AEI Income & Growth Fund XXII Files 10-Q

TL;DR

**AEI Income & Growth Fund XXII filed its Q2 2024 10-Q. Real estate focus. Based in MN.**

AI Summary

AEI Income & Growth Fund XXII Limited Partnership filed its 10-Q for the period ending June 30, 2024. The company, incorporated in Minnesota, is involved in real estate. Its principal executive offices are located at 30 East 7th Street, Suite 1300, St. Paul, Minnesota.

Why It Matters

This filing provides investors with an update on the financial performance and operational status of AEI Income & Growth Fund XXII Limited Partnership for the second quarter of 2024.

Risk Assessment

Risk Level: low — This is a routine quarterly filing for a real estate fund and does not contain immediately apparent high-risk disclosures.

Key Players & Entities

• AEI INCOME & GROWTH FUND XXII LIMITED PARTNERSHIP (company) — Registrant
• June 30, 2024 (date) — Quarterly period end date
• 30 East 7th Street, Suite 1300, St. Paul, Minnesota 55101 (location) — Principal executive offices
• 6512277333 (phone_number) — Business phone number
• 000-24003 (company_id) — Commission File Number

FAQ

Key Financial Figures

• $219,039 — Partnership recognized rental income of $219,039 and $283,801, respectively. In 2024, re
• $283,801 — ecognized rental income of $219,039 and $283,801, respectively. In 2024, rental income d
• $440,000 — ecognize rental income of approximately $440,000 in 2024. For the six months ended Jun
• $64,804 — ion expenses from affiliated parties of $64,804 and $60,006, respectively. These admini
• $60,006 — from affiliated parties of $64,804 and $60,006, respectively. These administration exp
• $49,543 — ment expenses from unrelated parties of $49,543 and $21,324, respectively. These expens
• $21,324 — s from unrelated parties of $49,543 and $21,324, respectively. These expenses represent
• $2,712 — rtnership recognized interest income of $2,712 and $2,320, respectively. In 2024, inte
• $2,320 — ecognized interest income of $2,712 and $2,320, respectively. In 2024, interest income
• $73,511 — he Partnership's cash balance decreased $73,511 as a result of distributions paid to Pa
• $37 — he Partnership's cash balance increased $37 as a result of cash generated from oper
• $207,663 — by operating activities decreased from $207,663 in 2023 to $99,522 in 2024 as a result
• $99,522 — ties decreased from $207,663 in 2023 to $99,522 in 2024 as a result of timing differenc
• $138,440 — e Partnership declared distributions of $138,440 and $213,928, respectively. Pursuant to
• $213,928 — declared distributions of $138,440 and $213,928, respectively. Pursuant to the Partners

Filing Documents

• aei22-20240630.htm (10-Q) — 281KB
• ex2231-1.htm (EX-31.1) — 8KB
• ex2231-2.htm (EX-31.2) — 8KB
• ex2232.htm (EX-32) — 8KB
• 0001023458-24-000008.txt ( ) — 1156KB
• aei22-20240630.xsd (EX-101.SCH) — 16KB
• aei22-20240630_def.xml (EX-101.DEF) — 54KB
• aei22-20240630_lab.xml (EX-101.LAB) — 118KB
• aei22-20240630_pre.xml (EX-101.PRE) — 59KB
• aei22-20240630_cal.xml (EX-101.CAL) — 16KB
• aei22-20240630_htm.xml (XML) — 51KB

– Financial Information

Part I – Financial Information Item 1.

Financial Statements (unaudited)

Financial Statements (unaudited): Balance Sheets as of June 30, 2024 and December 31, 2023 3 Operations 4 Cash Flows 5 Changes in Partners' Capital 6 Condensed Notes to Financial Statements 7 – 8 Item 2.

Management's Discussion and Analysis of Financial

Management's Discussion and Analysis of Financial Condition and Results of Operations 9 - 13 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 13 Item 4.

Controls and Procedures

Controls and Procedures 14

– Other Information

Part II – Other Information Item 1.

Legal Proceedings

Legal Proceedings 14 Item 1A.

Risk Factors

Risk Factors 14 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 14 Item 3. Defaults Upon Senior Securities 15 Item 4. Mine Safety Disclosures 15 Item 5. Other Information 15 Item 6. Exhibits 15

