What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-11-12 compared with 2025-08-14 · 239 added, 228 removed, 791 unchanged (37% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

June 30, 2025 December 31, 2024

Loans held for investment at fair value (cost of $ 48,318,884 and $ 50,241,018 at June 30, 2025 and December 31, 2024, respectively, net)

September 30, 2025 December 31, 2024

Loans held for investment at fair value (cost of $ 48,107,898 and $ 50,241,018 at September 30, 2025 and December 31, 2024, respectively, net)

$ 16,923,809 $ 30,510,804

20 unchanged sentences

Shareholders’ equity

Preferred stock, par value $ 0.01 per share, 10,000 shares authorized at June 30, 2025 and December 31, 2024 and 0 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively

Common stock, par value $ 0.01 per share, 50,000,000 shares authorized at June 30, 2025 and December 31, 2024 and 22,595,111 and 22,332,927 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively

Preferred stock, par value $ 0.01 per share, 10,000 shares authorized at September 30, 2025 and December 31, 2024 and 0 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively

Common stock, par value $ 0.01 per share, 50,000,000 shares authorized at September 30, 2025 and December 31, 2024 and 22,594,541 and 22,332,927 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively

225,945 223,329

7 unchanged sentences

Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

2025 2024 2025 2024

31 unchanged sentences

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Three months ended June 30, 2025

Three months ended September 30, 2025

Stock Common Stock Additional

3 unchanged sentences

Shares Amount

Balance at March 31, 2025 $ — 22,596,007 $ 225,960 $ 252,416,881 $ ( 51,842,351 ) $ 200,800,490

Balance at June 30, 2025 $ — 22,595,111 $ 225,951 $ 252,901,392 $ ( 68,396,269 ) $ 184,731,074

Stock-based compensation, net of forfeitures — ( 570 ) ( 6 ) 487,442 — 487,436

2 unchanged sentences

Net loss — — — — ( 12,490,506 ) ( 12,490,506 )

Balance at June 30, 2025 $ — 22,595,111 $ 225,951 $ 252,901,392 $ ( 68,396,269 ) $ 184,731,074

Three months ended June 30, 2024

Balance at September 30, 2025 $ — 22,594,541 $ 225,945 $ 253,388,834 $ ( 84,275,956 ) $ 169,338,823

Three months ended September 30, 2024

Stock Common Stock Additional

3 unchanged sentences

Shares Amount

Balance at March 31, 2024 $ 1 20,667,094 $ 206,671 $ 350,347,018 $ ( 39,932,564 ) $ 310,621,126

Balance at June 30, 2024 $ — 20,667,094 $ 206,671 $ 350,591,362 $ ( 36,514,212 ) $ 314,283,821

Issuance of common stock, net of offering costs — 1,214,953 12,150 12,149,217 — 12,161,367

Stock-based compensation — — — 218,643 — 218,643

1 unchanged sentence

— — — — ( 7,221,076 ) ( 7,221,076 )

Dividends declared on preferred shares ($ 60 per share)

— — — — ( 7,500 ) ( 7,500 )

Redemption of preferred shares ( 1 ) — — ( 124,999 ) — ( 125,000 )

Distributions in connection with the Spin-Off — — — ( 114,765,177 ) — ( 114,765,177 )

Net income — — — — 1,383,734 1,383,734

Balance at June 30, 2024 $ — 20,667,094 $ 206,671 $ 350,591,362 $ ( 36,514,212 ) $ 314,283,821

Balance at September 30, 2024 $ — 21,882,047 $ 218,821 $ 248,194,045 $ ( 42,351,554 ) $ 206,061,312

See accompanying notes to the consolidated financial statements

1 unchanged sentence

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Six months ended June 30, 2025

Nine months ended September 30, 2025

Stock Common Stock Additional

8 unchanged sentences

Net loss — — — — ( 21,587,472 ) ( 21,587,472 )

Balance at June 30, 2025 $ — 22,595,111 $ 225,951 $ 252,901,392 $ ( 68,396,269 ) $ 184,731,074

Six months ended June 30, 2024

Balance at September 30, 2025 $ — 22,594,541 $ 225,945 $ 253,388,834 $ ( 84,275,956 ) $ 169,338,823

Nine months ended September 30, 2024

Stock Common Stock Additional

4 unchanged sentences

Balance at December 31, 2023 $ 1 20,457,697 $ 204,577 $ 349,805,890 $ ( 29,958,243 ) $ 320,052,225

Issuance of common stock, net of offering costs — 1,214,953 12,150 12,149,217 — 12,161,367

Stock-based compensation — 209,397 2,094 1,129,114 — 1,131,208

4 unchanged sentences

Redemption of preferred shares ( 1 ) — — ( 124,999 ) — ( 125,000 )

Distributions in connection with the Spin-Off — — — ( 114,765,177 ) — ( 114,765,177 )

Net income — — — — 17,775,739 17,775,739

Balance at June 30, 2024 $ — 20,667,094 $ 206,671 $ 350,591,362 $ ( 36,514,212 ) $ 314,283,821

Balance at September 30, 2024 $ — 21,882,047 $ 218,821 $ 248,194,045 $ ( 42,351,554 ) $ 206,061,312

See accompanying notes to the consolidated financial statements

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six months ended

Nine months ended

September 30,

Operating activities:

12 unchanged sentences

Changes in operating assets and liabilities:

Accounts receivable — 55

Interest receivable 1,201,663 2,242,351

11 unchanged sentences

Principal repayment of loans 63,277,253 53,259,314

Net cash (used in) provided by investing activities of continuing operations ( 3,547,884 ) 96,634,888

Net cash provided by (used in) investing activities of continuing operations 23,846,844 99,298,100

Net cash (used in) provided by investing activities of discontinued operations — ( 47,211,339 )

Net cash (used in) provided by investing activities ( 3,547,884 ) 59,076,900

Net cash provided by (used in) investing activities 23,846,844 52,086,761

Cash flows from financing activities:

Proceeds from sale of common stock — 12,335,674

Payment of offering costs - equity offering — ( 174,307 )

Payment of financing costs ( 176,934 ) ( 240,612 )

Redemption of preferred shares — ( 125,000 )

Cash distribution in connection with the Spin-Off of SUNS — ( 67,913,215 )

Borrowings on revolving credit facilities 70,600,000 185,000,000

11 unchanged sentences

Non-cash funding of new loan $ — $ 14,672,640

Non-cash net assets distribution in connection with the spin-off of SUNS $ — $ 46,851,962

Supplemental information:

4 unchanged sentences

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

As of June 30, 2025

As of September 30, 2025

Advanced Flower Capital Inc.

15 unchanged sentences

These loans are generally held for investment and are typically secured, directly or indirectly, by real estate, equipment, cash flows and the value associated with licenses (where applicable) and/or other assets of borrowers depending on the applicable laws and regulations governing such borrowers.

The Company has elected to be taxed as a real estate investment trust (“REIT”) for United States federal income tax purposes under the Internal Revenue Code of 1986, as amended (the “Code”).

The Company elected to be taxed as a real estate investment trust (“REIT”) for United States federal income tax purposes under the Internal Revenue Code of 1986, as amended (the “Code”).

The Company generally will not be subject to United States federal income taxes on its REIT taxable income as long as it annually distributes all of its REIT taxable income prior to the deduction for dividends paid to shareholders and complies with various other requirements as a REIT.

3 unchanged sentences

The Company believes there are also attractive lending opportunities in companies ancillary to and outside of the cannabis industry that could generate attractive risk-adjusted returns.

The investment team has over 30 years of experience in direct lending outside of the cannabis industry across $ 10 billion of transactions.

By expanding the investment mandate, the Company expects to be able to diversify its exposure across industries and credit risk profiles while maintaining deal selectivity.

The Company may make investments in accordance with this expanded investment strategy to the extent consistent with maintaining its eligibility to continue to qualify as a REIT under the Code and maintain our exemption from registration under the Investment Company Act of 1940, as amended (“1940 Act”).

At a meeting held on August 12, 2025, the Board, including a majority of the directors who are not “interested persons” of the Company (as that term is defined under the Investment Company Act of 1940), unanimously approved, subject to the approval of the Company’s shareholders, a new Investment Advisory Agreement between the Company and the Manager.

If approved by the shareholders, the new Investment Advisory Agreement would enable the Company to operate as a BDC under the 1940 Act, as discussed further below in “Note 18—Subsequent Events”.

During the reporting period, the Company formed TCGDL LLC, a wholly-owned subsidiary of the Company, to facilitate direct lending transactions.

As of the end of the reporting period, the subsidiary had no operations or balances.

The Company anticipates that this subsidiary will be utilized in connection with direct lending activities that align with the Company’s long term strategic initiatives.

At the August Meeting, the Board also unanimously approved a series of matters intended to facilitate the conversion (the “Conversion”) of the Company from a REIT to a business development company (“BDC”).

Among other things, the Board, including a majority of the directors who are not “interested persons” of the Company (as that term is defined under the 1940 Act) (the “Independent Directors”), approved a new, 1940 Act-compliant investment advisory agreement by and between the Company and the Manager, subject to the approval of the Company’s shareholders (the “Investment Advisory Agreement”).

On September 16, 2025, the Company filed a definitive proxy statement with the U.S.

