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Item 7. Management’s Discussion and Analysis

2026-03-04 compared with 2025-03-13 · 322 added, 256 removed, 337 unchanged (63% of the section changed)

6 unchanged sentences

is an institutional lender that was founded in July 2020 by a veteran team of investment professionals.

We primarily originate, structure, underwrite, invest in and manage senior secured loans and other types of mortgage loans and debt securities, with a specialization in loans to cannabis industry operators in states that have legalized medical and/or adult-use cannabis.

Our investment guidelines primarily relate to deploying capital in attractive lending opportunities to state law-compliant cannabis operators, typically secured by real estate, equipment, cash flows and license value.

Our objective is to provide attractive risk-adjusted returns over time through cash distributions and capital appreciation primarily by providing loans to state law compliant cannabis companies.

The loans we originate are primarily structured as senior loans typically secured by real estate, equipment, cash flows and the value associated with licenses (where applicable) and/or other assets of the loan parties to the extent permitted by applicable laws and the regulations governing such loan parties.

We are a Maryland corporation and externally managed by AFC Management, LLC.

Effective January 1, 2026, we elected to be regulated as a business development company (“BDC”) under the 1940 Act, as amended (the “1940 Act”).

During the year ended December 31, 2025, we primarily originated, structured, underwrote, invested in and managed senior secured loans and other types of mortgage loans and debt securities, with a specialization in loans to cannabis industry operators in states that have legalized medical and/or adult-use cannabis.

During that period, our investment guidelines primarily related to deploying capital in attractive lending opportunities to state law-compliant cannabis operators, typically secured by real estate, equipment, cash flows and license value.

Our objective is to provide attractive risk-adjusted returns over time through cash distributions and capital appreciation.

During 2025, we sought to attain this objective primarily by providing loans to state law compliant cannabis companies.

The loans we originate during this period were primarily structured as senior loans typically secured by real estate, equipment, cash flows and the value associated with licenses (where applicable) and/or other assets of the loan parties to the extent permitted by applicable laws and the regulations governing such loan parties.

Some of our cannabis-related borrowers have their equity securities listed for public trading on the Canadian Securities Exchange (“CSE”) in Canada and/or over-the-counter (“OTC”) in the United States.

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Updates to Our Loan Portfolio During the Year Ended December 31, 2025

During the year ended December 31, 2024, we received approximately $21.8 million in aggregate principal prepayments f rom Private Company L’s sale of certain collateral assets, which was applied to our outstanding principal balance, recognizing $0.6 million in prepayment premiums and $0.04 million in exit fees.

In January 2024, we delivered a reservation of rights letter to Private Company K with respect to the occurrence of certain events of default, including the failure to make principal and interest payments when due and to deliver monthly statements as required under the credit agreement with Private Company K.

In March 2024, we entered into a forbearance agreement with Private Company K, pursuant to which we agreed to forbear from exercising certain remedies as a result of certain defaults under the credit agreement.

In exchange for such forbearance, Private Company K agreed to, among other things, (i) additional reporting requirements and (ii) contribute additional cash equity in an aggregate amount of up to $5.5 million in increments on or before August 31, 2024 or obtain a combination of additional equity and debt financing in an aggregate amount of up to $8.5 million in increments on or before August 31, 2024, with certain of the proceeds applied to the outstanding obligations under the credit agreement.

The existing credit agreement was amended by the forbearance agreement entered into with Private Company K to require a portion of cash interest payments to instead be paid in kind from December 2023 to May 2024, interest for the remainder of the months during the term of the forbearance agreement to be payable in cash in arrears and payments of principal during the term of the forbearance to be deferred.

As part of the equity requirements under the forbearance agreement with Private Company K, we received a cash payment of approximately $1.5 million in June 2024, which was applied to the outstanding interest and principal under the credit agreement with Private Company K.

In June 2024, we delivered a reservation of rights letter to Private Company K with respect to the occurrence of certain events of default under the credit agreement and the forbearance agreement, including the failure to make principal and interest payments when due.

See “ Management's Discussion and Analysis of Financial Condition and Results of Operations—Recent Developments ” regarding recent updates with respect to our loan with Private Company K.

In March 2024, we sold $6.0 million of our investment in Subsidiary of Public Company M, which was sold for approximately 94% of face value, compared to a blended weighted-average carrying value of 96%, resulting in a realized loss of approximately $0.1 million.

In July 2024, we received an approximately $10.0 million principal prepayment and $0.2 million prepayment premium on our investment in Subsidiary of Public Company M.

Following the prepayment, the aggregate outstanding principal balance on our investments in Subsidiary of Public Company M is approximately $2.8 million as of December 31, 2024.

In March 2024, we were repaid on all outstanding principal under the loan to Private Company I, which was previously placed on nonaccrual status, effective May 1, 2023.

In addition to the repayment of the outstanding principal amount of approximately $3.8 million, we also received and recognized past due cash interest of approximately $0.7 million during the year ended December 31, 2024.

During the year ended December 31, 2024, we received approximately $5.2 million in aggregate principal prepayments from Private Company A’s sale of certain collateral assets and monthly payments, which was applied to our outstanding principal balance.

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

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.

In September 2024, we purchased $4.6 million of outstanding principal of a third-party syndicate partner’s minority debt as part of the credit agreement with Private Company A for approximately $1.8 million.

We now hold approximately $53.1 million of outstanding principal as of December 31, 2024.

In March 2024, we entered into the 2024 Subsidiary of Private Company G Forbearance Agreement, pursuant to which we agreed to forbear from exercising certain remedies as a result of certain events of default under the credit agreement and under the 2023 Subsidiary of Private Company G Forbearance Agreement.

In exchange for such forbearance, Subsidiary of Private Company G agreed to, among other things, (i) contribute additional cash equity in an aggregate amount of not less than $3.0 million before April 30, 2024, (ii) sell certain assets, the proceeds of which will be applied to pay down outstanding obligations under the credit agreement, (iii) enter into a management services agreement with a third party with respect to Subsidiary of Private Company G’s operations in Pennsylvania, (iv) enter into a consulting or similar agreement with a third party with respect to Subsidiary of Private Company G’s operations in New Jersey, and (v) deliver additional reporting requirements.

In addition, the existing credit agreement was amended by 2024 Subsidiary of Private Company G Forbearance Agreement to, for the remaining life of the loan (so long as Subsidiary of Private Company G complies with its obligations under the 2024 Subsidiary of Private Company G Forbearance Agreement):

(a) remove the financial

covenants, (b) revise the existing cash flow sweep such that 75% of excess cash flow is paid toward current interest, accrued interest and principal, (c) change the interest rate on the loans to 12.5% per annum, a minimum portion of which is payable in cash pursuant to the excess cash flow sweep, and the remainder of which, if any, is paid in kind, and (d) remove required amortization payments.

In May 2024, we delivered a reservation of rights letter to Subsidiary of Private Company G with respect to the occurrence of certain events of default under the 2024 Subsidiary of Private Company G Forbearance Agreement , including the failure to deliver proceeds of cash equity contributions and other deliverables by the deadlines set forth in the 2024 Subsidiary of Private Company G Forbearance Agreement .

The Company agreed to a cure period and to continue the forbearance period so long as the deliverables were made by the cure date, with which the Subsidiary of Private Company G was able to comply.

See “ Management's Discussion and Analysis of Financial Condition and Results of Operations—Recent Developments ” regarding recent updates with respect to our loan with Subsidiary of Private Company G.

In March 2024, we entered into two senior secured credit facilities with Private Company N totaling $34.0 million, which were fully funded at closing.

The loans are bifurcated between Private Company N Real Estate and Private Company N Non-Real Estate with commitments of $16.8 million and $17.2 million, respectively, and were originated at a discount of 4.0%, for a net funded amount of approximately $16.1 million and $16.5 million, respectively.

The loans each bear interest at an annual rate of SOFR plus 8.0%, subject to a SOFR floor of 4.5%, and mature on April 1, 2028.

In May 2024, we entered into the first amendment to the credit agreement with Private Company N - Real Estate, which increased the commitment size approximately $0.7 million and is fully funded under the same terms of the existing credit agreement.

In August 2024, we entered into the second amendment to the credit agreement with Private Company N - Real Estate, which increased the total aggregate commitment by an additional approximately $1.8 million under the terms of the existing credit agreement.

As of December 31, 2024, the loan with Private Company N - Real Estate is fully funded.

In May 2024, we entered into a $7.5 million senior secured credit facility with Private Company O.

The loan bears interest at SOFR plus an 8.5% spread, subject to a SOFR floor of 5.0%, and matures June 1, 2028.

In January 2025, AFC Agent placed Private Company K in a consensual receivership to operate the collateral assets for the benefit of the Company, as a secured lender, and all other stakeholders.

In February 2025, we entered into a $15.0 million senior secured credit facility with Private Company U, which was fully funded at closing.

The loan was originated at a discount of 2.5% and matures March 1, 2028.

The loan bears interest at 14.0%.

In February 2025, AFC Agent, on behalf of the Company and the other lenders, initiated a mortgage foreclosure proceeding in connection with the forbearance agreement entered into by the Company and Subsidiary of Private Company

G in March 2024 (the “2024 Subsidiary of Private Company G Forbearance Agreement”) over a cultivation facility owned by Subsidiary of Private Company G.

The Company also delivered a reservation of rights letter to Subsidiary of Private Company G concerning the occurrence of events of default and forbearance defaults under the credit agreement and the 2024 Subsidiary of Private Company G Forbearance Agreement, respectively, including unpermitted payments, the failure to maintain and preserve one of Subsidiary of Private Company G’s cannabis licenses and its cultivation facility and its failure to cooperate with us in the foreclosure proceeding.

We believe these defaults have had a material adverse impact on Subsidiary of Private Company G’s ability to operate its business and make payments under the credit agreement.

AFC Agent is also therefore pursuing a payment guarantee from the parent company and the beneficial shareholders of Subsidiary of Private Company G that guaranteed the loan.

In April 2025, we and AFC Agent (collectively, the “AFC Parties”) commenced separate legal actions against (i) two shareholders (the “Guarantors”) of the parent of Subsidiary of Private Company G in the United States District Court for the Southern District of New York asserting claims for violations of the Racketeer Influenced and Corrupt Organizations Act, breach of a shareholder guaranty, tortious interference with contract, fraud, aiding and abetting fraud, and conversion and (ii) the parent of Subsidiary of Private Company G in New York state court asserting a claim for breach of contract arising from its failure to satisfy its obligations under a guaranty agreement related to the Company’s credit facility with Subsidiary of Private Company G.

