What happens if there isn't enough rental income to cover expenses?

BRXS Properties has implemented a comprehensive system to handle situations where rental income may temporarily be insufficient to cover property expenses. This multi-layered approach includes:

Cash Reserve System

For each property, we establish and maintain a dedicated cash reserve that serves as the first line of defense. This reserve is:

• Initially established when the property is acquired
• Continually supplemented from gross rental income
• Specifically allocated to cover unexpected expenses

Emergency Response Plan

In situations such as maintenance cost overruns, vacancy periods, or tenant payment issues, we follow a structured approach:

1. First Response: Draw from the property-specific cash reserves
2. Secondary Support: If needed, utilize BRXS Properties’ company cash reserves
3. Additional Backup: In some cases, arrange a short-term loan from our parent company

Last Resort Scenario

If expenses cannot be covered within a six-month period despite these measures, we will take more decisive action:

• The property will be put up for sale
• Noteholders are protected by a security right on the specific property
• Net proceeds from the sale will be used to repay noteholders

This structured approach helps ensure that temporary cash flow challenges can be managed effectively while protecting investor interests through multiple layers of financial security.