Securities and Exchange Commission (“SEC”) in connection with a special meeting of shareholders (the “Special Meeting”) held on November 6, 2025 for the purpose of seeking shareholder approval of certain proposals required to effect the Conversion, namely shareholder approvals of (i) the Investment Advisory Agreement between the Company and the Manager and (ii) the application of reduced asset coverage requirements pursuant to Section 61(a) of the 1940 Act (enabling the Company to utilize a greater degree of leverage than would otherwise be permitted) (the “Proposals”).

Subsequent to the end of the reporting period, on November 6, 2025, at the Special Meeting, the Company’s shareholders approved the Investment Advisory Agreement, which was necessary for the Company to be able to operate as a BDC under the 1940 Act.

In the coming months, the Board will consider other matters required to effect the Conversion.

There can be no assurance that the board will approve the matters required to effect the Conversion.

SIGNIFICANT ACCOUNTING POLICIES

6 unchanged sentences

All intercompany balances and transactions have been eliminated in consolidation.

The Company’s results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results that may ultimately be realized for the full fiscal year ending December 31, 2025.

The Company’s results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results that may ultimately be realized for the full fiscal year ending December 31, 2025.

BDC Conversion Expenses

Expenses associated with the Company’s election and subsequent conversion to be regulated as a business development company (“BDC”) under the 1940 Act are expensed as incurred and include legal fees related to the proxy statement and special shareholder meeting in connection the BDC election, the entry into certain agreements relating to the BDC election and adoption of certain compliance policies and procedures relating to the BDC election.

Expenses associated with the Company’s election and subsequent conversion to be regulated as a BDC are expensed as incurred and include legal fees related to the proxy statement and special shareholder meeting in connection the BDC election, the entry into certain agreements relating to the BDC election and adoption of certain compliance policies and procedures relating to the BDC election.

During the three and nine months ended September 30, 2025, the Company incurred approximately $ 0.6 million and $ 0.8 million in expenses related to the Conversion, respectively, which are recorded within BDC conversion expenses line item in the Company’s consolidated statements of operations.

Use of Estimates in the Preparation of Financial Statements

22 unchanged sentences

LOANS HELD FOR INVESTMENT AT FAIR VALUE

As of June 30, 2025 and December 31, 2024, the Company’s portfolio included one loan held at fair value.

The aggregate commitment under this loan was approximately $ 42.5 million and $ 44.4 million, respectively, and outstanding principal was approximately $ 51.2 million and $ 53.1 million as of June 30, 2025 and December 31, 2024, respectively.

For the six months ended June 30, 2025, the Company received approximately $ 1.9 million of principal repayments of loans held at fair value.

As of June 30, 2025 and December 31, 2024, the Company’s loan held at fair value did not have a floating interest rate.

The following tables summarize the Company’s loans held at fair value as of June 30, 2025 and December 31, 2024:

As of June 30, 2025

As of September 30, 2025 and December 31, 2024, the Company’s portfolio included one loan held at fair value.

The aggregate commitment under this loan was approximately $ 42.3 million and $ 44.4 million, respectively, and outstanding principal was approximately $ 51.0 million and $ 53.1 million as of September 30, 2025 and December 31, 2024, respectively.

For the nine months ended September 30, 2025, the Company received approximately $ 2.1 million of principal repayments of loans held at fair value.

As of September 30, 2025 and December 31, 2024, the Company’s loan held at fair value did not have a floating interest rate.

The following tables summarize the Company’s loans held at fair value as of September 30, 2025 and December 31, 2024:

As of September 30, 2025

Fair Value (1)

15 unchanged sentences

(2) The difference between the carrying value and the outstanding principal amount of the loans consists of unaccreted original issue discount (“OID”) and loan origination costs.

(3) As of June 30, 2025 and December 31, 2024, the maturity date passed on the credit facility with Private Company A without repayment.

The following table presents changes in loans held at fair value as of and for the six months ended June 30, 2025:

(3) As of September 30, 2025 and December 31, 2024, the maturity date passed on the credit facility with Private Company A without repayment.

The following table presents changes in loans held at fair value as of and for the nine months ended September 30, 2025:

Principal Original Issue

3 unchanged sentences

Loan repayments ( 2,133,120 ) — — ( 2,133,120 )

Total loan held at fair value at June 30, 2025 $ 51,186,315 $ ( 2,867,431 ) $ ( 21,471,662 ) $ 26,847,222

As of June 30, 2025 and December 31, 2024 , the Company ha d one l oan held at fair value on nonaccrual status.

Total loan held at fair value at September 30, 2025 $ 50,975,329 $ ( 2,867,431 ) $ ( 31,184,089 ) $ 16,923,809

As of September 30, 2025 and December 31, 2024 , the Company ha d one l oan held at fair value on nonaccrual status.

Effective March 1, 2024, the Company placed Private Company A on nonaccrual status.

As of June 30, 2025 , the loan with Private Company A had an outstanding principal balance of approximately $ 51.2 million and an unrealized loss of approximately $( 21.5 ) million.

During the three and six months ended June 30, 2025, approximately $ 0.7 million and $ 1.9 million of payments were received and applied as a reduction to the amortized cost of the Private Company A loan.

A more detailed listing of the Company’s loan held at fair value portfolio based on information available as of June 30, 2025 is as follows:

As of September 30, 2025 , the loan with Private Company A had an outstanding principal balance of approximately $ 51.0 million and an unrealized loss of approximately $( 31.2 ) million.

During the three and nine months ended September 30, 2025, approximately $ 0.2 million and $ 2.1 million of payments were received and applied as a reduction to the amortized cost of the Private Company A loan, respectively.

A more detailed listing of the Company’s loan held at fair value portfolio based on information available as of September 30, 2025 is as follows:

Collateral Location Collateral

13 unchanged sentences

In October 2023, AFC Agent LLC (“AFC Agent”) delivered a notice of default to Private Company A based on certain financial and other covenant defaults and began charging additional default interest of 5.0 %, beginning as of July 1, 2023, in accordance with the terms of the Private Company A Credit Facility.

Effective March 1, 2024, the Company placed the borrower on nonaccrual status.

Effective March 1, 2024, the Company placed the borrower on nonaccrual

The maturity date passed on the credit facility to Private Company A without repayment.

2 unchanged sentences

LOANS HELD FOR INVESTMENT AT CARRYING VALUE

As of June 30, 2025 and December 31, 2024, t he Company’s portfolio included 14 and 14 loans held at carrying value, respectively.

A s of June 30, 2025 and December 31, 2024, t he aggregate originated commitment under these loans was approximately $ 327.8 million and $ 312.8 million, resp ectively, and outstanding principal was approximately $ 308.4 million and $ 301.8 million, respectively.

During the six months ended June 30, 2025, the Company funded approximately $ 30.0 million of new loans and additional principal and had approximately $ 23.6 million of principal repayments of loans held at carrying value.

As of June 30, 2025 and December 31, 2024, approximately 49 % and 52 %, respectively, of the Company’s loans held at carrying value had floating interest rates.

As of June 30, 2025, t hese floating benchmark rates included one-month Secured Overnight Financing Rate (“SOFR”) quoted at 4.3 % and subject to a weighted average floor of 3.8 % based on outstanding principal.

The following tables summarize the Company’s loans held at carrying value as of June 30, 2025 and December 31, 2024:

As of June 30, 2025

As of September 30, 2025 and December 31, 2024, t he Company’s portfolio included 13 and 14 loans held at carrying value, respectively.

A s of September 30, 2025 and December 31, 2024, t he aggregate originated commitment under these loans was approximately $ 302.3 million and $ 312.8 million, resp ectively, and outstanding principal was approximately $ 281.8 million and $ 301.8 million, respectively.

During the nine months ended September 30, 2025, the Company funded approximately $ 40.7 million of new loans and additional principal and had approximately $ 61.0 million of principal repayments of loans held at carrying value.

As of September 30, 2025 and December 31, 2024, approximately 44 % and 52 %, respectively, of the Company’s loans held at carrying value had floating interest rates.

As of September 30, 2025, t hese floating benchmark rates included one-month Secured Overnight Financing Rate (“SOFR”) quoted at 4.1 % and subject to a weighted average floor of 4.3 % based on outstanding principal.

The following tables summarize the Company’s loans held at carrying value as of September 30, 2025 and December 31, 2024:

As of September 30, 2025

Principal (1)

10 unchanged sentences

(1) The difference between the carrying value and the outstanding principal amount of the loans consists of unaccreted OID and loan origination costs.

(2) Weighted average remaining life is calculated based on the carrying value of the loans as of June 30, 2025 and December 31, 2024 .

The following table presents changes in loans held at carrying value as of and for the six months ended June 30, 2025:

(2) Weighted average remaining life is calculated based on the carrying value of the loans as of September 30, 2025 and December 31, 2024 .

The following table presents changes in loans held at carrying value as of and for the nine months ended September 30, 2025:

Principal Original Issue

6 unchanged sentences

Loan amortization payments ( 14,148,239 ) — ( 14,148,239 )

Total loans held at carrying value at June 30, 2025 $ 308,405,751 $ ( 7,459,543 ) $ 300,946,208

As of June 30, 2025 and December 31, 2024 , the Company had three and two loans held at carrying value on nonaccrual status, respectively, with a total amortized cost of approximately $ 104.2 million and $ 89.3 million, respectively.

During the three and six months ended June 30, 2025, the Company recognized interest income of zero and $ 0.7 million on loans on nonaccrual status.

Subsequent to June 30, 2025, AFC Agent delivered a notice of default and acceleration to Private Company P based on certain payment defaults, including the failure to make its interest payment when due for July 1, 2025, and began charging additional default interest of 5.0 %, in accordance with the terms of the credit facility with Private Company P.