In June 2025, the AFC Parties filed an amended complaint against the Guarantors, asserting claims for breach of contract, tortious interference with contract, fraud, aiding and abetting fraud, and conversion, and dismissing without prejudice the RICO cause of action.

In July 2025, the Guarantors moved to dismiss the action and, in a separate motion, moved to transfer it to the District of New Jersey.

Those motions are pending.

AFC Agent is required to file a Note of Issue indicating the action is ready for trial by September 23, 2026.

In April 2025, two Subsidiaries of Private Company G-affiliated cannabis companies (the “Plaintiffs”) that are borrowers the Company’s credit facility with Subsidiary of Private Company G filed a complaint in the United States District Court for the District of New Jersey alleging, among other things, breach of contract, breach of the implied covenant of good faith and fair dealing, and violations of the New York Uniform Commercial Code in connection with the Company’s termination of a forbearance agreement between the parties.

In May 2025, the court granted Plaintiffs’ request for a preliminary injunction, enjoining the Company from seizing any of Plaintiffs’ assets or cash or enforcing any remedy for Subsidiary of Private Company G’s failure to (a) cooperate in the foreclosure proceeding on the Pennsylvania property;

(b) provide annual audited financial statements for fiscal years 2023 and 2024;

or (c) obtain a certificate of occupancy for the New Jersey facility by May 15, 2024.

The Court did not consider Subsidiary of Private Company G’s failure to maintain and preserve one of its subsidiary cannabis licenses or its unpermitted payments.

In June 2025, the AFC Parties appealed the injunction to the Third Circuit Court of Appeals, which heard oral argument on March 3, 2026.

On February 23, 2026, the District Court granted the AFC Parties’ motion for summary judgment on the Amended Complaint’s fourth count, which sought declaratory relief relating to the outstanding loan balance.

The credit facility to Subsidiary of Private Company G matures on May 1, 2026.

Because each of these actions are in their early stages, no reasonable estimate of possible outcomes resulting from these legal actions can be made at this time.

On September 9, 2025, a complaint was filed in the Superior Court of the State of California in Los Angeles County naming, among others, the Company, the Manager, and certain of their officers and/or directors as defendants.

On September 19, 2025, an amended complaint was filed in the same action that revised certain allegations, but did not assert new causes of action or add or remove plaintiffs or defendants.

The amended complaint was filed by the parent company and two subsidiaries of Private Company G.

The complaint alleges that the Company conspired with a restructuring advisory firm to mismanage the borrowers’ operations and wrongfully seize their assets during a forbearance period that followed the borrowers’ material defaults under the credit facility.

The complaint alleges claims for breach of fiduciary duty, conversion, intentional interference with contract, and unjust enrichment, and seeks substantial monetary damages.

On January 8, 2026, the Superior Court quashed service of summons as to the Company, Manager, and their officers and directors for lack of personal jurisdiction.

During the year ended December 31, 2025, we received approximately $5.5 million in aggregate voluntary prepayments from Private Company L, which was applied to our outstanding principal balance, recognizing $0.1 million in exit fees.

In April 2025, we entered into a $14.0 million senior secured credit facility with Subsidiaries of Private Company V.

The loan was originated at a discount of 3.0% and matures April 1, 2029.

The loan bears cash interest at 12.5% and 1.5%

interest paid-in kind.

As of December 31, 2025, approximately $12.4 million was drawn and the remainder is available to be drawn within one year of closing.

In May 2024, Private Company C repaid its loan in full.

The loan had an original maturity date of December 1, 2025 and the outstanding principal of Private Company C on the date of repayment was approximately $3.5 million.

We received exit fees of approximately $1.7 million.

In June 2024, we sold our loan with Private Company B at par plus accrued interest.

The outstanding principal of the Private Company B credit facility on the date of the sale was approximately $19.3 million.

In previous quarters, we noted that the Private Company B credit facility matured, but was not repaid, in September 2023 and the borrower was placed in receivership.

In addition to the repayment of the outstanding principal amount of $19.3 million upon the sale, we also received an exit fee of approximately $1.0 million.

Concurrently with the sale of the loan to Private Company B, we entered into an approximately $15.1 million senior secured credit facility with Private Company P.

The borrower has since been removed from receivership and Private Company P is pursuing a foreclosure over the assets.

The loan bears interest at a fixed rate of 13.0%.

The credit agreement has a maturity date of three years, provided that in the event Private Company P has not acquired the assets of Private Company B within one year from closing, subject to a 120 day extension on the terms therein, our loan to Private Company P becomes due and payable.

The loan is secured by substantially all assets of Private Company P (and will include the assets of Private Company B when acquired).

In August 2024, we entered into the first amendment to the credit agreement with Private Company P, which amended the interest payable for July 2024 and August 2024 to be paid in kind and payable in cash thereafter.

In November 2024, in connection with its credit facility with Private Company P, we entered into a limited waiver and amendment to such facility to waive certain failures by Private Company P to pay monthly cash interest payments when due.

In connection with the waiver and amendment, Private Company P made a cash payment constituting the majority of such missed interest payments of approximately $0.3 million, with the remaining amount due capitalized into the loan balance.

Cash interest payments on the facility restarted January 1, 2025.

In June 2024, we sold the Subsidiary of Public Company H credit facility at par plus accrued interest to a third-party.

The outstanding principal on the date of the sale was $84.0 million.

During the first quarter of fiscal year 2024, we noted that the borrower failed to make its April interest payment.

In addition to the repayment of the outstanding principal amount of $84.0 million, we also received and recognized past due cash interest of approximately $2.3 million and default interest of approximately $0.6 million when sold during the year ended December 31, 2024.

In August 2024, we entered into the fourth amendment to the credit agreement with Private Company J, pursuant to which, we, among other things, (i) amended certain financial covenants, (ii) increased the total aggregate commitment by an

additional $5.5 million, of which we have funded $4.5 million as of December 31, 2024 and (iii) consented to Private Company J’s acquisition of three Missouri dispensaries and sale of one of its cultivation facilities.

In August 2024, we entered into a $11.0 million senior secured credit facility with Private Company Q.

The loan was originated at a discount of 4.0% and matures September 1, 2028.

The loan bears interest at SOFR plus an 8.75% spread, subject to a SOFR floor of 5.0%.

As of December 31, 2024, approximately $5.8 million was drawn and the remainder is available to be drawn within two years of closing.

In October 2024, we entered into a $41.0 million senior secured credit facility with Private Company R, which was fully funded at closing.

The loan was originated at a discount of 2.0% and matures November 1, 2027.

The loan bears interest at SOFR plus a 7.5% spread, subject to a SOFR floor of 4.5%.

In November 2024, we 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 par from a third party lender and the third party lender assigned all of its rights and obligations under such loan to us.

In May 2025, we were fully repaid on our loan with Private Company T at par plus accrued interest.

The outstanding principal of the senior secured term loan on the date of repayment was approximately $7.7 million.

In May 2025, we were fully repaid on our loan with Subsidiary of Public Company M at par plus accrued interest.

The outstanding principal of our investment on the date of repayment was approximately $2.8 million.

In June 2025, we deemed our 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.

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

In the second quarter of 2025, we 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.

In August 2025, we 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.

In December 2024, we entered into an agreement to purchase approximately $8.9 million in outstanding principal amount of a senior secured term loan to Private Company T at par from a third party lender and the third party lender assigned all of its rights and obligations under such loan to us.

The term loan under the Private Company T Credit Facility accrues interest at a fixed rate per annum of 11.25% and matures in July 2027.

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

In August 2025, we were fully repaid on our loan with Private Company J at par plus accrued interest.

The outstanding principal balance of the senior secured term loan on the date of repayment was approximately $23.2 million.

We received exit fees of approximately $0.9 million upon repayment of the loan.

In September 2025, we entered into the third amendment to the credit agreement with Private Company O, which, among other things, increased the loan commitment by an additional $3.0 million under the terms of the existing credit agreement, extended the draw period and amortization start date until August 1, 2027 and increased the unused fee from 2.0% to 3.15%.

All other material terms of the credit agreement remained substantially unchanged.

During the year ended December 31, 2025, we received approximately $6.3 million in total loan payments from Private Company A’s sale of its collateral assets, which was applied as a reduction to the amortized cost of the Private Company A loan.

As of December 31, 2025, our 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.

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

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 on July 1, 2025.

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.

In connection with the settlement and release, the Company received a settlement amount of approximately $10.0 million, with $6.0 million of the settlement payment financed by the Company via a new loan to Private Company W at a 10% interest rate, which is held at fair value.

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.

At the time of write-off, the loan with Private Company P had an outstanding principal balance of approximately $15.6 million and the Company’s net carrying value of its non-performing loan with Private Company P was approximately $10.0 million, which was net of the $5.3 million CECL Reserve at the time of resolution.

During the year ended December 31, 2025, the Company realized a taxable loss of approximately $5.3 million and wrote off the CECL Reserve of $5.3 million.

In December 2025, we entered into an agreement to purchase $5.0 million in outstanding principal amount of a senior secured term loan to Subsidiary of Public Company T, a publicly traded operator, at par.

The term loan under the Subsidiary of Public Company T Credit Facility accrues interest at a fixed rate per annum of 10.5% and matures in December 2030.

Revolving Credit Facility

On March 26, 2024, the Company entered into Amendment Number One 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 expand the borrowing base to include funds maintained in a borrowing base cash account.

On July 18, 2024, the Company entered into Amendment Number Two 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 exclude certain subsidiaries from the calculation of certain financial covenants so long as such subsidiaries are considered immaterial under the terms of the Loan and Security Agreement.

On January 24, 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 January 2025, we 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, we 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.

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, we 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, we incurred certain closing costs of approximately $0.1 million, which were included in prepaid expenses and other assets on our consolidated balance sheets and amortized over the life of the Revolving Credit Facility.

AFCF Credit Facility

In December 2024, we entered into an unsecured revolving credit agreement (the “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.

AFC Finance, LLC is wholly owned by Leonard M.

Tannenbaum, Chairman of the Company’s Board of Directors.

