $104,000 during the year ended December 31, 2019, while there were no releases of surface entry rights during the year ended December 31, 2017. ~~Cash payments~~

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NOTE 7. INVESTMENTS IN JOINT VENTURES

Land JV. The Investment in Joint Ventures on the Company’s consolidated balance sheets includes the Company’s ownership interest in the Land JV. We have concluded the Land JV is a variable interest entity and is accounted for under the equity method of accounting as the Company is not the primary beneficiary as defined in FASB ASC Topic 810, Consolidation. The significant factors related to this determination include, but are not limited to, the Land JV being jointly controlled by the members through the use of unanimous approval for all material actions. Under the guidance of FASB ASC 323, Investments-Equity Method and Joint Ventures, the Company uses the equity method to account for the ~~release~~JV Investment.

The following table provides summarized financial information of ~~surface entry rights totaled approximately $493,000 and $995,000 during~~the Land JV as of December 31, 2019. There were no balances as of December 31, 2018.


	As of
	December 31, 2019
	($000's)
Assets, cash and cash equivalents	$	15,066
Assets, prepaid expenses		61
Assets, investment in land assets		17,058
Total Assets	$	32,185

Liabilities, accounts payable, deferred revenue	$	987
Equity	$	31,198
Total Liabilities & Equity	$	32,185

The following table provides summarized financial information of the Land JV for the year ended December 31, 2019. There was no activity for the years ended December 31, ~~2016~~2018 and ~~2015, respectively,~~2017.


	Year Ended
	December 31, 2019
	($000's)
Revenues	$	14,635
Direct Cost of Revenues		1,268
Operating Income	$	13,367
Other Operating Expenses	$	90
Net Income	$	13,277

The Company’s share of the Land JV’s net income was zero for the year ended December 31, 2019. Pursuant to ASC 323, certain adjustments are made when calculating the Company’s share of net income, including adjustments required to reflect the investor’s share of changes in investee’s capital to reflect distributions from the venture. Additionally, basis differences are also considered. The Company recorded the retained interest in the Land JV of approximately $48.9 million at the estimated fair market value based on the relationship of the $97.0 million sales price of the 66.5% equity interest to the 33.5% retained interest. The Land JV recorded the assets contributed by the Company at carry-over basis pursuant to ASC 845 which states that transfers of nonmonetary assets to should typically be recorded at the transferor’s historical cost basis. Accordingly, the Company’s basis difference in the 33.5% retained equity interest will be evaluated each quarter upon determining the Company’s share of the Land JV’s net income.

Mitigation Bank. The mitigation bank transaction consists of the sale of a 70% interest in the entity that holds approximately 2,492 acres of land that has been permitted for the creation of a wetland mitigation bank (the “Mitigation Bank JV”). The purchaser of the 70% interest in the Mitigation Bank JV is comprised of certain funds and accounts managed by an investment advisor subsidiary of BlackRock, Inc. (“BlackRock”). The Company retained an approximately 30% non-controlling interest in the Mitigation Bank JV. A third-party was retained by the Mitigation Bank JV as the day-to-day manager of the Mitigation Bank property, responsible for the maintenance, generation, tracking, and other aspects of wetland mitigation credits.

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The gain on the sale of the 70% interest in the Mitigation Bank JV totaled approximately $18.4 million and is comprised of the gain on the sale of 70% interest for proceeds of $15.3 million as well as the gain on the retained 30% interest pursuant to FASB ASC Topic 610-20, Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets. The gain is included in ~~revenue from real estate~~the Gain on Disposition of Assets in the Company’s consolidated statements of operations. ~~During 2015,~~As of December 31, 2018, the approximately $6.8 million Investments in Joint Ventures included on the Company’s consolidated balance sheets is comprised of the fair market value of the 30% retained interest in the Mitigation Bank JV.

The operating agreement of the Mitigation Bank JV (the “Operating Agreement”) executed in conjunction with the ~~release~~mitigation bank transaction stipulates that the Company shall arrange for sales of the Mitigation Bank JV’s mitigation credits to unrelated third parties totaling no less than $6 million of revenue to the Mitigation Bank JV, net of commissions, by the end of 2020, utilizing a maximum of 60 mitigation credits (the “Minimum Sales Requirement”). The Operating Agreement stipulates that if the Minimum Sales Requirement is not achieved, then BlackRock has the right, but is not required, to cause the Company to purchase the number of mitigation credits necessary to reach the Minimum Sales Requirement (the “Minimum Sales Guarantee”). The Company estimates the fair value of the Minimum Sales Guarantee to be approximately $100,000 which was recorded as a reduction in the gain on the transaction and is included in Accrued and Other Liabilities in the Company’s consolidated balance sheet as of December 31, 2018.

~~In addition,~~

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Table of Contents

The following tables provide summarized financial information of the ~~Company generated revenue~~Mitigation Bank JV as of ~~approximately $250,000~~December 31, 2019 and ~~$73,000 during~~2018:


	As of		As of
	December 31, 2019		December 31, 2018
	($000's)		($000's)
Assets, cash and cash equivalents	$	4,015	$	2,316
Assets, prepaid expenses		19		19
Assets, investment in mitigation credit assets		1,521		1,511
Assets, property, plant, and equipment		17		18
Total Assets	$	5,572	$	3,864

Liabilities, accounts payable, deferred mitigation credit sale revenue	$	39	$	62
Equity	$	5,533	$	3,802
Total Liabilities & Equity	$	5,572	$	3,864

The following table provides summarized financial information of the Mitigation Bank JV for the year ended December 31, 2019 and 2018. There was no activity for the year ended December 31, 2017.


	Year Ended
	December 31, 2019		December 31, 2018
	($000's)		($000's)
Revenues	$	1,922	$	—
Direct Cost of Revenues		76		—
Operating Income	$	1,846	$	—
Other Operating Expenses	$	197	$	117
Net Income	$	1,649	$	(117)

The Company’s share of the Mitigation Bank JV’s net income was zero for the years ended December 31, ~~2016~~2019 and ~~2015, respectively,~~2018. Pursuant to ASC 323, certain adjustments are made when calculating the Company’s share of net income, including adjustments required to reflect the investor’s share of changes in investee’s capital to reflect distributions from ~~fill dirt excavation agreements, with no such revenue generated during~~ the ~~year ended December 31, 2017.~~venture. Additionally, basis differences are also considered. The Company recorded the retained interest in the Mitigation Bank JV of approximately $6.8 million at the estimated fair market value based on the relationship of the $15.3 million sales price of the 70% equity interest to the 30% retained interest. The Mitigation Bank JV recorded the assets contributed by the Company at carry-over basis pursuant to ASC 845 which states that transfers of nonmonetary assets to should typically be recorded at the transferor’s historical cost basis. Accordingly, the Company’s basis difference in the 30% retained equity interest will be evaluated each quarter upon determining the Company’s share of the Mitigation Bank JV’s net income.

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NOTE 5.8. INVESTMENT SECURITIES

~~During the year ended December 31, 2016,~~On November 26, 2019, the Company ~~completed the disposition~~purchased 394,737 shares of ~~its remaining position in investment securities, including~~PINE common stock ~~and debt~~for a total purchase price of $7.5 million (the “Private Placement”). Also, on November 26, 2019, the Company purchased 421,053 shares of PINE common stock in the IPO for a total purchase price of $8.0 million. Including the Company’s investment in PINE as a result of receiving 1,223,854 OP Units, the Company owns, in the aggregate, approximately 2.04 million shares of PINE, or approximately 22.3% of PINE’s total shares outstanding for approximately $38.8 million. The Company has elected the fair value option related to the aggregate investment in securities of ~~a publicly traded real estate company, with a total basis of approximately $6.8 million, resulting in net proceeds of approximately $6.3 million, or a loss of approximately $576,000.~~PINE pursuant to ASC 825, otherwise such investments would have been accounted for under the equity method.


	As of December 31, 2019
	Cost		Unrealized Gains in Investment Income		Unrealized Losses in Investment Income		Estimated Fair Value (Level 1 and 2 Inputs)
Common Stock	$	15,500,000	$	24,484	$	—	$	15,524,484
Operating Units		23,253,230		36,711		—		23,289,941
Total Equity Securities		38,753,230		61,195		—		38,814,425
Total Investment Securities	$	38,753,230	$	61,195	$	—	$	38,814,425

The Company had no ~~remaining available-for-sale~~investment securities as of December 31, ~~2017~~2018 or ~~2016.~~2017.

~~The following is a table reflecting the gains and losses recognized on the sale of investment securities during the years ended December 31, 2017, 2016, and 2015:~~

For the Year Ended December 31,


2017

2016

2015

Proceeds from the Disposition of Debt Securities

$
—

$
827,738

$
2,084,994

Cost Basis of Debt Securities Sold

—

(843,951)

(1,930,080)

Loss recognized in Statement of Operations on the Disposition of Debt Securities

—

(16,213)

154,914

Proceeds from the Disposition of Equity Securities

—

5,424,624

2,574,091

Cost Basis of Equity Securities Sold

—

(5,983,978)

(2,565,816)

Gain (Loss) recognized in Statement of Operations on the Disposition of Equity Securities

$
—

$
(559,354)

$
8,275

Total Gain (Loss) recognized in Statement of Operations on the Disposition of Debt and Equity Securities

$
—

$
(575,567)

$
163,189

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~~Table of Contents~~

NOTE 6.9. FAIR VALUE OF FINANCIAL INSTRUMENTS

The following table presents the carrying value and estimated fair value of the Company’s financial instruments not carried at fair value on the consolidated balance sheets at December 31, ~~2017~~2019 and ~~2016:~~2018:


	December 31, 2017				December 31, 2016				December 31, 2019				December 31, 2018
	Carrying		Estimated		Carrying		Estimated		Carrying		Estimated		Carrying		Estimated
	Value		Fair Value		Value		Fair Value		Value		Fair Value		Value		Fair Value
Cash and Cash Equivalents - Level 1	$	6,559,409	$	6,559,409	$	7,779,562	$	7,779,562	$	6,474,637	$	6,474,637	$	2,310,489	$	2,310,489
Restricted Cash - Level 1		6,508,131		6,508,131		9,855,469		9,855,469		128,430,049		128,430,049		19,721,475		19,721,475
Commercial Loan Investments - Level 2		11,925,699		12,015,628		23,960,467		24,228,242		34,625,173		35,001,997		—		—
Long-Term Debt - Level 2		195,816,364		200,000,776		166,245,201		171,111,337		287,218,303		288,830,346		247,624,811		248,765,650

To determine estimated fair values of the financial instruments listed above, market rates of interest, which include credit assumptions, were used to discount contractual cash flows. The estimated fair values are not necessarily indicative of the amount the Company could realize on disposition of the financial instruments. The use of different market assumptions or estimation methodologies could have a material effect on the estimated fair value amounts.

~~The following table presents the fair value of assets measured on a recurring basis by Level at December 31, 2017:~~

Fair Value at Reporting Date Using

Quoted Prices in

Significant

Active Markets

Significant Other

Unobservable



for Identical

Observable Inputs

Inputs

12/31/2017

Assets (Level 1)

(Level 2)

(Level 3)



Cash Flow Hedge - Interest Rate Swap

$
606,621

$
—

$
606,621

$
—
Total

$
606,621

$
—

$
606,621

$
—

The following table presents the fair value of assets measured on a recurring basis by Level at December 31, ~~2016:~~2019:


			Fair Value at Reporting Date Using
			Quoted Prices in				Significant				Fair Value at Reporting Date Using
			Active Markets		Significant Other		Unobservable				Quoted Prices in				Significant
			for Identical		Observable Inputs		Inputs				Active Markets		Significant Other		Unobservable
	12/31/2016		Assets (Level 1)		(Level 2)		(Level 3)				for Identical		Observable Inputs		Inputs
									12/31/2019		Assets (Level 1)		(Level 2)		(Level 3)
Cash Flow Hedge - Interest Rate Swap	$	416,590	$	—	$	416,590	$	—	$	99,021	$	—	$	99,021	$	—
Investment Securities										38,814,425		38,814,425		—		—
Total	$	416,590	$	—	$	416,590	$	—	$	38,814,425	$	38,814,425	$	—	$	—

~~F-25~~F-31

Table of Contents

The following table presents the fair value of assets measured on a recurring basis by Level at December 31, 2018:


			Fair Value at Reporting Date Using
			Quoted Prices in				Significant
			Active Markets		Significant Other		Unobservable
			for Identical		Observable Inputs		Inputs
	12/31/2018		Assets (Level 1)		(Level 2)		(Level 3)
Cash Flow Hedge - Interest Rate Swap	$	651,722	$	—	$	651,722	$	—
Total	$	651,722	$	—	$	651,722	$	—

No assets were measured on a non-recurring basis as of December 31, 2017. At December 31, 2016, approximately eight acres of undeveloped land under contract for sale as of December 31, 2016 were measured on a non-recurring basis using Level 3 inputs in the fair value hierarchy, which resulted in aggregate impairment charge of approximately $1.0 million as further described in Note 8, “Impairment of Long-Lived Assets.” The following table presents the fair value of those assets measured on a non-recurring basis by Level as of December 31, 2016:2019 or 2018.

Fair Value at Reporting Date Using

Quoted Prices in

Significant

Active Markets

Significant Other

Unobservable



for Identical

Observable Inputs

Inputs

12/31/2016

Assets (Level 1)

(Level 2)

(Level 3)



Land Parcel - 3.6 Repurchased Acres

$
1,398,374

$
—

$
—

$
1,398,374
Land Parcel - 4.5 Repurchased Acres

1,119,410

—

—

1,119,410
Total

$
2,517,784

$
—

$
—

$
2,517,784

NOTE 7.10. INTANGIBLE ASSETS AND LIABILITIES

Intangible assets and liabilities consist of the value of above-market and below-market leases, the value of in-place leases, and the value of leasing costs, based in each case on their fair values.

Intangible assets and liabilities consisted of the following as of December 31, ~~2017~~2019 and ~~2016:~~2018:


	As of				As of
	December 31, 2017		December 31, 2016		December 31, 2019		December 31, 2018
Intangible Lease Assets:
Value of In-Place Leases	$	36,827,226	$	30,978,776	$	42,584,264	$	39,189,008
Value of Above Market In-Place Leases		2,966,322		2,905,624		7,119,316		4,114,715
Value of Intangible Leasing Costs		10,405,135		7,010,192		14,645,780		14,791,111
Sub-total Intangible Lease Assets		50,198,683		40,894,592		64,349,360		58,094,834
Accumulated Amortization		(11,440,624)		(6,168,770)		(15,327,182)		(14,539,389)
Sub-total Intangible Lease Assets—Net		38,758,059		34,725,822		49,022,178		43,555,445
Intangible Lease Liabilities (included in accrued and other liabilities):
Value of Below Market In-Place Leases		(35,312,017)		(33,370,217)		(36,507,336)		(35,321,234)
Sub-total Intangible Lease Liabilities		(35,312,017)		(33,370,217)		(36,507,336)		(35,321,234)
Accumulated Amortization		5,541,576		2,852,166		10,309,088		7,930,884
Sub-total Intangible Lease Liabilities—Net		(29,770,441)		(30,518,051)		(26,198,248)		(27,390,350)
Total Intangible Assets and Liabilities—Net	$	8,987,618	$	4,207,771
Total Intangible Assets and Liabilities��Net					$	22,823,930	$	16,165,095

During the year ended December 31, ~~2017,~~2019, the value of in-place leases increased by approximately ~~$5.8~~$16.1 million, the value of above-market in-place leases increased by approximately ~~$61,000,~~$3.2 million, the value of intangible leasing costs increased by approximately ~~$3.4~~$5.7 million, and the value of below-market in-place leases increased by approximately ~~$1.9~~$3.7 million due to the acquisition of ten single-tenant and one multi-tenant income properties, offset by the net amortization of approximately ~~$2.6~~$3.5 million, the reclass to accumulated amortization from assets held for sale for the Westcliff property of approximately $10.5 million, and the disposition of approximately $10.7 million of intangible lease assets and liabilities related to the 2019 Multi-Tenant Dispositions, the PINE Income Property Sale Transactions, the Wawa Disposition, for a net increase during ~~2017~~2019 of approximately ~~$4.8~~$6.6 million.

As of December 31, ~~2017~~2019 and ~~2016,~~2018, approximately ~~$26.7~~$22.2 and ~~$29.0~~$24.4 million, respectively, of the total below market in-place lease value is related to the Wells Fargo property located in Raleigh, North Carolina which was acquired on November 18, 2015.

~~F-26~~F-32

Table of Contents

The following table reflects the net amortization of intangible assets and liabilities during the years ended December 31, ~~2017, 2016,~~2019, 2018, and ~~2015:~~2017:


	Year Ended		Year Ended		Year Ended		Year Ended
	12/31/2017		12/31/2016		12/31/2015		December 31, 2019		December 31, 2018		December 31, 2017
	($000's)		($000's)		($000's)		($000's)		($000's)		($000's)
Depreciation and Amortization Expense	$	4,776	$	2,696	$	1,674	$	5,854	$	5,872	$	4,776
Increase to Income Properties Revenue		(2,194)		(2,240)		(159)		(2,383)		(2,339)		(2,194)
Net Amortization of Intangible Assets and Liabilities	$	2,582	$	456	$	1,515	$	3,471	$	3,533	$	2,582

The estimated future amortization expense (income) related to net intangible assets and liabilities is as follows:


			Future Accretion		Net Future				Future Accretion		Net Future
	Future		to Income		Amortization of		Future		to Income		Amortization of
	Amortization		Property		Intangible Assets		Amortization		Property		Intangible Assets
Year Ending December 31,	Amount		Revenue		and Liabilities		Amount		Revenue		and Liabilities
2018	$	5,340,302	$	(2,269,867)	$	3,070,435
2019		5,311,743		(2,264,743)		3,047,000
2020		4,870,322		(2,198,014)		2,672,308	$	5,812,069	$	(1,932,881)	$	3,879,188
2021		3,179,886		(2,348,869)		831,017		4,383,899		(2,004,052)		2,379,847
2022		2,561,959		(2,420,029)		141,930		3,976,582		(2,075,213)		1,901,369
2023								3,851,554		(2,070,019)		1,781,535
2024								3,808,092		(1,972,289)		1,835,803
Thereafter		15,387,811		(16,162,883)		(775,072)		21,294,453		(10,248,265)		11,046,188
Total	$	36,652,023	$	(27,664,405)	$	8,987,618	$	43,126,649	$	(20,302,719)	$	22,823,930

As of December 31, ~~2017,~~2019, the weighted average amortization period of both the total intangible assets and liabilities was approximately 13 years.

NOTE 8.11. IMPAIRMENT OF LONG-LIVED ASSETS

The Company assesses the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The fair value of long-lived assets required to be assessed for impairment is determined on a non-recurring basis using Level 3 inputs in the fair value hierarchy. These Level 3 inputs may include, but are not limited to, executed purchase and sale agreements on specific properties, third party valuations, discounted cash flow models, and other model-based techniques.

~~There~~During the years ended December 31, 2019, 2018, and 2017, there were no impairment charges ~~during~~on the Company’s undeveloped land holdings or its income property portfolio.

During the year ended December 31, ~~2017.~~

In2018, the ~~second quarter~~Company wrote down the value of ~~2016, an~~the golf assets comprising the Club, which resulted in a corresponding impairment charge of approximately ~~$942,000 was recognized on an income property in Altamonte Springs, Florida leased~~$1.1 million, or $0.15 per share, after tax. The write-down of the golf operation assets to ~~PNC Bank under contract for sale as of June 30, 2016. The total~~approximately $3.1 million and the related $1.1 million impairment charge ~~represented~~were the ~~anticipated loss on the sale plus estimated closing costs. This sale closed in September 2016.~~

In the second quarter of 2016, an impairment charge of approximately $717,000 was recognized on approximately four of the approximately six acres of undeveloped land in the City for which a contract for sale was executed during the three months ended June 30, 2016. Such acreage was repurchased in prior years by the Company and carried a higher cost basis than the remainderresult of the Company’s ~~historical land holdings. The total impairment charge represented~~assessment of certain triggering events, including activities related to a review of strategic alternatives for the ~~anticipated loss on~~golf operations, occurring during the third quarter of 2018, which required an assessment of the carrying value of the golf assets comprising the Club. In the fourth quarter of 2018, the Company commenced efforts to pursue the monetization of the golf operations and assets comprising the Club. Accordingly, as of December 31, 2018, the golf assets comprising the Club were classified as held for sale in the accompanying consolidated balance sheets until the completion of the sale of ~~approximately $646,000 plus estimated closing costs~~the golf operation assets during the fourth quarter of 2019, which resulted in a nominal gain of approximately ~~$71,000. This sale closed in March 2017.~~$15,000.

In the second quarter of 2016, an impairment charge of approximately $311,000 was recognized on approximately four acres of undeveloped land in the City for which a contract for sale was executed during the three months ended June 30, 2016. Such acreage was repurchased in prior years by the Company and carried a higher cost basis than the remainder of the Company’s historical land holdings. The total impairment charge represented the anticipated loss on the sale of approximately $256,000 plus estimated closing costs of approximately $55,000. This sale closed in April 2017.