Total loans held at carrying value at September 30, 2025 $ 281,848,482 $ ( 7,122,813 ) $ 274,725,669

As of September 30, 2025 and December 31, 2024 , the Company had three and two loans held at carrying value on nonaccrual status, respectively, with a total amortized cost of approximately $ 104.2 million and $ 89.3 million, respectively.

During the three and nine months ended September 30, 2025, the Company recognized interest income of zero and $ 0.7 million on loans on nonaccrual status.

The Company placed the loan with Private Company P on nonaccrual status effective June 1, 2025.

As of June 30, 2025, the loan with Private Company P had an outstanding principal amount of approximately $ 15.6 million and amortized cost of $ 15.3 million.

AFC Agent, on behalf of the Company and its affiliates, is actively pursuing judicial and non-judicial remedies against Private Company P.

As of September 30, 2025, the loan with Private Company P had an outstanding principal amount of approximately $ 15.6 million and amortized cost of $ 15.3 million.

In November 2025, the Company and AFC Agent entered into a mutual release and settlement agreement with Private Company P and other related parties to resolve various claims and counterclaims among the parties relating to, among other things, the Company’s credit facility with Private Company P and the underlying loan collateral.

See further discussion in “Note 18—Subsequent Events”.

The Company placed Subsidiary of Private Company G on nonaccrual status effective December 1, 2023.

As of June 30, 2025, the loan with Subsidiary of Private Company G had an outstanding principal amount of approximately $ 78.9 million

and an amortized cost of approximately $ 77.4 million, respectively.

During the three and six months ended June 30, 2025, the Company recognized interest income of zero an d approximately $ 0.7 million related to this loan, which was received in cash.

As of September 30, 2025, the loan with Subsidiary of Private Company G had an outstanding principal amount of approximately $ 78.9 million and an amortized cost of approximately $ 77.4 million, respectively.

During the three and nine months ended September 30, 2025, the Company recognized interest income of zero an d approximately $ 0.7 million related to this loan, which was received in cash.

As full recovery of principal and accrued interest is doubtful, future cash receipts received in accordance with terms of the forbearance agreement are accounted for under the cost recovery method.

During the three and six months ended June 30, 2025, approximately $ 0.3 million and $ 0.3 million of contractual interest payments were received and applied as a reduction to this loan’s amortized cost, respectively.

The Company placed Private Company K on nonaccrual status effective December 1, 2023, with an outstanding principal amount of approximately $ 12.2 million and an amortized cost of approximately $ 11.5 million as of June 30, 2025 .

During the three and six months ended June 30, 2025, the Company recognized no interest income related to this loan.

A more detailed listing of the Company’s loans held at carrying value portfolio based on information available as of June 30, 2025 is as follows:

During the three and nine months ended September 30, 2025, zero and approximately $ 0.3 million of contractual interest payments were received and applied as a reduction to this loan’s amortized cost, respectively.

During the three and nine months ended September 30, 2025, the Company recognized no interest income related to this loan.

A more detailed listing of the Company’s loans held at carrying value portfolio based on information available as of September 30, 2025 is as follows:

Collateral Location Collateral

5 unchanged sentences

K MA C, D 12,195,762 ( 682,619 ) 11,513,143 18.1 % (6)

J MO C, D 23,359,234 ( 32,799 ) 23,326,435 18.3 % (7)

L OH C, D 29,575,644 ( 240,615 ) 29,335,029 13.0 % (7)

8 unchanged sentences

11/1/2027 P/I

of Public Co.

S FL, IL, MA, NY, OH, PA C, D 10,000,000 — 10,000,000 9.5 % (16)

8/12/2026 I/O

U GA, OH C, D 15,000,000 ( 293,919 ) 14,706,081 14.0 % (15)

1 unchanged sentence

V MO, OH, UT C, D 12,323,460 ( 367,500 ) 11,955,960 14.0 % (16)

of Public Co.

S FL, IL, MA, NY, OH, PA C, D 10,000,000 ( 386,667 ) 9,613,333 12.5 % (17)

8/13/2030 I/O

Total loans held at carrying value $ 281,848,482 $ ( 7,122,813 ) $ 274,725,669

10 unchanged sentences

Effective December 1, 2023, the Company placed the borrower on nonaccrual status.

(7) Base interest rate of 12.0 % plus SOFR (SOFR floor of 1.0 %) and PIK interest rate of 2.0 %.

(7) Base interest rate of 8.0 % plus SOFR (SOFR floor of 5.0 %).

8 unchanged sentences

(15) Base interest rate of 14.0 %.

(17) Base interest rate of 14.0 %.

(16) Base interest rate of 12.5 % and PIK interest rate of 1.5 %.

(17) Base interest rate of 12.5 %.

LOAN RECEIVABLE HELD AT CARRYING VALUE

As of June 30, 2025 and December 31, 2024, the Company’s portfolio included zero and one loan receivable held at carrying value.

The originated commitment under this loan was $ 4.0 million and outstanding principal was zero and $ 1.9 million as of June 30, 2025 and December 31, 2024, respectively.

During the six months ended June 30, 2025, the Company received $ 0.1 million of principal repayments of loan receivable held at carrying value.

The following table presents changes in loans receivable as of and for the six months ended June 30, 2025:

As of September 30, 2025 and December 31, 2024, the Company’s portfolio included zero and one loan receivable held at carrying value.

The originated commitment under this loan was $ 4.0 million and outstanding principal was zero and $ 1.9

million as of September 30, 2025 and December 31, 2024, respectively.

During the nine months ended September 30, 2025, the Company received $ 0.1 million of principal repayments of loan receivable held at carrying value.

The following table presents changes in loans receivable as of and for the nine months ended September 30, 2025:

Principal Original Issue

3 unchanged sentences

Loan write-off ( 1,778,932 ) 1,686 ( 1,777,246 )

Total loan receivable held at carrying value at June 30, 2025 $ — $ — $ —

Total loan receivable held at carrying value at September 30, 2025 $ — $ — $ —

Effective October 1, 2022, the Company placed Public Company A equipment loan receivable on nonaccrual status.

During the three and six months ended June 30, 2025, the Company recognized no interest income related to this loan.

During the three and nine months ended September 30, 2025, the Company recognized no interest income related to this loan.

Payments received were accounted for under the cost recovery method and applied as a reduction to the amortized cost of the Public Company A equipment loan.

Prior to the write-off, in June 2025, the equipment loan with Public Company A had an outstanding principal balance of approximately $ 1.8 million and amortized cost of approximately $ 1.8 million.

Based on discussions with the collateral agent, the Company does not expect future proceeds and deemed the remaining balance on the loan with Public Company A to be uncollectible.

Prior to the write-off, the equipment loan with Public Company A had an outstanding principal balance of approximately $ 1.8 million and amortized cost of approximately $ 1.8 million.

Based on discussions with the collateral agent, no other proceeds were expected and the Company deemed the remaining balance on the loan with Public Company A to be uncollectible.

Prior to the write-off, the loan receivable had a CECL Reserve that was fully reserved for.

In the second quarter of 2025, the Company wrote off $ 1.8 million, which was equal to the carrying value of the loan receivable, excluding the CECL Reserve at the time the loan was written off.

During the second quarter of 2025, the Company wrote off $ 1.8 million, which was equal to the carrying value of the loan receivable, excluding the CECL Reserve at the time the loan was written off.

CURRENT EXPECTED CREDIT LOSSES

As of June 30, 2025 and December 31, 2024, the Company’s CECL Reserve for its loans held at carrying value and loan receivable held at carrying value was approximately $ 44.0 million and $ 30.6 million, respectively, or 14.61 % and 10.36 %, respectively, of the Company’s total loans held at carrying value and loan receivable held at carrying value of approximately $ 300.9 million and $ 295.2 million, respectively, and is bifurcated between the current expected credit loss reserve (contra-asset) related to outstanding balances on loans held at carrying value and loan receivable held at carrying value of approximately $ 43.8 million and $ 30.4 million, respectively, and a liability for unfunded commitments of approximately $ 0.1 million and $ 0.2 million, respectively.

As of September 30, 2025 and December 31, 2024, the Company’s CECL Reserve for its loans held at carrying value and loan receivable held at carrying value was approximately $ 51.3 million and $ 30.6 million, respectively, or 18.69 % and 10.36 %, respectively, of the Company’s total loans held at carrying value and loan receivable held at carrying value of approximately $ 274.7 million and $ 295.2 million, respectively, and is bifurcated between the current expected credit loss reserve (contra-asset) related to outstanding balances on loans held at carrying value and loan receivable held at carrying value of approximately $ 51.2 million and $ 30.4 million, respectively, and a liability for unfunded commitments of approximately $ 0.2 million and $ 0.2 million, respectively.

The liability was based on the unfunded portion of the loan commitment over the full contractual period over which the Company is exposed to credit risk through a current obligation to extend credit.

Management considered the likelihood that funding will occur and, if funded, the expected credit loss on the funded portion when determining the amount to allocate to its CECL Reserve.