The AFCF Credit Agreement provides for an unsecured revolving credit facility (the “AFCF Credit Facility”) with a $40.0 million commitment, which may be borrowed, repaid and redrawn, subject to a draw fee and the other conditions provided in the AFCF Credit Agreement.

Interest is payable on the AFCF Credit Facility at a rate per annum equal to 8.00%.

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, we 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.

There were no outstanding borrowings under the AFCF Credit Agreement at the time of its termination.

2027 Senior Notes

During the year ended December 31, 2025, we repurchased $13.0 million in principal amount of the Company’s 2027 Senior Notes at 96.3% of par value, plus accrued interest.

This resulted in a gain on extinguishment of debt of approximately $0.4 million, recorded within the consolidated statements of operations.

As of December 31, 2025, we had $77.0 million in principal amount of the 2027 Senior Notes outstanding.

At-the-Market Offering Program

In April 2022, we filed our shelf registration statement on Form S-3 with the SEC, registering the offer and sale of up to $1.0 billion of securities (the “Shelf Registration Statement”).

The Shelf Registration Statement enables us to issue shares of common stock, preferred stock, debt securities, warrants, rights, as well as units that include one or more of such securities.

The Shelf Registration Statement also included a prospectus for the ATM Program to sell up to an aggregate of $75.0 million of shares of our common stock that may be issued and sold from time to time under the Sales Agreement, dated April 5, 2022 (the “Sales Agreement”), with Jefferies LLC and Citizens JMP Securities LLC, as Sales Agents.

the terms of the Sales Agreement, we have agreed to pay the Sales Agents a commission of up to 3.0% of the gross proceeds from each sale of common stock under the Sales Agreement.

During the year ended December 31, 2024, we sold an aggregate of 1,582,960 shares of our common stock under the Sales Agreement at a weighted average price of $10.24 per share, generating net proceeds of approximately $15.6 million.

As of December 31, 2024, the Company’s remaining authorization under the Sales Agreement was approximately $47.4 million.

In April 2022, we filed a shelf registration statement on Form S-3 with the SEC, registering the offer and sale of up to $1.0 billion of securities (the “ Prior Shelf Registration Statement”).

The Prior Shelf Registration Statement enabled us to issue shares of common stock, preferred stock, debt securities, warrants, rights, as well as units that include one or more of such securities.

On April 17, 2025, we filed a new shelf registration statement on Form S-3 (File No.

333-286604) (the “Shelf Registration Statement”) to replace the Prior Shelf Registration Statement, which was declared effective on April 25, 2025.

The Prior Shelf Registration Statement also included a prospectus for the ATM Program to sell up to an aggregate of $75.0 million of shares of our common stock that may be issued and sold from time to time under the Sales Agreement, dated April 5, 2022 (the “Sales Agreement”), with Jefferies LLC and Citizens JMP Securities LLC, as Sales Agents.

Under the terms of the Sales Agreement, we have agreed to pay the Sales Agents a commission of up to 3.0% of the gross proceeds from each sale of common stock under the Sales Agreement.

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

During the year ended December 31, 2025, the Company did not sell any shares of the Company’s

common stock under the Sales Agreement.

We do not currently have an ATM program, but we may enter into a new ATM program and related sales agreement in the future pursuant to which sales may be made under the Shelf Registration Statement.

Dividends Declared Per Share

For the year ended December 31, 2024 and 2023, we declared the following cash dividends:

For the years ended December 31, 2025 and 2024, we declared the following cash dividends:

Date Declared Payable to Shareholders of Record at the Close of Business on Payment Date Amount per Share Total Amount

March 2, 2023 March 31, 2023 April 14, 2023 $ 0.56 $ 11.5 million

June 15, 2023 June 30, 2023 July 14, 2023 0.48 9.8 million

September 15, 2023 September 30, 2023 October 13, 2023 0.48 9.8 million

December 15, 2023 December 31, 2023 January 12, 2024 0.48 9.8 million

March 4, 2024 March 31, 2024 April 15, 2024 $ 0.48 $ 9,920,205

June 13, 2024 June 24, 2024 July 15, 2024 0.48 9,920,205

June 27, 2024 July 8, 2024 July 15, 2024 0.15 3,100,064

September 13, 2024 September 30, 2024 October 15, 2024 0.33 7,221,076

December 13, 2024 December 31, 2024 January 15, 2025 0.33 7,369,866

2024 Period Subtotal

$ 2.00 $ 40.9 million

March 4, 2024 March 31, 2024 April 15, 2024 $ 0.48 $ 9.9 million

June 13, 2024 June 24, 2024 July 15, 2024 0.48 9.9 million

June 27, 2024 July 8, 2024 July 15, 2024 0.15 3.1 million

September 13, 2024 September 30, 2024 October 15, 2024 0.33 7.2 million

December 13, 2024 December 31, 2024 January 15, 2025 0.33 7.4 million

$ 1.77 $ 37,531,416

March 11, 2025 March 31, 2025 April 15, 2025 $ 0.23 $ 5,197,082

June 13, 2025 June 30, 2025 July 15, 2025 0.15 3,389,267

September 15, 2025 September 30, 2025 October 15, 2025 0.15 3,389,181

2025 Period Subtotal

$ 1.77 $ 37.5 million

In connection with the Spin-Off, we declared a one-time dividend of $0.15 per share of our common stock, which was paid on July 15, 2024 to shareholders of record as of July 8, 2024.

The aggregate amount of the one-time dividend payment was approximately $3.1 million .

Based on our current estimates and assumptions, we expect to generate distributable earnings at, or around, $0.23 per basic weighted average common share for the first two fiscal quarters of 2025.

However, this estimate is preliminary and may change.

See “Special Note Regarding Forward-Looking Statements” and “Risk Factors.”

$ 0.53 $ 11,975,530

Recent Developments

In January 2025, AFC Agent placed Private Company K in a consensual receivership to operate the collateral assets for the benefit of the Company, as a secured lender, and all other stakeholders.

In February 2025, we entered into a $15.0 million senior secured credit facility with Private Company U, which was fully funded at closing.

The loan was originated at a discount of 2.50% and matures March 1, 2028.

The loan bears interest at 14.00%.

In February 2025, AFC Agent, on behalf of the Company and the other lenders, initiated a mortgage foreclosure proceeding in connection with the 2024 Subsidiary of Private Company G Forbearance Agreement over a cultivation facility owned by Subsidiary of Private Company G.

We believe these defaults have had a material adverse impact on Subsidiary of Private Company G’s ability to operate its business and make payments under the credit agreement.

AFC Agent is also therefore pursuing a payment guarantee from the parent company and the beneficial shareholders of Subsidiary of Private Company G that guaranteed the loan.

For more information on related risks, s ee “ Risk Factors—Risks Related to Our Business and Growth Strategy— Loans to relatively new and/or small companies and companies operating in the cannabis industry generally involve significant risks .”

Key Financial Measures and Indicators

In January 2026, the Company completed a strategic transition from operating as a REIT to operating as a BDC.

Effective January 1, 2026, the Company elected to be regulated as a BDC under the 1940 Act.

As a result of this election, the Company is now subject to the regulatory framework applicable to BDCs, including requirements relating to portfolio composition, asset coverage, affiliate transactions, governance, and compliance.

The Company was not regulated as a BDC during the year ended December 31, 2025.

Beginning with its taxable year ending December 31, 2026, the Company intends to elect to be treated as a regulated investment company (“RIC”) for U.S.

federal income tax purposes.

In connection with the Company’s transition to BDC status, and subsequent to December 31, 2025, the Company entered into an amendment to its existing Revolving Credit Facility.

The amendment, among other things, includes provisions in light of the Company’s conversion from a REIT to a BDC.

The amendment did not affect the Company’s financial statements for the year ended December 31, 2025.

In January 2026, the Company entered into a new credit facility with TCGSL LLC, an affiliate of the Company (the “TCGSL Credit Facility”).

The TCGSL Credit Facility is intended to provide additional liquidity and financial flexibility to support the Company’s investment activities following is election to be regulated as a BDC.

The TCGSL Credit Facility was entered into on terms approved in accordance with applicable governance and regulatory requirements and provides a $20.0 million commitment, which may be borrowed, repaid and redrawn, subject to a draw fee and the other conditions provided in the TCGSL Credit Agreement.

Interest is payable on the TCGSL Credit Facility at a rate per annum equal to 8.5% and matures on August 1, 2028.

The TCGSL Credit Facility was not outstanding during the year ended December 31, 2025.

In January 2026, we were fully repaid on our loan with Private Company L at par plus accrued interest.

The outstanding principal balance of the senior secured term loan on the date of repayment was approximately $25.1 million.

We received exit fees of approximately $1.5 million upon repayment of the loan.

In January 2026, we were fully repaid on our loan with Private Company O at par plus accrued interest.

The outstanding principal balance of the senior secured term loan on the date of repayment was approximately $5.4 million.

We received a prepayment premium of approximately $0.2 million upon repayment of the loan.

In January 2026, we entered into a $60.0 million senior secured credit facility with Private Company X, which was fully funded at closing.

The loan was originated at a discount of 2.0% and matures February 1, 2031.

The loan bears interest at rate of SOFR plus 8.5%, with a rate index floor of 2.75%.

In February 2026, we committed $29.7 million of a $60.0 million senior secured credit facility with Private Company Y, of which $20.1 million was funded at closing.

The loan was originated at a discount of 2.5% and matures February 1, 2030.

The loan bears cash interest at a rate of 7.5% and 9.0% interest paid-in kind, with the option for the borrower to elect to pay cash interest at a rate of 5.5% and 13.0% interest paid-in kind until the end of the fiscal quarter following the first anniversary of the initial closing date.

In February 2026, the Company delivered a notice of default and reservation of rights to Private Company N under the credit facilities governing the real estate and non-real estate loans, following the breach of certain financial covenants.

The Company is evaluating its remedies and continues discussions with Private Company N regarding the matter.

No assurance can be given as to the timing or outcome of these matters.

In March 2026, the Company’s Board of Directors declared a regular cash dividend of $0.05 per outstanding share of common stock for the first quarter of 2026 to shareholders of record as of March 31, 2026, which will be paid on April 15, 2026.