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In the first quarter of 2016, an impairment charge of approximately $210,000 was recognized on an income property held for sale as of March 31, 2016. The total impairment charge represented the loss on the sale of approximately $134,000 plus closing costs of approximately $76,000. This sale closed in April 2016.

During the first quarter of 2015, an impairment charge of approximately $510,000 was recognized on two income properties held for sale as of March 31, 2015. The total impairment charge represented the loss on the sale of approximately $277,000 plus estimated closing costs of approximately $233,000. As the actual loss on the sale was approximately $497,000, an adjustment to reduce that charge in the amount of approximately $13,000 was recognized during the ~~three months ended June 30, 2015. This~~ ~~sale closed in April 2015~~.

NOTE 9.12. OTHER ASSETS

Other assets consisted of the following:


	As of				As of
	December 31, 2017		December 31, 2016		December 31, 2019		December 31, 2018
Income Property Tenant Receivables	$	895,476	$	125,383	$	532,636	$	627,691
Income Property Straight-line Rent Adjustment		2,517,195		1,773,946		3,352,245		4,304,279
Income Property Lease Incentive		2,696,678		—		—		2,394,246
Interest Receivable from Commercial Loan Investments		38,078		72,418
Interest Receivable from Commercial Loan Investment						96,604		—
Operating Leases - Right-of-Use Asset						363,631		—
Golf Rounds Surcharge - LPGA						549,251		—
Cash Flow Hedge - Interest Rate Swap		606,621		416,590		99,021		651,722
Infrastructure Reimbursement Receivables		2,213,305		3,844,236		1,591,445		1,847,375
Golf Operations Receivables		349,220		325,510
Deferred Deal Costs		480,257		745,878		4,787		425,476
Prepaid Expenses, Deposits, and Other		3,174,299		2,165,127		3,113,929		2,634,664
Total Other Assets	$	12,971,129	$	9,469,088	$	9,703,549	$	12,885,453

Income Property Lease Incentive. As of December 31, 2017, the Infrastructure Reimbursement Receivables were all related to the Tomoka Town Center land sales and consisted of approximately $1,575,000 due from Tanger for infrastructure reimbursement to be repaid in nine remaining annual installments of $175,000, net of a discount of approximately $172,000, and approximately $880,000 due from Sam’s Club for infrastructure reimbursement to be repaid in eight remaining annual installments of $110,000, net of a discount of approximately $75,000.

~~As of December 31, 2017,~~2018, the Income Property Lease Incentive of approximately ~~$2.7~~$2.4 million relates to a tenant improvement allowance of approximately $2.7 million provided to Hilton Grand Vacations in conjunction with the extension of their leases of two buildings from November 30, 2021 to November 30, 2026, offset by accumulated amortization which ~~will be~~had been recognized as an offset to rental ~~revenue over~~revenue. The properties leased to Hilton Grand Vacations were part of the PINE Income Property Sale Transactions, and therefore the remaining ~~term~~balance was written off as part of the ~~leases.~~gain at the time of sale on November 26, 2019.

Infrastructure Reimbursement Receivables. As of December 31, 2019 and 2018, the Infrastructure Reimbursement Receivables were all related to the land sales within the Tomoka Town Center. The balance as of December 31, 2019 consisted of approximately $1,200,000 due from Tanger for infrastructure reimbursement to be repaid in seven remaining annual installments of $175,000, net of a discount of approximately $134,000, and approximately $550,000 due from Sam’s Club for infrastructure reimbursement to be repaid in five remaining annual installments of $110,000, net of a discount of approximately $50,000.

Deferred Deal Costs. Deferred deal costs represent legal costs incurred in advance of the potential execution of and/or closing of a contract for the disposition of assets, primarily land sales. The costs are deferred and expensed at the time the transaction closes or at the time it becomes evident that the transaction will not be completed. During the years ended December 31, 2019, 2018, and 2017, approximately $322,000, $380,000, and $717,000, respectively, of deal costs were expensed at the time the related transactions were closed. Additionally, during the years ended December 31, 2019, 2018, and 2017, approximately $552,000, $150,000, and $15,000, respectively, of deal costs were expensed at the time it became evident that the transaction would not be completed.

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NOTE ~~10.~~13. COMMON STOCK AND EARNINGS PER SHARE

Basic earnings per common share ~~were~~is computed by dividing net income by the weighted average number of shares of common stock outstanding during the ~~year.~~period. Diluted earnings per common share ~~were determined~~is based on the assumption of the conversion of stock options and vesting of restricted stock at the beginning of each period using the treasury stock method at average ~~market prices~~cost for the periods.

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		Year Ended					Year Ended
		December 31, 2017		December 31, 2016		December 31, 2015	December 31, 2019		December 31, 2018		December 31, 2017
Income Available to Common Shareholders:
Net Income Attributable to Consolidated-Tomoka Land Co.	$	41,719,424	$	16,251,248	$	8,347,166
Net Income							$	114,972,858	$	37,167,790	$	41,719,424
Weighted Average Shares Outstanding		5,538,859		5,680,165		5,804,655		4,991,656		5,495,792		5,538,859
Common Shares Applicable to Stock
Options Using the Treasury Stock Method		40,933		13,697		25,423		6,387		33,529		40,933
Total Shares Applicable to Diluted Earnings Per Share		5,579,792		5,693,862		5,830,078		4,998,043		5,529,321		5,579,792

Per Share Information:
Basic
Net Income Attributable to Consolidated-Tomoka Land Co.	$	7.53	$	2.86	$	1.44
Net Income from Continuing Operations							$	3.32	$	2.72	$	3.92
Net Loss from Discontinued Operations (Net of Tax)								19.71		4.04		3.61
Net Income							$	23.03	$	6.76	$	7.53

Diluted
Net Income Attributable to Consolidated-Tomoka Land Co.	$	7.48	$	2.85	$	1.43
Net Income from Continuing Operations							$	3.32	$	2.71	$	3.90
Net Loss from Discontinued Operations (Net of Tax)								19.68		4.01		3.58
Net Income							$	23.00	$	6.72	$	7.48

In addition to the dilutive securities presented above, the effect of ~~57,750, 85,500,~~7,500, 15,000, and ~~60,200~~57,750, potentially dilutive securities were not included for the years ended December 31, ~~2017, 2016,~~2019, 2018, and ~~2015,~~2017, respectively, as the effect would be antidilutive.

The Company intends to settle its 4.50% Convertible Senior Notes due 2020 in cash upon conversion with any excess conversion value to be settled in shares of our common stock. Therefore, only the amount in excess of the par value of the Notes will be included in our calculation of diluted net income per share using the treasury stock method. As such, the Notes have no impact on diluted net income per share until the price of our common stock exceeds the current conversion price of ~~$68.72.~~$68.11. The average price of our common stock during the ~~year~~years ended December 31, 2019, 2018, or 2017 did not exceed the conversion price which resulted in no additional diluted outstanding shares.

NOTE ~~11.~~14. TREASURY STOCK

In January 2019 and November 2019, the ~~fourth quarter~~Company’s Board of ~~2015,~~Directors approved two equal increases totaling $20.0 million to the ~~Company announced a $10 million~~open market stock repurchase program (the “$10 Million Repurchase Program”). As of March 29, 2017, the $10 Million Repurchase Program had been completed. In the first quarter of 2017, the Company announced a new $10 million stock repurchase program (the “New $10 Million Repurchase Program”) under which approximately $4.6 million of the Company’s common stock had been repurchased as of December 31, 2017. In the aggregate, duringprogram. During the year ended December 31, ~~2017, under both programs,~~2019, the Company repurchased ~~135,329~~691,102 shares of its common stock ~~on the open market~~ for a total cost of approximately ~~$7.2~~$41.1 million, or an average price per share of ~~$53.27,~~$59.46, which includes both open market purchases and ~~placed those~~the Block Share Repurchase (hereinafter defined). The shares of the Company’s common stock repurchased during the year ended December 31, 2019 were returned to the Company’s treasury and substantially completed the aggregate $20.0 million buyback program.

On April 10, 2019, the Company repurchased 320,741 shares of common stock, or approximately 6% of the Company’s outstanding shares, for approximately $18.4 million (the “Block Share Repurchase”). The shares were purchased from investment vehicles managed by Wintergreen Advisers, LLC (collectively, the “Wintergreen Entities”) in ~~treasury.~~connection with the disposition of their entire position in the Company’s common stock (approximately 28% of the Company’s outstanding shares of common stock at the time of the Block Share Repurchase). The shares that were sold by the Wintergreen Entities and not repurchased by the Company were acquired by multiple third-party investors. The Block Share Repurchase was completed outside of the Company’s aggregate $20.0 million buyback program, which was substantially complete as of December 31, 2019.

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NOTE ~~12.~~15. LONG-TERM DEBT

As of December 31, ~~2017,~~2019, the Company’s outstanding indebtedness, at face value, was as follows:

Face

Maturity

Interest

Face

Maturity

Interest

Value Debt

Date

Rate

Value Debt

Date

Rate

Credit Facility

70,000,000

September 2021

30 ‑day LIBOR
plus 1.50% -2.20%

159,845,349

May 2023

30 ‑day LIBOR
plus 1.35% -1.95%

Mortgage Note Payable (originated with Wells Fargo) (1)

30,000,000

October 2034

4.330%

30,000,000

October 2034

4.330%

Mortgage Note Payable (originated with Wells Fargo) (2)

25,000,000

April 2021

30 ‑day LIBOR
plus 1.90%

23,884,373

April 2021

30 ‑day LIBOR
plus 1.90%

4.50% Convertible Senior Notes due 2020, net of discount

75,000,000

March 2020

4.500%

75,000,000

March 2020

4.500%

Total Long-Term Face Value Debt

200,000,000

288,729,722

~~F-29~~

~~Table of Contents~~

On November 26, 2019, the Company entered into the Third Amendment to the Second Amended and Restated Credit Agreement (the “Second 2019 Revolver Amendment”), which further amends the 2017 Amended Credit Facility. The Second 2019 Revolver Amendment included, among other things, an adjustment of certain financial maintenance covenants, including a temporary reduction of the minimum fixed charge coverage ratio to allow the Company to redeploy the proceeds received from the PINE Income Property Sale Transactions, and an increase in the maximum amount the Company may invest in stock and stock equivalents of real estate investment trusts to allow the Company to invest in the common stock and operating partnership units of PINE.

At December 31, ~~2017,~~2019, the current commitment level under the Credit Facility was ~~$100.0~~$200.0 million. The available borrowing capacity under the Credit Facility was approximately ~~$30.0~~$40.2 million, based on the level of borrowing base assets. As of December 31, ~~2017,~~2019, the Credit Facility had a ~~$70.0~~$159.8 million ~~balance. See Note 21, “Subsequent Events” for a description of increase in in the commitment level subsequent to December 31, 2017.~~balance outstanding.

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various financial maintenance covenants including, but not limited to, a maximum indebtedness ratio, a maximum secured indebtedness ratio, and a minimum fixed charge coverage ratio. The Credit Facility also contains affirmative covenants and events of default including, but not limited to, a cross default to the Company’s other indebtedness and upon the occurrence of a change in control. The Company’s failure to comply with these covenants or the occurrence of an event of default could result in acceleration of the Company’s debt and other financial obligations under the Credit Facility.

Convertible Debt. The Company’s $75.0 million aggregate principal amount of 4.50% Convertible Notes (the “Notes”) will mature on March 15, 2020, unless earlier purchased or converted. See description of the 2025 Notes as hereinafter defined in Note 24. Subsequent Events. The initial conversion rate was 14.5136 shares of common stock for each $1,000 principal amount of ~~Convertible~~ Notes, which represented an initial conversion price of approximately $68.90 per share of common stock. Since July of 2016, when the Company’s Board of Directors implemented a quarterly dividend in place of the previous semi-annual dividend, the conversion rate has been adjusted with each successive quarterly dividend and is currently, after the fourth quarter ~~2017~~2019 dividend, equal to ~~14.5515~~14.6813 shares of common stock for each $1,000 principal amount of ~~Convertible~~ Notes, which represents an adjusted conversion price of approximately ~~$68.72~~$68.11 per share of common stock.

The conversion rate is subject to adjustment in certain circumstances. Holders may not surrender their ~~Convertible~~ Notes for conversion prior to December 15, 2019 except upon the occurrence of certain conditions relating to the closing sale price of the Company’s common stock, the trading price per $1,000 principal amount of ~~Convertible~~ Notes, or specified corporate events including a change in control of the Company. The Company may not redeem the ~~Convertible~~ Notes prior to the stated maturity date and no sinking fund is provided for the ~~Convertible~~ Notes. The ~~Convertible~~ Notes are convertible, at the election of the Company, into solely cash, solely shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock. The Company intends to settle the ~~Convertible~~ Notes in cash upon conversion, with any excess conversion value to be settled in shares of our common stock. In accordance with GAAP, the ~~Convertible~~ Notes are accounted for as a liability with a separate equity component recorded for the conversion

~~F-30~~

~~Table of Contents~~

option. A liability was recorded for the ~~Convertible~~ Notes on the issuance date at fair value based on a discounted cash flow analysis using current market rates for debt instruments with similar terms. The difference between the initial proceeds from the ~~Convertible~~ Notes and the estimated fair value of the debt instruments resulted in a debt discount, with an offset recorded to additional paid-in capital representing the equity component. The discount on the ~~Convertible~~ Notes was approximately $6.1 million at issuance, which represents the cash discount paid of approximately $2.6 million and the approximate $3.5 million attributable to the value of the conversion option recorded in equity, which is being amortized into interest expense through the maturity date of the ~~Convertible~~ Notes. As of December 31, ~~2017,~~2019, the unamortized debt discount of our ~~Convertible~~ Notes was approximately ~~$2.9 million.~~$293,000.

Long-term debt consisted of the following:


	December 31, 2017				December 31, 2016				December 31, 2019				December 31, 2018
			Due Within				Due Within				Due Within				Due Within
	Total		One Year		Total		One Year		Total		One Year		Total		One Year
Credit Facility	$	70,000,000	$	—	$	34,300,000	$	—	$	159,845,349	$	—	$	120,745,579	$	—
Mortgage Note Payable (originated with UBS)		—		—		7,300,000		—
Mortgage Note Payable (originated with Wells Fargo)		30,000,000		—		30,000,000		—		30,000,000		—		30,000,000		—
Mortgage Note Payable (originated with Wells Fargo)		25,000,000		—		25,000,000		—		23,884,373		—		24,557,468		—
4.50% Convertible Senior Notes due 2020, net of discount		72,075,295		—		70,880,581		—		74,706,078		75,000,000		73,348,731		—
Loan Costs, net of accumulated amortization		(1,258,931)		—		(1,235,380)		—		(1,217,497)		—		(1,026,967)		—
Total Long-Term Debt	$	195,816,364	$	—	$	166,245,201	$	—	$	287,218,303	$	75,000,000	$	247,624,811	$	—

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Payments applicable to reduction of principal amounts will be required as follows:


Year Ending December 31,	Amount		Amount
2018	$	—
2019		—
2020		75,000,000	$	75,000,000	(1)
2021		95,000,000		23,884,373
2022		—		—
2023				159,845,349
2024				—
Thereafter		30,000,000		30,000,000
Total Long-Term Debt - Face Value	$	200,000,000	$	288,729,722

(1)See Note 24, Subsequent Events for a description of the New Notes, which effectively extends the 2020 Maturity of the $75.0 million face value Notes to 2025.

The carrying value of long-term debt as of December 31, ~~2017~~2019 consisted of the following:


	Total		Total
Current Face Amount	$	200,000,000	$	288,729,722
Unamortized Discount on Convertible Debt		(2,924,705)		(293,922)
Loan Costs, net of accumulated amortization		(1,258,931)		(1,217,497)
Total Long-Term Debt	$	195,816,364	$	287,218,303

The following table reflects a summary of interest expense incurred and paid during the years ended December ~~2017, 2016,~~31, 2019, 2018, and ~~2015:~~2017:


	Year Ended		Year Ended			Year Ended		Year Ended
	12/31/2017		12/31/2016			12/31/2015		December 31, 2019		December 31, 2018		December 31, 2017
	($000's)		($000's)			($000's)		($000's)		($000's)		($000's)
Interest Expense	$	7,034	$	6,804		$	5,703	$	10,665	$	8,655	$	7,034
Amortization of Loan Costs		509		828	(1)		365		444		495		509
Amortization of Discount on Convertible Notes		1,195		1,121			852		1,357		1,273		1,195
Capitalized Interest		(215)		—			—		—		—		(215)
Total Interest Expense	$	8,523	$	8,753		$	6,920	$	12,466	$	10,423	$	8,523

Total Interest Paid	$	7,060	$	6,779		$	4,705	$	10,782	$	8,419	$	7,060

The Company was in compliance with all of its debt covenants as of December 31, ~~2017~~2019 and ~~2016.~~2018.

~~F-31~~

~~Table of Contents~~

NOTE ~~13.~~16. INTEREST RATE SWAP

During April 2016, the Company entered into an interest rate swap agreement to hedge cash flows tied to changes in the underlying floating interest rate tied to LIBOR for the $25.0 million mortgage note payable as discussed in Note ~~12,~~15, “Long-Term Debt.” During the years ended December 31, ~~2017~~2018 and ~~2016,~~2017, the interest rate swap agreement was 100% effective. Accordingly, the change in fair value on the interest rate swap has been classified in accumulated other comprehensive income. As of December 31, ~~2017~~2019 and ~~2016,~~2018, the fair value of our interest rate swap agreement, which was a gain of approximately ~~$607,000~~$99,000 and ~~$417,000,~~$652,000, respectively, was included in other assets on the consolidated balance sheets. The interest rate swap was effective on April 7, 2016 and matures on April 7, 2021. The interest rate swap fixed the variable rate debt on the notional amount of related debt of ~~$25.0~~$23.9 million to a rate of 3.17%.

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NOTE ~~14.~~17. ACCRUED AND OTHER LIABILITIES

Accrued and other liabilities consisted of the following:


	As of				As of
	December 31, 2017		December 31, 2016		December 31, 2019		December 31, 2018
Golf Course Lease	$	—	$	2,226,527
Golf $1 Round Surcharge		700,000		—
Accrued Property Taxes		66,909		28,973	$	44,232	$	12,312
Reserve for Tenant Improvements		3,302,831		398,621		617,968		100,519
Accrued Construction Costs		1,360,950		856,947		93,270		350,593
Accrued Interest		1,194,681		1,220,990		1,312,801		1,430,236
Environmental Reserve and Restoration Cost Accrual		866,936		1,505,757		205,774		520,404
Operating Leases - Liability						364,888		—
Other		2,668,219		2,430,082		3,048,259		2,783,820
Total Accrued and Other Liabilities	$	10,160,526	$	8,667,897	$	5,687,192	$	5,197,884

~~Golf Course Lease.~~ In July 2012, the Company entered into an agreement with the City to, among other things, amend the lease payments under its golf course lease (the “Lease Amendment”). Under the Lease Amendment, the base rent payment, which was scheduled to increase from $250,000 to $500,000 as of September 1, 2012, remained at $250,000 for the remainder of the lease term and any extensions would have been subject to an annual rate increase of 1.75% beginning September 1, 2013. On January 24, 2017, the Company acquired the approximately 690 acres of land and improvements comprising the golf courses, previously leased from the City, for approximately $1.5 million (the “Golf Course Land Purchase”). In conjunction with the Golf Course Land Purchase, the lease between the Company and the City was terminated. Therefore, during the first quarter of 2017, the Company eliminated the remaining accrued liability of approximately $2.2 million, resulting in the recognition of approximately $0.40 per share in non-cash earnings, or $0.24 per share after tax, which comprises the land lease termination in the consolidated statements of operations. The balance as of December 31, 2016 of approximately $2.2 million consisted of approximately $1.7 million which reflected the acceleration of the remaining amount of accrued rent that was no longer owed to the City as a result of the Lease Amendment, which prior to the Golf Course Land Purchase was being recognized into income over the remaining lease term which was originally to expire in 2022. The remaining approximately $500,000 reflected the amount of rent accrued pursuant to the lease, as amended, which is no longer owed to the City due to the lease termination on January 24, 2017.

~~Golf $1 Round Surcharge.~~ In connection with the Golf Course Land Purchase, each year the Company is obligated to pay the City additional consideration in the amount of an annual surcharge of $1 per golf round played (the “Per-Round Surcharge”) with an annual minimum Per-Round Surcharge of $70,000 and a maximum aggregate amount of the Per-Round Surcharges paid equal to $700,000. The maximum amount of $700,000 represents contingent consideration and has been recorded as an increase in Golf Buildings, Improvements, and Equipment and Accrued and Other Liabilities in the accompany consolidated balance sheets as of December 31, 2017. The first annual payment of $70,000 was made in January 2018 leaving a remaining commitment of $630,000 as of the date of this report.

~~Reserve for Tenant Improvements.~~ In connection with the acquisition on April 22, 2014 of the property in Katy, Texas leased to Lowe’s, the Company was credited approximately $651,000 at closing for certain required tenant improvements, some of which were not required to be completed until December 2016. Through December 31, 2016, approximately $100,000 of these tenant improvements had been completed and funded, leaving approximately $551,000 remaining to be funded. The remaining commitment as of December 31, 2016, totaled approximately $381,000, which was equal to the amount of the final reimbursement request the Company received from Lowe’s and was paid during the year ended December 31, 2017, leaving no remaining commitment related to the Lowe’s property.