Activity related to the CECL Reserve for outstanding balances and unfunded commitments on the Company’s loans held at carrying value and loan receivable held at carrying value as of and for the three and six months ended June 30, 2025 was as follows:

Outstanding (1)

Balance at March 31, 2025 $ 29,744,212 $ 142,743 $ 29,886,955

Balance at June 30, 2025 $ 43,834,149 $ 127,126 $ 43,961,275

Provision for (reversal of) current expected credit losses 7,336,004 36,774 7,372,778

1 unchanged sentence

Recoveries — — —

Balance at June 30, 2025 $ 43,834,149 $ 127,126 $ 43,961,275

Balance at September 30, 2025 $ 51,170,153 $ 163,900 $ 51,334,053

Outstanding (1)

3 unchanged sentences

Recoveries — — —

Balance at June 30, 2025 $ 43,834,149 $ 127,126 $ 43,961,275

(1) As of June 30, 2025 and December 31, 2024, the CECL Reserve related to outstanding balances on loans held at carrying value and loan receivable held at carrying value is recorded within current expected credit loss reserve in the Company’s consolidated balance sheets.

(2) As of June 30, 2025 and December 31, 2024, the CECL Reserve related to unfunded commitments on loans held at carrying value is recorded within current expected credit loss reserve as a liability in the Company’s consolidated balance sheets.

Balance at September 30, 2025 $ 51,170,153 $ 163,900 $ 51,334,053

(1) As of September 30, 2025 and December 31, 2024, the CECL Reserve related to outstanding balances on loans held at carrying value and loan receivable held at carrying value is recorded within current expected credit loss reserve in the Company’s consolidated balance sheets.

(2) As of September 30, 2025 and December 31, 2024, the CECL Reserve related to unfunded commitments on loans held at carrying value is recorded within current expected credit loss reserve as a liability in the Company’s consolidated balance sheets.

The Company continuously evaluates the credit quality of each loan by assessing the risk factors of each loan and assigning a risk rating based on a variety of factors.

13 unchanged sentences

The risk ratings are primarily based on historical data as well as taking into account future economic conditions.

As of June 30, 2025, the carrying value, excluding the CECL Reserve, of the Company’s loans held at carrying value and loan receivable held at carrying value within each risk rating by year of origination is as follows:

As of September 30, 2025, the carrying value, excluding the CECL Reserve, of the Company’s loans held at carrying value and loan receivable held at carrying value within each risk rating by year of origination is as follows:

2025 2024 2023 2022 2021 2020 Total

6 unchanged sentences

Gross write-offs $ — $ — $ — $ — $ — $ ( 1,777,246 ) $ ( 1,777,246 )

During the three months ended June 30, 2025, the Company deemed its equipment loan receivable with Public Company A uncollectible and wrote off the remaining balance.

During the nine months ended September 30, 2025, the Company deemed its equipment loan receivable with Public Company A uncollectible and wrote off the remaining balance.

At the time of write-off, the equipment loan with Public Company A had an outstanding principal balance of approximately $ 1.8 million and amortized cost of approximately $ 1.8 million.

3 unchanged sentences

INTEREST RECEIVABLE

The following table summarizes the interest receivable by the Company as of June 30, 2025 and December 31, 2024:

June 30, 2025 As of

The following table summarizes the interest receivable by the Company as of September 30, 2025 and December 31, 2024:

September 30, 2025 As of

December 31, 2024

13 unchanged sentences

Based on the terms of the Revolving Credit Agreement, the unused line fee is waived if our average revolver usage exceeds the minimum amount required per the Revolving Credit Agreement.

During the three and six months ended June 30, 2025, the Company incurred an unused line fee of approximately $ 18.3 thousand and $ 74.5 thousand, respectively.

During the three and nine months ended September 30, 2025, the Company incurred an unused line fee of approximately $ 28.6 thousand and $ 103.1 thousand, respectively.

The obligations of the Company under the Revolving Credit Facility are secured by certain assets of the Company comprising of or relating to loan obligations designated for inclusion in the borrowing base.

1 unchanged sentence

(1) liquidity of at least $ 5.0 million, (2) annual debt service coverage of at least 1.5 to 1.0 and (3) secured debt not to exceed 25 % of total consolidated assets of the Company and its subsidiaries.

To the best of our knowledge, as of June 30, 2025, we were in compliance in all material respects with all covenants contained in our Revolving Credit Agreement.

To the best of our knowledge, as of September 30, 2025, we were in compliance in all material respects with all covenants contained in our Revolving Credit Agreement.

In January 2025, the Company entered into Amendment Number Three to Loan and Security Agreement, by and among the Company, as borrower, the lenders party thereto, and the lead arranger, bookrunner and administrative agent party thereto, pursuant to which, among other things, the parties agreed to reduce the procedural requirements for obligor loan receivables to become eligible under the borrowing base.

In April 2025, the Company entered into Amendment Number Four to Loan and Security Agreement (“Amendment Number Four”), by and among the Company, as borrower, the lenders party thereto, and the lead arranger, bookrunner and administrative agent party thereto.

The Amendment, among other things, (i) extends the maturity date of the Agreement to April 29, 2028, (ii) increases the interest rate floor from 4.00 % to 7.00 %, (iii) permits certain restricted payments to be made upon the Company meeting certain terms and conditions, and (iv) expands the collateral secured under the Agreement from assets comprising of or relating to loan obligations designed for inclusion in the borrower base to substantially all of the Company’s and its subsidiaries’ assets.

Amendment Number Four, among other things, (i) extends the maturity date of the Revolving Credit Agreement to April 29, 2028, (ii) increases the interest rate floor from 4.00 % to 7.00 %, (iii) permits certain restricted payments to be made upon the Company meeting certain terms and conditions, and (iv) expands the collateral secured under the Revolving Credit Agreement from assets comprising of or relating to loan obligations designed for inclusion in the borrower base to substantially all of the Company’s and its subsidiaries’ assets.

In connection with the amendment, the Revolving Credit Facility has a lead commitment of $ 30.0 million from a FDIC-insured banking institution (which may be increased up to $ 100.0 million in aggregate, subject to available borrowing base and additional commitments) which may be borrowed, repaid and redrawn, subject to a borrowing base based on eligible loan obligations held by the Company and subject to the satisfaction of other conditions provided under the Revolving Credit Facility.

In June 2025, the Company entered into Amendment Number Five to the Loan and Security Agreement, by and among the Company, as borrower, the lenders party thereto, and the lead arranger, bookrunner and administrative party thereto.

The Amendment among other things increased the commitment from the lenders by $ 20.0 million to a total aggregate commitment of $ 50.0 million.

Interest is payable on the Revolving Credit Facility at the greater of (1) the applicable base rate plus 0.50 % and (2) 7.00 %, as provided in the Revolving Credit Agreement, payable in cash in arrears.

In connection with the Revolving Credit Agreement and related amendments, the Company incurred certain closing costs of approximately $ 35.9 thousand, which were included in prepaid expenses and other assets on the Company’s consolidated balance sheets and amortized over the life of the Revolving Credit Facility.

As of June 30, 2025 and December 31, 2024, outstanding borrowings under the Revolving Credit Facility were $ 10.4 million and $ 60.0 million, respectively, and $ 39.6 million and zero were available for borrowing as of June 30, 2025 and December 31, 2024, respectively.

As of June 30, 2025 and December 31, 2024, the interest rate on the Company’s borrowings under the Revolving Credit Facility was 8.00 %, respectively.

In June 2025, the Company entered into Amendment Number Five to the Loan and Security Agreement (“Amendment Number Five”), by and among the Company, as borrower, the lenders party thereto, and the lead arranger, bookrunner and administrative party thereto.

Amendment Number Five among other things increased the commitment from the lenders by $ 20.0 million to a total aggregate commitment of $ 50.0 million.

Interest is payable on the Revolving Credit Facility at the greater of (1) the applicable base rate plus 0.50 % and (2) 7.00 %, as provided in the Revolving Credit Agreement, as amended, payable in cash in arrears.

In connection with the Revolving Credit Agreement and related amendments, the Company incurred certain closing costs of approximately $ 0.1 million, which were included in prepaid expenses and other assets on the Company’s consolidated balance sheets and amortized over the life of the Revolving Credit Facility.

As of September 30, 2025 and December 31, 2024, outstanding borrowings under the Revolving Credit Facility were $ 22.0 million and $ 60.0 million, respectively, and $ 28.0 million and zero were available for borrowing as of September 30, 2025 and December 31, 2024, respectively.

As of September 30, 2025 and December 31, 2024, the interest rate on the Company’s borrowings under the Revolving Credit Facility was 7.75 % and 8.00 %, respectively.

AFCF Credit Facility

5 unchanged sentences

The AFCF Credit Facility matures on the earlier of (i) December 31, 2025 and (ii) the date of the closing of any unsecured debt with principal of at least $ 40.0 million used to refinance the AFCF Credit Agreement.

In April 2025, in conjunction with the entry by the Company into Amendment Number Four to the Revolving Credit Facility, the Company terminated that certain AFCF Credit Agreement, by and among the Company, as borrower, the

In April 2025, in conjunction with the entry by the Company into Amendment Number Four to the Revolving Credit Agreement, the Company terminated that certain AFCF Credit Agreement, by and among the Company, as borrower, the

lenders party thereto from time to time, and AFC Finance, LLC, as agent and lender.

1 unchanged sentence

As December 31, 2024, outstanding borrowings under the AFCF Credit Facility were $ 40.0 million and no amounts available for borrowing.

As of June 30, 2025, the AFCF Credit Facility had been terminated and no amounts were outstanding or available for borrowing thereunder.

As of September 30, 2025, the AFCF Credit Facility had been terminated and no amounts were outstanding or available for borrowing thereunder.

2027 Senior Notes

14 unchanged sentences

These events of default are subject to a number of important exceptions and qualifications set forth in the Indenture.