Key Financial Measures and Indicators for the Year Ended December 31, 2025

As a commercial real estate finance company, we believe the key financial measures and indicators for our business are Distributable Earnings, book value per share and dividends declared per share.

Book Value Per Share

We believe that book value per share is helpful to shareholders in evaluating our growth as we scale our equity capital base and continue to invest in our target investments.

The book value per share of our common stock as of December 31, 2025 and 2024 was approximately $7.46 and $9.02, respectively.

Non-GAAP Metrics

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We believe providing Distributable Earnings on a supplemental basis to our net income as determined in accordance with GAAP is helpful to shareholders in assessing the overall performance of our business.

As a REIT, we are required to distribute at least 90% of our annual REIT taxable income, subject to certain adjustments, and to pay tax at regular corporate rates to the extent that we annually distribute less than 100% of such taxable income.

As a REIT, we are required to

distribute at least 90% of our annual REIT taxable income, subject to certain adjustments, and to pay tax at regular corporate rates to the extent that we annually distribute less than 100% of such taxable income.

Given these requirements and our belief that dividends are generally one of the principal reasons that shareholders invest in our common stock, we generally intend to attempt to pay dividends to our shareholders in an amount at least equal to such REIT taxable income, if and to the extent authorized by our Board.

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We caution readers that our methodology for calculating Distributable Earnings may differ from the methodologies employed by other REITs to calculate the same or similar supplemental performance measures, and as a result, our reported Distributable Earnings may not be comparable to similar measures presented by other REITs.

The following table provides a reconciliation of GAAP net income to distributable earnings:

Net income $ 16,784,205 $ 20,951,999

Adjustments to net income:

The following table provides a reconciliation of GAAP net (loss) income to distributable earnings:

Net (loss) income $ (20,673,426) $ 16,784,205

Adjustments to net income (loss):

Stock-based compensation expense 6,840,805 1,390,978

Depreciation and amortization — —

Unrealized losses (gains) or other non-cash items 9,806,916 8,513,364

Provision for (reversal of) current expected credit losses (1)

Unrealized losses or other non-cash items 7,933,276 9,806,916

Provision for current expected credit losses (1)(2)

15,549,928 4,233,310

TRS loss (income), net of dividends 2,711,006 (1,158,946)

TRS (income) loss, net of dividends (996,290) 2,711,006

One-time events pursuant to changes in GAAP and certain non-cash charges — —

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Distributable earnings per basic weighted average share $ 0.39 $ 1.68

(1) The provision for current expected credit losses above includes approximately $71.9 thousand and zero in connection with the Spin-Off for the years ended December 31, 2024 and 2023, respectively, which is included in the net income from discontinued operations, net of tax financial statement line on the consolidated statements of operations.

Book Value Per Share

We believe that book value per share is helpful to shareholders in evaluating our growth as we scale our equity capital base and continue to invest in our target investments.

The book value per share of our common stock as of December 31, 2024 and 2023 was approximately $9.02 and $15.64, respectively.

On July 9, 2024, we completed the Spin-Off of SUNS, which had a book value of approximately $114.8 million, or $5.55 per share, on the Distribution Date.

In connection with the Spin-Off, we recognized a reduction to additional paid-in capital of approximately $114.8 million related to the transfer of certain assets and liabilities associated with our CRE portfolio to SUNS.

Factors Impacting our Operating Results

(1) During 2024, the provision for current expected credit losses included approximately $71.9 thousand in connection with the Spin-Off, which was included in the net income from discontinued operations, net of tax financial statement line on the consolidated statements of operations.

(2) The provision for current expected credit losses is presented net of any write-offs.

Factors Impacting our Operating Results for the Year Ended December 31, 2025

The results of our operations are affected by a number of factors and primarily depend on, among other things, the level of our net interest margin, the market value of our assets and the supply of, and demand for, commercial real estate debt and other financial assets in the marketplace.

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Results of Operations f or the years ended December 31, 2025 and 2024

Our net income from continuing operations allocable to our common shareholders for the year ended December 31, 2024, was approximately $13.9 million, or $0.64 per basic weighted average common share from continuing operations, compared to net income from continuing operations allocable to our common shareholders of approximately $20.7 million, or $1.01 per basic weighted average common share from continuing operations for the year ended December 31, 2023, respectively.

Interest income decreased approximately $(18.3) million, or (26.0)%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023.

This decrease was driven by lower interest income of approximately ($17.9) million driven by Subsidiary of Private Company G, Private Company K and Private Company A on nonaccrual status during fiscal year 2024, lower interest income of approximately ($7.7) million driven by less capital deployed relating to loan exits and prepayments, partially offset by higher fee income of approximately $3.8 million driven by loan exits and prepayments during the year ended December 31, 2024, and higher OID income of approximately $3.5 million due to the acceleration of unaccreted OID of current year loan exits and prepayments during the year ended December 31, 2024, as compared to the year ended December 31, 2023, respectively.

Interest expense decreased approximately $(21.1) thousand, or (0.3)%, for the year ended December 31, 2024, as compared to the year ended December 31, 2023, driven by lower interest incurred on the 2027 Senior Notes due to a weighted average decrease in the 2027 Senior Notes principal outstanding of approximately $(1.9) million, or (2.0)%, for the year ended December 31, 2024, as compared to the year ended December 31, 2023, due to the repurchase of $10.0 million of our 2027 Senior Notes during the year ended December 31, 2023.

No repurchases took place during the year ended December 31, 2024.

The decrease in interest expense year-over-year is also driven by less unused fees incurred due to an increase in borrowings on the credit facilities.

Relatedly, this is partially offset by an increase in interest expense on such borrowings year-over-year on both the Revolving Credit Facility and AFCF Credit Facility.

Management fees decreased approximately $(0.1) million, or (2.9)%, for the year ended December 31, 2024, as compared to the year ended December 31, 2023, driven by lower outside fees earned and offset by lower equity attributable to the Spin-Off of SUNS completed on July 9, 2024.

The following table summarizes our consolidated results of operations for the years ended December 31, 2025 and 2024:

Interest income $ 31,322,137 $ 51,991,789

Interest expense (6,758,536) (6,336,308)

Net interest income 24,563,601 45,655,481

Management and incentive fees, net (less rebate of $854,432 and $947,969, respectively) 2,927,867 10,361,821

General and administrative expenses 3,231,642 3,967,764

Stock-based compensation 6,840,805 1,390,978

Professional fees 1,451,361 1,563,484

BDC conversion expenses 1,234,054 —

Total expenses 15,685,729 17,284,047

Provision for current expected credit losses (22,590,706) (4,161,456)

Realized losses on investments, net — (93,338)

Gain on extinguishment of debt 359,305 —

Change in unrealized losses on loans at fair value, net (7,933,276) (9,806,916)

Net (loss) income from continuing operations before income taxes (21,286,805) 14,309,724

Income tax (benefit) expense (613,379) 447,587

Net (loss) income from continuing operations (20,673,426) 13,862,137

Net income (loss) from continuing operations .

Our net loss from continuing operations allocable to our common shareholders for the year ended December 31, 2025, was approximately $(20.7) million, or $(0.95) per basic common share from continuing operations, compared to net income from continuing operations allocable to our common shareholders of approximately $13.9 million, or $0.64 per basic common share from continuing operations for the year ended December 31, 2024, respectively.

Interest income.

Interest income decreased $(20.7) million, or (39.8)%, for the year ended December 31, 2025, as compared to the year ended December 31, 2024.

The decrease in interest income was driven by more loan exits and prepayments in the prior period, which resulted in ($3.6) million lower fee income, ($3.9) million lower OID income due to the acceleration of unaccreted OID, ($3.3) million lower interest income driven by less capital deployed and ($1.6) million lower PIK income during the year ended December 31, 2025, as compared to the year ended December 31, 2024, respectively.

Loans on nonaccrual status resulted in ($8.3) million lower interest income year over year.

Interest expense.

Interest expense increased approximately $0.4 million, or 6.7%, for the year ended December 31, 2025, as compared to the year ended December 31, 2024, driven by an increase in the duration borrowings were outstanding on our Revolving Credit Facility resulting in additional interest expense of $0.4 million.

Management and incentive fees, net.

Management fees decreased approximately $(0.7) million, or (18.5)%, for the year ended December 31, 2025, as compared to the year ended December 31, 2024.

The decrease period over period was driven by lower equity, attributable to the Spin-Off of SUNS completed on July 9, 2024.

In connection with the Spin-Off, we recognized a reduction to additional paid-in capital of approximately $115 million.

Incentive fees decreased approximately $(3.6) million, or (34.7)%, for the year ended December 31, 2024, as compared to the year ended December 31, 2023, driven by lower Core Earnings (as defined in the Management Agreement), as well as lower Adjusted Capital (as defined in the Management Agreement) attributable to the Spin-Off.

General and administrative expenses decreased approximately $(1.0) million, or (20.7)%, for the year ended December 31, 2024, as compared to the year ended December 31, 2023.

This decrease was primarily due to severance expense incurred during the year ended December 31, 2023 attributable to the departure of our former Chief Financial Officer of approximately $0.7 million.

No severance expense was incurred during the year ended December 31, 2024.

Stock-based compensation increased approximately $0.4 million, or 38.0%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023.

This was driven by additional equity awards granted in January and December 2024.

Professional fees increased approximately $0.1 million, or 5.8%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023.

The net change in realized gains (losses) on investments was approximately $1.2 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023, driven by the net change in realized losses relating to separate sales of our investment in Subsidiary of Public Company M of approximately $33.7 thousand and realized loss relating to our loan to Public Company A of approximately $1.2 million during such periods.

In the prior year, the credit facility with Public Company A matured without repayment.

The agent on the credit facility placed the borrower in default, and we recorded a realized loss of approximately $(1.2) million during such period.

Incentive fees decreased approximately $(6.8) million, for the year ended December 31, 2025, as compared to the year ended December 31, 2024, driven by lower Core Earnings (as defined in the Management Agreement).

There was no incentive fee incurred during the year ended December 31, 2025.

General and administrative expenses.

General and administrative expenses decreased $(0.7) million, or (18.6)%, and for the year ended December 31, 2025, as compared to the year ended December 31, 2024.

The decrease year over year was primarily due to less reimbursable shared expenses allocated by our Manager of approximately $(0.5) million.

Stock-based compensation .

