Core Viewpoint - Resurgent Realty Trust (RRT) is urging Generation Income Properties, Inc. (GIPR) to engage in discussions regarding a non-binding term sheet submitted on January 30, 2025, highlighting the need for immediate action to address governance and financial issues facing GIPR [1][2]. Financial Obligations - GIPR has a $6 million obligation to LOCI Capital due on May 15, 2025, which, if not redeemed, could lead to a governance crisis where LOCI gains board control and the interest rate on the obligation increases to 18.5% upon default [3]. - GIPR also has $3 million in preferred equity from Brown Family Enterprises, which is draining liquidity despite an extended maturity to 2027 [4]. Upcoming Financial Reporting - The Q1 2025 Form 10-Q is due on May 15, coinciding with the LOCI redemption deadline, making it a critical moment for GIPR to clarify its financial position and plans regarding LOCI and preferred equity restructuring [4][5]. Executive Compensation Concerns - CEO David Sobelman received over $700,072 in 2024, including unusual "guarantee fees," while the company has recorded cumulative net losses of $8.6 million through 2022 and has never been profitable [6][7]. Operational and Governance Issues - GIPR's portfolio has significant concerns, including reliance on a few major tenants for 62% of base rent and unresolved material weaknesses in internal controls over financial reporting [13]. - The leadership of GIPR is criticized for misaligned interests and ineffective decision-making, necessitating experienced leadership to navigate the current crisis [9][10]. Call to Action - RRT is proposing immediate actions, including convening an emergency board meeting, engaging with RRT for potential solutions, ensuring full disclosure in the upcoming 10-Q, and considering new leadership capable of restructuring [14].
Resurgent Realty Trust Issues Open Letter to Generation Income Properties, Inc. (“GIPR”)