As of June 30, 2025 and December 31, 2024, the Company had $ 90.0 million in principal amount of the 2027 Senior Notes outstanding.

As of September 30, 2025 and December 31, 2024, the Company had $ 90.0 million in principal amount of the 2027 Senior Notes outstanding.

The 2027 Senior Notes are due on May 1, 2027.

Scheduled principal payments on the 2027 Senior Notes as of June 30, 2025 are as follows:

Scheduled principal payments on the 2027 Senior Notes as of September 30, 2025 are as follows:

2027 Senior Notes

4 unchanged sentences

Senior notes payable, net $ 89,057,895

The following tables reflect a summary of interest expense incurred during the three and six months ended June 30, 2025 and 2024:

The following tables reflect a summary of interest expense incurred during the three and nine months ended September 30, 2025 and 2024:

Three months ended

June 30, 2025

September 30, 2025

2027 Senior Notes Revolving Credit Facility AFCF Credit Facility Total

4 unchanged sentences

Three months ended

June 30, 2024

September 30, 2024

2027 Senior Notes Revolving Credit Facility AFCF Credit Facility Total

3 unchanged sentences

Total interest expense $ 1,452,714 $ 119,991 $ — $ 1,572,705

Six months ended

June 30, 2025

Nine months ended

September 30, 2025

2027 Senior Notes Revolving Credit Facility AFCF Revolving Credit Facility Total Borrowings

3 unchanged sentences

Total interest expense $ 4,353,244 $ 942,439 $ 8,889 $ 5,304,572

Six months ended

June 30, 2024

Nine months ended

September 30, 2024

2027 Senior Notes Revolving Credit Facility AFCF Revolving Credit Facility Total Borrowings

4 unchanged sentences

COMMITMENTS AND CONTINGENCIES

As of June 30, 2025 and December 31, 2024, the Company had the following commitments to fund various investments:

June 30, 2025 As of

As of September 30, 2025 and December 31, 2024, the Company had the following commitments to fund various investments:

September 30, 2025 As of

December 31, 2024

3 unchanged sentences

The Company from time to time may be a party to litigation or other legal proceedings relating to claims arising from the ordinary course of business.

As of June 30, 2025, the Company was not subject to any material pending legal proceedings to which the Company is a party or any of the Company’s assets are subject that could materially impact its business, financial condition or results of operations.

As of September 30, 2025, the Company was not subject to any material pending legal proceedings to which the Company is a party or any of the Company’s assets are subject that could materially impact its business, financial condition or results of operations.

The Company provides loans to companies operating in the cannabis industry which involves significant risks, including the risk of strict enforcement against the Company’s borrowers on the federal illegality of cannabis, the Company’s borrowers’ inability to renew or otherwise maintain their licenses or other requisite authorizations for their cannabis operations, and such loans lack of liquidity, and the Company could lose all or part of any of the Company’s loans.

5 unchanged sentences

Series A Preferred Stock

As of June 30, 2025 and December 31, 2024, the Company authorized 10,000 preferred shares and previously issued 125 of the preferred shares designated as 12.0 % Series A Cumulative Non-Voting Preferred Stock, par value $ 0.01 per share (the “Series A Preferred Stock”).

As of June 30, 2025 and December 31, 2024, there were zero shares of Series A Preferred Stock issued and outstanding, respectively.

As of September 30, 2025 and December 31, 2024, the Company authorized 10,000 preferred shares and previously issued 125 of the preferred shares designated as 12.0 % Series A Cumulative Non-Voting Preferred Stock, par value $ 0.01 per share (the “Series A Preferred Stock”).

As of September 30, 2025 and December 31, 2024, there were zero shares of Series A Preferred Stock issued and outstanding, respectively.

The Series A Preferred Stock entitles the holders thereof to receive cumulative cash dividends at a rate per annum of 12.0 % of the liquidation preference of $ 1,000 per share plus all accumulated and unpaid dividends thereon.

The Company generally may not declare or pay, or set apart for payment, any dividend or other distribution on any shares of the Company’s stock ranking junior to the Series A Preferred Stock as to dividends, including the Company’s common stock, or redeem, repurchase or otherwise make payments on any such shares, unless full, cumulative dividends on all outstanding

shares of Series A Preferred Stock have been declared and paid or set apart for payment for all past dividend periods.

or redeem, repurchase or otherwise make payments on any such shares, unless full, cumulative dividends on all outstanding shares of Series A Preferred Stock have been declared and paid or set apart for payment for all past dividend periods.

The holders of the Series A Preferred Stock generally have no voting rights except in limited circumstances, including certain amendments to the Company’s charter and the authorization or issuance of equity securities senior to or on parity with the Series A Preferred Stock.

6 unchanged sentences

There were no accrued and unpaid dividends at the time of redemption.

As of June 30, 2025 and December 31, 2024, the Company authorized 50,000,000 shares of common stock at $ 0.01 par value per share, pursuant to the Articles of Amendment, dated March 10, 2022 (“Common Stock”).

As of June 30, 2025 and December 31, 2024, 22,595,111 and 22,332,927 shares of Common Stock were issued and outstanding, respectively.

During the three and six months ended June 30, 2025 and the year ended December 31, 2024 , the Company did not issue any shares of its common stock, other than shares of common stock sold under the ATM Program (hereinafter defined) and restricted stock awards granted under the 2020 Plan.

As of September 30, 2025 and December 31, 2024, the Company authorized 50,000,000 shares of common stock at $ 0.01 par value per share, pursuant to the Articles of Amendment, dated March 10, 2022 (“Common Stock”).

As of September 30, 2025 and December 31, 2024, 22,594,541 and 22,332,927 shares of Common Stock were issued and outstanding, respectively.

During the three and nine months ended September 30, 2025 and the year ended December 31, 2024 , the Company did not issue any shares of its common stock, other than shares of common stock sold under the ATM Program (hereinafter defined) and restricted stock awards granted under the 2020 Plan.

Shelf Registration Statement

10 unchanged sentences

Sales of common stock, if any, may be made in transactions that are deemed to be “at-the-market” offerings, as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended (the “Securities Act”).

During the three and six months ended June 30, 2025, the Company did not sell any shares of the Company’s common stock under the Sales Agreement.

During the three and nine months ended September 30, 2025, the Company did not sell any shares of the Company’s common stock under the Sales Agreement.

At the time of termination, the Company’s remaining authorization under the Sales Agreement was approximately $ 47.4 million.

As of June 30, 2025, the ATM Program was no longer in effect.

As of September 30, 2025, the ATM Program was no longer in effect.

The ATM Program and related Sales Agreement expired in April 2025, in connection with the expiration of the Company’s Prior Shelf Registration Statement.

7 unchanged sentences

Persons eligible to receive awards under the 2020 Plan include officers or employees of the Company or any of its subsidiaries, directors of the Company, employees of the Manager and certain directors, consultants and other service providers to the Company or any of its subsidiaries.

During the six months ended June 30, 2025, the Company’s Board of Directors approved grants of an aggregate of 271,497 shares of restricted stock to the Company’s directors and certain officers, as well as certain employees of the Manager and its affiliates.

The restricted stock awards granted during the six months ended June 30, 2025 under the 2020 Plan are subject to vesting periods that vary from immediately vested, one-year vesting and to vesting over a three-year period, with approximately 33 % vesting on each of the first, second and third anniversaries of the vesting commencement date.

As of June 30, 2025, there were 2,860,379 shares of common stock granted under the 2020 Plan, underlying 2,148,885 options and 711,494 shares of restricted stock.

As of June 30, 2025, the maximum number of shares of the Company’s common stock that may be delivered pursuant to awards under the 2020 Plan (the “Share Limit”) equaled 3,609,722 shares, of which 749,343 shares remained available for future issuance under the 2020 Plan.

The Share Limit is consistent with the Share Limit as of March 31, 2025.

During the nine months ended September 30, 2025, the Company’s Board of Directors approved grants of an aggregate of 271,497 shares of restricted stock to the Company’s directors and certain officers, as well as certain employees of the Manager and its affiliates.

The restricted stock awards granted during the nine months ended September 30, 2025 under the 2020 Plan are subject to vesting periods that vary from immediately vested, one-year vesting and to vesting over a three-year period, with approximately 33 % vesting on each of the first, second and third anniversaries of the vesting commencement date.

As of September 30, 2025, there were 951,518 shares of common stock granted under the 2020 Plan, underlying 240,594 options and 710,924 shares of restricted stock.

As of September 30, 2025, the maximum number of shares of the Company’s common stock that may be delivered pursuant to awards under the 2020 Plan (the “Share Limit”) equaled 3,609,722 shares, of which 2,658,204 shares remained available for future issuance under the 2020 Plan.

The Share Limit is consistent with the Share Limit as of June 30, 2025.

Shares that are subject to or underlie awards that expire or, for any reason, are cancelled, terminated, forfeited, fail to vest or are not paid or delivered under the 2020 Plan will not be counted against the Share Limit and will again be available for subsequent awards under the 2020 Plan.

19 unchanged sentences

The weighted-average exercise price of stock options have been retroactively adjusted to give effect to the Spin-Off for all periods presented.