Stock-based compensation increased $5.4 million, or 391.8%, for the year ended December 31, 2025 as compared to the year ended December 31, 2024, driven by restricted stock awards granted in November 2025 that immediately vested and the acceleration of outstanding restricted stock awards during 2025, which resulted in additional expense related to the modification of $2.8 million that was immediately recognized.

Stock-based compensation expense is not expected to continue following the Conversion.

Professional fees .

Professional fees decreased approximately $(0.1) million, or (7.2)%, for the year ended December 31, 2025 as compared to the year ended December 31, 2024, respectively.

BDC conversion expenses .

BDC conversion expenses are expensed as incurred and primarily include legal fees related to the creation and organization of our election to be regulated as a BDC.

The Conversion process began during the second quarter of 2025 and we incurred approximately $1.2 million of conversion expenses during the year ended December 31, 2025.

No such costs were incurred in the prior year.

Realized losses.

The decrease in realized losses recognized for the year ended December 31, 2025, compared to the year ended December 31, 2024, was driven by a realized loss recognized in the prior period due to separate sales of our investment in Subsidiary of Public Company M.

There were no realized losses recognized during the year ended December 31, 2025.

Gain on extinguishment of debt.

The gain on extinguishment of debt was approximately $0.4 million for the year ended December 31, 2025, as a result of the repurchase of $13.0 million of our 2027 Senior Notes during the period.

No repurchases took place during the year ended December 31, 2024.

Unrealized losses.

Investments in loans held at fair value are recorded on the trade date at cost, which reflects the amount of principal funded net of any original issue discounts.

An unrealized gain arises when the fair value of the loan portfolio exceeds its cost and an unrealized loss arises when the fair value of the loan portfolio is less than its cost.

The net change in unrealized gain (loss) of approximately $(9.8) million and $(8.5) million for the years ended December 31, 2024 and 2023, respectively, was mainly driven by the sale of our loan with Private Company B with an unrealized loss that was recovered, maturity of our loan with Public Company A with an unrealized loss that was realized, as well as the net change in the valuation of the loans, which was impacted by changes in market yields, revenue multiples, and recovery rates.

Gain on extinguishment of debt decreased approximately $(2.0) million for the year ended December 31, 2024 as compared to the year ended December 31, 2023.

This decrease was driven by the repurchase of $10.0 million of our 2027 Senior Notes during the year ended December 31, 2023.

No repurchases took place during the year ended December 31, 2024.

The net change in unrealized losses of approximately $1.9 million for the year ended December 31, 2025, compared to the year ended December 31, 2024, respectively, was driven by the net change in the valuation of the loans, which was impacted by changes in recovery rates, market yields, and revenue multiples, partially offset by the sale of our loan with Private Company B in the prior period with an unrealized loss that was recovered.

Income tax (benefit) expense .

Income tax expense decreased $(1.1) million, or (237.0)%, for the year ended December 31, 2025 as compared to the year ended December 31, 2024.

The change was driven by lower taxable income resulting from the write-off recognized during the year ended 2025 associated with Public Company A equipment loan and senior loan with Private Company P.

Provision for Current Expected Credit Losses

The provision for current expected credit losses decreased approximately $(8.0) million, or (65.7)%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023 .

The balance as of December 31, 2024 was approximatel y $30.6 million , or 10.36%, of our total loans held at carrying value and loan receivable held at carrying value balance of approximately $295.2 million and was bifurcated between (i) 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 $30.4 million and (ii) a liability for unfunded commitments of approximately $0.2 million .

The balance as of December 31, 2023 was approximately $26.4 million, or 8.71%, of our total loans held at carrying value and loan receivable held at carrying value balance of approximately $303.3 million and was bifurcated between (i) 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 $26.3 million and (ii) a liability for unfunded commitments of approximately $0.1 million.

The provision for current expected credit losses increased approximately $18.4 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024, respectively .

Our CECL Reserve as of December 31, 2025 was approximatel y $46.1 million , or 18.19%, of our total loans held at carrying value with a balance of approximately $253.6 million and was bifurcated between (i) the current expected credit loss reserve (contra-asset) related to outstanding balances on loans held at carrying value of approximately $46.1 million and (ii) a liability for unfunded commitments of approximately $0.1 million .

The balance as of December 31, 2024 was approximately $30.6 million, or 10.36%, of our total loans held at carrying value and loan receivable held at carrying value balance of approximately $295.2 million and was bifurcated between (i) 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 $30.4 million and (ii) a liability for unfunded commitments of approximately $0.2 million.

December 31, 2024 CECL Reserve balances exclude the commercial real estate loan portfolio and related CECL Reserve of SUNS in connection with the Spin-Off.

The CRE CECL Reserve is included within discontinued operations for the prior period presented.

The liability is based on the unfunded portion of loan commitments over the full contractual period over which we are 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.

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.

We continuously evaluate the credit quality of each loan by assessing the risk factors of each loan.

The change in the provision for current expected credit losses for the year ended December 31, 2024 compared to the year ended December 31, 2023 was due to changes in macroeconomic factors, changes to the loan portfolio including new commitments and repayments, borrower payment status, and changes in other data points we use in estimating the reserve.

The change in the provision for current expected credit losses for the year ended period over period was due to an increase in CECL Reserves for loans with a risk

rating of “4” or “5” as a result of changes in macroeconomic factors, changes to the loan portfolio including new commitments and repayments, borrower payment status, and changes in other data points we use in estimating the reserve.

Loan Portfolio

As of December 31, 2025 , our portfolio was comprised of 15 loans (such portfolio, our “Existing Portfolio”).

The aggregate originated commitment under these loans was approximately $361.3 million and outstanding principal was approximately $356.8 million as of December 31, 2024.

As of December 31, 2024, our portfolio had a weighted-average estimated YTM of approximately 18% and was secured by various types of assets of our borrowers, including real property and personal property, such as cash flows and the value associ ated with licenses (where applicable), equipment, and other assets to the extent permitted by applicable laws and the regulations governing our borrowers.

The aggregate commitment under these loans was approximately $332.6 million and outstanding principal was approximately $317.4 million as of December 31, 2025.

As of December 31, 2025 , we had three loans on nonaccrual status, which included two loans held for investment with a carrying value of $88.8 million and carrying value net of CECL Reserve of $49.4 million, and one loan held at fair value with an outstanding principal balance of $46.8 million and fair value of $16.3 million.

The table below summarizes our total loan portfolio as of December 31, 2025, unless otherwise specified.

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Floating Amortization During Term YTM

A - Equipment Loans (4)

8/5/2019 3/31/2025 $ 4,000,000 1.1% $ 1,897,324 12.0% N/A Fixed Yes 7%

5/8/2020 5/8/2024 $ 38,125,129 11.5% $ 46,790,684 13.0% 2.5% Fixed No —%

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4/30/2021 5/1/2026 73,052,668 22.0% 78,768,556 12.5% N/A Fixed No —%

J 8/30/2021 9/1/2025 28,500,000 7.9% 24,290,184 16.3% 2.0% Floating Yes 25%

4/28/2022 5/3/2027 13,229,626 4.0% 12,195,762 15.7% 2.0% Floating Yes —%

L 4/20/2022 5/1/2026 29,196,279 8.8% 25,146,957 13.0% N/A Floating Yes 19%

Sub of Public Co.

M 8/26/2022 8/27/2025 2,797,527 0.8% 2,797,527 9.5% N/A Fixed No 23%

7/31/2023 7/31/2026 30,000,000 9.0% 23,599,497 9.0% N/A Fixed Yes 18%

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O 5/20/2024 6/1/2028 10,500,000 3.2% 5,358,890 13.5% N/A Floating Yes 20%

6/18/2024 7/1/2027 15,126,433 4.2% 15,609,914 13.0% N/A Fixed Yes 16%

Q 8/16/2024 9/1/2028 11,000,000 3.2% 7,479,626 13.8% N/A Floating Yes 18%

R 10/4/2024 11/1/2027 41,000,000 12.3% 33,179,518 12.0% N/A Floating Yes 15%

U 2/14/2025 3/1/2028 15,000,000 4.5% 15,000,000 14.0% N/A Fixed Yes 17%

Sub of Private Co.

V 4/1/2025 4/1/2029 14,000,000 4.2% 12,370,245 12.5% 1.5% Fixed Yes 17%

of Public Co.

S 8/13/2025 8/13/2030 10,000,000 3.0% 10,000,000 12.5% N/A Fixed No 15%

T 12/18/2024 7/26/2027 8,945,972 2.5% 8,704,144 11.3% N/A Fixed Yes 12%

Subtotal (10)

W 12/8/2025 12/8/2028 6,000,000 1.8% 6,000,000 10.0% N/A Fixed Yes 23%

of Public Co.

T 12/17/2025 12/17/2030 5,000,000 1.5% 5,000,000 10.5% N/A Fixed No 11%

$ 332,631,207 100.0% $ 317,417,240 12.5% 0.5%

(1) All loans originated prior to July 31, 2020 were purchased from an affiliated entity at fair value which approximated accreted and/or amortized cost plus accrued interest on July 31, 2020.

(2) YTM excludes loans on nonaccrual status.

Estimated YTM includes a variety of fees and features that affect the total yield, which may include, but is not limited to, OID, exit fees, prepayment fees, unused fees and contingent features.

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Actual results could differ from those estimates and assumptions.

(3) Estimated YTM for the loan with Private Company A is enhanced by purchase discounts attributed to the fair value of equity warrants that were separated from the loan prior to our acquisition of such loan.

The purchase discounts accrete to income over the respective remaining terms of the applicable loan.

(4) Effective October 1, 2022, Public Company A equipment loan receivable was placed on nonaccrual status.

(3) Cash interest and PIK interest rates for Private Company A represent a blended rate of differing cash interest and PIK interest rates applicable to each of the tranches to which the Company is a lender under the senior secured term loan credit facility with Private Company A (as may be amended, restated, and supplemented or otherwise modified from time to time, the “Private Company A Credit Facility”).

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The court-appointed receiver is determining the amount of principal payments the borrower is able to repay either from operations or from sale of collateral assets on a monthly basis.

(6) Effective March 2024, pursuant to the 2024 Subsidiary of Private Company G Forbearance Agreement, Subsidiary of Private Company G transitioned from a floating interest rate tied to U.S.

prime rate to a fixed interest rate.