~~F-32~~

~~Table of Contents~~

In connection with the acquisition on April 28, 2017 of the property in Tampa, Florida leased to LA Fitness, the Company was credited approximately $400,000 at closing for certain tenant improvements. As of December 31, 2017, no amounts have been completed and funded related to the LA Fitness property. Additionally, the Company is obligated to fund the Income Property Lease Incentive to Hilton Grand Vacations, as described in Note 9, “Other Assets” in the amount of approximately $2.7 million as of December 31, 2017. The approximately $2.7 million Income Property Lease Incentive payment was made during January 2018. These two items comprise the majority of the approximately $3.3 million reserve for tenant improvements as of December 31, 2017.

Environmental Reserve. During the year ended December 31, 2014, the Company accrued an environmental reserve of approximately $110,000 in connection with an estimate of additional costs required to monitor a parcel of less than one acre of land owned by the Company in Highlands County, Florida, on which environmental remediation work had previously been performed. The Company engaged legal counsel who, in turn, engaged environmental engineers to review the site and the prior monitoring test results. During the year ended December 31, 2015, their review was completed, and the Company made an additional accrual of approximately $500,000, representing the low end of the range of possible costs estimated by the engineers to be between approximately $500,000 and $1.0 million to resolve this matter subject to the approval of the state department of environmental protection (the “FDEP”). The FDEP issued a Remedial Action Plan Modification Approval Order (the “FDEP Approval”) in August 2016 which supports the approximate $500,000 accrual made in 2015. The Company is implementing the remediation plan pursuant to the FDEP Approval. During the fourth quarter of 2017, the Company made an additional accrual of approximately $51,000 for the second year of monitoring as the low end of the original range of estimated costs was increased for the amount of monitoring now ~~expected.~~anticipated. Since the total accrual of approximately $661,000 was made, approximately ~~$502,000~~$577,000 in costs have been incurred through December 31, ~~2017,~~2019, leaving a remaining accrual of approximately ~~$159,000.~~$84,000.

Restoration Accrual. As part of the resolution of a regulatory matter pertaining to the Company’s prior agricultural activities on certain of the Company’s land located in Daytona Beach, Florida, as of December 31, 2015, the Company accrued an obligation of approximately $1.7 million, representing the low end of the estimated range of possible wetlands restoration costs for approximately 148.4 acres within such land, and such estimated costs were included on the consolidated balance sheets as an increase in the basis of our land and development costs associated with those and benefitting surrounding acres. The final proposal for restoration work was received during the second quarter of 2016 which totaled approximately $2.0 million. Accordingly, an increase in the accrual of approximately $300,000 was recorded during the second quarter of 2016. During the first quarter of 2019, the Company received a revised estimate for completion of the restoration work for which the adjusted final total cost was approximately $2.4 million. Accordingly, an increase in the accrual of approximately $361,000 was recorded during the first quarter of 2019. The Company has funded approximately ~~$1.3~~$2.3 million of the total ~~$2.0~~$2.4 million of estimated costs through ~~the period ended~~ December 31, ~~2017,~~2019, leaving a remaining accrual of approximately ~~$708,000.~~$121,000. This matter is more fully described in Note ~~18,~~21 “Commitments and Contingencies.”

Operating Leases – Liability. The Company implemented FASB ASC Topic 842, Leases, effective January 1, 2019, resulting in a cumulative effect adjustment to increase right-of-use assets and related liabilities for operating leases for which the Company is the lessee.

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NOTE ~~15.~~18. DEFERRED REVENUE

Deferred revenue consisted of the following:


	As of				As of
	December 31, 2017		December 31, 2016		December 31, 2019		December 31, 2018
Deferred Oil Exploration Lease Revenue	$	585,675	$	585,674	$	—	$	585,675
Interest Reserve from Commercial Loan Investment						834,972		—
Prepaid Rent		1,126,408		1,068,972		2,063,173		1,621,620
Tenant Contributions						2,888,822		4,104,151
Other Deferred Revenue		318,376		337,020		43,753		58,838
Total Deferred Revenue	$	2,030,459	$	1,991,666	$	5,830,720	$	6,370,284

~~On September 20, 2016,~~Deferred Oil Exploration Lease Revenue. Pursuant to the ~~Company received an approximate $807,000 rent payment~~amendment for the ~~sixth~~lease year eight renewal of the ~~Company’s thirteen-year~~ oil exploration lease, the annual lease payment is approximately $807,000, which ~~was~~has been recognized ratably over the twelve-month lease period ~~ending in~~ended September ~~2017. On October 11, 2017,~~22, 2019. The oil exploration lease has not been extended beyond the ~~Company received an approximate $807,000 rent payment for~~expiration of the ~~seventh year~~current term of September 22, 2019 and has effectively terminated.

Interest Reserve from Commercial Loan Investment. In conjunction with certain of the Company’s ~~thirteen-year oil exploration~~commercial loan investments, the borrower has deposited interest and real estate tax reserves in escrow accounts held by the Company. The corresponding liability is recorded in Deferred Revenue on the Company’s consolidated balance sheets as the interest reserves are utilized to fund the monthly interest due on the loans.

Tenant Contributions. In connection with the acquisition of the property in Aspen, Colorado, the master tenant contributed $1.5 million of the $28.0 million purchase price at closing on February 21, 2018. Additionally, the master tenant funded, from its leasing reserve escrow, approximately $935,000 of the Company’s acquisition-related costs. The tenant contributions are being recognized ratably over the remaining term of the lease ~~which~~into income property rental revenue. Approximately $223,000 was recognized into income property rental revenue through December 31, 2019, leaving an aggregate balance of approximately $2.2 million, related to the Company’s total acquisition cost of approximately $29.0 million, to be recognized over the remaining term of the lease.

In connection with the construction of the Company’s beachfront restaurant formerly leased to Cocina 214 in Daytona Beach, Florida, pursuant to the lease agreement, the tenant contributed approximately $1.9 million towards the completion of the building and tenant improvements through direct payments to various third-party construction vendors. The tenant contribution is being recognized ratably over the ~~twelve-month~~remaining term of the lease ~~period ending in September 2018. The oil exploration lease is more fully~~into income property rental revenue. As a result of the Termination Payment described in Note ~~4 “Land and Subsurface Interests.~~3, “Income Properties,” the balance of the tenant contribution liability was reduced by $1.0 million, leaving a balance of approximately $690,000 to be recognized into income property rental revenue ratably over the remaining term of the original Cocina 214 lease. Approximately $212,000 was recognized into income property rental revenue through December 31, 2019, leaving a balance of approximately $677,000 to be recognized over the remaining term of the lease.

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NOTE ~~16.~~19. STOCK-BASED COMPENSATION

SUMMARY OF STOCK-BASED COMPENSATION

A summary of share activity for all equity ~~and liability~~ classified stock compensation during the year ended December 31, ~~2017,~~2019, is presented below:


	Shares		Vested /			Shares	Shares					Shares
	Outstanding	Granted	Exercised	Expired	Forfeited	Outstanding	Outstanding at	Granted	Vested / Exercised	Expired	Forfeited	Outstanding at
Type of Award	at 1/1/2017	Shares	Shares	Shares	Shares	at 12/31/2017	1/1/2019	Shares	Shares	Shares	Shares	12/31/2019
Equity Classified - Performance Share Awards - Peer Group Market Condition Vesting	—	12,635	—	—	—	12,635	28,080	21,195	—	—	—	49,275
Equity Classified - Market Condition Restricted Shares - Stock Price Vesting	69,500	—	(7,750)	(32,000)	—	29,750	22,000	—	—	—	—	22,000
Equity Classified - Three Year Vest Restricted Shares	37,504	17,451	(17,298)	—	(267)	37,390	34,952	20,696	(18,053)	—	—	37,595
Equity Classified - Non-Qualified Stock Option Awards	113,500	—	(23,500)	—	—	90,000	80,000	—	—	—	—	80,000
Liability Classified - Stock Options and Stock Appreciation Rights	11,000	—	(6,000)	(5,000)	—	—
Total Shares	231,504	30,086	(54,548)	(37,000)	(267)	169,775	165,032	41,891	(18,053)	—	—	188,870

Amounts recognized in the financial statements for stock options, stock appreciation rights, and restricted stock are as follows:


	Year Ended
	December 31, 2019		December 31, 2018		December 31, 2017
Total Cost of Share-Based Plans Charged Against Income Before Tax Effect	$	2,688,292	$	1,922,962	$	1,540,359

Income Tax Expense Recognized in Income	$	(681,348)	$	(487,375)	$	(594,194)

EQUITY-CLASSIFIED STOCK COMPENSATION

Performance Share Awards – Peer Group Market Condition Vesting

On February 3, 2017, the Company awarded to certain employees 12,635 Performance Shares ~~to certain employees~~ under the Amended and Restated 2010 Equity Incentive Plan (the “2010 Plan”). The Performance Shares awards entitle the recipient to receive, upon the vesting thereof, shares of common stock of the Company equal to between 0% and 150% of the number of Performance Shares awarded. The number of shares of common stock ~~to be issued upon~~so vesting will be determined based on the ~~calculation of the~~ Company’s total shareholder return as compared to the total shareholder return of ~~the~~a certain peer group ~~of companies, established at the grant date,~~ during a three-year performance period commencing on January 1, 2017, and ending on December 31, 2019. Subsequent to December 31, 2019, on February 11, 2020, the actual number of shares that vested related to this award totaled 14,214.

On January 24, 2018, the Company awarded to certain employees 15,445 Performance Shares under the 2010 Plan. The Performance Shares awards entitle the recipient to receive, upon the vesting thereof, shares of common stock of the Company equal to between 0% and 150% of the number of Performance Shares awarded. The number of shares of common stock so vesting will be determined based on the Company’s total shareholder return as compared to the total shareholder return of a certain peer group during a three-year performance period commencing on January 1, 2018, and ending on December 31, 2020.

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On January 23, 2019, the Company awarded to certain employees 21,195 Performance Shares under the Second Amended and Restated 2010 Equity Incentive Plan (the “Amended 2010 Plan”). The Performance Shares awards entitle the recipient to receive, upon the vesting thereof, shares of common stock of the Company equal to between 0% and 150% of the number of Performance Shares awarded. The number of shares of common stock so vesting will be determined based on the Company’s total shareholder return as compared to the total shareholder return of a certain peer group during a three-year performance period commencing on January 1, 2019, and ending on December 31, 2021.

Pursuant to amendments to the employment agreements and certain restricted share award agreements entered into by the Company on August 4, 2017, the restricted shares granted thereunder, if they are subject to performance-based vesting conditions, will fully vest following a change in control only if the executive’s employment is terminated without cause or if the executive resigns for good reason (as such terms are defined in the executive’s employment agreement), in each case, at any time during the 24-month period following the change in control (as defined in the executive’s employment agreement).

The Company used a Monte Carlo simulation pricing model to determine the fair value of its awards that are based on market conditions. The determination of the fair value of market condition-based awards is affected by the Company’s stock price as well as assumptions regarding a number of other variables. These variables include expected stock price volatility over the three-year performance period, the relative performance of the Company’s stock price and shareholder return compared to the companies in the peer group, annual dividends paid by the Company, and a risk-free interest rate assumption. Compensation cost is recognized regardless of the achievement of the market conditions, provided the requisite service period is met.

A summary of activity during the years ended December 31, ~~2017, 2016,~~2019, 2018, and ~~2015~~2017 is presented below:


		Wtd. Avg.			Wtd. Avg.
Performance Shares with Market Conditions	Shares	Fair Value		Shares	Fair Value
Outstanding at January 1, 2015	—	$	—
Granted	—		—
Vested	—		—
Expired	—		—
Forfeited	—		—
Outstanding at December 31, 2015	—	$	—
Granted	—		—
Vested	—		—
Expired	—		—
Forfeited	—		—
Outstanding at December 31, 2016	—	$	—
Outstanding at January 1, 2017				—	$	—
Granted	12,635		55.66	12,635		55.66
Vested	—		—	—		—
Expired	—		—	—		—
Forfeited	—		—	—		—
Outstanding at December 31, 2017	12,635	$	55.66	12,635		55.66
Granted				15,445		74.99
Vested				—		—
Expired				—		—
Forfeited				—		—
Outstanding at December 31, 2018				28,080		66.29
Granted				21,195		64.66
Vested				—		—
Expired				—		—
Forfeited				—		—
Outstanding at December 31, 2019				49,275	$	65.59

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As of December 31, ~~2017,~~2019, there was approximately ~~$469,000~~$1.3 million of unrecognized compensation cost, adjusted for estimated forfeitures, related to Performance Share awards, which will be recognized over a remaining weighted average period of ~~2.0~~1.7 years.

~~Market Condition Restricted Shares – Peer Group Vesting~~

Under the 2010 Plan, in September 2010 and January 2011, the Company granted to certain employees restricted shares of the Company’s common stock, which would vest upon the achievement of certain market conditions, including thresholds relating to the Company’s total shareholder return as compared to the total shareholder return of a certain peer group during a five-year performance period.

The Company used a Monte Carlo simulation pricing model to determine the fair value of its awards that are based on market conditions. The determination of the fair value of market condition-based awards is affected by the Company’s stock price as well as assumptions regarding a number of other variables. These variables include expected stock price volatility over the requisite performance term of the awards, the relative performance of the Company’s stock price and shareholder returns to companies in its peer group, annual dividends, and a risk-free interest rate assumption. Compensation cost is recognized regardless of the achievement of the market conditions, provided the requisite service period is met.

~~A summary of activity during the years ended December 31, 2017, 2016, and 2015 is presented below:~~

Wtd. Avg.

Grant Date

Market Condition Non-Vested Restricted Shares

Shares

Fair Value

Outstanding at January 1, 2015

5,067

$
23.13

Granted

—

—

Vested

(2,034)

22.80

Expired

—

—

Forfeited

(633)

22.80

Outstanding at December 31, 2015

2,400

$
23.42

Granted

—

—

Vested

(2,300)

23.42

Expired

—

—

Forfeited

(100)

23.42

Outstanding at December 31, 2016

—

$
—

Granted

—

—

Vested

—

—

Expired

—

—

Forfeited

—

—

Outstanding at December 31, 2017

—

$
—

~~As of December 31, 2017, there is no unrecognized compensation as there are no outstanding shares remaining.~~

Market Condition Restricted Shares– Stock Price Vesting

~~“Inducement” grants of 96,000~~On May 20, 2015 and 17,000 shares of restricted Company common stock were awarded to Mr. Albright and Mr. Patten, in 2011 and 2012, respectively. Mr. Albright’s restricted shares were granted outside of the 2010 Plan while Mr. Patten’s restricted shares were awarded under the 2010 Plan. The Company filedFebruary 26, 2016, a registration statement with the Securities and Exchange Commission on Form S-8 to register the resale of Mr. Albright’s restricted stock award under this award. The restricted shares will vest in six increments based upon the price per share of the Company’s common stock during the term of their employment (or within sixty days after termination of employment by the Company without cause), meeting or exceeding the target trailing sixty-day average closing prices ranging from $36 per share for the first increment to $65 per share for the final increment. If any increment of the restricted shares fails to satisfy the applicable stock price condition prior to six years from the grant date, that increment of the restricted shares will be forfeited. As of December 31, 2017, four increments of Mr. Albright’s grants had vested. On August 1, 2017, the remaining 32,000 unvested “inducement” grant restricted shares, for the $60 and $65 price increments, awarded to Mr. Albright expired without vesting. As of December 31, 2017, the first five increments of Mr. Patten’s grants had vested.

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Additional grants of 2,500 and 3,000 shares of restricted Company common stock were awarded to Mr. Smith and Steven R. Greathouse, the Company’s Sr. Vice President of Investments, under the 2010 Plan, during the fourth quarter of 2014 and the first quarter of 2015, respectively. The restricted stock will vest in two increments based upon the price per share of Company common stock during the term of their employment (or within sixty days after termination of employment by the Company without cause), meeting or exceeding the target trailing sixty-day average closing prices of $60 per share and $65 per share for the two increments. If any increment of the restricted shares fails to satisfy the applicable stock price condition prior to six years from the grant date, that increment of the restricted shares will be forfeited. As of December 31, 2017, the first increment of Mr. Smith’s and Mr. Greathouse’s grants had vested.

Acombined grant of ~~94,000~~26,000 shares, net of 68,000 shares permanently surrendered during 2016, of restricted Company common stock was awarded to Mr. Albright under the Original 2010 Plan during the second quarter of 2015. As more fully described at the end of this Note 16, “Stock-Based Compensation,” on February 26, 2016, 72,000 of these shares were surrendered, of which 4,000 were re-granted on February 26, 2016 with identical terms of the surrendered restricted stock (68,000 of the shares having been permanently surrendered).under a new five-year employment agreement. The 26,000 shares of restricted Company common stock outstanding from these grants ~~will~~were to vest in four increments based upon the price per share of ~~the Company’s~~Company common stock during the term of his employment (or within sixty days after termination of employment by the Company without cause), meeting or exceeding the target trailing thirty-day average closing prices ranging from $60 and $65 per share for the first two

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increments of 2,000 shares each, $70 per share for the third increment toof 18,000 shares, and $75 per share for the ~~final increment.~~fourth increment of 4,000 shares. If any increment of the restricted shares fails to satisfy the applicable stock price condition prior to January 28, 2021, that increment of the restricted shares will be forfeited. As of December 31, ~~2017, one increment~~2019, the first two increments of this award had ~~vested.~~vested, leaving 22,000 shares outstanding.

Pursuant to amendments to the employment agreements and certain restricted share award agreements entered into by the Company on February 26, 2016 and August 4, 2017, the restricted shares granted thereunder, if they are subject to performance-based vesting conditions, will fully vest following a change in control only if the executive’s employment is terminated without cause or if the executive resigns for good reason (as such terms are defined in the executive’s employment agreement), in each case, at any time during the 24-month period following the change in control (as defined in the executive’s employment agreement).

The Company used a Monte Carlo simulation pricing model to determine the fair value of its awards that are based on market conditions. The determination of the fair value of market condition-based awards is affected by the Company’s stock price as well as assumptions regarding a number of other variables. These variables include expected stock price volatility over the requisite performance term of the awards, the relative performance of the Company’s stock price and shareholder returns to companies in its peer group, annual dividends, and a risk-free interest rate assumption. Compensation cost is recognized regardless of the achievement of the market conditions, provided the requisite service period is met.

~~F-36~~

~~Table of Contents~~

A summary of the activity for these awards during the years ended December 31, ~~2017, 2016,~~2019, 2018, and ~~2015~~2017 is presented below:


		Wtd. Avg.			Wtd. Avg.
Market Condition Non-Vested Restricted Shares	Shares	Fair Value		Shares	Fair Value
Outstanding at January 1, 2015	40,500	$	15.55
Granted	97,000		36.85
Vested	—		—
Expired	—		—
Forfeited	—		—
Outstanding at December 31, 2015	137,500	$	30.58
Granted	4,000		38.98
Vested	—		—
Expired	—		—
Forfeited	(72,000)		34.46
Outstanding at December 31, 2016	69,500	$	27.03
Outstanding at January 1, 2017				69,500	$	27.03
Granted	—		—	—		—
Vested	(7,750)		34.30	(7,750)		34.30
Expired	(32,000)		14.08	(32,000)		14.08
Forfeited	—		—	—		—
Outstanding at December 31, 2017	29,750	$	39.07	29,750		39.07
Granted				—		—
Vested				(7,750)		31.58
Expired				—		—
Forfeited				—		—
Outstanding at December 31, 2018				22,000		41.71
Granted				—		—
Vested				—		—
Expired				—		—
Forfeited				—		—
Outstanding at December 31, 2019				22,000	$	41.71

In connection with the permanent surrender of 68,000 shares of restricted Company common stock, approximately $1.6 million of related stock-based compensation expense was recognized during the year ended December 31, 2016 to accelerate the remaining expense pertaining the total grant date fair value of these awards.

As of December 31, ~~2017,~~2019, there is no unrecognized compensation cost related to market condition restricted stock.

Three Year Vest Restricted Shares

On January 22, 2014, the Company granted to certain employees 14,500 shares of restricted Company common stock under the 2010 Plan. One-third of the restricted shares ~~will vest~~vested on each of the first, second, and third anniversaries of the grant date, provided ~~they are~~the grantee was an employee of the Company on those dates. ~~In addition, any unvested portion of the restricted shares will vest upon a change in control.~~

On January 28, 2015, the Company granted to certain employees, which did not include Mr. Albright, 11,700 shares of restricted Company common stock under the 2010 Plan. Additionally, on February 9, 2015, the Company granted 8,000 shares of restricted Company common stock to Mr. Albright under the 2010 Plan. One-third of both awards of restricted shares ~~will vest~~vested on each of the first, second, and third anniversaries of ~~the~~ January 28, 2015, ~~grant date,~~ provided the grantee iswas an employee of the Company on those dates. ~~In addition, any unvested portion~~

F-43

Table of ~~the restricted shares will vest upon a change in control.~~Contents

On January 27, 2016, the Company granted to certain employees 21,100 shares of restricted Company common stock under the 2010 Plan. One-third of the restricted shares will vest on each of the first, second, and third anniversaries of January 28, 2016, provided the grantee is an employee of the Company on those dates. In addition, any unvested portion of the restricted shares will vest upon a change in control.