The following table presents the assumptions used in the Black-Scholes pricing model of options granted under the 2020 Plan during the three and six months ended June 30, 2025 and 2024:

The following table presents the assumptions used in the Black-Scholes pricing model of options granted under the 2020 Plan during the three and nine months ended September 30, 2025 and 2024:

Expected term

22 unchanged sentences

Stock Compensation

The following table summarize s the stock-based compensation expense incurred by the Company for the three and six months ended June 30, 2025 and 2024:

The following table summarize s the stock-based compensation expense incurred by the Company for the three and nine months ended September 30, 2025 and 2024:

Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

2025 2024 2025 2024

1 unchanged sentence

Stock Options

The following table summarizes the (i) non-vested options granted, (ii) vested options granted, (iii) exercised and (iv) forfeited options granted for the Company’s directors and officers and employees of the Manager and its affiliates as of June 30, 2025 and December 31, 2024:

June 30, 2025 As of

September 30, 2025 As of

December 31, 2024

4 unchanged sentences

Balance 239,694 2,168,452

The following tables summarize stock option activity as of and during the six months ended June 30, 2025:

The following tables summarize stock option activity as of and during the nine months ended September 30, 2025:

Number of options Weighted-average

3 unchanged sentences

Forfeited ( 1,928,758 ) 11.37

Outstanding as of June 30, 2025 2,147,985 $ 11.46 2.77 years $ —

Exercisable as of June 30, 2025 2,137,314 $ 11.45 2.76 years $ —

Unvested as of June 30, 2025 10,671 $ 12.99 3.53 years $ —

T he Company did not grant any options d uring the six months ended June 30, 2025 and 2024 .

No options were exercised during the six months ended June 30, 2025 and 2024 .

As of June 30, 2025 , there was approximately $ 6.2 thousand of total unrecognized compensation cost related to stock options, which is expected to be recognized over a weighted-average period of 0.53 years.

Outstanding as of September 30, 2025 239,694 $ 12.16 2.88 years $ —

Exercisable as of September 30, 2025 229,023 $ 12.12 2.86 years $ —

Unvested as of September 30, 2025 10,671 $ 12.99 3.28 years $ —

T he Company did not grant any options d uring the nine months ended September 30, 2025 and 2024 .

No options were exercised during the nine months ended September 30, 2025 and 2024 .

As of September 30, 2025 , there was approximately $ 3.3 thousand of total unrecognized compensation cost related to stock options, which is expected to be recognized over a weighted-average period of 0.28 years.

Restricted Stock

The following table summarizes restricted stock (i) granted, (ii) vested and (iii) forfeited for the Company’s directors and officers and employees of the Manager and its affiliates as of June 30, 2025 and December 31, 2024:

June 30, 2025 As of

September 30, 2025 As of

December 31, 2024

4 unchanged sentences

The fair value of the Company’s restricted stock awards is based on the Company’s stock price on the date of grant.

The following table summarizes the restricted stock activity as of and during the six months ended June 30, 2025:

The following table summarizes the restricted stock activity as of and during the nine months ended September 30, 2025:

Number of shares of restricted stock Weighted-average

4 unchanged sentences

Forfeited ( 9,883 ) 8.74

Balance as of June 30, 2025 480,770 $ 8.53

There were no shares of restricted stock granted during the three months ended June 30, 2025 and 2024.

The total fair value of shares vested during the three months ended June 30, 2025 and 2024, was zero and $ 14.5 thousand, respectively.

During the three months ended June 30, 2024, 1,159 shares of restricted stock vested with a weighted-average grant date fair value of $ 12.94 per share.

During the six months ended June 30, 2024, 209,397 shares of restricted stock were granted with a weighted-average grant date fair value of $ 11.70 per share.

During the six months ended June 30, 2024, 62,338 shares of restricted stock vested with a weighted-average grant date fair value of $ 14.50 per share.

The total fair value of shares vested during the six months ended June 30, 2025 and 2024, was approximately $ 1.1 million and $ 0.7 million, respectively.

As of June 30, 2025 , there was approximately $ 3.3 million of total unrecognized compensation cost related to non-vested restricted stock.

Balance as of September 30, 2025 477,786 $ 8.50

There were no shares of restricted stock granted during the three months ended September 30, 2025 and 2024.

The total fair value of shares vested during the three months ended September 30, 2025 and 2024, was $ 11.2 thousand and $ 25.0 thousand, respectively.

During the nine months ended September 30, 2024, 209,397 shares of restricted stock were granted with a weighted-average grant date fair value of $ 11.70 per share.

During the nine months ended September 30, 2024, 64,752 shares of restricted stock vested with a weighted-average grant date fair value of $ 14.50 per share.

The total fair value of shares vested during the nine months ended September 30, 2025 and 2024, was approximately $ 1.1 million and $ 0.8 million, respectively.

As of September 30, 2025 , there was approximately $ 2.8 million of total unrecognized compensation cost related to non-vested restricted stock.

That cost is expected to be recognized over a weighted-average period of 1.97 years.

EARNINGS PER SHARE

The following information sets forth the computations of basic and diluted weighted average earnings per common share for the three and six months ended June 30, 2025 and 2024:

The following information sets forth the computations of basic and diluted earnings per common share for the three and nine months ended September 30, 2025 and 2024:

Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

2025 2024 2025 2024

11 unchanged sentences

Discontinued operations $ — $ 0.01 $ — $ 0.14

Total basic weighted average earnings per common share $ ( 0.60 ) $ 0.80 $ ( 0.42 ) $ 0.79

Total basic earnings per common share $ ( 0.57 ) $ 0.06 $ ( 0.99 ) $ 0.85

Diluted earnings per share

1 unchanged sentence

Discontinued operations $ — $ 0.01 $ — $ 0.14

Total diluted weighted average earnings per common share $ ( 0.60 ) $ 0.80 $ ( 0.42 ) $ 0.79

Total diluted earnings per common share $ ( 0.57 ) $ 0.06 $ ( 0.99 ) $ 0.85

Diluted EPS was computed using the treasury stock method for stock options and restricted stock.

Diluted weighted average earnings per common share excluded 2,571,834 and 2,480,235 weighted average shares of unvested restricted stock and stock options due to anti-dilutive effect for the three and six months ended June 30, 2025, respectively, and 2,206,907 and 2,206,907 for the three and six months ended June 30, 2024, respectively .

For the three and six months ended June 30, 2025 , the potential dilutive shares due to unvested restricted stock and stock options were not included in the computation of diluted loss per share since to do so would decrease the loss per share from continuing operations.

Diluted earnings per common share excluded 1,717,543 and 2,104,898 weighted average shares of unvested restricted stock and stock options due to anti-dilutive effect for the three and nine months ended September 30, 2025, respectively, and 1,499,235 and 1,499,235 for the three and nine months ended September 30, 2024, respectively .

For the three and nine months ended September 30, 2025 , the potential dilutive shares due to unvested restricted stock and stock options were not included in the computation of diluted loss per share since to do so would decrease the loss per share from continuing operations.

A TRS is an entity taxed as a corporation that has not elected to be taxed as a REIT, in which a REIT directly or indirectly holds equity, and that has made a joint election with such REIT to be treated as a TRS.

3 unchanged sentences

The income tax provision is included in the line item income tax expense, including excise tax.

The income tax (benefit) provision for the Company was approximately $( 0.1 ) million and $( 25.6 ) thousand for the three and six months ended June 30, 2025, respectively, and $ 0.3 million and $ 0.4 million for the three and six months ended

June 30, 2024 , respectively.

The income tax expense for the three and six months ended June 30, 2025 and 2024 primarily related to activities of the Company’s taxable REIT subsidiary.

The income tax provision for the Company and TRS1 consisted of the following for the three and six months ended June 30, 2025 and 2024:

The income tax (benefit) provision for the Company was approximately $( 0.9 ) million and $( 0.9 ) million for the three and nine months ended September 30, 2025, respectively, and $ 0.4 million and $ 0.8 million for the three and nine months ended September 30, 2024 , respectively.

The income tax expense for the three and nine months ended September 30, 2025 and 2024 primarily related to activities of the Company’s taxable REIT subsidiary.

The income tax provision for the Company and TRS1 consisted of the following for the three and nine months ended September 30, 2025 and 2024:

Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

2025 2024 2025 2024

2 unchanged sentences

Total current income tax (benefit) expense ( 1,994 ) 394,210 92,735 838,545

Total deferred income tax expense (benefit) 43,873 — ( 8,702 ) —

Total deferred income tax (benefit) expense ( 872,668 ) — ( 881,370 ) —

Excise tax — ( 7,954 ) ( 111,665 ) ( 7,954 )

Total income tax (benefit) expense, including excise tax $ ( 874,662 ) $ 386,256 $ ( 900,300 ) $ 830,591

For the three and six months ended June 30, 2025 and 2024, the Company did not incur United States federal excise tax expense, respectively.

During the six months ended June 30, 2025, the Company received a partial refund of previously paid excise tax relating to the 2023 tax year, which was received in the second quarter of 2025.

For the three and nine months ended September 30, 2025 and 2024, the Company did not incur United States federal excise tax expense, respectively.

During the nine months ended September 30, 2025, the Company received a partial refund of previously paid excise tax relating to the 2023 tax year.

Excise tax represents a 4 % tax on the sum of a portion of the Company’s ordinary income and net capital gains not distributed during the period.

2 unchanged sentences

The Company does not have any unrecognized tax benefits and the Company does not expect that to change in the next 12 months.

As of June 30, 2025, tax years since 2021 remain subject to examination by taxing authorities.

The federal statutory rate was 21% for the three and six months ended June 30, 2025 and 2024.

As of September 30, 2025, tax years since 2022 remain subject to examination by taxing authorities.

The federal statutory rate was 21% for the three and nine months ended September 30, 2025 and 2024.

