Resurgent Realty Trust Issues Open Letter to Generation Income Properties, Inc. (“GIPR”)

Calls Out Urgent Governance Crisis and Looming Default Risk; Reiterates Prior Offer and Calls on Board of Directors to Engage in Good Faith Discussions

/EIN News/ -- VIRGINIA BEACH, Va., May 12, 2025 (GLOBE NEWSWIRE) -- Resurgent Realty Trust (“RRT”), a shareholder of Generation Income Properties, Inc. (NASDAQ: GIPR) (“GIPR” or the “Company”), issued an open letter requesting the Board of Directors fulfill its fiduciary duty by engaging with RRT to discuss the non-binding term sheet RRT submitted to GIPR’s Board of Directors (the “Board”) on January 30, 2025. As a shareholder of GIPR, RRT continues to believe significant, unrealized value exists and has continued to make efforts to establish a constructive dialogue with GIPR management and Board. RRT is proposing to acquire majority ownership of GIPR, thereby allowing it to effect a change in Board composition, senior management and the Company’s strategic direction.

The full text of the open letter presented to GIPR is as follows:

Open Letter to Generation Income Properties, Inc. (NASDAQ: GIPR)

Urgent Governance Crisis, LOCI Default Risk, and Immediate Call to Action

May 12, 2025

To:	Benjamin Adams, Gena Cheng, Stuart Eisenberg, and Patrick Quilty
	Board of Directors – Generation Income Properties, Inc.

Dear Directors,        

This is Jon Wheeler. As with many times in the past, I’ve written to you in good faith, offering capital, experience, and cooperation. But with only days remaining until a contractual governance default, I must now speak plainly & directly.

1. LOCI Capital: $6 Million Due in Just Four Days

Your amended 10-K confirms a $6 million obligation to LOCI Capital, contractually due May 15, 2025.

If not redeemed:

“The Partnership is required to redeem the Series A Preferred Units on the Redemption Date. If not redeemed, LOCI has the right to appoint one or more members of the Board and to implement a cash sweep. The interest rate increases to 18.5% upon default.”
(10-K/A, Note 7 – April 30, 2025)

This is not merely financial - it is a governance trigger. If payment is not made, GIPR forfeits board control and loses access to operational cash. Common shareholders will be wiped out.

2. Brown Family Enterprises: Ongoing Senior Drain

GIPR carries $3 million in preferred equity from Brown Family Enterprises:
- 7% IRR paid monthly
- 16% profit share upon liquidity
- Extended maturity to 2027, but actively draining liquidity today
(10-K/A, Note 9)

3. Q1 10-Q Due May 15^th: A Key Moment of Truth

Your Q1 2025 Form 10-Q is not yet overdue. But as that date coincides with the LOCI redemption deadline, it becomes a crucial benchmark. If the Q1 filing fails to provide clarity on:
- The LOCI payoff plan
- Current cash and liquidity
- Status of preferred equity restructuring
- Continued executive bonuses or “guarantee fees”

…it will signal to the market that the company has either lost control - or lost the will to communicate transparently.

4. Executive Compensation: Misaligned and Undisclosed

CEO David Sobelman received over $700,072 in 2024, including:
- $200,000 salary
- $70,000 bonus
- $387,056 in “guarantee fees” — a rarely seen structure in public REITs that is highly unusual
(10-K/A, Item 11)

Bonus’ (cash & stock grants) paid in Q1 2025 for year-end 2024 will be reflected in Q1 2025 Form 10-Q driving the $700,000 number closer to $1,500,000.

Yet, the company recorded a cumulative net loss of $8.6 million through 2022 with more extensive losses in 2023 & 2024 - GIPR has never been profitable.
(10-K, filed March 28, 2023, L776-L779), and continues funding distributions from equity offerings (10-K, L896-L912).

5. Portfolio Concerns & Operational Red Flags

- 13 properties totaling 338,000 sq ft
- Top 4 tenants = 62% of base rent
- One Norfolk tenant vacated in early 2023 with no update provided (10-K, L770-L772)
- More GSA tenants within the GIPR portfolio have already given notice to not renew per DOGE
- Material weakness in internal controls over financial reporting remains unresolved (10-K, Item 9A)

6. Resurgent’s Offer Still Stands

We are ready to:
- Inject $10 million immediately
- Pay off LOCI
- Recapitalize preferred equity into common
- Partner with the board to stabilize governance

This is not a takeover. It’s a rescue.

7. The Leadership Problem

Let me be clear: I appreciate David Sobelman’s efforts. But his decisions - particularly the LOCI structure, multiple loans for G&A and not growth, continued guarantee fees, and failure to engage capital partners - have put him in an impossible position. He is now unable to function responsibly in his CEO role as he is completely conflicted with personal interests. His problems have become GIPR’s and vice versa.

The company needs experienced, objective leadership with significate public real estate operational experiences to navigate what comes next.

8. You Must Act - Now

I respectfully call on you to:
1. Convene an emergency board meeting this week
2. Engage with Resurgent to explore this solution
3. Ensure full disclosure in the May 15^th 10-Q
4. Consider new leadership in the C-Suite to include Resurgent capable of restructuring in crisis

With the 10-Q and LOCI deadline converging, this is your final window. If you fail to lead now, you will be seen as having presided over GIPR’s collapse without lifting a hand with the potential of extreme liability.

I am standing by.

Sincerely,

Investor, Offeror, Willing Ally

Resurgent Realty Trust
                
Jon S. Wheeler
CEO
jon@resurgentrealty.net
(757) 621-2873