On January 25, 2017, the Company granted to certain employees 17,451 shares of restricted Company common stock under the 2010 Plan. One-third of the restricted shares will vest on each of the first, second, and third anniversaries of January 28, 2017, provided the grantee is an employee of the Company on those dates. In addition, any unvested portion of the restricted shares will vest upon a change in control.

On January 24, 2018, the Company granted to certain employees 17,712 shares of restricted Company common stock under the 2010 Plan. One-third of the restricted shares will vest on each of the first, second, and third anniversaries of January 28, 2018, provided the grantee is an employee of the Company on those dates. In addition, any unvested portion of the restricted shares will vest upon a change in control.

On January 23, 2019, the Company granted to certain employees 20,696 shares of restricted Company common stock under the Amended 2010 Plan. One-third of the restricted shares will vest on each of the first, second, and third anniversaries of January 28, 2019, provided the grantee is an employee of the Company on those dates. In addition, any unvested portion of the restricted shares will vest upon a change in control.

Effective as of August 4, 2017, the Company entered into amendments to the employment agreements and certain stock option award agreements and restricted share award agreements ~~of certain employees including Messrs. Albright, Patten, Smith, and Greathouse,~~ whereby such awards will fully vest following a change in control (as defined in the executive’s employment agreement) only if the executive’s employment is terminated without cause or if the executive resigns for good reason (as such terms are defined in the executive’s employment agreement), in each case, at any time during the 24-month period following the change in control.

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The Company’s determination of the fair value of the ~~three year~~three-year vest restricted stock awards was calculated by multiplying the number of shares issued by the Company’s stock price at the grant date, less the present value of expected dividends during the vesting period. Compensation cost is recognized on a straight-line basis over the vesting period.

A summary of activity for these awards during the years ended December 31, ~~2017, 2016,~~2019, 2018, and ~~2015,~~2017, is presented below:


		Wtd. Avg.			Wtd. Avg.
		Fair Value			Fair Value
Three Year Vest Non-Vested Restricted Shares	Shares	Per Share		Shares	Per Share
Outstanding at January 1, 2015	14,200		36.08
Granted	19,700		55.93
Vested	(4,734)		36.08
Expired	—		—
Forfeited	(2,266)		46.59
Outstanding at December 31, 2015	26,900		49.73
Granted	21,100		44.88
Vested	(10,363)		47.89
Expired	—		—
Forfeited	(133)		46.08
Outstanding at December 31, 2016	37,504		47.53
Outstanding at January 1, 2017				37,504	$	47.53
Granted	17,451		55.06	17,451		55.06
Vested	(17,298)		46.70	(17,298)		46.70
Expired	—		—	—		—
Forfeited	(267)		52.51	(267)		52.51
Outstanding at December 31, 2017	37,390	$	51.39	37,390		51.39
Granted				17,712		65.33
Vested				(18,883)		51.57
Expired				—		—
Forfeited				(1,267)		59.39
Outstanding at December 31, 2018				34,952		58.07
Granted				20,696		58.78
Vested				(18,053)		54.43
Expired				—		—
Forfeited				—		—
Outstanding at December 31, 2019				37,595	$	60.21

As of December 31, ~~2017,~~2019, there was approximately ~~$1.0~~$1.2 million of unrecognized compensation cost, adjusted for estimated forfeitures, related to the ~~three year~~three-year vest non-vested restricted shares, which will be recognized over a remaining weighted average period of 1.7 years.

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Non-Qualified Stock Option Awards

~~Pursuant to the Non-Qualified Stock Option Award Agreements between~~On October 22, 2014, the Company ~~and Messrs. Albright, Patten, and~~granted to Mr. Smith ~~each of these Company employees was granted~~ an option to purchase ~~50,000, 10,000, and~~ 10,000 shares of ~~Company~~the Company’s common stock ~~in 2011, 2012, and 2014, respectively,~~ under the Original 2010 Plan, with an exercise price ~~per share equal to the fair market value on their respective grant dates.~~of $50.00. One-third of the options vested on each of the first, second, and third anniversaries of ~~their respective~~the grant ~~dates.~~date. The options expire on the earliest of: (a) the tenth anniversary of the grant date; (b) twelve months after the employee’s death or termination for disability; or (c) thirty days after the termination of employment for any reason other than death or disability.

On January 23, 2013, the Company granted options to purchase 51,000 shares of the Company’s common stock under the 2010 Plan to certain employees of the Company, including 10,000 shares to Mr. Patten, with an exercise price of $34.95. One-third of these options vested on each of the first, second, and third anniversaries of the grant date. As of December 31, 2017, all 51,000 of these options have been exercised, including the 10,000 shares awarded to Mr. Patten.

On February 9, 2015, the Company granted to Mr. Albright an option to purchase 20,000 shares of the Company’s common stock under the 2010 Plan with an exercise price of $57.50. The option vested on January 28, 2016. The option expires on the earliest of: (a) January 28, 2025; (b) twelve months after the employee’s death or termination for disability; or (c) thirty days after the termination of employment for any reason other than death or disability.

On May 20, 2015, the Company granted to Mr. Albright an option to purchase 40,000 shares of the Company’s common stock under the 2010 Plan, with an exercise price of $55.62. ~~As more fully described at the end of this Note 16, “Stock-Based Compensation,” on~~On February 26, 2016, this option was surrendered and an option to purchase 40,000 shares was granted on February 26, 2016, with identical terms. One-third of the ~~options~~option vested immediately, and the remaining two-thirds vested on January 28, 2017, and January 28, 2018. The option expires on the earliest of: (a) January 28, 2025; (b) twelve

~~F-38~~

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months after the employee’s death or termination for disability; or (c) thirty days after the termination of employment for any reason other than death or disability.

On June 29, 2015, the Company granted to an officer of the Company an option to purchase 10,000 shares of the Company’s common stock under the 2010 Plan, with an exercise price of $57.54. One-third of the option will vest on each of the first, second, and third anniversaries of the grant date, provided the recipient is an employee of the Company on ~~those~~such dates. In addition, any unvested portion of the option will vest upon a change in control. The option expires on the earliest of: (a) June 29, 2025; (b) twelve months after the employee’s death or termination for disability; or (c) thirty days after the termination of employment for any reason other than death or disability.

Effective as of August 4, 2017, the Company entered into amendments to the employment agreements and certain stock option award agreements and restricted share award agreements whereby such awards will fully vest following a change in control (as defined in the executive’s employment agreement) only if the executive’s employment is terminated without cause or if the executive resigns for good reason (as such terms are defined in the executive’s employment agreement), in each case, at any time during the 24-month period following the change in control.

F-45

Table of Contents

A summary of the activity for these awards during the years ended December 31, ~~2017, 2016,~~2019, 2018, and ~~2015,~~2017, is presented below:


				Wtd. Avg.						Wtd. Avg.
				Remaining						Remaining
				Contractual		Aggregate				Contractual		Aggregate
		Wtd. Avg.		Term		Intrinsic		Wtd. Avg.		Term		Intrinsic
Non-Qualified Stock Option Awards	Shares	Ex. Price		(Years)		Value	Shares	Ex. Price		(Years)		Value
Outstanding at January 1, 2015	84,765	$	34.39
Granted	70,000		56.43
Exercised	(30,155)		30.24
Expired	—		—
Forfeited	(7,760)		34.95
Outstanding at December 31, 2015	116,850		48.63
Granted	40,000		55.62
Exercised	(3,350)		34.95
Expired	—		—
Forfeited	(40,000)		55.62
Outstanding at December 31, 2016	113,500		49.03
Outstanding at January 1, 2017							113,500	$	49.03
Granted	—		—				—		—
Exercised	(23,500)		34.95				(23,500)		34.95
Expired	—		—				—		—
Forfeited	—		—				—		—
Outstanding at December 31, 2017	90,000	$	52.71	6.98	$	971,400	90,000		52.71
Exercisable at December 31, 2016	76,600	$	45.94	1.87	$	573,181
Exercisable at December 31, 2017	73,000	$	51.94	6.88	$	843,968
Granted							—		—
Exercised							(10,000)		29.34
Expired							—		—
Forfeited							—		—
Outstanding at December 31, 2018							80,000		55.63
Granted							—		—
Exercised							—		—
Expired							—		—
Forfeited							—		—
Outstanding at December 31, 2019							80,000	$	55.63	5.26	$	375,400
Exercisable at January 1, 2019							80,000	$	55.63	6.50	$	25,000
Exercisable at December 31, 2019							80,000	$	55.63	5.26	$	375,400

~~F-39~~

~~Table of Contents~~

A summary of the non-vested options for these awards during the years ended December 31, ~~2017, 2016,~~2019, 2018, and ~~2015,~~2017, is presented below:


		Fair Value			Fair Value
		of Shares			of Shares
Non-Qualified Stock Option Awards	Shares	Vested		Shares	Vested
Non-Vested at January 1, 2015	47,570
Granted	70,000
Vested	(21,550)	$	783,764
Expired	—
Forfeited	(7,760)
Non-Vested at December 31, 2015	88,260
Granted	40,000
Vested	(51,360)	$	2,643,088
Expired	—
Forfeited	(40,000)
Non-Vested at December 31, 2016	36,900
Non-Vested at January 1, 2017				36,900
Granted	—			—
Vested	(19,900)	$	1,094,066	(19,900)	$	1,094,066
Expired	—			—
Forfeited	—			—
Non-Vested at December 31, 2017	17,000			17,000
Granted				—
Vested				(17,000)	$	952,068
Expired				—
Forfeited				—
Non-Vested at December 31, 2018				—
Granted				—
Vested				—	$	—
Expired				—
Forfeited				—
Non-Vested at December 31, 2019				—

No options were granted ~~during the year ended December 31, 2017. The total intrinsic value of options~~or exercised during the year ended December 31, ~~2017 was approximately $451,000.~~2019. As of December 31, ~~2017,~~2019, there ~~was approximately $78,000 of~~is no unrecognized compensation cost related to non-qualified, non-vested stock option ~~awards, which will be recognized over a weighted average period of 0.4 years.~~awards.

LIABILITY-CLASSIFIED STOCK COMPENSATION

The Company previously had a stock option plan (the “2001 Plan”) pursuant to which 500,000 shares of the Company’s common stock were eligible for issuance. The 2001 Plan expired in 2010, and no new stock options may be

F-46

Table of Contents

issued under the 2001 Plan. Under the 2001 Plan, both stock options and stock appreciation rights were issued in prior years and such issuances were deemed to be liability-classified awards under FASB ASC Topic, Share-Based Payments, which are required to be remeasured at fair value at each balance sheet date until the award is settled.

~~F-40~~

~~Table~~There was no remaining liability as of ~~Contents~~

December 31, 2019 or 2018, because there were no options outstanding and exercisable.

A summary of share option activity under the 2001 Plan during the years ended December 31, ~~2017, 2016,~~2019, 2018, and ~~2015~~2017 is presented below:

Stock Options


				Wtd. Avg.						Wtd. Avg.
				Remaining						Remaining
				Contractual	Aggregate					Contractual	Aggregate
		Wtd. Avg.		Term	Intrinsic			Wtd. Avg.		Term	Intrinsic
Liability-Classified Stock Options	Shares	Ex. Price		(Years)	Value		Shares	Ex. Price		(Years)	Value
Outstanding at January 1, 2015	35,300		62.47
Granted	—		—
Exercised	(3,300)		33.16
Expired	—		—
Forfeited	(14,000)		66.54
Outstanding at December 31, 2015	18,000		64.69
Granted	—		—
Exercised	—		—
Expired	(3,000)		67.27
Forfeited	(4,000)		64.99
Outstanding at December 31, 2016	11,000		63.87
Outstanding at January 1, 2017							11,000	$	63.87
Granted	—		—				—		—
Exercised	(6,000)		52.73				(6,000)		52.73
Expired	(5,000)		52.73				(5,000)		52.73
Forfeited	—		—				—		—
Outstanding at December 31, 2017	—	$	—	—	$	—	—		—
Exercisable at December 31, 2017	—	$	—	—	$	—
Granted							—		—
Exercised							—		—
Expired							—		—
Forfeited							—		—
Outstanding at December 31, 2018							—		—
Granted							—		—
Exercised							—		—
Expired							—		—
Forfeited							—		—
Outstanding at December 31, 2019							—	$	—	—	$	—
Exercisable at December 31, 2019							—	$	—	—	$	—

In connection with the grant of non-qualified stock options, a stock appreciation right for each share covered by the option was also granted. The stock appreciation right entitles the optionee to receive a supplemental payment, which may be paid in whole or in part in cash or in shares of common stock, equal to a portion of the spread between the exercise price and the fair market value of the underlying shares at the time of exercise. The total intrinsic value of options exercised during the year ended December 31, 2017 was approximately $316,000. No options ~~remain~~remained outstanding and exercisable as of December 31, ~~2017.~~ 2019 or 2018.

~~F-41~~F-47

Table of Contents

Stock Appreciation Rights


				Wtd. Avg.						Wtd. Avg.
				Remaining						Remaining
				Contractual	Aggregate					Contractual	Aggregate
		Wtd. Avg.		Term	Intrinsic			Wtd. Avg.		Term	Intrinsic
Liability-Classified Stock Appreciation Rights	Shares	Fair Value		(Years)	Value		Shares	Fair Value		(Years)	Value
Outstanding at January 1, 2015	35,300		5.56
Granted	—		—
Exercised	(3,300)		12.19
Expired	—		—
Forfeited	(14,000)		4.84
Outstanding at December 31, 2015	18,000		2.64
Granted	—		—
Exercised	—		—
Expired	(3,000)		—
Forfeited	(4,000)		0.87
Outstanding at December 31, 2016	11,000		1.33
Outstanding at January 1, 2017							11,000	$	1.33
Granted	—		—				—		—
Exercised	(6,000)		3.84				(6,000)		3.84
Expired	(5,000)		—				(5,000)		—
Forfeited	—		—				—		—
Outstanding at December 31, 2017	—	$	—	—	$	—	—		—
Exercisable at December 31, 2017	—	$	—	—	$	—
Granted							—		—
Exercised							—		—
Expired							—		—
Forfeited							—		—
Outstanding at December 31, 2018							—		—
Granted							—		—
Exercised							—		—
Expired							—		—
Forfeited							—		—
Outstanding at December 31, 2019							—	$	—	—	$	—
Exercisable at December 31, 2019							—	$	—	—	$	—

~~The total intrinsic value of stock appreciation rights exercised during the year ended December 31, 2017 was approximately $23,000.~~ No stock appreciation rights ~~remain~~remained outstanding and exercisable as of December 31, ~~2017.~~2019 or 2018.

The aggregate intrinsic value of options is calculated by taking the current stock price of the Company as of the balance sheet date less the option exercise price, times the respective number of shares outstanding or exercisable, on a weighted average basis. Options with an exercise price greater than the current stock price are excluded from the calculation.

The fair value of each share option and stock appreciation right is estimated on the measurement date using the Black-Scholes option pricing model based on assumptions noted in the following table. Expected volatility is based on the historical volatility of the Company and other factors. The Company has elected to use the simplified method of estimating the expected term of the options and stock appreciation rights.

Due to the small number of employees included in the 2001 Plan, the Company uses the specific identification method to estimate forfeitures and includes all participants in one group. The risk-free rate for periods within the contractual term of the share option is based on the U.S. Treasury rates in effect at the time of measurement.

The Company issues new, previously unissued, shares as options are exercised.

Following are assumptions used in determining the fair value of stock options and stock appreciation rights for the years ended December 31, 2016 and 2015. There were no assumptions for the year ended December 31, 2017 as there are no remaining stock options or stock appreciation rights:

Assumptions at:

December 31,
2017


December 31,
2016


December 31,
2015


Expected Volatility

—
%

14.13
%

29.40
%

Expected Dividends

—
%

0.22
%

0.15
%

Expected Term

—
years

0.61
years

1.3
years

Risk-Free Rate

—
%

0.66
%

0.75
%

There were no stock options or stock appreciation rights granted under the 2001 Plan during the years ended December 31, ~~2017, 2016,~~2019, 2018, or ~~2015.~~2017.

NON-EMPLOYEE DIRECTOR STOCK COMPENSATION

Each member of the Company’s Board of Directors has the option to receive his or her annual retainer in shares of Company common stock rather than cash. The number of shares awarded to the directors making such election is calculated quarterly by dividing (i) the sum of (A) the amount of the quarterly retainer payment due to such director plus (B) meeting fees earned by such director during the quarter, by (ii) the closing price of the Company’s common stock on the last business day of the quarter for which such payment applied, rounded down to the nearest whole number of shares.

~~F-42~~F-48

Table of Contents

The liability for stock options and stock appreciation rights, at fair value, reflected on the consolidated balance sheet at December 31, 2016, was approximately $42,000. There was no remaining liabilityCommencing in 2019, each non-employee director serving as of ~~December 31, 2017 because there were no options outstanding and exercisable as~~the beginning of December 31, 2017. These fair value measurements are based on Level 2 inputs based on Black-Scholes and market implied volatility. The Black-Scholes determination of fair value is affected by variables including stock price, expected stock price volatility over the term of the awards,each calendar year shall receive an annual ~~dividends, and a risk-free interest rate assumption.~~

~~Amounts recognized in the financial statements for stock options, stock appreciation rights, and restricted stock are as follows:~~

Year Ended


December 31,
2017

December 31,
2016

December 31,
2015

Accelerated Charge for Stock-Based Compensation

$
—

$
1,649,513

$
—

Recurring Charge for Stock-Based Compensation

1,437,223

1,529,370

2,186,408

Total Cost of Share-Based Plans Charged Against Income Before Tax Effect

$
1,437,223

$
3,178,883

$
2,186,408

Income Tax Expense Recognized in Income

$
(554,409)

$
(1,226,254)

$
(843,407)

In January 2015, the Compensation Committee awarded to Mr. Albright 8,000 restricted shares of the Company’s common stock. In February 2015, the Compensation Committee awarded to Mr. Albright options to purchase a total of 20,000 shares of the Company’s common stock. In May 2015, in connection with the extension of Mr. Albright’s employment agreement, the Compensation Committee awarded to Mr. Albright 94,000 restricted sharesaward of the Company’s common stock valued at $20,000 (the ~~“May 2015 Restricted Share Grant”~~“Annual Award”) ~~and options to purchase a total~~. The number of ~~40,000~~ shares awarded will be calculated based on the trailing 20-day average price of the Company’s common stock ~~(the “May 2015 Option Grant”). Each of these awards were approved by the Company’s Board.~~

Upon review of the total equity awards to Mr. Albright in 2015, it was determined that the annual per person award limit under the 2010 Plan was inadvertently exceeded. In determining the extent to which the 2010 Plan’s individual annual award limit had been exceeded by the above awards, the Compensation Committee, as the administrator of the 2010 Plan, identified a conflict between Sections 3(d) and 3(e) of the 2010 Plan, the relevant provisions which provide limitations of the 2010 Plan. Section 3(d) of the 2010 Plan could be read to provide an overall limit of 50,000 shares applicable to all awards granted to a participant in any calendar year; however, the Compensation Committee could not disregard Section 3(e) of the 2010 Plan. Section 3(e) could be read to provide for two additional limits of 50,000 shares each for any (a) “Qualified Performance-Based Awards” (as defined in the 2010 Plan) constituting stock options and stock appreciation rights and (b) “Qualified Performance-Based Awards” other than stock options and stock appreciation rights. If the Compensation Committee were to determine that Section 3(e) of the 2010 Plan provides the applicable limits for two categories of “Qualified Performance-Based Awards,” then the Compensation Committee could conclude that Section 3(d) of the 2010 Plan provides the limit for awards other than Qualified Performance-Based Awards.

The Compensation Committee consulted with outside advisors and determined that it was not possible to conclude which interpretation of the 2010 Plan was conclusively correct. Pursuant to its authority to interpret the 2010 Plan, the Compensation Committee elected to comply with the limit in Section 3(d) of the 2010 Plan. As a result of applying this interpretation of the 2010 Plan, the awards granted to Mr. Albright in 2015 exceeded the 2010 Plan’s individual annual award limit by 112,000 shares of our common stock (the “Excess 2015 Awards”).

On February 26, 2016, the Company notified the NYSE American (i) that the Excess 2015 Awards may have violated Rule 711 of the NYSE American Company Guide and (ii) of the Company and Mr. Albright’s intention to rectify the Excess 2015 Awards in the manner described below. On March 4, 2016, the NYSE American notified the Company that it would not take any action and considered the matter closed.

In consultation with the Board, Mr. Albright elected to rectify the Excess 2015 Awards by surrendering, in full, the May 2015 Option Grant and surrendering, in part, the May 2015 Restricted Share Grant. In 2016, a portion of the surrendered awards were replaced with new awards under the 2010 Plan. Effective as of February 26, 2016, the Compensation Committee awarded Mr. Albright (i) an option to purchase an additional 40,000 shares of our common stock under the 2010 Plan (the “New Option Grant”) and (ii) a grant of 4,000 restricted shares of our common stock (the “New Restricted Share Grant”).