The primary difference between the Company’s statutory rate and effective tax rate is largely determined by the amount of income subject to tax by the Company’s taxable REIT subsidiary .

The Company expects that its future effective tax rate will be determined in a similar manner.

As of June 30, 2025 and December 31, 2024, the Company’s deferred tax assets were $ 0.7 million and $ 0.7 million, respectively, and are included in prepaid expenses and other assets in the Company’s consolidated balance sheets.

As of September 30, 2025 and December 31, 2024, the Company’s deferred tax assets were $ 1.6 million and $ 0.7 million, respectively, and are included in prepaid expenses and other assets in the Company’s consolidated balance sheets.

The Company believes it is more likely than not that the deferred tax assets will be realized in the future.

2 unchanged sentences

The Company recorded deferred tax assets related to temporary differences on the fair value adjustments of the unrealized losses of loans held in the TRS and CECL allowance on loans held in the TRS.

There were no valuation allowances for deferred tax assets during the three and six months ended June 30, 2025 and 2024.

There were no valuation allowances for deferred tax assets during the three and nine months ended September 30, 2025 and 2024.

Loans Held for Investment

4 unchanged sentences

A key determinant of risk, among other things, is the leverage through the loan relative to the enterprise value of the borrower.

As loans held by the Company are substantially illiquid with no active loan market, the Company depends on

primary market data, including newly funded loans, as well as secondary market data with respect to high-yield debt instruments and syndicated loans, as inputs in determining the appropriate market yield, as applicable.

The following tables present fair value measurements of loans held at fair value as of June 30, 2025 and December 31, 2024:

Fair Value Measurement as of June 30, 2025

As loans held by the Company are substantially illiquid with no active loan market, the Company depends on primary market data, including newly funded loans, as well as secondary market data with respect to high-yield debt instruments and syndicated loans, as inputs in determining the appropriate market yield, as applicable.

The following tables present fair value measurements of loans held at fair value as of September 30, 2025 and December 31, 2024:

Fair Value Measurement as of September 30, 2025

Total Level 1 Level 2 Level 3

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Total $ 30,510,804 $ — $ — $ 30,510,804

The following table presents changes in loans that use Level 3 inputs as of and for the six months ended June 30, 2025:

Six months ended

June 30, 2025

The following table presents changes in loans that use Level 3 inputs as of and for the nine months ended September 30, 2025:

Nine months ended

September 30, 2025

Total loans using Level 3 inputs at December 31, 2024 $ 30,510,804

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Loan repayments ( 2,133,120 )

Total loans using Level 3 inputs at June 30, 2025 $ 26,847,222

The change in unrealized losses included in the unaudited interim consolidated statements of operations attributable to loans held at fair value, categorized as Level 3, held as of June 30, 2025 is $( 1,741,448 ).

The following tables summarize the significant unobservable inputs the Company used to value the loans categorized within Level 3 as of June 30, 2025 and December 31, 2024.

Total loans using Level 3 inputs at September 30, 2025 $ 16,923,809

The following tables summarize the significant unobservable inputs the Company used to value the loans categorized within Level 3 as of September 30, 2025 and December 31, 2024.

The tables are not intended to be all-inclusive, but instead capture the significant unobservable inputs relevant to the Company’s determination of fair values.

As of June 30, 2025

As of September 30, 2025

Unobservable Input

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Due to the inherent uncertainty of determining the fair value of loans that do not have a readily available market value, the fair value of the Company’s loans may fluctuate from period to period.

Additionally, the fair value of the Company’s loans may differ significantly from the values that would have been used had a ready market existed for such loans and may

differ materially from the values that the Company may ultimately realize.

Additionally, the fair value of the Company’s loans may differ significantly from the values that would have been used had a ready market existed for such loans and may differ materially from the values that the Company may ultimately realize.

Further, such loans are generally subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities.

If the Company was required to liquidate a loan in a forced or liquidation sale, it could realize significantly less than the value at which the Company has recorded it.

If the Company was required to

liquidate a loan in a forced or liquidation sale, it could realize significantly less than the value at which the Company has recorded it.

In addition, changes in the market environment and other events that may occur over the life of the loans may cause the gains or losses ultimately realized on these loans to be different than the unrealized gains or losses reflected in the valuations currently assigned.

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GAAP requires disclosure of fair value information about financial instruments, whether or not recognized at fair value in the balance sheets, for which it is practicable to estimate that value.

The following table details the book value and fair value of the Company’s financial instruments not recognized at fair value in the unaudited interim consolidated balance sheets as of June 30, 2025 :

As of June 30, 2025

The following table details the carrying value and fair value of the Company’s financial instruments not recognized at fair value in the unaudited interim consolidated balance sheets as of September 30, 2025 :

As of September 30, 2025

Carrying Value Fair Value

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Cash and cash equivalents $ 45,120,389 $ 45,120,389

Loans held for investment at carrying value $ 300,946,208 $ 256,542,083

Loans held for investment at carrying value, net $ 274,725,669 $ 222,847,572

Financial liabilities:

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“Core Earnings” is defined in the Management Agreement as, for a given period, the net income (loss) for such period, computed in accordance with GAAP, excluding (i) non-cash equity compensation expense, (ii) the Incentive Compensation, (iii) depreciation and amortization, (iv) any unrealized gains or losses or other non-cash items that are included in net income for the applicable reporting period, regardless of whether such items are included in other comprehensive income or loss, or in net income and (v) one-time events pursuant to changes in GAAP and certain non-cash charges, in each case after discussions between the Manager and the Company’s independent directors and approved by a majority of the independent directors.

The Incentive Compensation for the three and six months ended June 30, 2025 was zero and zero , respectively.

The Incentive Compensation for the three and six months ended June 30, 2024 was approximately $ 2.9 million and $ 5.3 million, respectively.

There was no Incentive Compensation for the three and nine months ended September 30, 2025, respectively.

The Incentive Compensation for the three and nine months ended September 30, 2024 was approximately $ 0.3 million and $ 5.6 million, respectively.

The Company is required to pay all of its costs and expenses and reimburse the Manager or its affiliates for expenses of the Manager and its affiliates paid or incurred on behalf of the Company, excepting only those expenses that are specifically the responsibility of the Manager pursuant to the Management Agreement.

With respect to certain office expenses incurred by the Manager on behalf of the Company and other funds managed by the Manager or its affiliates, such as rent, the Manager determines each fund’s pro rata portion of such expenses in an amount equal to the proportional amount of time employees of the Manager spent providing services to the Company, as reasonably stipulated by time sheets.

The following table summarizes the related party costs incurred by the Company for the three and six months ended June 30, 2025 and 2024 :

The following table summarizes the related party costs incurred by the Company for the three and nine months ended September 30, 2025 and 2024 :

Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

2025 2024 2025 2024

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Total $ 1,230,349 $ 1,584,711 $ 3,872,874 $ 10,564,764

Amounts payable to the Manager as of June 30, 2025 and December 31, 2024 were approximately $ 1.4 million and $ 3.1 million, respectively.

Amounts payable to the Manager as of September 30, 2025 and December 31, 2024 were approximately $ 1.4 million and $ 3.1 million, respectively.

The Manager is a wholly-owned subsidiary of Castleground Holdings LLC (the “Parent Manager”).

The outstanding equity of the Parent Manager is beneficially owned by certain officers as of the date of this Quarterly Report on Form 10-Q:

72.4 % by Leonard Tannenbaum, Chairman of the Board, 9.7 % by Robyn Tannenbaum, President and Chief Investment Officer, 9.7 % by other Tannenbaum family members and trusts, 2.9 % by Bernard Berman, a member of the Company’s Investment Committee, 2.5 % by Daniel Neville, Chief Executive Officer, 1.5 % by Brandon Hetzel, Chief Financial Officer and Treasurer, and 1.0 % by Gabriel Katz, Chief Legal Officer and Secretary, respectively.

At the August Meeting, the Board, including a majority of the directors who are not “interested persons” (“Independent Directors”) of the Company (as that term is defined under the 1940 Act)), unanimously approved, subject to the approval of the Company’s shareholders, a new Investment Advisory Agreement between the Company and the Manager.

At the August Meeting, the Board unanimously approved a series of matters intended to facilitate the Conversion.

Among other things, the Board, including the Independent Directors, approved the Investment Advisory Agreement, subject to approval by the Company’s shareholders.

In the coming months, the Board will consider other matters required to effect the Conversion.

There can be no assurance that the Board will approve the additional matters required to effect the Conversion.

Investments in Loans

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Additionally, the Manager or its affiliates, including AFC Agent, may from time to time serve as administrative and collateral agent to the lenders under the Company’s loans.

As of June 30, 2025, there were two co-invested loans held by the Company and affiliates of the Company.

As of September 30, 2025, there were two co-invested loans held by the Company and affiliates of the Company.

Unsecured Revolving Credit Facility with Affiliate

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DIVIDENDS AND DISTRIBUTIONS

The following table summarizes the Company’s dividends declared during the six months ended June 30, 2025 and 2024:

The following table summarizes the Company’s dividends declared during the nine months ended September 30, 2025 and 2024:

Declaration Date Record Date Payment

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Special cash dividend 6/27/2024 7/8/2024 7/15/2024 0.15 3,100,064

Regular cash dividend 9/13/2024 9/30/2024 10/15/2024 0.33 7,221,076

2024 Period Subtotal

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6/13/2025 6/30/2025 7/15/2025 0.15 3,389,267

Regular cash dividend

9/15/2025 9/30/2025 10/15/2025 0.15 3,389,181

2025 Period Subtotal

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Cash flows from the Company’s discontinued operations are presented as such in the consolidated statements of cash flows for all periods presented.