Signatures

Signatures 15 2 AEI INCOME & GROWTH FUND XXII LIMITED PARTNERSHIP BALANCE SHEETS ASSETS June 30, December 31, 2024 2023 (unaudited) Current Assets: Cash $ 200,093 $ 273,604 Real Estate Investments: Land 1,914,315 1,914,315 Buildings 5,356,358 5,356,358 Acquired Intangible Lease Assets 1,415,859 1,415,859 Real Estate Held for Investment, at Cost 8,686,532 8,686,532 Accumulated Depreciation and Amortization ( 2,214,654 ) ( 2,056,836 ) Real Estate Held for Investment, Net 6,471,878 6,629,696 Total Assets $ 6,671,971 $ 6,903,300 LIABILITIES AND PARTNERS' CAPITAL Current Liabilities: Payable to AEI Fund Management, Inc. $ 37,181 $ 67,322 Distributions Payable 69,220 103,813 Unearned Rent 22,006 15,184 Total Current Liabilities 128,407 186,319 Partners' Capital: General Partners ( 10,008 ) ( 5,504 ) Limited Partners – 24,000 Units authorized; 11,749.37 Units issued and outstanding as of 6/30/2024 and 12/31/2023 6,553,572 6,722,485 Total Partners' Capital 6,543,564 6,716,981 Total Liabilities and Partners' Capital $ 6,671,971 $ 6,903,300 The accompanying Condensed Notes to Financial Statements are an integral part of these statements. 3 AEI INCOME & GROWTH FUND XXII LIMITED PARTNERSHIP (unaudited) Three Months Ended June 30 Six Months Ended June 30 2024 2023 2024 2023 Rental Income $ 109,520 $ 141,899 $ 219,039 $ 283,801 Expenses: Partnership Administration – Affiliates 31,277 29,939 64,804 60,006 Partnership Administration and Property Management – Unrelated Parties 30,797 2,030 49,543 21,324 Depreciation and Amortization 71,192 75,777 142,381 151,545 Total Expenses 133,266 107,746 256,728 232,875 Operating Income (Loss) ( 23,746 ) 34,153 ( 37,689 ) 50,926 Other Income: Interest Income 1,344 1,289 2,712

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. This section contains "forward-looking statements" which represent management's expectations or beliefs concerning future events, including statements regarding anticipated application of cash, expected returns from rental income, growth in revenue, the sufficiency of cash to meet operating expenses, rates of distribution, and other matters. These, and other forward-looking statements, should be evaluated in the context of a number of factors that may affect the Partnership's financial condition and results of operations, including the following: — Market and economic conditions which affect the value of the properties the Partnership owns and the cash from rental income such properties generate; — the federal income tax consequences of rental income, deductions, gain on sales and other items and the effects of these consequences for the Partners; — resolution by the General Partners of conflicts with which they may be confronted; — the success of the General Partners of locating properties with favorable risk return characteristics; — the effect of tenant defaults; and — the condition of the industries in which the tenants of properties owned by the Partnership operate. Application of Critical Accounting Policies The Partnership's financial statements have been prepared in accordance with US GAAP. Preparing the financial statements requires management to use judgment in the application of these accounting policies, including making estimates and assumptions. These judgments will affect the reported amounts of the Partnership's assets and liabilities and the disclosure of contingent assets and liabilities as of the dates of the financial statements and will affect the reported amounts of revenue and expenses during the reporting periods. It is possible that the carrying amount of the Partnership's assets and liabilities, or the results of re

MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued) The fair values of above market and below market in-place leases will be recorded 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) an estimate of fair market lease rates for the corresponding in-place leases measured over a period equal to the non-cancelable term of the lease including any bargain renewal periods. The above market and below market lease values will be capitalized as intangible lease assets or liabilities. Above market lease values will be amortized as an adjustment of rental income over the remaining term of the respective leases. Below market lease values will be amortized on a straight-line basis as an adjustment of rental income over the remaining term of the respective leases, including any bargain renewal periods. If a lease were to be terminated prior to its stated expiration, all unamortized amounts of above market and below market in-place lease values relating to that lease would be recorded as an adjustment to rental income. The fair values of in-place leases will include estimated direct costs associated with obtaining a new tenant, and opportunity costs associated with lost rentals which are avoided by acquiring an in-place lease. Direct costs associated with obtaining a new tenant may include commissions, tenant improvements, and other direct costs and are estimated, in part, by management's consideration of current market costs to execute a similar lease. These direct costs will be included in intangible lease assets on the balance sheet and will be amortized to expense over the remaining term of the respective leases. The value of opportunity costs will be calculated using the contractual amounts to be paid pursuant to the in-place leases over a market absorption period for a similar lease. These intangible

MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued) Allocation of Expenses AEI Fund Management, Inc. allocates expenses to each of the funds they manage primarily on the basis of the number of hours devoted by their employees to each fund's affairs. They also allocate expenses at the end of each month that are not directly related to a fund's operations based upon the number of investors in the fund and the fund's capitalization relative to other funds they manage. The Partnership reimburses these expenses subject to detailed limitations contained in the Partnership Agreement. Factors Which May Influence Results of Operations The Partnership is not aware of any material trends or uncertainties, other than national economic conditions affecting real estate generally, that may reasonably be expected to have a material impact, favorable or unfavorable, on revenues and investment property value. However, due to current economic factors, higher interest rates, and inflation in the U.S. and globally, our tenants and operating partners may be impacted. Results of Operations For the six months ended June 30, 2024 and 2023, the Partnership recognized rental income of $219,039 and $283,801, respectively. In 2024, rental income decreased due to one property that was vacated in 2023, which was partially offset by one property with a rent increase. Based on the scheduled rent for the properties owned as of July 31, 2024, the Partnership expects to recognize rental income of approximately $440,000 in 2024. For the six months ended June 30, 2024 and 2023, the Partnership incurred Partnership administration expenses from affiliated parties of $64,804 and $60,006, respectively. These administration expenses include costs associated with the management of the properties, processing distributions, reporting requirements and communicating with the Limited Partners. During the same periods, the Partnership incurred Partnership administration and property management e

MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued) Liquidity and Capital Resources During the six months ended June 30, 2024, the Partnership's cash balance decreased $73,511 as a result of distributions paid to Partners in excess of cash generated from operating activities. During the six months ended June 30, 2023, the Partnership's cash balance increased $37 as a result of cash generated from operating activities in excess of distributions paid to Partners. Net cash provided by operating activities decreased from $207,663 in 2023 to $99,522 in 2024 as a result of timing differences in the collection of payments from the tenants, a decrease in rental income and an increase in Partnership administration expenses in 2024, which was partially offset by the timing of payment of expenses. The major components of the Partnership's cash flow from investing activities are investments in real estate and proceeds from the sale of real estate. During the six months ended June 30, 2024 and 2023, the Partnership did not complete any property acquisitions or property sales. The Partnership's primary use of cash flow, other than investment in real estate, is distribution payments to Partners and cash used to repurchase Units. The Partnership declares its regular quarterly distributions before the end of each quarter and pays the distribution in the first week after the end of each quarter. The Partnership attempts to maintain a stable distribution rate from quarter to quarter. The Partnership may repurchase tendered Units on April 1st and October 1st of each year subject to limitations. For the six months ended June 30, 2024 and 2023, the Partnership declared distributions of $138,440 and $213,928, respectively. Pursuant to the Partnership Agreement, distributions of Net Cash Flow are to be allocated 97% to the Limited Partners and 3% to the General Partners. Distributions of Net Proceeds of Sale are to be allocated 99% to the Limited Partners and 1% to the Ge

MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued) Off-Balance Sheet Arrangements As of June 30, 2024 and December 31, 2023, the Partnership had no material off-balance sheet arrangements that had or are reasonably likely to have current or future effects on its financial condition, results of operations, liquidity or capital resources.

QUANTITATIVE & QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 3. QUANTITATIVE & QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Not required for a smaller reporting company.

CONTROLS AND PROCEDURES

ITEM 4. CONTROLS AND PROCEDURES. (a) Disclosure Controls and Procedures. Under the supervision and with the participation of management, including its President and Chief Financial Officer, the Managing General Partner of the Partnership evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act")). Based upon that evaluation, the President and Chief Financial Officer of the Managing General Partner concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in applicable rules and forms and that such information is accumulated and communicated to management, including the President and Chief Financial Officer of the Managing General Partner, in a manner that allows timely decisions regarding required disclosure. (b) Changes in Internal Control Over Financial Reporting. During the most recent period covered by this report, there has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 13

– OTHER INFORMATION

PART II – OTHER INFORMATION

LEGAL PROCEEDINGS

ITEM 1. LEGAL PROCEEDINGS. There are no material pending legal proceedings to which the Partnership is a party or of which the Partnership's property is subject.

RISK FACTORS

ITEM 1A. RISK FACTORS. Not required for a smaller reporting company.

UNREGISTERED SALES OF EQUITY SECURITIES & USE OF PROCEEDS

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES & USE OF PROCEEDS. (a) None. (b) Not applicable. (c) Pursuant to Section 7.7 of the Partnership Agreement, each Limited Partner has the right to present Units to the Partnership for purchase by submitting notice to the Managing General Partner during January or July of each year. The purchase price of the Units is equal to 90% of the net asset value per Unit, as of the first business day of January or July of each year, as determined by the Managing General Partner in accordance with the provisions of the Partnership Agreement. Units tendered to the Partnership during January and July may be repurchased on April 1 st and October 1 st , respectively, of each year subject to the following limitations. The Partnership will not be obligated to purchase in any year any number of Units that, when aggregated with all other transfers of Units that have occurred since the beginning of the same calendar year (excluding Permitted Transfers as defined in the Partnership Agreement), would exceed 5% of the total number of Units outstanding on January 1 of such year. In no event shall the Partnership be obligated to purchase Units if, in the sole discretion of the Managing General Partner, such a purchase would impair the capital or operation of the Partnership. During the period covered by this report, the Partnership did not purchase any Units. 14

DEFAULTS UPON SENIOR SECURITIES

ITEM 3. DEFAULTS UPON SENIOR SECURITIES. None.

MINE SAFETY DISCLOSURES

ITEM 4. MINE SAFETY DISCLOSURES. Not Applicable.

OTHER INFORMATION

ITEM 5. OTHER INFORMATION. None.

EXHIBITS

ITEM 6. EXHIBITS. 31.1 Certification of President of General Partner pursuant to Rule 15d-14(a)(17 CFR 240.15d-14(a)) and Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification of Chief Financial Officer of General Partner pursuant to Rule 15d-14(a)(17 CFR 240.15d-14(a)) and Section 302 of the Sarbanes-Oxley Act of 2002. 32 Certification of President and Chief Financial Officer of General Partner purs

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