~~F-43~~

~~Table of Contents~~

The New Option Grant has an exercise price per share of $55.62, which is equal to the exercise price per share applicable to the May 2015 Option Grant. This option is intended to have the same vesting terms as the May 2015 Option Grant, and as a result has vested with respect to 26,400 shares, and will vest with respect to 13,600 shares on January 28, 2018. The New Restricted Share Grant is intended to have the same vesting terms as the May 2015 Restricted Share Grant, and as a result will vest upon the price per share of Company common stock during the term of Mr. Albright’s employment (or within 60 days after termination of his employment by the Company other than for cause, due to death or disability or due to his voluntary resignation) meeting or exceeding the target trailing 30-day average closing price of $75 per share. If the restricted shares fail to satisfy the stock price condition prior to January 28, 2021, the restricted shares will be forfeited. Any unvested restricted shares will vest immediately upon Mr. Albright’s termination of employment without Cause or for his resignation for Good Reason (as such terms are defined in his amended and restated employment agreement), in each case, at any time during the 24-month period following a change in control. Mr. Albright has the right to vote the restricted shares prior to their vesting but is not entitled to dividends paid on any unvested shares. These restricted shares have not yet vested.

Because the Excess 2015 Awards exceeded the 2010 Plan limits, the grants do not qualify, for purposes of calculating the Code Section 162(m) compensation for Mr. Albright for tax purposes, as performance-based awards.

As noted herein, 112,000 shares of the awards granted to Mr. Albright in 2015 were deemed to have exceeded the limits of the 2010 Plan. However, when granted these shares were issued and outstanding as of their grant date and all legal requirements for their issuance under Florida law and the Company’s organizational documents were fulfilled and Mr. Albright’s ability to enforce his rights to such grants could not be negated or otherwise impaired. All requirements under FASB ASC Topic 718-10-20 were met, including a mutual understanding of the key terms and conditions of the awards, the Company was contingently liable to issue the shares underlying the awards, and all required approvals for the awards to be legally issued and outstanding were obtained as of the ~~grant date. Consequently,~~date two business days prior to the ~~112,000 shares were deemed appropriately reflected as stock compensation expense as~~date of the award, rounded down to the nearest whole number of shares.

During the year ended December 31, ~~2015.~~

~~Effective as~~2019, 2018 and 2017, the expense recognized for the value of ~~February 26, 2016, the Company entered into amendments to the employment agreements and certain restricted share award agreements of Messrs. Albright, Patten, and Smith to clarify~~ the Company’s ~~intention that~~common stock received by non-employee directors totaled approximately $532,000, or 9,004 shares, $239,000, or 3,822 shares, and $103,000, or 1,833 shares, respectively. The 2019 amount includes the restricted shares granted thereunder, that are subject to performance-based vesting conditions, will fully vest upon the executive’s termination of employment without cause or his resignation for good reason (as such terms are defined in his employment agreement), in each case, at any timeapproximately $174,000 Annual Award received during the ~~24-month period following a change in control. There was no impact to the valuation established at the original date~~first quarter of ~~grant pertaining to this modification of the restricted share award agreements of Messrs. Albright, Patten, and Smith.~~

Effective as of August 4, 2017, the Company entered into amendments to the employment agreements and certain stock option award agreements and restricted share award agreements whereby such awards will fully vest following a change in control (as defined in the executive’s employment agreement) only if the executive’s employment is terminated without cause or if the executive resigns for good reason (as such terms are defined in the executive’s employment agreement), in each case, at any time during the 24-month period following the change in control.2019.

NOTE ~~17.~~20. INCOME TAXES

Total income tax benefit (expense) are summarized as follows:


	Year ended December 31,
	2019		2018		2017
Income Tax (Expense) Benefit from Continuing Operations	$	(5,472,178)	$	(6,025,148)	$	22,481,523
Income Tax (Expense) Benefit from Discontinued Operations		(32,641,194)		(7,529,596)		(12,546,257)
Total Consolidated Income Tax Benefit (Expense)	$	(38,113,372)	$	(13,554,744)	$	9,935,266

The provisions for income tax benefit (expense) from continuing operations are summarized as follows:


	2017				2016				2015				2019				2018				2017
	Current		Deferred		Current		Deferred		Current		Deferred		Current		Deferred		Current		Deferred		Current		Deferred
Federal	$	794,174	$	8,317,453	$	(159,596)	$	(10,740,617)	$	479,671	$	(5,607,970)	$	(225,495)	$	(4,973,699)	$	(231,239)	$	(5,380,837)	$	1,729,007	$	18,959,360
State		70,384		753,255		(311,525)		(625,116)		185,584		(326,389)		19,998		(292,982)		(127,470)		(285,602)		153,234		1,639,922
Total	$	864,558	$	9,070,708	$	(471,121)	$	(11,365,733)	$	665,255	$	(5,934,359)	$	(205,497)	$	(5,266,681)	$	(358,709)	$	(5,666,439)	$	1,882,241	$	20,599,282

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

~~F-44~~F-49

Table of Contents

The sources of these differences and the related deferred income tax assets (liabilities) are summarized as follows:


	Deferred Tax				Deferred Tax
	2017		2016		2019		2018
Deferred Income Tax Assets
Depreciation	$	2,073,439	$	2,475,898	$	4,785,992	$	4,904,976
Intangible Lease Liabilities		7,512,629		11,714,651		6,503,574		7,111,608
Income Property Tenant Contributions						732,172		1,069,882
Impairment Reserves		1,139,918		2,085,808		92,751		1,393,415
Stock Options and Restricted Stock		883,725		1,438,292		1,274,694		977,210
Net Operating Loss Carryforward		266,036		—
Capital Loss Carryforward		20,750		—		20,750		20,750
Deferred Oil Lease Income		148,439		225,924		—		121,323
Deferred Lease Expense		—		858,882
Other - Net		60,480		217,887		6,638		44,967
Gross Deferred Income Tax Assets		12,105,416		19,017,342		13,416,571		15,644,131
Less - Valuation Allowance		(272,966)		(415,453)		(272,966)		(272,966)
Net Deferred Income Tax Assets		11,832,450		18,601,889		13,143,605		15,371,165
Deferred Income Tax Liabilities
Sales of Real Estate		(52,720,764)		(68,358,404)		(87,353,465)		(67,388,733)
Income Property Lease Incentive						—		(606,820)
Discount on Equity Component of Convertible Debt		(421,895)		(904,422)		(42,400)		(238,200)
Basis Difference in Joint Venture		(224,715)		(342,015)
Basis Differences in Joint Ventures						(11,789,044)		(764,566)
Basis Difference in Alpine Income Property OP, LP						(3,979,966)		—
Interest Rate Swap		(452,873)		(255,891)		(73,924)		(486,543)
Deferred Revenue (Net of Straight-line Rent Adjustments)		(226,673)		(105,729)		(186,979)		(578,034)
Other - Net		(79,394)		—		—		(78,176)
Total Deferred Income Tax Liabilities		(54,126,314)		(69,966,461)		(103,425,778)		(70,141,072)
Net Deferred Income Tax Liabilities	$	(42,293,864)	$	(51,364,572)	$	(90,282,173)	$	(54,769,907)

In assessing the realizability of deferred income tax assets, Management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the realization of future taxable income during the periods in which those temporary differences become deductible. We consider past history, the scheduled reversal of taxable temporary differences, projected future taxable income, and tax planning strategies in making this assessment. As of December 31, ~~2017~~2019 and ~~2016,~~2018, we believe it is more likely than not that a portion of the Company’s deferred income tax assets will not be realized, and accordingly, a valuation allowance has been provided. As of December 31, ~~2017~~2019 and ~~2016,~~2018, the valuation allowance was approximately ~~$273,000 and $415,000, respectively, with the decrease being related solely to the decrease in the federal corporate tax rate.~~$273,000.

As of December 31, ~~2017~~2019 and ~~2016,~~2018, the valuation allowance relates solely to a basis difference in a joint venture with a wholly owned and fully consolidated subsidiary, and no valuation allowance is provided for charitable contribution carryforwards due to the expectation of full utilization during ~~2017 and 2016.~~2019.

~~F-45~~F-50

Table of Contents

Following is a reconciliation of the income tax computed at the federal statutory rate of 21% for ~~2017~~2019 and 2018 and 35% ~~2016 and 2015:~~for 2017 for continuing operations:


	Year ended December 31,
	2017		2016		2015		Year ended December 31,
							2019		2018		2017
Income Tax (Expense) Benefit Computed at Federal Statutory Rate	$	(10,528,124)	$	(9,219,942)	$	(4,481,029)	$	(4,410,318)	$	(4,557,366)	$	245,168
Increase (Decrease) Resulting from:
State Income Tax, Net of Federal Income Tax Benefit		(1,703,805)		(1,693,578)		(755,481)		(1,075,960)		(1,363,007)		39,677
Income Tax on Permanently Non-Deductible Items		66,015		(1,015,936)		—		(85,842)		(31,466)		66,015
Change in Corporate Federal Tax Rate		22,249,536		—		—		—		—		22,249,536
Other Reconciling Items		(148,356)		92,602		(32,594)		99,942		(73,309)		(118,873)
Benefit (Expense) for Income Taxes	$	9,935,266	$	(11,836,854)	$	(5,269,104)	$	(5,472,178)	$	(6,025,148)	$	22,481,523

The effective income tax rate for each of the three years ended December 31, ~~2017, 2016,~~2019, 2018, and ~~2015,~~2017, including income taxes attributable to the discontinued operations, was ~~(31.0)%~~24.9%, ~~42.2%~~26.7%, and ~~38.9%~~(31.0)%, respectively. The provision for income taxes reflects the Company’s estimate of the effective rate expected to be applicable for the full fiscal year, adjusted for any discrete events, which are reported in the period that they occur. During the fourth quarter of 2017, the Company recorded an income tax benefit of approximately $22.2 million due to the impact of the reduction in the corporate tax rate from 35% to 21% for the Tax Cuts and Jobs Act. During the first quarter of 2016, 68,000 shares of restricted Company common stock were permanently surrendered which constituted a discrete event in which the total related stock compensation expense charged to earnings under GAAP of approximately $2.3 million, of which approximately $1.6 million was recognized during the first quarter of 2016 and approximately $676,000 was recognized during the year ended December 31, 2015, became permanently non-deductible for tax purposes as the surrendered shares will not vest. Accordingly, no income tax benefit was recorded related to the approximately $2.3 million of stock compensation expense.

The Company files a consolidated income tax return in the United States Federal jurisdiction and the States of Alabama, Arizona, Colorado, California, Florida, ~~Illinois,~~ Georgia, Maryland, Massachusetts, Nevada, New Mexico, New York, North Carolina, Oregon, Texas, Virginia, Washington, and ~~Washington.~~Wisconsin. The Internal Revenue Service has audited the federal tax returns through the year 2012, with all proposed adjustments settled. The Florida Department of Revenue has audited the Florida tax returns through the year 2014, with all proposed adjustments settled. The Company recognizes all potential accrued interest and penalties to unrecognized tax benefits in income tax expense. For the years ended December 31, ~~2017, 2016,~~2019, 2018, and ~~2015~~2017 the Company recognized no uncertain tax positions or accrued interest and penalties for uncertain tax positions.

~~Net income~~Income taxes totaling approximately $2.5 million, $323,000, and $334,000 were paid during the years ended December 31, ~~2017, 2016,~~2019, 2018, and ~~2015 totaled approximately $334,000, $510,000, and $1.2 million,~~2017, respectively. Additionally, income taxes totaling approximately ~~$958,000~~$687,000, $204,000 and ~~$133,000~~$958,000 were refunded during the years ended December 31, 2019, 2018, and 2017, ~~and 2016,~~ respectively.

NOTE ~~18.~~21. COMMITMENTS AND CONTINGENCIES

MINIMUM FUTURE RENTAL PAYMENTS

The Company leases, as lessee, certain equipment under operating leases.

Minimum future rental payments under non-cancelable operating leases having remaining terms in excess of one year as of December 31, ~~2017,~~2019, are summarized as follows:

Year Ending December 31,

Amounts

2018

$
150,689

2019

146,334

2020

71,804

2021

5,740

2022

—

2023 and thereafter (cumulative)

—

Total

$
374,567

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Year Ending December 31,	Amounts ($000's)
2020	$	127
2021		123
2022		118
2023		33
2024		—
2025 and thereafter (cumulative)		—
Total	$	401

Rental expense under all operating leases amounted to approximately ~~$339,000, $389,000,~~$286,000, $309,000, and ~~$410,000,~~$339,000, for the years ended December 31, ~~2017, 2016,~~2019, 2018, and ~~2015,~~2017, respectively.

~~MINIMUM FUTURE RENTAL RECEIPTS~~

~~Additionally, the Company, as lessor, leases certain land, buildings, and improvements under operating leases.~~

~~Minimum future rental receipts under non-cancelable operating leases having remaining terms in excess~~F-51

Table of ~~one year as of December 31, 2017, are summarized as follows:~~Contents

Year Ending December 31,

Amounts

2018

$
27,723,892

2019

27,062,887

2020

25,829,071

2021

22,671,393

2022

21,043,187

2023 and thereafter (cumulative)

94,483,824

Total

$
218,814,254

LEGAL PROCEEDINGS

From time to time, the Company may be a party to certain legal proceedings, incidental to the normal course of business. While the outcome of the legal proceedings cannot be predicted with certainty, the Company does not expect that these proceedings will have a material effect upon our financial condition or results of operations.

CONTRACTUAL COMMITMENTS - EXPENDITURES

In ~~conjunction~~connection with the ~~Company’s sale~~acquisition of The Strand property located in Jacksonville, FL on December 9, 2019, the Company received a credit of approximately ~~3.4 acres of land to RaceTrac in December 2013, the Company agreed to reimburse RaceTrac~~$450,000 for a ~~portion~~tenant improvement allowance for one of the costs for road improvements and the other costs associated with bringing multiple ingress/egress points to the entire 23 acre Williamson Crossing site, including the Company’s remaining 19.6 acres. The estimated cost for the improvements equals approximately $1.26 million and the Company’s commitment is to reimburse RaceTrac in an amount equal to the lesser of 77.5% of the actual costs or $976,500. The Company’s commitment to fund the improvement costs benefiting the remaining Company land within Williamson Crossing can be paid over five years utilizing proceeds from sales of the remaining land or at the end of the fifth year. In 2013, the Company deposited $283,500 of cash in escrow related to the improvements, which is classified as restricted cash in the consolidated balance sheets. The total amount in escrow as of December 31, 2017 was approximately $288,000, including accrued interest. Accordingly, as of December 31, 2017, the remaining maximum commitment is approximately $689,000.

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~~Table of Contents~~

related to construction work which remains classified as restricted cash in the consolidated balance sheets. The total amount in escrow as of December 31, 2017 was approximately $125,000, including accrued interest. Accordingly, the Company’s maximum commitment related to the construction work benefitting the outparcels adjacent to Sam’s land parcel is approximately $125,000, to be paid from escrow upon completion.

In conjunction with the Company’s development of two income properties, both restaurants, on the beach parcel as described in Note 4, “Land and Subsurface Interests,” the Company has executed multiple contracts with third-parties to perform the work necessary to prepare the site, construct the restaurants, and acquire the related furniture and equipment. Pursuant to the leases with the tenants of the two restaurant properties, LandShark and Cocina 214, and based on the Company’s current cost estimates, the total estimated cost to improve the land and develop the income properties is approximately $6.7 million. Through December 31, 2017, the Company has incurred approximately $5.9 million of the total estimated cost, whichThe Strand. Accordingly, this amount is included in Construction in Progress on the Company’s consolidated balance sheets, leaving a remaining commitment of approximately $858,000. The development of the two restaurant properties was completed in time for the tenants to commence operations during January of 2018. Accordingly, during the first quarter of 2018, the total investment in the beach parcel and the construction costs of the two single-tenant properties will be classified as Income Properties, Land, Building, and Improvements, within the Property, Plant, and Equipment classification on the Company’s consolidated balance sheets.

In connection with the Golf Course Land Purchase, each year the Company is obligated to pay the City additional consideration in the amount of an annual surcharge of $1 per golf round played (the “Per-Round Surcharge”) with an annual minimum Per-Round Surcharge of $70,000 and a maximum aggregate amount of the Per-Round Surcharges paid equal to $700,000. The maximum amount of $700,000 represents contingent consideration and has been recorded as an increase in Golf Buildings, Improvements, and Equipment and Accrued and Other Liabilities in the ~~accompany~~accompanying consolidated balance sheets as of December 31, ~~2017. The first annual payment of $70,000 was made in January 2018 leaving a remaining commitment of $630,000 as of~~2019. Subsequent to December 31, 2019, the ~~date of this report.~~improvements were completed by the tenant and the Company funded the $450,000.

~~CONTRACTUAL COMMITMENTS – LAND PIPELINE~~

~~As of February 28, 2018,~~In connection with the ~~Company’s pipeline of potential land sales transactions, including~~Daytona Beach Development, the ~~terms of an~~Company has executed non-binding term sheet to form a joint venture with an institutional investor to establish a mitigation bank on a parcel of our land (the “Mitigation Bank”), included the following eighteen potential transactions with sixteen different buyers, representing more than 6,000 acres or approximately 75% of our land holdings:

~~(1)The amount~~agreements for the ~~Mitigation Bank represents the amount in the term sheet for buyer’s acquisition~~demolition of certain existing structures, which commitments totaled approximately ~~70% of the joint venture that owns the Mitigation Bank, with the Company retaining 30%.~~

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~~Table of Contents~~

~~(5)Pursuant to the contract, amount includes the reimbursement of infrastructure costs incurred by the Company for Tomoka Town Center plus interest accrued~~$316,000 as of December 31, ~~2017.~~

As noted above, these agreements contemplate closing dates ranging from early 2018 through fiscal year 2020, and although some of the transactions may close in 2018, some of the buyers are not contractually obligated to close until after 2018. Each of the transactions are in varying stages of due diligence by the various buyers including, in some instances, making submissions to the planning and development departments of the City, and other permitting activities with other applicable governmental authorities, including wetlands permits from the St. John’s River Water Management District and the U.S. Army Corps of Engineers, and conducting traffic analyses with local government and the Florida Department of Transportation and negotiating other matters with Volusia County. In addition to other customary closing conditions, the majority of these transactions are conditioned upon the receipt of approvals or permits from those various governmental authorities, as well as other matters that are beyond our control. If such approvals are not obtained, the prospective buyers may have the ability to terminate their respective agreements prior to closing. As a result, there can be no assurances regarding the likelihood or timing of any one of these potential land transactions being completed or the final terms thereof, including the sales price.2019.

OTHER MATTERS

In connection with a certain land sale contract to which the Company is a party, the purchaser’s pursuit of customary development entitlements gave rise to an inquiry by federal regulatory agencies regarding prior agricultural activities by the Company on such land. During the second quarter of 2015, we received a written information request regarding such activities. We submitted a written response to the information request along with supporting documentation. During the fourth quarter of 2015, based on discussions with the agency, a penalty related to this matter was deemed probable, and accordingly the estimated penalty of $187,500 was accrued as of December 31, 2015, for which payment was made during the quarter ended September 30, 2016. Also, during the fourth quarter of 2015, the agency advised the Company that the resolution to the inquiry would likely require the Company to incur costs associated with wetlands restoration relating to approximately 148.4 acres of the Company’s land. At December 31, 2015, the Company’s third-party environmental engineers estimated the cost for such restoration activities to range from approximately $1.7 million to approximately $1.9 million. Accordingly, as of December 31, 2015, the Company accrued an obligation of approximately $1.7 million, representing the low end of the estimated range of possible restoration costs, and included such estimated costs on the consolidated balance sheets as an increase in the basis of our land and development costs associated with those and benefitting surrounding acres. As of June 30, 2016, the final proposal from the Company’s third-party environmental engineer was received reflecting a total cost of approximately $2.0 million. Accordingly, an increase in the accrual of approximately $300,000 was made during the second quarter of 2016. During the first quarter of 2019, the Company received a revised estimate for completion of the restoration work for which the adjusted final total cost was approximately $2.4 million. Accordingly, an increase in the accrual of approximately $361,000 was recorded during the first quarter of 2019. The Company has funded approximately ~~$1.3~~$2.3 million of the total ~~$2.0~~$2.4 million of estimated costs through December 31, ~~2017.~~2019, leaving a remaining accrual of approximately $121,000. The Company believes there is at least a reasonable possibility that the estimated remaining liability of approximately ~~$708,000~~$121,000 could change within one year of the date of the consolidated financial statements, which in turn could have a material impact on the Company’s consolidated balance sheets and future cash flows. The Company evaluates its estimates on an ongoing basis; however, actual results may differ from those estimates.

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~~F-49~~

~~Table of Contents~~

approximately 36 mitigation credits were required to be utilized, which represents approximately $298,000 in cost basis of the Company’s mitigation credits. Accordingly, the Company transferred the mitigation credits through a charge to direct cost of revenues of real estate operations during the three months ended June 30, 2017, thereby resolving the required mitigation activities related to the approximately 54.66 acres. In addition, in connection with other land sale contracts to which the Company is or may become a party, the pursuit of customary development entitlements by the potential purchasers may require the Company to utilize or acquire mitigation credits for the purpose of obtaining certain permits from the applicable federal or state regulatory agencies. Any costs incurred in connection with utilizing or acquiring such credits would be incorporated into the basis of the land under contract. No amounts related to such potential future costs have been accrued as of December 31, ~~2017.~~2019.

NOTE ~~19.~~22. BUSINESS SEGMENT DATA

~~The~~Prior to 2019, the Company ~~operates~~operated in four primary business segments: income properties, commercial loan investments, real estate operations, and golf operations. During the fourth quarter of 2018, the Company commenced efforts to monetize the golf operations and accordingly, as of December 31, 2018, the golf assets and liabilities related to the golf operations were classified has held for sale in the accompanying consolidated balance sheets and the results of golf operations were classified as discontinued operations in the accompanying consolidated statements of income for all years presented. The golf operations segment, although discontinued in 2018, held assets as of the December 31, 2018. Accordingly, the identifiable assets and liabilities, and the related capital expenditures and depreciation and amortization have been disclosed separately as discontinued golf operations for the years presented.

As a result of the significant transactions during the fourth quarter of 2019, including the Land JV transaction, the PINE Income Property Sale Transactions, and the Golf Sale, the Company’s segment structure has been modified to more closely align with the continuing operations of the Company. The Company now operates in four primary business segments: income properties, management services, commercial loan investments, and real estate operations. The new management services segment consists of the revenue generated from managing PINE and the Land JV. The management services segment had no assets as of December 31, 2019, 2018, or 2017, and therefore there are no related capital expenditures or depreciation and amortization for the years presented. The real estate operations segment previously included land sales from the Daytona Beach land portfolio as well as revenue and expenses related to the sale of mitigation credits and subsurface operations. Upon the completion of the Land JV transaction in the fourth quarter of 2019, the real estate operations related to land sales have been classified as discontinued operations in the accompanying consolidated statements of income for the years ended December 31, 2019, 2018, and 2017 and the real estate operations segment remaining consists of subsurface operations and mitigation credit sales. The identifiable assets and liabilities related to the discontinued real estate operations have been separately disclosed as discontinued real estate operations for the years presented.

Our income property operations consist primarily of income-producing properties, and our business plan is focused on investing in additional income-producing properties. Our income property operations accounted for ~~83.4%~~66.0% and ~~74.1%~~88.5% of our identifiable assets as of December 31, ~~2017~~2019 and ~~2016,~~2018, respectively, and ~~34.4%~~93.4%, ~~35.3%~~91.8%, and ~~44.3%~~81.3% of our consolidated revenues for the years ended December 31, 2019, 2018, and 2017, ~~2016,~~respectively. Our management fee income consists of the management fees earned for the management of PINE and ~~2015, respectively.~~the Land JV. As of December 31, ~~2017, we had two~~2019, our commercial loan ~~investments including a variable-rate B-Note representing a secondary tranche in a commercial mortgage loan and a~~investment portfolio consisted of three fixed-rate first ~~mortgage loan.~~mortgages and the Ground Lease Loan. Our continuing real estate operations primarily consist of revenues generated from ~~land transactions and~~ leasing and royalty income from our interests in subsurface oil, gas and mineral rights. ~~Our golf operations consist~~

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Table of a single property located in the City of Daytona Beach, with two 18-hole championship golf courses, a practice facility, and clubhouse facilities, including a restaurant and bar operation and pro-shop with retail merchandise. The majority of the revenues generated by our golf operations are derived from members and public customers playing golf, club memberships, and food and beverage operations.Contents

The Company evaluates performance based on profit or loss from operations before income taxes. The Company’s reportable segments are strategic business units that offer different products. They are managed separately because each segment requires different management techniques, knowledge, and skills.

~~F-50~~

~~Table of Contents~~

Information about the Company’s operations in different segments for the years ended December 31, ~~2017, 2016,~~2019, 2018, and ~~2015~~2017 is as follows:


	Year Ended						Year Ended
	December 31, 2017		December 31, 2016		December 31, 2015		December 31, 2019		December 31, 2018		December 31, 2017
Revenues:
Income Properties	$	31,406,930	$	25,092,484	$	19,041,111	$	41,955,414	$	40,075,731	$	31,406,930
Management Services								304,553		—		—
Commercial Loan Investments		2,052,689		2,588,235		2,691,385		1,829,015		615,728		2,052,689
Real Estate Operations		52,522,555		38,144,347		15,942,894		852,264		2,966,429		5,190,951
Golf Operations		5,095,313		5,190,394		5,243,485
Agriculture and Other Income		334,804		59,401		78,805
Total Revenues	$	91,412,291	$	71,074,861	$	42,997,680	$	44,941,246	$	43,657,888	$	38,650,570
Operating Income:
Income Properties	$	24,489,187	$	19,887,621	$	15,385,176	$	34,955,413	$	31,905,648	$	24,489,187
Management Services								304,553		—		—
Commercial Loan Investments		2,052,689		2,588,235		2,691,385		1,829,015		615,728		2,052,689
Real Estate Operations		35,161,533		23,263,036		11,650,370		747,598		2,375,050		3,770,389
Golf Operations		(863,575)		(396,683)		(349,600)
Agriculture and Other Income		238,655		(107,368)		(147,749)
General and Corporate Expense		(20,809,180)		(7,915,254)		(8,960,273)		(25,615,353)		(25,546,893)		(22,567,310)
Gains on Disposition of Assets								21,977,465		22,035,666		38
Total Operating Income	$	40,269,309	$	37,319,587	$	20,269,309	$	34,198,691	$	31,385,199	$	7,744,993
Depreciation and Amortization:
Income Properties	$	12,272,265	$	7,872,689	$	4,898,803	$	15,774,228	$	15,728,095	$	12,272,265
Golf Operations		349,261		266,074		263,335
Agriculture and Other		42,433		56,654		50,759
Corporate and Other								23,050		33,428		42,435
Total Depreciation and Amortization	$	12,663,959	$	8,195,417	$	5,212,897	$	15,797,278	$	15,761,523	$	12,314,700
Capital Expenditures:
Income Properties	$	92,125,062	$	92,434,774	$	84,261,324	$	166,683,689	$	108,996,747	$	92,125,062
Commercial Loan Investments		3,000,000		—		15,394,879		18,046,450		—		3,000,000
Real Estate Operations ($5,744,636 Contributed by Consolidated VIE in 2015)		—		—		11,489,272
Golf Operations		2,373,894		95,513		109,505
Agriculture and Other		128,716		19,881		38,714
Real Estate Operations								2,791,137		4,658,956		—
Discontinued Golf Operations								—		94,734		2,373,894
Corporate and Other								4,348		13,775		128,716
Total Capital Expenditures	$	97,627,672	$	92,550,168	$	111,293,694	$	187,525,624	$	113,764,212	$	97,627,672


	As of				As of
	December 31, 2017		December 31, 2016		December 31, 2019		December 31, 2018
Identifiable Assets:
Income Properties	$	388,602,721	$	302,757,565	$	464,285,272	$	492,093,615
Commercial Loan Investments		11,963,777		24,032,885		35,742,218		—
Real Estate Operations		43,296,528		58,868,298		65,554,619		14,315,805
Golf Operations		6,262,634		3,675,842
Agriculture and Other		16,004,718		19,288,836
Discontinued Land Operations						833,167		20,971,754
Discontinued Golf Operations						—		4,462,477
Corporate and Other						136,870,927		24,486,221
Total Assets	$	466,130,378	$	408,623,426	$	703,286,203	$	556,329,872

Operating income represents income from continuing operations before loss on early extinguishment of debt, interest expense, investment income, and income taxes. General and corporate expenses are an aggregate of general and administrative expenses, impairment charges, depreciation and amortization expense, and gains ~~(losses)~~ on the disposition of assets. Identifiable assets by segment are those assets that are used in the Company’s operations in each segment. ~~Other~~Real Estate Operations includes the identifiable assets of the Mitigation Bank JV and Land JV. Corporate and other assets consist primarily of cash, property, plant, and equipment related to the other operations, as well as the general and corporate operations. ~~Land, timber,~~

The Management Services segment had no capital expenditures and ~~Subsurface Interests were previously stated~~held no assets as ~~a separate line item within property, plant, and equipment on the consolidated financial statements and are now included with land, timber, and development costs as all~~ of ~~the costs are related to the Company’s land portfolio of approximately 8,100 acres.~~

December 31, 2019 or 2018.

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Table of Contents

NOTE ~~20. VARIABLE INTEREST ENTITY~~23. ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS

During the fourth quarter of 2018, the Company commenced efforts to pursue monetization of certain of its multi-tenant income properties and the golf operations and assets comprising the Club. Accordingly, four multi-tenant income properties and the golf assets comprising the Club were classified as held for sale as of December 31, 2018. Additionally, the golf operations qualify as discontinued operations and have been reclassified as such in the accompanying consolidated statements of income for the years ended December 31, 2019, 2018, and 2017.

As described in Note 3, “Income Properties”, the Multi-Tenant Dispositions were completed during the year ended December 31, ~~2015,~~2019 comprising $56.8 million of the ~~Company entered into a real estate venture with an unaffiliated third party institutional investor, whereby~~reduction in assets held for sale. Additionally, the ~~venture acquired approximately six acres of vacant beachfront~~Westcliff property located in ~~Daytona Beach, Florida. The Company acquired its 50% interest~~Fort Worth, Texas is no longer being actively marketed and was reclassified as held and used during the quarter ended June 30, 2019 comprising $14.6 million of the reduction in ~~the real estate venture~~assets held for ~~approximately $5.7 million and served as its general partner with day-to-day management responsibilities. The venture was structured such that~~sale.

In October 2019, the Company ~~earned a base management fee and would have received a preferred interest as well as a promoted interest if certain return hurdles were achieved. The Company’s preferred interest represents~~completed the ~~first 9%~~sale of the investment return achieved at the disposition of the property. GAAP requires consolidation of a VIE in which an enterprise has a controlling financial interest and is the primary beneficiary. Upon entering into the venture described above andGolf Club. There were no assets or liabilities held for sale as of December 31, ~~2015, the Company determined it has a controlling financial interest and is the primary beneficiary; therefore, the venture~~2019.

The following is a ~~VIE~~summary of assets and ~~has been consolidated in the Company’s financial statements.~~

Asliabilities held for sale as of December 31, ~~2015, the VIE had one asset totaling $11,329,574, consisting~~2018:


	As of December 31, 2018
	Land JV Assets		Multi-Tenant Income Properties		Golf Assets		Total Assets Held for Sale
Property, Plant, and Equipment—Net	$	—	$	67,810,880	$	3,659,703	$	71,470,583
Land and Development Costs		20,139,788		—		—		20,139,788
Cash and Cash Equivalents		—		—		156,489		156,489
Restricted Cash		831,966		—		—		831,966
Other Assets		—		—		646,285		646,285
Intangible Lease Assets—Net		—		4,366,858		—		4,366,858
Intangible Lease Liabilities—Net		—		(773,705)		—		(773,705)
Total Assets Held for Sale	$	20,971,754	$	71,404,033	$	4,462,477	$	96,838,264


	As of December 31, 2018
	Land JV Liabilities		Multi-Tenant Income Properties		Golf Liabilities		Total Liabilities Held for Sale
Accounts Payable	$	—	$	—	$	199,422	$	199,422
Accrued and Other Liabilities		—		—		924,323		924,323
Deferred Revenue		831,320		—		223,551		1,054,871
Total Liabilities Held for Sale	$	831,320	$	—	$	1,347,296	$	2,178,616

Golf $1 Round Surcharge. Accrued and Other Liabilities within Liabilities Held for Sale of the six acre vacant beachfront property. During the year ended December 31, 2015, the Company contributed 50%, or $5,664,787, to the VIE for the initial property acquisition, with the other 50% contributed by the noncontrolling interest in the consolidated VIE. This consolidated venture has been accounted for in real estate operations with the inter-company management fees totaling approximately ~~$9,000 during the year ended 2015 eliminated upon consolidation.~~

$924,000 is primarily comprised of a $1 per round of golf surcharge. On ~~November 17, 2016,~~January 24, 2017, the Company acquired the ~~unaffiliated third party’s interest~~land and improvements comprising the golf courses, previously leased from the City, for approximately ~~$4.8~~$1.5 million (the “Golf Course Land Purchase”). In connection with the Golf Course Land Purchase, each year the Company is obligated to pay the City additional consideration in the amount of an annual surcharge of $1 per golf round played (the “Per-Round Surcharge”) with an annual minimum Per-Round Surcharge of $70,000 and a ~~discount~~maximum aggregate of Per-Round Surcharges of $700,000. The maximum amount of $700,000 represents contingent consideration and was recorded as an increase in Golf Buildings, Improvements, and Equipment and Accrued and Other Liabilities in the accompanying consolidated balance sheets. The first two annual payments were made in January 2018 and 2019 leaving a remaining commitment of approximately ~~$879,000.~~$560,000. In conjunction with the sale of the Golf Club in October 2019, the Company repaid its remaining $560,000 obligation to the City. As a part of the sale of the Golf Club, the buyer agreed to pay the Company approximately $560,000 in the future based on a per round surcharge of $1.50 per round for each round played at the Golf Club.

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Deferred Revenue on Land Sales. In conjunction with the land sale to Buc-ee’s in March 2018, the Company funded an escrow account for approximately $831,000 related to the portion of the acreage sold for which the Company remains obligated to perform wetlands mitigation. As a result of the Company’s continuing obligation, approximately $831,000 of the sales price collected at closing was deferred and the revenue will be recognized upon the Company’s performance of the obligation. The ~~discount was recorded through equity on~~Company estimates the ~~consolidated balance sheet during~~obligation related to the ~~quarter and year~~wetlands mitigation will total approximately $25,000.

The following is a summary of discontinued operations for the years ended December 31, ~~2016. The Company evaluated its interest in the six-acre vacant beachfront property for impairment~~2019, 2018, and ~~determined that no impairment was necessary as of December 31, 2017 and 2016. As the Company owned the entire real estate venture as of December 31, 2016, there is no longer a consolidated VIE.~~2017:

The cost basis of the six-acre vacant beachfront property asset totaled approximately $11.7 million as of December 31, 2017 which includes costs for entitlement. The beachfront property received approval of the rezoning and entitlement of the site to allow for the development of two restaurants and also for the future potential development of up to approximately 1.2 million square feet of vertical density. In the first quarter of 2017, the Company executed a 15-year lease agreement with the operator of LandShark, which provided for the development by the Company of an approximately 6,264 square foot restaurant property on the parcel. The annual rent under the LandShark lease is based on a percentage of the tenant’s net operating income (“NOI”) until the Company has received its investment basis in the property and thereafter, the Company will receive a lower percentage of the tenant’s NOI during the remaining lease term. In the second quarter of 2017, the Company executed a 15-year lease agreement with Cocina 214, for the second restaurant property to be developed on the parcel. The annual rent under the Cocina 214 lease is equal to the greater of $360,000 per year or a certain percentage of gross sales. The lease also provides for additional percentage rent upon the achievement of certain gross sales thresholds. The Company completed the design phase and commenced construction on the two restaurants during the third quarter of 2017. As of December 31, 2017, the Company has incurred approximately $5.9 million of design and construction costs. See Note 18, “Commitment and Contingencies” for the total expected cost to be incurred for the development of the site and both restaurants. The development of the two restaurant properties was completed in time for the tenants to commence operations during January of 2018. Accordingly, during the first quarter of 2018, the total investment in the beach parcel and the construction costs of the two single-tenant properties will be classified as Income Properties, Land, Building, and Improvements, within the Property, Plant, and Equipment classification on the Company’s consolidated balance sheets.


	Year Ended
	December 31, 2019		December 31, 2018		December 31, 2017
Golf Operations Revenue	$	4,096,594	$	4,941,997	$	5,095,313
Golf Operations Direct Cost of Revenues		(5,259,424)		(5,848,429)		(5,958,888)
Loss from Operations		(1,162,830)		(906,432)		(863,575)
Impairment Charges		—		(1,119,362)		—
Depreciation and Amortization		—		(373,979)		(349,259)
Gain on Disposition of Assets		15,050		—		—
Land Lease Income		—		—		2,226,526
Income (Loss) from Discontinued Operations Before Income Tax		(1,147,780)		(2,399,773)		1,013,692
Income Tax Benefit (Expense)		290,906		608,222		(391,032)
Income (Loss) from Discontinued Operations (Net of Income Tax)	$	(856,874)	$	(1,791,551)	$	622,660

Land Operations Revenue	$	11,043,151	$	43,030,713	$	47,666,408
Land Operations Direct Cost of Revenues		(6,404,844)		(10,922,539)		(16,155,784)
Loss from Operations		4,638,307		32,108,174		31,510,624
Gain on Disposition of Assets		127,518,231		—		—
Income from Discontinued Operations Before Income Tax		132,156,538		32,108,174		31,510,624
Income Tax Expense		(32,932,100)		(8,137,818)		(12,155,225)
Income from Discontinued Operations (Net of Income Tax)	$	99,224,438	$	23,970,356	$	19,355,399

Total Income from Discontinued Operations (Net of Income Tax)	$	98,367,564	$	22,178,805	$	19,978,059

NOTE ~~21.~~24. SUBSEQUENT EVENTS

The Company reviewed all subsequent events and transactions that have occurred after December 31, ~~2017,~~2019, the date of the consolidated balance sheet.

~~During the first quarter of 2018,~~Income Property Acquisitions. On January 23, 2020, the Company ~~expanded~~acquired the ~~commitment under its Credit Facility to $130.0 million, providing~~Crossroads Towne Center (“Crossroads”), an ~~additional capacity~~approximately 254,000 square-foot retail center in Chandler, Arizona, for a purchase price of approximately ~~$60.0 million, based~~$61.8 million. The acquisition was purchased using the remaining 1031 like-kind exchange proceeds from the Land JV transaction and a portion of the 1031 like-kind exchange proceeds from the PINE Income Property Sale Transactions.

On February 21, 2020, the Company acquired Perimeter Place (“Perimeter”), an approximately 269,000 square foot retail center situated on ~~the outstanding balance as~~over 24 acres of ~~December 31, 2017~~land in Atlanta, Georgia, for a purchase price of approximately ~~$70.0~~$75.4 million.

The acquisition was purchased using the remaining approximately $65 million of 1031 like-kind exchange proceeds from the PINE Income Property Sale Transactions. The balance of the purchase price was funded using the Company’s line of credit and structured as a reverse 1031 like-kind exchange in order to account for possible future dispositions of income properties by the Company.

~~F-52~~F-56

Table of Contents

Commercial Loan Investments. On January 13, 2020, the Company originated a $3.5 million first mortgage loan secured by the fee simple interest in a redevelopment property located in Honolulu, Hawaii. The loan is interest-only with a term of one-year with a fixed interest rate of 11.0%. The Company received an origination fee of 2%, or $70,000.

On February ~~21, 2018,~~28, 2020, the Company ~~acquired~~originated an approximately $3.4 million first mortgage loan secured by property sold by the Land JV of approximately 12 acres, which consisted of a ~~19,596-square foot, newly constructed commercial building~~land sale and conveyance of certain interests. The loan is interest-only with a term of one-year with a fixed interest rate of 9.50%. The Company received an origination fee of 1.5%, or approximately $51,000.

Convertible Notes. On February 4, 2020, the Company closed privately negotiated exchange agreements with certain holders of its outstanding 4.50% Convertible Senior Notes due 2020 (the ~~“Aspen Property”~~“2020 Notes”) ~~located~~pursuant to which the Company issued $57.4 million principal amount of 3.875% Convertible Senior Notes due 2025 (the “2025 Notes”) in ~~downtown Aspen, Colorado~~exchange for $57.4 million principal amount of the 2020 Notes (the “Note Exchanges”). In addition, the Company closed a privately negotiated purchase agreement with an investor, who had not invested in the 2020 Notes, and issued approximately ~~$28~~$17.6 million principal amount of the 2025 Notes (the “New Notes Placement,” and together with the ~~Company’s net investment totaling approximately $26.5 million after giving affect for contributions made by~~Note Exchanges, the ~~Master Tenant. Simultaneously with the closing, the Company entered a twenty-year master lease on the Aspen Property with a Dallas, Texas based family office (the “Master Tenant”~~“Convert Transactions”). The ~~lease includes annual rent escalations, tenant~~Company used approximately $5.9 million of the proceeds from the New Notes Placement to repurchase ~~options and~~approximately $5.9 million of the 2020 Notes. As a result of the Convert Transactions there is ~~absolute net~~a total of $75 million of outstanding 2025 Notes.

In exchange for issuing the 2025 Notes pursuant to the ~~Company.~~Note Exchanges, the Company received and cancelled the exchanged 2020 Notes. The $11.7 million of net proceeds from the New Notes Placement will be used to redeem at maturity on March 15, 2020 approximately $11.7 million of the aggregate principal amount of the 2020 Notes that remain outstanding.

The 2025 Notes represent senior unsecured obligations of the Company and pay interest semi-annually in arrears on each April 15th and October 15th, commencing on April 15, 2020, at a rate of 3.875% per annum. The 2025 Notes mature on April 15, 2025 and may not be redeemed by the Company prior to the maturity date. The conversion rate for the 2025 Notes is initially 12.7910 shares of the Company’s common stock per $1,000 of principal of the 2025 Notes (equivalent to an initial conversion price of approximately $78.18 per share of the Company’s common stock). The initial conversion price of the 2025 Notes represents a premium of approximately 20% to the $65.15 closing sale price of the Company’s common stock on the NYSE American on January 29, 2020. The 2025 Notes are convertible into cash, common stock or a combination thereof, subject to various conditions, at the Company’s option. Should certain corporate transactions or events occur prior to the stated maturity date, the Company will increase the conversion rate for a holder that elects to convert its 2025 Notes in connection with such corporate transaction or event.

There were no other reportable subsequent events or transactions.

~~F-53~~F-57

Table of Contents

NOTE ~~22.~~25. QUARTERLY FINANCIAL DATA

QUARTERLY FINANCIAL DATA

(UNAUDITED)


	March 31,				June 30,				September 30,				December 31,				March 31,				June 30,				September 30,				December 31,
	2017		2016		2017		2016		2017		2016		2017		2016		2019		2018		2019		2018		2019		2018		2019		2018
Revenues
Income Properties	$	7,073,240	$	6,429,241	$	7,565,007	$	6,033,082	$	7,928,258	$	6,021,331	$	8,840,425	$	6,608,830	$	10,724,418	$	9,205,727	$	10,375,295	$	9,781,299	$	10,260,831	$	9,360,155	$	10,594,870	$	11,728,550
Management Fee Income																		—		—		—		—		—		—		304,553		—
Interest Income from Commercial Loan Investments		536,489		881,245		553,159		635,050		637,801		534,212		325,240		537,728		—		300,999		52,765		273,467		855,559		41,262		920,691		—
Real Estate Operations		29,474,460		9,560,898		13,257,355		4,774,620		2,926,406		4,643,646		6,864,334		19,165,183		234,901		862,450		260,771		750,296		213,589		1,042,059		143,003		311,624
Golf Operations		1,474,944		1,464,359		1,383,513		1,412,196		797,420		1,001,368		1,439,436		1,312,471
Agriculture and Other Income		154,151		18,692		78,749		18,990		90,717		10,388		11,187		11,331
Total Revenues		38,713,284		18,354,435		22,837,783		12,873,938		12,380,602		12,210,945		17,480,622		27,635,543		10,959,319		10,369,176		10,688,831		10,805,062		11,329,979		10,443,476		11,963,117		12,040,174
Direct Cost of Revenues
Income Properties		(1,411,713)		(1,176,707)		(1,629,515)		(1,204,040)		(1,715,516)		(1,430,642)		(2,160,999)		(1,393,474)		(1,932,488)		(1,869,029)		(1,634,720)		(2,034,889)		(1,476,288)		(1,773,840)		(1,956,505)		(2,492,325)
Real Estate Operations		(9,156,849)		(2,257,041)		(5,792,529)		(1,124,641)		(459,169)		(1,257,183)		(2,071,650)		(10,242,446)		(46,167)		(144,983)		(40,129)		(123,418)		(8,484)		(215,534)		(9,886)		(107,445)
Golf Operations		(1,498,678)		(1,404,588)		(1,401,919)		(1,447,176)		(1,272,647)		(1,302,920)		(1,785,644)		(1,432,393)
Agriculture and Other Income		(40,437)		(48,051)		(30,536)		(52,654)		(18,874)		(52,894)		(6,302)		(13,170)
Total Direct Cost of Revenues		(12,107,677)		(4,886,387)		(8,854,499)		(3,828,511)		(3,466,206)		(4,043,639)		(6,024,595)		(13,081,483)		(1,978,655)		(2,014,012)		(1,674,849)		(2,158,307)		(1,484,772)		(1,989,374)		(1,966,391)		(2,599,770)
General and Administrative Expenses		(3,220,147)		(4,797,457)		(2,727,187)		(1,899,126)		(1,995,512)		(1,821,827)		(2,309,764)		(1,779,467)		(2,501,620)		(2,823,548)		(2,119,176)		(2,429,181)		(2,260,728)		(1,928,008)		(2,936,551)		(2,604,633)
Impairment Charges		—		(209,908)		—		(1,970,822)		—		—		—		—
Depreciation and Amortization		(2,762,575)		(2,067,367)		(3,215,690)		(1,805,559)		(3,161,169)		(1,945,460)		(3,524,525)		(2,377,031)		(3,346,287)		(3,796,823)		(4,074,587)		(3,755,546)		(4,286,836)		(3,756,507)		(4,089,568)		(4,452,647)
Total Operating Expenses																		(7,826,562)		(8,634,383)		(7,868,612)		(8,343,034)		(8,032,336)		(7,673,889)		(8,992,510)		(9,657,050)
Gain (Loss) on Disposition of Assets		—		—		—		1,362,948		(266)		11,479,490		304		(83,668)		6,869,957		3,650,858		11,811,907		18,384,808		2,187,332		—		1,108,269		—
Land Lease Income		2,226,526		—		—		—		—		—		—		—
Total Operating Expenses		(15,863,873)		(11,961,119)		(14,797,376)		(8,141,070)		(8,623,153)		3,668,564		(11,858,580)		(17,321,649)
Operating Income		22,849,411		6,393,316		8,040,407		4,732,868		3,757,449		15,879,509		5,622,042		10,313,894		10,002,714		5,385,651		14,632,126		20,846,836		5,484,975		2,769,587		4,078,876		2,383,124
Investment Income (Loss)		9,183		(566,384)		8,524		2,691		9,724		2,531		10,554		31,181
Investment Income																		38,755		12,312		14,560		11,892		33,048		14,179		258,480		13,838
Interest Expense		(2,061,891)		(2,091,766)		(2,144,176)		(2,154,437)		(2,073,299)		(2,454,390)		(2,243,770)		(2,052,745)		(2,923,229)		(2,561,465)		(3,042,058)		(2,537,301)		(3,253,908)		(2,345,156)		(3,246,867)		(2,979,364)
Income Before Income Tax Benefit (Expense)		20,796,703		3,735,166		5,904,755		2,581,122		1,693,874		13,427,650		3,388,826		8,292,330
Income Tax Benefit (Expense)		(8,050,311)		(2,342,601)		(2,225,847)		(1,000,480)		(726,974)		(5,281,646)		20,938,398		(3,212,127)
Income from Continuing Operations Before Income Tax Benefit (Expense)																		7,118,240		2,836,498		11,604,628		18,321,427		2,264,115		438,610		1,090,489		(582,402)
Income Tax Benefit (Expense) from Continuing Operations																		(1,774,640)		(585,068)		(2,941,213)		(4,645,012)		(573,731)		(153,550)		(182,594)		(641,518)
Income from Continuing Operations																		5,343,600		2,251,430		8,663,415		13,676,415		1,690,384		285,060		907,895		(1,223,920)
Income (Loss) from Discontinued Operations (Net of Tax)																		1,124,499		8,660,869		1,933,385		486,493		(204,364)		11,112		95,514,044		13,020,331
Net Income		12,746,392		1,392,565		3,678,908		1,580,642		966,900		8,146,004		24,327,224		5,080,203	$	6,468,099	$	10,912,299	$	10,596,800	$	14,162,908	$	1,486,020	$	296,172	$	96,421,939	$	11,796,411
Less: Net Loss (Income) Attributable to Noncontrolling Interest in Consolidated VIE		—		32,153		—		(10,199)		—		15,010				14,870
Net Income Attributable to Consolidated-Tomoka Land Co.	$	12,746,392	$	1,424,718	$	3,678,908	$	1,570,443	$	966,900	$	8,161,014	$	24,327,224	$	5,095,073

Per Share Information:
Basic
Net Income Attributable to Consolidated-Tomoka Land Co.	$	2.28	$	0.25	$	0.67	$	0.28	$	0.18	$	1.44	$	4.42	$	0.91
Income from Continuing Operations																	$	1.00	$	0.40	$	1.75	$	2.47	$	0.35	$	0.05	$	0.19	$	(0.23)
Income (Loss) from Discontinued Operations (Net of Tax)																		0.21		1.57		0.39		0.09		(0.04)		-		19.86		2.40
Net Income																	$	1.21	$	1.97	$	2.14	$	2.56	$	0.31	$	0.05	$	20.05	$	2.17

Diluted
Net Income Attributable to Consolidated-Tomoka Land Co.	$	2.27	$	0.25	$	0.66	$	0.28	$	0.18	$	1.44	$	4.38	$	0.90
Income from Continuing Operations																	$	1.00	$	0.40	$	1.75	$	2.47	$	0.35	$	0.05	$	0.19	$	(0.23)
Income (Loss) from Discontinued Operations (Net of Tax)																		0.21		1.56		0.39		0.09		(0.04)		-		19.85		2.40
Net Income																	$	1.21	$	1.96	$	2.14	$	2.56	$	0.31	$	0.05	$	20.04	$	2.17

~~F-54~~F-58

Table of Contents

SCHEDULE III

REAL ESTATE AND ACCUMULATED DEPRECIATION

FOR THE YEAR ENDED DECEMBER 31, ~~2017~~2019

Costs Capitalized

Subsequent to

Initial Cost to Company

Acquisition

Buildings &

Carrying

Description

Encumbrances

Land

Improvements

Improvements

Costs

$

$

$

$

$

Income Properties:

3600 Peterson, Santa Clara, CA

—

17,855,023

8,414,925

—

—

7-Eleven, Inc., Dallas, TX

—

974,862

1,550,744

—

—

At Home, Raleigh, NC

—

2,118,420

5,774,284

—

—

Bank of America, Monterey, CA

—

4,458,840

—

—

—

Barnes & Noble, Daytona Beach, FL

—

1,798,600

3,803,000

—

—

Best Buy, McDonough, GA

—

2,622,682

3,150,000

82,264

—

Big Lots, Germantown, MD

3,300,000

1,781,918

2,951,231

—

—

Big Lots, Phoenix, AZ

3,400,000

1,715,717

3,050,164

—

—

Carrabba's Italian Grill, Austin, TX

—

1,160,925

1,305,117

—

—

Century Theatre, Reno, NV

—

1,669,377

4,484,938

11,140

—

Container Store, Glendale, AZ

—

1,968,398

5,493,102

—

—

CVS, Dallas, TX

—

7,535,013

—

—

—

Dick's Sporting Goods, McDonough, GA

—

3,934,022

4,725,000

—

—

Harris Teeter Supermarket, Charlotte, NC

6,600,000

5,601,837

3,409,338

—

—

Hilton Grand Vacations (Office), Orlando, FL

—

2,810,942

6,590,681

20,188

—

Hilton Grand Vacations (Office), Orlando, FL

—

1,210,138

2,453,690

282,099

—

Joann's, Saugus, MA

—

1,574,594

4,769,946

—

—

LA Fitness, Brandon, FL

—

3,208,889

9,677,636

—

—

Lowe's, Katy, TX

8,500,000

9,412,181

3,480,650

—

—

Maple Ave Land, Dallas, TX

—

359,116

—

—

—

Outback Steakhouse, Austin, TX

—

1,376,793

1,585,791

��—

—

Outback Steakhouse, Charlottesville, VA

—

1,308,881

3,135,515

—

—

Outback steakhouse, Huntersville, NC

—

1,987,831

1,299,017

—

—

Rite Aid, Renton, WA

4,700,000

2,036,235

4,148,415

—

—

Riverside, Jacksonville, FL

—

6,019,815

14,239,515

264,128

—

Staples, Sarasota, FL

—

2,728,083

1,145,137

—

—

The Grove, Winter Park, FL

—

1,240,000

1,860,000

8,431,336

—

Walgreens, Alpharetta, GA

—

3,265,623

1,406,160

—

—

Walgreens, Clermont, FL

3,500,000

3,021,665

1,269,449

—

—

Wells Fargo, Hillsboro, OR

—

10,005,650

25,902,632

—

—

Wells Fargo, Raleigh, NC

25,000,000

8,680,056

59,166,753

241,641

—

Westcliff, Fort Worth, TX

—

10,520,822

4,196,359

—

—

Whole Foods Market Centre, Sarasota, FL

—

4,497,825

13,104,352

274,085

—

Mason Commerce Center-Bldg 1, Daytona Beach, FL

—

66,304

1,277,027

1,064,124

—

Mason Commerce Center-Bldg 2, Daytona Beach, FL

—

66,304

1,277,027

913,032

—

Williamson Business Park-Bldg 3, Daytona Beach, FL

—

110,509

1,008,784

986,104

—

Concierge Office Building, Daytona Beach, FL

—

293,872

2,862,171

157,497

—

Vacant Pad Site, Winter Park, FL

—

436,400

—

—

—

55,000,000

131,434,162

213,968,550

12,727,638

—



				Costs Capitalized
		Initial Cost to Company		Subsequent to Acquisition
			Buildings &		Carrying
Description	Encumbrances	Land	Improvements	Improvements	Costs
	$	$	$	$	$
Income Properties:
24 Hour Fitness USA, Inc., Falls Church, VA	—	7,308,225	11,559,506	—	—
7-Eleven, Dallas, TX	—	974,862	1,550,744	—	—
Aspen Development, Aspen, CO	—	11,973,930	14,968,210	—	—
Bank of America, Monterey, CA	—	4,458,840	—	—	—
Wawa (formerly Barnes & Noble), Daytona Beach, FL	—	1,798,600	3,803,000	—	—
Big Lots, Germantown, MD	3,300,000	1,781,918	2,951,231	6,750	—
Big Lots, Phoenix, AZ	3,400,000	1,715,717	3,050,164	—	—
Burlington Stores, Inc., N. Richland Hills, TX	—	3,915,679	7,028,945	—	—
Carrabba's Italian Grill, Austin, TX	—	1,160,925	1,305,117	—	—
Chuy's Restaurant & Bar, Jacksonville, FL	—	5,504,039	—	—	—
Crabby's Restaurant (formerly Cocina 214), Daytona Beach, FL	—	5,835,939	4,249,199	8,662	—
General Dynamics Corporation, Reston, VA	—	7,530,432	9,068,274	—	—
CVS, Dallas, TX	—	7,535,013	—	—	—
Fidelity Investments (affiliate of), Albuquerque, NM	—	5,751,131	29,537,069	—	—
Firebirds Woodfired Grill, Jacksonville, FL	—	4,202,924	—	—	—
Harris Teeter, Charlotte, NC	6,600,000	5,601,837	3,409,338	—	—
JPMorgan Chase Bank, Jacksonville, FL	—	4,516,486	—	—	—
LandShark Bar & Grill, Daytona Beach, FL	—	5,835,939	4,578,168	8,662	—
Lowe's Corporation, Katy, TX	8,500,000	9,412,181	3,480,650	—	—
Macaroni Grill, Arlington, TX	—	956,685	1,069,700	—	—
Maple Ave Land, Dallas, TX	—	359,116	—	—	—
Moe's Southwest Grill, Jacksonville, FL	—	1,862,284	—	—	—
Outback Steakhouse, Austin, TX	—	1,376,793	1,585,791	—	—
Party City Corporation, Oceanside, NY	—	2,964,507	3,288,786	—	—
PDQ, Jacksonville, FL	—	2,205,539	—	—	—
Rite Aid Corp., Renton, WA	4,700,000	2,036,235	4,148,415	—	—
Riverside Avenue, Jacksonville, FL	—	6,019,815	14,239,515	767,532	—
Staples, Sarasota, FL	—	2,728,083	1,145,137	—	—
The Strand, Jacksonville, FL	—	13,886,294	38,832,707	—	—
Walgreens, Clermont, FL	3,500,000	3,021,665	1,269,449	—	—
Wawa, Jacksonville, FL	—	6,252,632	—	—	—
Wells Fargo, Raleigh, NC	23,884,373	8,680,056	59,166,753	1,186,118	—
Westcliff Shopping Center, Fort Worth, TX	—	10,520,822	4,196,359	95,464	—
World of Beer/Fuzzy's Taco Shop, Brandon, FL	—	416,663	1,184,678	—	—
	53,884,373	160,101,806	230,666,905	2,073,188	—

~~F-55~~F-59

Table of Contents

Gross Amount at Which

Carried at Close of Period

December 31, ~~2017~~2019

Land

Buildings

Total

Accumulated Depreciation

Date of Completion of Construction

Date Acquired

Life

$

$

$

$

Income Properties:

3600 Peterson, Santa Clara, CA

17,855,023

8,414,925

26,269,948

718,307

N/A

10/14/16

30 Yrs.

7-Eleven, Inc., Dallas, TX

974,862

1,550,744

2,525,606

71,076

N/A

02/18/16

40 Yrs.

At Home, Raleigh, NC

2,118,420

5,774,284

7,892,704

429,700

N/A

09/29/16

20 Yrs

Bank of America, Monterey, CA

4,458,840

—

4,458,840

—

N/A

08/17/16

N/A

Barnes & Noble, Daytona Beach, FL

1,798,600

3,803,000

5,601,600

1,616,275

N/A

12/15/05

40 Yrs.

Best Buy, McDonough, GA

2,622,682

3,232,264

5,854,946

915,616

N/A

06/15/06

40 Yrs.

Big Lots, Germantown, MD

1,781,918

2,951,231

4,733,149

319,717

N/A

09/13/13

40 Yrs.

Big Lots, Phoenix, AZ

1,715,717

3,050,164

4,765,881

374,916

N/A

01/23/13

40 Yrs.

Carrabba's Italian Grill, Austin, TX

1,160,925

1,305,117

2,466,042

88,026

N/A

09/15/16

25 Yrs

Century Theatre, Reno, NV

1,669,377

4,496,078

6,165,455

260,643

N/A

11/30/16

23 Yrs

Container Store, Glendale, AZ

1,968,398

5,493,102

7,461,500

335,042

N/A

05/18/15

55 Yrs.

CVS, Dallas, TX

7,535,013

—

7,535,013

—

N/A

09/22/16

N/A

Dick's Sporting Goods, McDonough, GA

3,934,022

4,725,000

8,659,022

1,368,280

N/A

06/15/06

40 Yrs.

Harris Teeter Supermarket, Charlotte, NC

5,601,837

3,409,338

9,011,175

831,026

N/A

04/17/08

40 Yrs.

Hilton Grand Vacations (Office), Orlando, FL

2,810,942

6,610,869

9,421,811

804,368

N/A

01/30/13

40 Yrs.

Hilton Grand Vacations (Office), Orlando, FL

1,210,138

2,735,789

3,945,927

328,545

N/A

01/30/13

40 Yrs.

Joann's, Saugus, MA

1,574,594

4,769,946

6,344,540

97,692

N/A

04/06/17

50 Yrs.

LA Fitness, Brandon, FL

3,208,889

9,677,636

12,886,525

271,310

N/A

04/28/17

30 Yrs.

Lowe's, Katy, TX

9,412,181

3,480,650

12,892,831

491,997

N/A

04/22/14

30 Yrs.

Maple Ave Land, Dallas, TX

359,116

—

359,116

—

N/A

03/17/17

N/A

Outback Steakhouse, Austin, TX

1,376,793

1,585,791

2,962,584

91,270

N/A

09/15/16

30 Yrs.

Outback Steakhouse, Charlottesville, VA

1,308,881

3,135,515

4,444,396

161,768

N/A

09/15/16

30 Yrs.

Outback steakhouse, Huntersville, NC

1,987,831

1,299,017

3,286,848

109,046

N/A

09/15/16

20 Yrs.

Rite Aid, Renton, WA

2,036,235

4,148,415

6,184,650

458,054

N/A

07/25/13

40 Yrs.

Riverside, Jacksonville, FL

6,019,815

14,503,643

20,523,458

1,601,471

N/A

07/16/15

43 Yrs.

Staples, Sarasota, FL

2,728,083

1,145,137

3,873,220

52,584

N/A

01/27/17

40 Yrs.

The Grove, Winter Park, FL

1,240,000

10,291,336

11,531,336

439,199

N/A

12/30/14

40 Yrs.

Walgreens, Alpharetta, GA

3,265,623

1,406,160

4,671,783

483,368

N/A

03/31/04

40 Yrs.

Walgreens, Clermont, FL

3,021,665

1,269,449

4,291,114

431,084

N/A

05/27/04

40 Yrs.

Wells Fargo, Hillsboro, OR

10,005,650

25,902,632

35,908,282

226,204

N/A

10/27/17

35 Yrs.

Wells Fargo, Raleigh, NC

8,680,056

59,408,394

68,088,450

4,198,411

N/A

11/18/15

45 Yrs.

Westcliff, Fort Worth, TX

10,520,822

4,196,359

14,717,181

338,105

N/A

03/01/17

10 Yrs.

Whole Foods Market Centre, Sarasota, FL

4,497,825

13,378,437

17,876,262

1,099,829

N/A

10/07/14

40 Yrs.

Mason Commerce Center-Bldg 1, Daytona Beach, FL

66,304

2,341,151

2,407,455

948,544

09/01/08

N/A

40 Yrs.

Mason Commerce Center-Bldg 2, Daytona Beach, FL

66,304

2,190,059

2,256,363

843,737

09/01/08

N/A

40 Yrs.

Williamson Business Park-Bldg 3, Daytona Beach, FL

110,509

1,994,888

2,105,397

157,395

05/01/14

N/A

40 Yrs.

Concierge Office Building, Daytona Beach, FL

293,872

3,019,668

3,313,540

915,860

07/01/09

N/A

40 Yrs.

Vacant Pad Site, Winter Park, FL

436,400

—

436,400

—

N/A

05/28/15

N/A

131,434,162

226,696,188

358,130,350

21,878,465


	Land	Buildings	Total		Accumulated Depreciation	Date of Completion of Construction	Date Acquired	Life
	$	$	$		$
Income Properties:
24 Hour Fitness USA, Inc., Falls Church, VA	7,308,225	11,559,506	18,867,731		201,852	N/A	10/14/16	30 Yrs.
7-Eleven, Dallas, TX	974,862	1,550,744	2,525,606		148,613	N/A	02/18/16	40 Yrs.
Aspen Development, Aspen, CO	11,973,930	14,968,210	26,942,140		583,973	N/A	02/21/18	52 Yrs.
Bank of America, Monterey, CA	4,458,840	—	4,458,840		—	N/A	08/17/16	N/A
Wawa (formerly Barnes & Noble), Daytona Beach, FL	1,798,600	3,803,000	5,601,600		1,806,425	N/A	12/15/05	40 Yrs.
Big Lots, Germantown, MD	1,781,918	2,957,981	4,739,899		468,403	N/A	09/13/13	40 Yrs.
Big Lots, Phoenix, AZ	1,715,717	3,050,164	4,765,881		527,424	N/A	01/23/13	40 Yrs.
Burlington Stores, Inc., N. Richland Hills, TX	3,915,679	7,028,945	10,944,624		57,361	N/A	10/28/19	30 Yrs.
Carrabba's Italian Grill, Austin, TX	1,160,925	1,305,117	2,466,042		220,066	N/A	09/15/16	25 Yrs.
Chuy's Restaurant & Bar, Jacksonville, FL	5,504,039	—	5,504,039		—	N/A	10/10/18	N/A
Crabby's Restaurant (formerly Cocina 214), Daytona Beach, FL	5,835,939	4,257,861	10,093,800		434,517	01/25/18	N/A	40 Yrs.
General Dynamics Corporation, Reston, VA	7,530,432	9,068,274	16,598,706		243,267	N/A	07/12/19	35 Yrs.
CVS, Dallas, TX	7,535,013	—	7,535,013		—	N/A	09/22/16	N/A
Fidelity Investments (affiliate of), Albuquerque, NM	5,751,131	29,537,069	35,288,200		1,405,493	N/A	10/04/18	45 Yrs.
Firebirds Woodfired Grill, Jacksonville, FL	4,202,924	—	4,202,924		—	N/A	10/10/18	N/A
Harris Teeter, Charlotte, NC	5,601,837	3,409,338	9,011,175		1,001,493	N/A	04/17/08	40 Yrs.
JPMorgan Chase Bank, Jacksonville, FL	4,516,486	—	4,516,486		—	N/A	10/10/18	N/A
LandShark Bar & Grill, Daytona Beach, FL	5,835,939	4,586,830	10,422,769		422,800	01/25/18	N/A	40 Yrs.
Lowe's Corporation, Katy, TX	9,412,181	3,480,650	12,892,831		758,345	N/A	04/22/14	30 Yrs.
Macaroni Grill, Arlington, TX	956,685	1,069,700	2,026,385		54,714	N/A	12/20/18	30 Yrs.
Maple Ave Land, Dallas, TX	359,116	—	359,116		—	N/A	03/17/17	N/A
Moe's Southwest Grill, Jacksonville, FL	1,862,284	—	1,862,284		—	N/A	10/10/18	N/A
Outback Steakhouse, Austin, TX	1,376,793	1,585,791	2,962,584		228,176	N/A	09/15/16	30 Yrs.
Party City Corporation, Oceanside, NY	2,964,507	3,288,786	6,253,293		26,376	N/A	09/24/19	35 Yrs.
PDQ, Jacksonville, FL	2,205,539	—	2,205,539		—	N/A	10/10/18	N/A
Rite Aid Corp., Renton, WA	2,036,235	4,148,415	6,184,650		665,475	N/A	07/25/13	40 Yrs.
Riverside Avenue, Jacksonville, FL	6,019,815	15,007,047	21,026,862		2,866,175	N/A	07/16/15	43 Yrs.
Staples, Sarasota, FL	2,728,083	1,145,137	3,873,220		167,313	N/A	01/27/17	40 Yrs.
The Strand, Jacksonville, FL	13,886,294	38,832,707	52,719,001		123,295	N/A	12/09/19	48 Yrs.
Walgreens, Clermont, FL	3,021,665	1,269,449	4,291,114		494,556	N/A	05/27/04	40 Yrs.
Wawa, Jacksonville, FL	6,252,632	—	6,252,632		—	N/A	10/10/18	N/A
Wells Fargo, Raleigh, NC	8,680,056	60,352,871	69,032,927		8,309,888	N/A	11/18/15	45 Yrs.
Westcliff Shopping Center, Fort Worth, TX	10,520,822	4,291,823	14,812,645		1,203,607	N/A	03/01/17	10 Yrs.
World of Beer/Fuzzy's Taco Shop, Brandon, FL	416,663	1,184,678	1,601,341		132,109	N/A	04/28/17	30 Yrs.
	160,101,806	232,740,093	392,841,899	(1)	22,551,716

⁽¹⁾

The aggregate cost, net of deferred tax liabilities, of Income Properties, Land, Buildings, and Improvements for Federal income tax purposes at December 31, 2019 is approximately $231.0 million.

~~F-56~~F-60

Table of Contents

REAL ESTATE AND ACCUMULATED DEPRECIATION

FOR THE YEAR ENDED DECEMBER 31, ~~2017~~2019


	2017	2016	2015	2019	2018	2017
	$	$	$	$	$	$
Cost:
Balance at Beginning of Year	274,334,139	268,970,875	209,294,277	463,703,673	358,130,350	274,334,139
Additions and Improvements	83,796,211	68,274,211	97,767,725	130,004,868	104,043,734	83,796,211
Adjust to Fair Value	—	—	(2,343,013)
Cost of Real Estate Sold	—	(62,910,947)	(20,431,548)	(200,866,642)	(10,142,289)	—
Reclassification to Land and Development Costs	—	—	(15,316,566)
Reclassification from Land and Development Costs				—	11,671,878	—
Balance at End of Year	358,130,350	274,334,139	268,970,875	392,841,899	463,703,673	358,130,350

	$	$	$	$	$	$
Accumulated Depreciation:
Balance at Beginning of Year	14,391,567	14,374,079	14,073,096	28,732,504	21,878,465	14,391,567
Depreciation and Amortization	7,486,898	5,346,538	3,224,227	9,891,813	9,827,154	7,486,898
Depreciation on Real Estate Sold	—	(5,329,050)	(2,472,192)	(16,072,601)	(2,973,115)	—
Reclassification to Land and Development Costs	—	—	(451,052)
Balance at End of Year	21,878,465	14,391,567	14,374,079	22,551,716	28,732,504	21,878,465

(1) Reconciliation to Consolidated Balance Sheet at December 31, 2017
(1) Reconciliation to Consolidated Balance Sheet at December 31, 2019
Income Properties, Land, Buildings, and Improvements			358,130,350			392,841,899
			358,130,350			392,841,899
(2) Cost Basis of Assets Classified as Held for Sale on Balance Sheet			—			—
Total Per Schedule			358,130,350			392,841,899

~~F-57~~F-61

Table of Contents

SCHEDULE IV

MORTGAGE LOANS ON REAL ESTATE

FOR THE YEAR ENDED DECEMBER 31, ~~2017~~2019

There were four commercial loan investments as of December 31, 2019.


Description	Interest Rate	Final Maturity Date	Periodic Payment Terms	Prior Liens	Face Amount of Mortgages	Carrying Amounts of Mortgages	Principal Amount of Loans Subject to Delinquent Principal or Inter	Interest Rate	Final Maturity Date	Periodic Payment Terms	Prior Liens	Face Amount of Mortgages	Carrying Amounts of Mortgages	Principal Amount of Loans Subject to Delinquent Principal or Interest
	%			$	$	$	$	%			$	$	$	$
Junior Mortgage Loan:
Retail Shopping Center – Sarasota, FL	30-day LIBOR plus 7.50%	June 2018	Principal payable in full at maturity	—	8,960,467	8,960,467	—
Ground Lease Loan:
Carpenter Hotel-400 Josephine Street, Austin, TX								N/A	N/A	Monthly Rent Payments	—	16,250,000	16,443,942	—
First Mortgage:
Land Parcel - Daytona Beach, FL	11.00%	July 2018	Principal payable in full at maturity	—	3,000,000	2,965,232	—
72-Acre Land Parcel, Orlando, FL								12.00%	June 2020	Principal payable in full at maturity	—	8,000,000	7,927,869	—
Mortgage Note-400 Josephine Street, Austin, TX								11.50%	July 2020	Principal payable in full at maturity	—	8,250,000	8,207,964	—
LPGA Golf Loan-Daytona Beach, FL								7.50%	October 2020	Principal payable in full at maturity	—	2,070,000	2,045,398	—
Totals				—	11,960,467	11,925,699	—				—	34,570,000	34,625,173	—

The following represents the activity within the Company’s commercial loan investment segment for the years ended December 31, 2019, 2018, and 2017:


	2017	2016	2015	2019	2018	2017
	$	$	$	$	$	$
Balance at Beginning of Year	23,960,467	38,331,956	30,208,074	—	11,925,699	23,960,467
Additions During the Year:
New Mortgage Loans ~~(1)~~	��3,000,000	—	15,394,878	34,570,000	—	3,000,000
Loan Fees Paid	—	—	40,000
Accretion of Origination Fees (2)	(34,768)	132,923	74,781
Accretion of Origination Fees (1)				(138,770)	34,768	(34,768)
Imputed Interest Over Rent Payments on Ground Lease Loan				193,943	—	—
Deductions During the Year:
Collection of Principal	(15,000,000)	(14,282,500)	(7,200,909)	—	(11,960,467)	(15,000,000)
Discount on Payoff	—	(217,500)	—
Collection of Origination Fees	—	—	(181,250)
Amortization of Fees	—	(4,412)	(3,618)
Balance at End of Year	11,925,699	23,960,467	38,331,956	34,625,173	—	11,925,699

⁽¹⁾

~~Includes 2015 construction loan draws~~

⁽²⁾

Non-cash accretion of loan origination fees

~~F-58~~F-62


					Gross Sales				Gain
			Date of	No. of	Price (1)		Price		on Sale
	Buyer (or Description)	Location	Sale	Acres	($000's)		per Acre		($000's)
1	Minto Communities, LLC	West of I-95	02/10/17	1,581.0	$	27,151	$	17,000	$	20,041
2	Commercial	East of I-95	03/22/17	6.4		1,556		245,000		11
3	Commercial	East of I-95	04/05/17	27.5		3,218		117,000		2,955
4	Commercial	East of I-95	04/13/17	4.5		1,235		274,000		13
5	Commercial	West of I-95	04/25/17	30.0		2,938		98,000		627
6	Third NADG Land Sale	East of I-95	06/27/17	19.4		4,422		228,000		3,263
7	Commercial	West of I-95	10/13/17	5.1		275		54,000		239
8	Fourth NADG Land Sale	East of I-95	12/29/17	27.0		6,216		230,000		4,609
				1,700.9	$	47,011	$	28,000	$	31,758


	No. of	Total Proceeds
Year	Acres	($ in millions)
2012	16.6	$	0.6
2013	11.7	$	3.0
2014	99.7	$	8.8
2015	114.1	$	22.5
2016	707.7	$	13.8
2017	1,700.9	$	47.0


	Consolidated-Tomoka Land Co. Shareholders
											Total
											Consolidated-
									Accumulated		Tomoka		Noncontrolling
					Additional				Other		Land Co.		Interest in		Total
	Common		Treasury		Paid-In		Retained		Comprehensive		Shareholders’		Consolidated		Shareholders'
	Stock		Stock		Capital		Earnings		Income (Loss)		Equity		VIE		Equity
Balance January 1, 2015	$	5,862,063	$	(1,381,566)	$	11,289,846	$	112,561,115	$	73,241	$	128,404,699	$	—	$	128,404,699
Net Income (Loss)		—		—		—		8,347,166		—		8,347,166		(57,849)		8,289,317
Contributions from Noncontrolling Interest in Consolidated VIE		—		—		—		—		—		—		5,664,787		5,664,787
Stock Repurchase		—		(6,484,844)		—		—		—		(6,484,844)		—		(6,484,844)
Equity Component of Convertible Debt		—		—		2,130,002		—		—		2,130,002		—		2,130,002
Exercise of Stock Options		33,455		—		1,062,405		—		—		1,095,860		—		1,095,860
Vested Restricted Stock		5,348		—		(25,509)		—		—		(20,161)		—		(20,161)
Stock Issuance		644		—		34,258		—		—		34,902		—		34,902
Stock Compensation Expense from Restricted Stock Grants and Equity Classified Stock Options		—		—		2,500,255		—		—		2,500,255		—		2,500,255
Cash Dividends ($0.08 per share)		—		—		—		(464,279)		—		(464,279)		—		(464,279)
Other Comprehensive Loss, Net of Income Tax		—		—		—		—		(762,212)		(762,212)		—		(762,212)
Balance December 31, 2015		5,901,510		(7,866,410)		16,991,257		120,444,002		(688,971)		134,781,388		5,606,938		140,388,326
Net Income (Loss)		—		—		—		16,251,248		—		16,251,248		(51,834)		16,199,414
Contributions from Noncontrolling Interest in Consolidated VIE		—		—		—		—		—		—		102,844		102,844
Acquisition of Noncontrolling Interest		—		—		—		879,158		—		879,158		(5,657,948)		(4,778,790)
Stock Repurchase		—		(7,431,896)		—		—		—		(7,431,896)		—		(7,431,896)
Exercise of Stock Options		3,350		—		413,577		—		—		416,927		—		416,927
Vested Restricted Stock		8,884		—		(205,090)		—		—		(196,206)		—		(196,206)
Stock Issuance		816		—		39,299		—		—		40,115		—		40,115
Stock Compensation Expense from Restricted Stock Grants and Equity Classified Stock Options		—		—		3,272,345		—		—		3,272,345		—		3,272,345
Cash Dividends ($0.12 per share)		—		—		—		(682,097)		—		(682,097)		—		(682,097)
Other Comprehensive Income, Net of Income Tax		—		—		—		—		944,860		944,860		—		944,860
Balance December 31, 2016		5,914,560		(15,298,306)		20,511,388		136,892,311		255,889		148,275,842		—		148,275,842
Net Income		—		—		—		41,719,424		—		41,719,424		—		41,719,424
Stock Repurchase		—		(7,209,454)		—		—		—		(7,209,454)		—		(7,209,454)
Exercise of Stock Options		28,527		—		1,056,406		—		—		1,084,933		—		1,084,933
Vested Restricted Stock		18,930		—		(413,184)		—		—		(394,254)		—		(394,254)
Stock Issuance		1,833		—		101,303		—		—		103,136		—		103,136
Stock Compensation Expense from Restricted Stock Grants and Equity Classified Stock Options		—		—		1,479,315		—		—		1,479,315		—		1,479,315
Cash Dividends ($0.18 per share)		—		—		—		(997,461)		—		(997,461)		—		(997,461)
Other Comprehensive Income, Net of Income Tax		—		—		—		—		116,727		116,727		—		116,727
Balance December 31, 2017	$	5,963,850	$	(22,507,760)	$	22,735,228	$	177,614,274	$	372,616	$	184,178,208	$	—	$	184,178,208


	For the Year Ended December 31,
	2017		2016		2015
Proceeds from the Disposition of Debt Securities	$	—	$	827,738	$	2,084,994
Cost Basis of Debt Securities Sold		—		(843,951)		(1,930,080)
Loss recognized in Statement of Operations on the Disposition of Debt Securities		—		(16,213)		154,914
Proceeds from the Disposition of Equity Securities		—		5,424,624		2,574,091
Cost Basis of Equity Securities Sold		—		(5,983,978)		(2,565,816)
Gain (Loss) recognized in Statement of Operations on the Disposition of Equity Securities	$	—	$	(559,354)	$	8,275
Total Gain (Loss) recognized in Statement of Operations on the Disposition of Debt and Equity Securities	$	—	$	(575,567)	$	163,189


		Wtd. Avg.
		Grant Date
Market Condition Non-Vested Restricted Shares	Shares	Fair Value
Outstanding at January 1, 2015	5,067	$	23.13
Granted	—		—
Vested	(2,034)		22.80
Expired	—		—
Forfeited	(633)		22.80
Outstanding at December 31, 2015	2,400	$	23.42
Granted	—		—
Vested	(2,300)		23.42
Expired	—		—
Forfeited	(100)		23.42
Outstanding at December 31, 2016	—	$	—
Granted	—		—
Vested	—		—
Expired	—		—
Forfeited	—		—
Outstanding at December 31, 2017	—	$	—


Assumptions at:	December 31, 2017		December 31, 2016		December 31, 2015
Expected Volatility	—	%	14.13	%	29.40	%
Expected Dividends	—	%	0.22	%	0.15	%
Expected Term	—	years	0.61	years	1.3	years
Risk-Free Rate	—	%	0.66	%	0.75	%


Year Ending December 31,	Amounts
2018	$	150,689
2019		146,334
2020		71,804
2021		5,740
2022		—
2023 and thereafter (cumulative)		—
Total	$	374,567


				Costs Capitalized
				Subsequent to
	Initial Cost to Company			Acquisition
			Buildings &		Carrying
Description	Encumbrances	Land	Improvements	Improvements	Costs
	$	$	$	$	$
Income Properties:
3600 Peterson, Santa Clara, CA	—	17,855,023	8,414,925	—	—
7-Eleven, Inc., Dallas, TX	—	974,862	1,550,744	—	—
At Home, Raleigh, NC	—	2,118,420	5,774,284	—	—
Bank of America, Monterey, CA	—	4,458,840	—	—	—
Barnes & Noble, Daytona Beach, FL	—	1,798,600	3,803,000	—	—
Best Buy, McDonough, GA	—	2,622,682	3,150,000	82,264	—
Big Lots, Germantown, MD	3,300,000	1,781,918	2,951,231	—	—
Big Lots, Phoenix, AZ	3,400,000	1,715,717	3,050,164	—	—
Carrabba's Italian Grill, Austin, TX	—	1,160,925	1,305,117	—	—
Century Theatre, Reno, NV	—	1,669,377	4,484,938	11,140	—
Container Store, Glendale, AZ	—	1,968,398	5,493,102	—	—
CVS, Dallas, TX	—	7,535,013	—	—	—
Dick's Sporting Goods, McDonough, GA	—	3,934,022	4,725,000	—	—
Harris Teeter Supermarket, Charlotte, NC	6,600,000	5,601,837	3,409,338	—	—
Hilton Grand Vacations (Office), Orlando, FL	—	2,810,942	6,590,681	20,188	—
Hilton Grand Vacations (Office), Orlando, FL	—	1,210,138	2,453,690	282,099	—
Joann's, Saugus, MA	—	1,574,594	4,769,946	—	—
LA Fitness, Brandon, FL	—	3,208,889	9,677,636	—	—
Lowe's, Katy, TX	8,500,000	9,412,181	3,480,650	—	—
Maple Ave Land, Dallas, TX	—	359,116	—	—	—
Outback Steakhouse, Austin, TX	—	1,376,793	1,585,791	��—	—
Outback Steakhouse, Charlottesville, VA	—	1,308,881	3,135,515	—	—
Outback steakhouse, Huntersville, NC	—	1,987,831	1,299,017	—	—
Rite Aid, Renton, WA	4,700,000	2,036,235	4,148,415	—	—
Riverside, Jacksonville, FL	—	6,019,815	14,239,515	264,128	—
Staples, Sarasota, FL	—	2,728,083	1,145,137	—	—
The Grove, Winter Park, FL	—	1,240,000	1,860,000	8,431,336	—
Walgreens, Alpharetta, GA	—	3,265,623	1,406,160	—	—
Walgreens, Clermont, FL	3,500,000	3,021,665	1,269,449	—	—
Wells Fargo, Hillsboro, OR	—	10,005,650	25,902,632	—	—
Wells Fargo, Raleigh, NC	25,000,000	8,680,056	59,166,753	241,641	—
Westcliff, Fort Worth, TX	—	10,520,822	4,196,359	—	—
Whole Foods Market Centre, Sarasota, FL	—	4,497,825	13,104,352	274,085	—
Mason Commerce Center-Bldg 1, Daytona Beach, FL	—	66,304	1,277,027	1,064,124	—
Mason Commerce Center-Bldg 2, Daytona Beach, FL	—	66,304	1,277,027	913,032	—
Williamson Business Park-Bldg 3, Daytona Beach, FL	—	110,509	1,008,784	986,104	—
Concierge Office Building, Daytona Beach, FL	—	293,872	2,862,171	157,497	—
Vacant Pad Site, Winter Park, FL	—	436,400	—	—	—
	55,000,000	131,434,162	213,968,550	12,727,638	—