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

(7) As amended by the forbearance agreement entered into in March 2024, between 20.0% and 80.0% of the monthly cash interest was paid in kind from December 1, 2023 to June 1, 2024.

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

(8) Quarterly cash interest was paid in kind from closing to February 1, 2024 and then payable in cash thereafter.

(9) Pursuant to the first amendment to the credit agreement entered into in August 2024, interest was paid in kind from July 1, 2024 to August 31, 2024 and then payable in cash thereafter.

Cash interest payments on the facility restarted January 1, 2025.

(6) The interest and PIK subtotal rates are weighted average rates.

Loans Held for Investment at Fair Value

As of December 31, 2024 and 2023, our portfolio included one and two loans held at fair value, respectively.

As of December 31, 2025 and 2024, our portfolio included three loans and one held at fair value, respectively.

The aggregate commitment under these loans was approximately $49.1 million and $44.4 million, respectively, and outstanding principal was approximately $57.8 million and $53.1 million as of December 31, 2025 and 2024, respectively.

For the year ended December 31, 2024, we funded approximately $4.6 million in new loans and additional principal and received approximately $5.2 million of principal repayments of loans held at fair value and sold $19.3 million of the Company’s investment in Private Company B.

As of December 31, 2024 and 2023 , none of our loans held at fair value had floating interest rates.

For the year ended December 31, 2025, we funded $11.0 million of new loans and additional principal and we received approximately $6.3 million of principal repayments of loans held at fair value.

As of December 31, 2025 and 2024, none of our loans held at fair value had a floating interest rate.

The following tables summarize our loans held at fair value as of December 31, 2025 and 2024 :

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Remaining Life

Senior term loan $ 30,510,804 $ 50,241,018 $ 53,108,449 0.0

Total loan held at fair value $ 30,510,804 $ 50,241,018 $ 53,108,449 0.0

Senior term loans $ 26,080,763 $ 53,744,253 $ 57,790,684 3.9

Total loans held at fair value $ 26,080,763 $ 53,744,253 $ 57,790,684 3.9

As of December 31, 2024

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

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

(4) Weighted average remaining life is calculated based on the fair value of the loans as of December 31, 2023.

As of December 31, 2023, the weighted average remaining life only reflects the remaining life of the Private Company A Credit Facility.

(3) As of December 31, 2025 and 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 year ended December 31, 2025:

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New fundings 11,000,000 (1,179,000) — 9,821,000

Accretion of original issue discount — 128,384 — 128,384

Loan repayments (6,317,765) — — (6,317,765)

Sale of loans (19,284,846) — — (19,284,846)

PIK interest 1,134,785 — — 1,134,785

Total loans held at fair value at December 31, 2025 $ 57,790,684 $ (4,046,431) $ (27,663,490) $ 26,080,763

Loans Held for Investment at Carrying Value

As of December 31, 2024 and 2023 , our portfolio included fourteen and nine loans held at carrying value, respectively.

A s of December 31, 2024 and 2023 , the aggregate originated commitment under these loans was approximately $312.8 million and $333.1 million, respectively, and outstanding principal was approximately $301.8 million and $314.4 million, respectively.

During the year ended December 31, 2024, we funded approximately $128.8 million of new loans and additional principal, had approximately $53.4 million of principal repayments of loans held at carrying value and sold $90.0 million in the aggregate of our investments in Subsidiary of Public Company H and Subsidiary of Public Company M.

As of December 31, 2024 and 2023 , approximately 52% and 84%, respectively, of our loans held at carrying value had

floating interest rates.

As of December 31, 2024, these floating benchmark rates included one-month Secured Overnight Financing Rate (“SOFR”) subject to a weighted average floor of 3.8% and quoted at 4.3%.

As of December 31, 2025 and 2024, our portfolio included 12 and 14 loans held at carrying value, respectively.

A s of December 31, 2025 and 2024, t he aggregate commitment under these loans was approximately $283.5 million and $312.8

million, resp ectively, and outstanding principal was approximately $259.6 million and $301.8 million, respectively.

During the year ended December 31, 2025, we funded approximately $41.7 million of new loans and additional principal and had approximately $78.7 million of principal repayments of loans held at carrying value.

As of December 31, 2025 and 2024, approximately 46% and 52%, respectively, of our loans held at carrying value had floating interest rates.

As of December 31, 2025, t hese floating benchmark rates included one-month Secured Overnight Financing Rate (“SOFR”) quoted at 3.7% and subject to a weighted average floor of 4.3% based on outstanding principal.

The following tables summarize our loans held at carrying value as of December 31, 2025 and 2024 :

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Loan repayments (60,585,298) — (60,585,298)

Sale of loans (90,000,000) 251,662 (89,748,338)

Loan write-off (5,574,704) 311,172 (5,263,532)

PIK interest 464,809 — 464,809

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Loan Receivable Held at Carrying Value

As of December 31, 2024 and 2023 , our portfolio included one loan receivable held at carrying value.

The originated commitment under this loan was $4.0 million and outstanding principal was approximately $1.9 million and $2.0 million as

of December 31, 2024 and 2023 , respectively.

During the year ended December 31, 2024, we received approximately $0.1 million of principal repayments of loan receivable held at carrying value.

As of December 31, 2025 and 2024, our 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 approximately zero and $1.9 million as of December 31, 2025 and 2024, respectively.

During the year ended December 31, 2025, we received $0.1 million of principal repayments of loan receivable held at carrying value.

Based on discussions with the collateral agent, no further proceeds were expected and we 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.

During the year

ended December 31, 2025, we 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.

The following table presents changes in loans receivable as of and for the year ended December 31, 2025:

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Loan repayments (118,392) — (118,392)

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

Total loan receivable held at carrying value at December 31, 2025 $ — $ — $ —

Potential Key Components of Future Results of Operations Following the Conversion

Following the Conversion, we expect to invest in a much broader universe of assets, including both real estate and non-real estate related assets, including in private and public lower middle-market companies.

Our level of investment activity (both the number of investments and the size of each investment) can and will vary substantially from period to period depending on many factors, including the amount of debt and equity capital available to lower middle market companies, the level of merger and acquisition activity for such companies, the general economic environment, trading prices of loans and other securities and the competitive environment for the types of investments we make.

We expect to generate revenues in the form of interest income from the debt securities we hold and dividends.

We expect to receive payments on our debt investments based on scheduled amortization of the outstanding balances.

In addition, we may receive repayments of some of our debt investments prior to their scheduled maturity date.

The frequency or volume of these repayments fluctuates significantly from period to period.

Our portfolio activity also reflects the proceeds of sales of securities.

In some cases, our investments may provide for deferred interest payments or PIK interest.

The principal amount of loans and any accrued but unpaid interest generally become due at the maturity date.

In addition, we expect to generate revenue from various fees in the ordinary course of business such as in the form of commitment, loan origination, structuring, consent, waiver, amendment, syndication and other miscellaneous fees as well as fees for providing managerial assistance to our portfolio companies.

Except as provided for in the Advisory Agreement, investment professionals and staff of the Adviser, when and to the extent engaged in providing investment advisory services to us, and the base compensation, bonus and benefits, and the routine overhead expenses, of such personnel allocable to such services, will be provided and paid for by the Adviser.

We bear all other costs and expenses of our operations, administration and transactions, including, but not limited to (a) investment advisory fees, including management fees and incentive fees, to the Adviser, pursuant to the Advisory Agreement;

(b) our allocable portion of compensation, overhead (including rent, office equipment and utilities) and other expenses incurred by the Administrator in performing its administrative obligations under the Administration Agreement.

From time to time, the Adviser, the Administrator or their affiliates may pay third-party providers of goods or services on our behalf.

We will reimburse the Adviser, the Administrator or such affiliates thereof for any such amounts.

From time to time, the Adviser or the Administrator may defer or waive fees and/or rights to be reimbursed.

Costs and expenses of the Administrator and the Adviser that are eligible for reimbursement by us will be reasonably allocated on the basis of time spent, assets under management, usage rates, proportionate holdings, a combination thereof or other reasonable methods determined by the Administrator.

Liquidity and Capital Resources

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The sources of financing for our target investments are described below.

Our primary sources of cash generally consist of unused borrowing capacity under the Revolving Credit Facility and the AFCF Credit Facility, the net proceeds of future debt or equity offerings, including in connection with the ATM Program, payments of principal and interest we receive on our portfolio of assets and cash generated from our operating results.

Our net cash provided by operating activities for the year ended December 31, 2024 of approximately $21.6 million was less than our dividend payments of $40.0 million made during the same period due to earned OID of $8.0 million and PIK repayments of $5.5 million related to the exits from Private Company I, Private Company C and Private Company B during such period.

Our primary sources of cash generally consist of unused borrowing capacity under the Revolving Credit Facility, TCGSL Credit Facility, the net proceeds of future debt or equity offerings, payments of principal and interest we receive on our portfolio of assets and cash generated from our operating results.

Our net cash provided by operating activities for the year ended December 31, 2025 of approximately $11.2 million was less than our dividends declared of $12.0 million made during the same period due to earned OID of $3.5 million and PIK repayments of $3.2 million related to the repayment from Private Company J and Private Company P during such period.

OID relates to cash withheld by the Company upon funding of its investments and is included under the ‘Supplemental disclosure of non-cash activity’ on the Consolidated Statements of Cash Flows.

As of December 31, 2025 and 2024, all of our cash was unrestricted and totaled approximately $38.6 million and $103.6 million, respectively.

As of December 31, 2024, we believe that our cash on hand, capacity available under the Revolving Credit Facility, AFCF Credit Facility and cash flows from operations will be sufficient to satisfy the operating requirements of our business through at least the next twelve months.

As of December 31, 2025, we believe that our cash on hand, capacity available under the Revolving Credit Facility, TCGSL Credit Facility, and cash flows from operations will be sufficient to satisfy the operating requirements of our business through at least the next twelve months.

Capital Markets

Our Shelf Registration Statement became effective on April 18, 2022, allowing us to sell, from time to time in one or more offerings, up to $1.0 billion of our securities, including common stock, preferred stock, debt securities, warrants and rights (including as part of a unit) to purchase shares of our common stock or preferred stock.

Our current Shelf Registration Statement became effective on April 25, 2025, allowing us to sell, from time to time in one or more offerings, up to $1.0 billion of our securities, including common stock, preferred stock, debt securities, warrants and rights (including as part of a unit) to purchase shares of our common stock or preferred stock.

The specifics of any future offerings, along with the use of proceeds of any securities offered, will be described in detail in a prospectus supplement, or other offering materials, at the time of any offering.

We may also access liquidity through our ATM Program, which was established in April 2022, pursuant to which we may sell, from time to time, up to $75.0 million of our common stock.

As of December 31, 2024, our remaining authorization under the Sales Agreement was approximately $47.4 million.

We may seek to raise further equity capital and issue debt securities in order to fund our future investments in loans.

As the cannabis industry continues to evolve and to the extent that additional states legalize cannabis, the demand for capital continues to increase as operators seek to enter and build out new markets.

We expect the principal amount of the loans we originate for cannabis operators to increase.

We also expect our expanded investment focus to require additional capital.

As a result, we expect we will need to raise additional equity and/or debt funds to increase our liquidity in the near future.

As of December 31, 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 our Prior Shelf Registration Statement.

We do not currently have an ATM program, but we may enter into a new ATM program and related sales agreement in the future pursuant to which sales may be made under the Shelf Registration Statement.

We may seek to raise further equity capital and issue debt securities in order to fund our future investments in loans, as we expect our expanded investment focus to require additional capital.

Revolving Credit Facility

On April 29, 2022, we entered into the Revolving Credit Facility.

As of December 31, 2024, we had $60.0 million of borrowings outstanding and zero availability under our Revolving Credit Agreement, which may be borrowed, repaid and redrawn, subject to a borrowing base based on eligible loan obligations held by us and subject to the satisfaction of other conditions provided under the Revolving Credit Facility.

All outstanding borrowings under the Revolving Credit Facility were subsequently repaid in full on January 2, 2025.

The Revolving Credit Facility contains aggregate commitments of $60.0 million from two FDIC-insured banking institutions, which may be increased to up to $100.0 million in aggregate (subject to available borrowing base and additional commitments), and contains a maturity date of April 29, 2025.

Interest is payable on the Revolving Credit Facility at the greater of (1) the applicable base rate plus 0.50% and (2) 4.50%, as provided in the Revolving Credit Agreement, payable in cash in arrears.

Upon entering into the Revolving Credit Agreement, w e incurred a one-time commitment fee expense of approximately $0.5 million, which is amortized over the life of the facility.

Commencing on the six-month anniversary of the closing date, the Revolving Credit Facility has an unused line fee of 0.25% per annum, payable semi-annually in arrears, which is included within interest expense in our consolidated statements of operations.

Based on the terms of the Revolving Credit Agreement, our estimated average cash balance will exceed the minimum balance required to waive the unused line fee and as such, we did not incur an unused line fee for the year ended December 31, 2024.

On April 29, 2022, we entered into the Revolving Credit Facility, which contained initial aggregate commitments of $60.0 million from two FDIC-insured banking institutions, (which may be increased to 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 us and subject to the satisfaction of other conditions provided under the Revolving Credit Agreement.

The Revolving Credit Facility’s initial maturity date of April 29, 2025 was extended to April 29, 2028 under Amendment Number Four to the Revolving Credit Agreement, as described further below.

In April 2025, we entered into Amendment Number Four 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.

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, we 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 agent 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.

In January 2026, we entered into Amendment Number Six to the Loan and Security Agreement (“Amendment Number Six”), by and among the Company, as borrower, the lenders party thereto and the lead arranger, bookrunner and administrative agent party thereto.

Amendment Number Six, among other things, includes provisions relevant in light of the Company’s conversion from a real estate investment trust to a business development company.

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

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To the best of our knowledge, as of December 31, 2025, we were in compliance in all material respects with all covenants contained in our Revolving Credit Agreement.

TCGSL Credit Facility

In January 2026, we entered into the TCGSL Credit Facility, which provides for an unsecured revolving credit facility with a $20.0 million commitment, which may be borrowed, repaid and redrawn, subject to a draw fee and the other conditions provided in the TCGSL Credit Agreement .

AFCF Credit Facility

In December 2024, we entered into the AFCF Credit Facility, which provides for an unsecured revolving credit facility with a $40.0 million commitment, which may be borrowed, repaid and redrawn, subject to a draw fee and the other conditions provided in the AFCF Credit Agreement .

As of December 31, 2024, we had $40.0 million of borrowings outstanding and zero availability under our AFCF Credit Agreement.

All outstanding borrowings under the AFCF Credit Facility were subsequently repaid in full on January 2, 2025.

See “Developments During the Year Ended December 31, 2024— AFCF Credit Facility” above.

In April 2025, in conjunction with the entry by the Company into Amendment Number Four to the Revolving Credit Agreement, we terminated that certain AFCF Credit Agreement, dated December 17, 2024.

At the time of termination, we had no borrowings outstanding and $40.0 million of availability under our AFCF Credit Facility.

As of December 31, 2025, the AFCF Credit Facility was no longer in effect.

2027 Senior Notes

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TRS1 is currently a subsidiary guarantor under the Indenture.

During the year ended December 31, 2025, we repurchased $13.0 million in principal amount of our 2027 Senior Notes at 96.3% of par value, plus accrued interest.

This resulted in a gain on extinguishment of debt of approximately $0.4 million, recorded within the consolidated statements of operations.

Following this transaction, as of December 31, 2025, we had $77.0 million in principal amount of the 2027 Senior Notes outstanding.

Prior to February 1, 2027, we may redeem the 2027 Senior Notes in whole or in part, at a price equal to the greater of 100% of the principal amount of the 2027 Senior Notes being redeemed or a make-whole premium set forth in the Indenture, plus accrued and unpaid interest thereon to, but excluding, the applicable redemption date.

On or after February 1, 2027, we may redeem the 2027 Senior Notes in whole or in part at a price equal to 100% of the principal amount of the 2027 Senior Notes being redeemed, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date.

On or after February 1, 2027, we may redeem the 2027 Senior Notes in whole or in part at a price equal to 100% of the principal amount of the

2027 Senior Notes being redeemed, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date.

The Indenture also requires us to offer to purchase all of the 2027 Senior Notes at a purchase price equal to 101% of the principal amount of the 2027 Senior Notes, plus accrued and unpaid interest if a “change of control triggering event” (as defined in the Indenture) occurs.

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We expect that these facilities will typically have maturities ranging from two to five years and may accrue interest at either fixed or floating rates.

As of December 31, 2024 , we believe that our cash on hand, capacity available under our Revolving Credit Facility and AFCF Credit Facility, and cash flows from operations will be sufficient to service our outstanding debt during the next twelve months.

Cash provided by (used in) operating, investing and financing activities of continuing operations for the year ended December 31, 2024 and 2023 is as follows:

Net cash provided by (used in) operating activities of continuing operations $ 18,286,230 $ 20,984,312

Net cash provided by (used in) investing activities of continuing operations $ 42,362,420 $ 28,519,379

Net cash (used in) provided by financing activities of continuing operations $ (34,724,749) $ (68,494,701)

Net Cash Provided by (Used in) Operating Activities of Continuing Operations

As of December 31, 2025 , we believe that our cash on hand, capacity available under our Revolving Credit Facility, TCGSL Credit Facility, and cash flows from operations will be sufficient to service our outstanding debt during the next twelve months.

Cash provided by (used in) operating, investing and financing activities of continuing operations for the years ended December 31, 2025 and 2024 is as follows:

Net cash provided by operating activities of continuing operations $ 11,235,352 $ 18,286,230

Net cash provided by investing activities of continuing operations $ 34,904,497 $ 42,362,420

Net cash used in financing activities of continuing operations $ (111,144,802) $ (34,724,749)

Net Cash Provided by Operating Activities of Continuing Operations

Net cash provided by operating activities of continuing operations during the year ended December 31, 2025 was approximately $11.2 million, compared to approximately $18.3 million for the same period in 2024.

The decrease of approximately $(2.7) million during the year ended December 31, 2023 to December 31, 2024 was primarily due to an increase in the change in unrealized (gains) losses on loans held at fair value of approximately $1.3 million, decrease in PIK interest of approximately $7.8 million, decrease in gain (loss) on extinguishment of debt of approximately $2.0 million, increase in interest reserve of approximately $4.7 million, partially offset by a decrease in net income from continuing operations of approximately $(6.9) million, decrease in accrued management and incentive fees of approximately $(1.1) million, decrease in provision for current expected credit losses of approximately $(8.0) million and increase in OID accretion of approximately $(1.8) million, respectively.

Net Cash Provided by (Used in) Investing Activities of Continuing Operations

The decrease of approximately $(7.1) million period over period was primarily due lower revenue and related incoming cash payments from borrowers due to loans on nonaccrual status and no sales of loans in the current year, partially offset by lower management and incentive paid to our Manager period over period.

Net Cash Provided by Investing Activities of Continuing Operations

Net cash provided by investing activities of continuing operations during the year ended December 31, 2025 was approximately $34.9 million, compared to approximately $42.4 million for the same period in 2024.

The increase in net cash provided by investing activities of approximately $13.8 million during the year ended December 31, 2023 to December 31, 2024 was primarily due to an increase in issuance and fundings on loans of approximately $(60.7) million, an increase in proceeds from the sale of loans of approximately $74.7 million.

Net Cash Provided by (Used in) Financing Activities of Continuing Operations

The decrease in net cash provided by investing activities of approximately $(7.5) million during the year ended 2024 to 2025 was primarily due to a decrease in proceeds from the sale of loans in the prior period of $(96.1) million, partially offset by a decrease in loan fundings of $67.0 million and an increase on loan repayments of $21.6 million, respectively.

Net Cash Used in Financing Activities of Continuing Operations

Net cash used in financing activities of continuing operations during the year ended December 31, 2025 was approximately $(111.1) million, compared to approximately $(34.7) million for the same period in 2024.

The decrease of approximately $33.8 million during the year ended December 31, 2023 to December 31, 2024 was primarily due to an increase in borrowings on the Revolving Credit Facility and the AFCF Credit Facility of $222.0 million in the aggregate, offset by an increase in repayments on the Revolving Credit Facility of $(146.0) million, an increase in proceeds from the ATM program of $15.8 million, a decrease in repayments of the 2027 Senior Notes of approximately $7.7 million, and an increase in cash distributions in connection with the Spin-Off of SUNS of approximately $(67.9) million, respectively.

Cash provided by (used in) operating, investing and financing activities of discontinued operations for the year ended December 31, 2024 and 2023 is as follows:

Net cash provided by (used in) operating activities of discontinued operations $ 3,271,445 $ 244,622

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

The decrease of approximately $(76.4) million during the year ended 2024 to 2025 was primarily due to a decrease in borrowings on the Revolving Credit Facility and the AFCF Credit Facility of $(193.4) million in the aggregate, partially offset by a decrease in repayments on the Revolving Credit Facility and the AFCF Credit Facility of $56.4 million in the aggregate and decrease in cash distributions in connection with the Spin-Off of SUNS of approximately $67.9 million, respectively.

Cash provided by (used in) operating, investing and financing activities of discontinued operations for the years ended December 31, 2025 and 2024 is as follows:

Net cash provided by operating activities of discontinued operations $ — $ 3,271,445

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

Net cash provided by (used in) financing activities of discontinued operations $ — $ —

Net Cash Provided by (Used in) Operating Activities of Discontinued Operations

Net cash provided by operating activities of discontinued operations during the year ended December 31, 2024 was approximately $3.3 million, compared to approximately $0.2 million for the same period in 2023.

The increase of approximately $3.0 million during the year ended December 31, 2023 to December 31, 2024 was primarily due to an increase in net income from discontinued operations of $2.7 million and changes in working capital of $0.3 million, respectively.

Net Cash Provided by (Used in) Investing Activities of Discontinued Operations

Net cash used in investing activities of discontinued operations during the year ended December 31, 2024 was approximately $(47.2) million, compared to net cash provided by investing activities of zero for the same period in 2023.

The decrease of net cash used in investing activities of discontinued operations was primarily due to the issuance and fundings on loans of approximately $(67.3) million, offset by principal repayments of loans of $15.1 million, respectively.

Net Cash Provided by Operating Activities of Discontinued Operations

Net cash provided by operating activities of discontinued operations during the year ended December 31, 2025 was zero, compared to approximately $3.3 million for the same period in 2024.

The decrease of approximately $(3.3) million during the year ended December 31, 2024 to December 31, 2025 was primarily due to a decrease in net income from discontinued operations of $(2.9) million and changes in working capital of $(0.3) million, respectively.

Net Cash Used in Investing Activities of Discontinued Operations

Net cash used in investing activities of discontinued operations during the year ended December 31, 2025 was zero, compared to net cash provided by investing activities of $(47.2) million for the same period in 2024.

The increase of net cash used in investing activities of discontinued operations was primarily due to the issuance and fundings on loans of approximately $(67.3) million, offset by principal repayments of loans of $15.1 million, respectively.

Net Cash Provided by (Used in) Financing Activities of Discontinued Operations

There were no cash flows related to financing activities of discontinued operations during the year ended December 31, 2024 and 2023.

There were no cash flows related to financing activities of discontinued operations during the years ended December 31, 2025 and 2024.

Contractual Obligations, Other Commitments, and Off-Balance Sheet Arrangements

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This policy is subject to change by management and our Board.

We have elected to be taxed as a REIT for United States federal income tax purposes and, as such, intend to annually distribute to our shareholders at least 90% of our REIT taxable income, prior to the deduction for dividends paid and excluding our net capital gain.

During the year ended December 31, 2025, we elected to be taxed as a REIT for United States federal income tax purposes and, as such, intended to distribute to our shareholders at least 90% of our REIT taxable income during the year, prior to the deduction for dividends paid and excluding our net capital gain.

If we distribute less than 100% of our REIT taxable income in any tax year (taking into account any distributions made in a subsequent tax year under Sections 857(b)(9) or 858 of the Code), we will pay tax at regular corporate rates on that undistributed portion.

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If we determine that our estimated current year taxable income (including net capital gain) will be in excess of estimated dividend distributions (including capital gains dividends) for the current year from such income, we will accrue excise tax on a portion of the estimated excess taxable income as such taxable income is earned.

To the extent that our cash available for distribution is less than the amount required to be distributed under the REIT provisions of the Code, we may be required to fund distributions from working capital or through equity, equity-related or debt financings or, in certain circumstances, asset sales, as to which our ability to consummate transactions in a timely manner on favorable terms, or at all, cannot be assured, or we may make a portion of the Required Distribution in the form of a taxable stock distribution or distribution of debt securities.

Critical Accounting Policies and Estimates

To the extent that our cash available for distribution is less than the amount required to be distributed under the REIT provisions of the Code during the year ended December 31, 2025, we may be required to fund distributions from working capital or through equity, equity-related or debt financings or, in certain circumstances, asset sales, as to which our ability to consummate transactions in a timely manner on favorable terms, or at all, cannot be assured, or we may make a portion of the Required Distribution in the form of a taxable stock distribution or distribution of debt securities.

Critical Accounting Policies and Estimates During the Year Ended December 31, 2025

Our consolidated financial statements are prepared in accordance with GAAP which requires the use of estimates and assumptions that involve the exercise of judgment as to future uncertainties.

In accordance with SEC guidance, the following discussion addresses the accounting policies that we believe apply to us based on the nature of our initial operations.

In accordance with SEC guidance, the

following discussion addresses the accounting policies that we believe apply to us based on the nature of our initial operations.

Our most critical accounting policies involve decisions and assessments that could affect our reported assets and liabilities, as well as our reported revenues and expenses.

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Loans Held at Fair Value

We originate commercial real estate debt and related instruments generally to be held for investment.

During the year ended December 31, 2025, we originated commercial real estate debt and related instruments generally to be held for investment.

Although we generally hold our target investments as long-term loans, we may occasionally classify some of our loans as held for sale.

We may carry our loans at fair value or amortized cost in our consolidated balance sheet.

As of December 31, 2024 and 2023, one and two loans held for investment were carried at fair value within loans held at fair value in our consolidated balance sheets, respectively, with changes in fair value recorded through earnings.

As of December 31, 2025 and 2024, our portfolio included three loans and one loan held for investment were carried at fair value within loans held at fair value in our consolidated balance sheets, respectively, with changes in fair value recorded through earnings.

Refer to Note 13 to our consolidated financial statements titled “Fair Value” for more information on the valuations of the loans.

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and (iv) market review, which analyzes the collateral from a supply and demand perspective of similar property types, as well as from a capital markets perspective.

We follow Accounting Standards Codification (“ASC”) 825-10, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASC 825-10”), which provides companies the option to report selected financial assets and liabilities at fair value.

During the year ended December 31, 2025, we followed Accounting Standards Codification (“ASC”) 825-10, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASC 825-10”), which provides companies the option to report selected financial assets and liabilities at fair value.

ASC 825-10 also establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities and to more easily understand the effect of the company’s choice to use fair value on its earnings.

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We have elected the ASC 825-10 option to report selected financial assets and liabilities at fair value.

We also follow ASC 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”), which defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands disclosure of fair value measurements.

During the year ended December 31, 2025, we also followed ASC 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”), which defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands disclosure of fair value measurements.

ASC 820-10 determines fair value to be the price that would be received for an investment in a current sale, which assumes an orderly transaction between market participants on the measurement date.

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Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the loan.

This includes loans that are valued using “bid” and “ask” prices obtained from independent third-party pricing services or directly from brokers.

This includes loans

that are valued using “bid” and “ask” prices obtained from independent third-party pricing services or directly from brokers.

Financial instruments with readily available quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment inherent in measuring fair value.

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Current Expected Credit Loss Reserve (“CECL”)

We estimate our current expected credit losses on both the outstanding balances and unfunded commitments on loans held for investment and requires consideration of a broader range of historical experience adjusted for current conditions and reasonable and supportable forecast information to inform the “CECL Reserve” using a model that considers multiple datapoints and methodologies that may include discounted cash flows (“DCF”) and other inputs which may include the risk rating of the loan, how recently the loan was originated compared to the measurement date and expected prepayment, if applicable.

During the year ended December 31, 2025, we estimated our current expected credit losses on both the outstanding balances and unfunded commitments on loans held for investment and requires consideration of a broader range of historical experience adjusted for current conditions and reasonable and supportable forecast information to inform the “CECL Reserve” using a model that considers multiple datapoints and methodologies that may include discounted cash flows (“DCF”) and other inputs which may include the risk rating of the loan, how recently the loan was originated compared to the measurement date and expected prepayment, if applicable.

Calculation of the CECL Reserve requires loan specific data, which may include the fixed charge coverage ratio, loan-to-value ratio, property type and geographic location.

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To maintain our status as a REIT, this non-cash source of income is included in taxable income and will increase the dividend paid to shareholders for the year earned, even though the Company has not yet collected the cash.

We are a Maryland corporation and have elected to be taxed as a REIT under the Code, commencing with our taxable year ended December 31, 2020.

We are a Maryland corporation and, prior to January 1, 2026, elected to be taxed as a REIT under the Code, commencing with our taxable year ended December 31, 2020.

We believe we have qualified, and our method of operation will enable us to continue to qualify, as a REIT.

However, no assurances can be given that our beliefs or expectations will be fulfilled, since qualification as a REIT depends on us satisfying numerous asset, income and distribution tests which depend, in part, on our operating results.

To continue to qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement that we distribute annually to our shareholders at least 90% of our REIT taxable income prior to the deduction for dividends paid and excluding our net capital gain.

To qualify as a REIT, we were required during the year ended December 31, 2025 and during prior periods, to meet a number of organizational and operational requirements, including a requirement that we distribute annually to our shareholders at least 90% of our REIT taxable income prior to the deduction for dividends paid and excluding our net capital gain.

To the extent that we distribute less than 100% of our REIT taxable income in any tax year (taking into account any distributions made in a subsequent tax year under Sections 857(b)(9) or 858 of the Code), we will pay tax at regular corporate rates on that undistributed portion.

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The JOBS Act permits an emerging growth company such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies.

We have elected to avail ourselves of the extended transition period for complying with new or

revised financial accounting standards.

We have elected to avail ourselves of the extended transition period for complying with new or revised financial accounting standards.

We intend to rely on other exemptions provided by the JOBS Act, including without limitation, not being required to comply with the auditor attestation requirements of Section 404(b) of Sarbanes-Oxley.

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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-K

Item 7. Management’s Discussion and Analysis