The following table summarizes the financial statement lines included in net income from discontinued operations, net of tax for the three and six months ended June 30, 2025 and 2024:

The following table summarizes the financial statement lines included in net income from discontinued operations, net of tax for the three and nine months ended September 30, 2025 and 2024:

Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

2025 2024 2025 2024

4 unchanged sentences

Net income from discontinued operations, net of tax $ — $ 165,944 $ — $ 2,922,068

During the three and six months ended June 30, 2025 and 2024, Spin-Off costs incurred were zero and zero , respectively, and approximately $ 0.6 million and $ 1.1 million, respectively.

During the three and nine months ended September 30, 2025 and 2024, Spin-Off costs incurred were zero and zero , respectively, and approximately $( 15.6 ) thousand and $ 1.1 million, respectively.

During the three months ended September 30, 2024, previous estimates for Spin-Off work performed were less than actuals, resulting in a credit to expense.

Prior to the completion of the Spin-Off in the third quarter of 2024, Spin-Off costs were historically presented within professional fees in the consolidated statements of operations and are now included in the measurement and presentation of discontinued operations for all periods presented.

There were no assets or liabilities classified as discontinued operations as of June 30, 2025 or December 31, 2024.

There were no assets or liabilities classified as discontinued operations as of September 30, 2025 or December 31, 2024.

REPORTABLE SEGMENTS

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The CODM uses net income to evaluate income generated from segment assets and in deciding the amount of dividends to be distributed, as well as using net income as a basis for evaluating lender terms for loans with state law compliant operators.

During the three and six months ended June 30, 2025, interest income earned on the Company’s portfolio was concentrated with five and five borrowers, respectively, each comprising more than 10% of consolidated interest income for an aggregate amount of $ 5.8 million, or 72 %, and $ 11.7 million, or 71 %, of consolidated interest income, respectively.

During the three and six months ended June 30, 2024, interest income earned on the Company’s portfolio was concentrated with five and two borrowers, respectively, each comprising more than 10% of consolidated interest income for an aggregate amount of $ 12.9 million, or 72 %, and $ 13.0 million, or 40 %, of consolidated interest income, respectively.

During the three and nine months ended September 30, 2025, interest income earned on the Company’s portfolio was concentrated with five and five borrowers, respectively, each comprising more than 10% of consolidated interest income for an aggregate amount of $ 6.1 million, or 75 %, and $ 17.8 million, or 72 %, of consolidated interest income, respectively.

During the three and nine months ended September 30, 2024, interest income earned on the Company’s portfolio was concentrated with six and three borrowers, respectively, each comprising more than 10% of consolidated interest income for an aggregate amount of $ 9.0 million, or 86 %, and $ 19.8 million, or 46 %, of consolidated interest income, respectively.

SUBSEQUENT EVENTS

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There were no material subsequent events, other than those described below, that required disclosure in these unaudited interim consolidated financial statements.

In July 2025, AFC Agent delivered a notice of default and acceleration to Private Company P based on certain payment defaults, including the failure to make its interest payment when due for July 1, 2025, and began charging additional default interest of 5.0 %, in accordance with the terms of the credit facility with Private Company P.

The Company placed the loan with Private Company P on nonaccrual status effective June 1, 2025.

AFC Agent, on behalf of the Company and its affiliates, is actively pursuing judicial and non-judicial remedies against Private Company P.

In August 2025, the Company entered into an agreement to purchase $ 10.0 million in outstanding principal amount of a senior secured term loan to Subsidiary of Public Company S, a publicly traded operator, at a 4.0 % discount.

The term loan under the Subsidiary of Public Company S Credit Facility accrues interest at a fixed rate per annum of 12.5 % and matures in August 2030.

Concurrently, the Company’s existing $ 10.0 million investment with Subsidiary of Public Company S was repaid at par plus accrued interest and the Company recognized an exit fee of approximately $ 0.2 million.

At the August Meeting, the Board, including a majority of the Independent Directors, unanimously approved, subject to the approval of the Company’s shareholders, a new Investment Advisory Agreement between the Company and the Manager.

If approved by the shareholders, the new Investment Advisory Agreement would enable the Company to operate as a BDC under the 1940 Act.

The Company believes that converting from a mortgage REIT to a BDC (the “Conversion”) would enable the Company to pursue a broader array of investment opportunities, as further discussed below.

The Company expects, in the coming days, to file a preliminary proxy statement with the U.S.

Securities and Exchange Commission (“SEC”) and, subsequently, to mail definitive proxy statements to its shareholders seeking their approval of (1) the new Investment Advisory Agreement and (2) in connection with its anticipated operation as a BDC, a reduction in the asset coverage ratio applicable to the Company (enabling the Company to utilize a greater degree of leverage than would otherwise be permitted), all of which will be more fully described in the proxy statement.

In addition, in the coming months, the Board will consider other matters necessary to effect the Company’s conversion to a BDC.

There can be no assurance that the Board or the Company’s shareholders will approve the matters necessary for the Company to convert to a BDC.

BDC conversion expenses incurred were approximately $ 0.2 million and $ 0.2 million for the three and six months ended June 30, 2025, respectively.

The Company currently operates as a mortgage REIT and has historically focused on lending to cannabis operators.

In order to qualify as a mortgage REIT for income tax purposes and avoid being subject to registration under the 1940 Act, the Company currently must focus its investments in certain types of real estate-related assets, including loans collateralized by real property, which limits the universe of qualifying assets.

The Company is pursuing the Conversion, which, subject to shareholder approval, will result in the Company ceasing to operate as a mortgage REIT and electing to be regulated as a BDC under the 1940 Act, to enable it to invest in a much broader universe of assets, including both real estate- and non-real estate-related assets.

Following the Conversion, the Company expects that it would seek to qualify to be treated as a regulated investment company for federal income tax purposes.

The Company has historically targeted lending to vertically integrated cannabis companies with significant real estate holdings.

Given the capital-intensive nature of the cannabis industry, combined with the high cost of capital, many operators do not own real estate, which significantly limits the universe of cannabis operators to which the Company can lend as a mortgage REIT.

The Conversion would allow the Company to invest in non-real estate covered vertically integrated operators.

In addition, following the Conversion, the Company intends to continue investing in businesses ancillary to the cannabis industry, as contemplated under the Sixth Amendment.

Ancillary cannabis businesses can have high growth potential, but often do not own real property and have limited access to debt capital.

If completed, the transition to a BDC will enable the Company to significantly expand its investment universe by increasing its ability to lend to ancillary cannabis businesses as well as non-real estate covered vertically integrated operators.

In October 2025 , AFC Agent received approximately $ 5.4 million in total loan payments from Private Company A’s sale of its collateral assets, of which approximately $ 4.2 million was allocated to the Company relating to the Company’s pro rata portion of the Private Company A Credit Facility and was applied as a reduction to the amortized cost of the Private Company A loan.

Following the payment, the Company’s outstanding principal balance under the Private Company A Credit Facility was approximately $ 46.8 million.

AFC Agent continues to monitor the court-appointed receivership installed to maintain the borrower’s operations and maximize value for the benefit of its creditors.

Subsequent to the end of the reporting period, on November 6, 2025, the Company held the Special Meeting, at which shareholders approved the Proposals.

In the coming months, the Board will consider other matters required to effect the Conversion.

There can be no assurance that the board will approve the matters required to effect the Conversion.

In connection with the settlement and release, the Company will be paid a settlement in the amount of $ 13.3 million, less certain fees and expenses, with $ 6.0 million of the settlement payment to be financed by the Company via a new loan to Private Company T at a 10 % interest rate.

The new loan will be secured by a second priority lien on the borrower’s real property and a first priority lien on certain of the borrower’s equipment and other personal property.

The new loan is to be repaid over a term of three years (subject to a one-year extension), with monthly cash payments of principal and interest.

Closing of the settlement and the related loan is expected to occur in the fourth quarter of 2025.

As of September 30, 2025, the Company’s net carrying value of its non-performing loan with Private Company P was approximately $ 11.2 million, which was net of a $ 4.1 million CECL Reserve.

In connection with the settlement and release, the Company expects to realize a taxable loss of approximately $ 4.1 million and write-off the CECL Reserve of $ 4.1 million once the closing of the transaction is completed .

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

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• impact of and changes in governmental regulations, tax law and rates, accounting guidance, tariffs and similar matters;

• our ability to maintain our exemption from registration under the Investment Company Act of 1940 (the “Investment Company Act”);

• our ability to maintain our exemption from registration under the Investment Company Act of 1940 (the “1940 Act”);

• our ability to qualify and maintain our qualification as a real estate investment trust (a “REIT”) for U.S.

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The above list of factors is not exhaustive or necessarily in order of importance.

Please see the section entitled “ Risk Factors ” located in our Annual Report on Form 10-K, filed with the SEC on March 13, 2025 and subsequently filed Quarterly Reports on Form 10-Q, for a further discussion of these and other risks and uncertainties which could affect our future results.

Please see the section entitled “ Risk Factors ” located in our Annual Report on Form 10-K, filed with the SEC on March 13, 2025 and in our subsequently filed Quarterly Reports on Form 10-Q, for a further discussion of these and other risks and uncertainties which could affect our future results.

These forward-looking statements apply only as of the date of this report and we undertake no obligation to update or revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events, except to the extent we are legally required to disclose certain matters in SEC filings or otherwise.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements