What changed in this filing

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Item 9A. Controls and Procedures

2026-03-04 compared with 2025-03-13 · 358 added, 275 removed, 984 unchanged (39% of the section changed)

8 unchanged sentences

Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures are being made only in accordance with authorizations of management and our directors;

22 unchanged sentences

A current copy of the code is posted under “Corporate Governance” on our website at https://investors.advancedflowercapital.com/corporate-governance/governance-overview .

In addition, as required by Rule 17-j-1 under the 1940 Act and Rule 240A-1 under the Advisers Act, respectively, we and the Adviser have adopted codes of ethics which apply to, among others, our and the Adviser’s executive officers, including

our Chief Executive Officer and Chief Financial Officer, as well as the Adviser’s officers, directors and employees.

Our codes of ethics generally will not permit investments by our and the Adviser’s personnel in securities that may be purchased or sold by us.

To the extent required by rules adopted by the Securities and Exchange Commission and Nasdaq, we intend to promptly disclose future amendments to certain provisions of the Code of Business Conduct and Ethics, or waivers of such provisions granted to executive officers and directors on our website at https://investors.advancedflowercapital.com/corporate-governance/governance-overview/ .

20 unchanged sentences

Articles of Amendment, dated October 22, 2024 (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K on October 22, 2024 and incorporated herein by reference).

Certificate of Notice of Advanced Flower Capital Inc., dated December 31, 2025 (filed as Exhibit 3.1 of the Company’s Current Report on Form 8-K on January 5, 2026 and incorporated herein by reference).

Amended and Restated Bylaws of Advanced Flower Capital Inc.

1 unchanged sentence

Second Amended and Restated Bylaws of Advanced Flower Capital Inc., dated October 22, 2024 (filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K on October 22, 2024 and incorporated herein by reference).

Third Amended and Restated Bylaws of Advanced Flower Capital Inc., dated December 31, 2025 (filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K on January 5, 2026 and incorporated herein by reference).

Description of Capital Stock (filed as Exhibit 4.1 to the Company’s Annual Report on Form 10-K on March 10, 2022 and incorporated herein by reference).

14 unchanged sentences

(f/k/a AFC Gamma, Inc.) and AFC Management, LLC (filed as Exhibit 10.1E to the Company’s Current Report on Form 8-K on February 22, 2024 and incorporated herein by reference).

Sixth Amendment to Amended and Restated Management Agreement, dated August 13, 2025 by and between Advanced Flower Capital Inc.

and AFC Management, LLC (filed as Exhibit 10.1F to the Company’s Quarterly Report on Form 10-Q on August 14, 2025 and incorporated herein by reference).

Tax Matters Agreement, dated as of July 8, 2024, by and between Advanced Flower Capital Inc.

19 unchanged sentences

Amendment Number Three to Loan and Security Agreement, dated January 24, 2025, by and among Advanced Flower Capital Inc.

(f/k/a AFC Gamma, Inc.), as Borrower, and the lenders that are party thereto.

(f/k/a AFC Gamma, Inc.), as Borrower, and the lenders that are party thereto (filed as Exhibit 10.9C to the Company’s Annual Report on Form 10-K on March 13, 2025 and incorporated herein by reference).

Amendment Number Four to Loan and Security Agreement, dated January 24, 2025, by and among Advanced Flower Capital Inc.

(f/k/a AFC Gamma, Inc.), as Borrower, and the lenders that are party thereto (filed as Exhibit 10.9D to the Company’s Current Report on Form 8-K on May 2, 2025 and incorporated herein by reference).

Amendment Number Five to Loan and Security Agreement, dated June 6, 2025, by and among Advanced Flower Capital Inc.

(f/k/a AFC Gamma, Inc.), as Borrower, and the lenders that are party thereto (filed as Exhibit 10.9E to the Company’s Current Report on Form 8-K on June 9, 2025 and incorporated herein by reference).

Amendment Number Six to Loan and Security Agreement, dated January 13, 2026, by and among Advanced Flower Capital Inc.

(f/k/a AFC Gamma, Inc.), as Borrower, and the lenders that are party thereto (filed as Exhibit 10.9F to the Company’s Current Report on Form 8-K on January 15, 2026 and incorporated herein by reference).

Unsecured Revolving Credit Agreement, dated as of January 27, 2026, by and between the Company, as borrower, and TCGSL LLC, as lender and agent thereto (filed as Exhibit 10.12 to the Company’s Current Report on Form 8-K on January 29, 2026 and incorporated by herein by reference).

Employment Agreement, dated January 3, 2023, by and between AFC Management, LLC and Brandon Hetzel (filed as Exhibit 10.8 to the Company’s Annual Report on Form 10-K on March 7, 2024 and incorporated herein by reference).

Employment Agreement, dated October 30, 2023, by and between AFC Management, LLC and Daniel Neville (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K on October 30, 2023 and incorporated herein by reference).

Insider Trading Policy.

List of Subsidiaries of the Registrant.

Investment Advisory Agreement, dated December 31, 2025, by and between Advanced Flower Capital Inc.

and AFC Management, LLC (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K on January 5, 2026).

Administration Agreement, dated December 31, 2025, by and between Advanced Flower Capital Inc.

and AFC Management, LLC (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K on January 5, 2026).

Form of Custody Agreement by and between Advanced Flower Capital Inc.

and East West Bank (filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K on January 5, 2026).

Transfer Agency and Registrar Services Agreement, dated December 31, 2025, by and between Advanced Flower Capital Inc.

and Equiniti Trust Company, LLC (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K on January 5, 2026).

Services Agreement, dated December 31, 2025, by and between Advanced Flower Capital Inc.

and PINE Advisors LLC (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K on January 5, 2026).

Insider Trading Policy (filed as Exhibit 19 to the Company’s Annual Report on Form 10-K on March 13, 2025 and incorporated herein by reference).

List of Subsidiaries of the Registrant (filed as Exhibit 21.1 to the Company’s Quarterly Report on Form 10-Q on November 12, 2025 and incorporated herein by reference).

Consent of CohnReznick LLP, independent registered public accounting firm.

64 unchanged sentences

Cash and cash equivalents 38,605,507 103,610,460

Accounts receivable — 1,837,450

Interest receivable 899,382 1,982,897

Prepaid expenses and other assets 2,443,814 1,214,817

Assets of discontinued operations — 31,244,622

Total assets $ 275,594,747 $ 402,057,313

9 unchanged sentences

Line of credit payable to affiliate — 40,000,000

Liabilities of discontinued operations — 10,000

Total liabilities 100,026,760 200,681,175

1 unchanged sentence

Shareholders’ equity

Preferred stock, par value $ 0.01 per share, 10,000 shares authorized at December 31, 2024 and 2023 and 0 and 125 shares issued and outstanding at December 31, 2024 and 2023, respectively

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

Common stock, par value $ 0.01 per share, 50,000,000 shares authorized at December 31, 2025 and 2024 and 23,528,844 and 22,332,927 shares issued and outstanding at December 31, 2025 and 2024, respectively

15 unchanged sentences

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

BDC conversion expenses 1,234,054 —

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

(Provision for) reversal of current expected credit losses ( 4,161,456 ) ( 12,132,718 )

Realized gains (losses) on investments, net ( 93,338 ) ( 1,340,476 )

Gain (loss) on extinguishment of debt — 1,986,381

Change in unrealized gains (losses) on loans at fair value, net ( 9,806,916 ) ( 8,513,364 )

Net income from continuing operations before income taxes 14,309,724 22,376,714

Income tax expense 447,587 1,659,337

Net income from continuing operations 13,862,137 20,717,377

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 from discontinued operations, net of tax — 2,922,068

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

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

Basic earnings per common share:

19 unchanged sentences

Balance at December 31, 2024 $ — 22,332,927 $ 223,329 $ 251,865,763 $ ( 50,712,954 ) $ 201,376,138

Issuance of common stock, net of offering costs — 1,582,960 15,829 15,561,994 — 15,577,823

Stock-based compensation — 292,270 2,923 1,388,055 — 1,390,978

Stock-based compensation, net of forfeitures — 1,195,917 11,959 6,828,846 — 6,840,805

Dividends declared on common shares ($ 0.53 per share)

— — — — ( 11,975,530 ) ( 11,975,530 )

Dividends declared on preferred shares ($ 60 per share)

— — — — ( 7,500 ) ( 7,500 )

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

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

Net income — — — — 16,784,205 16,784,205

Net loss — — — — ( 20,673,426 ) ( 20,673,426 )

Balance at December 31, 2025 $ — 23,528,844 $ 235,288 $ 258,694,609 $ ( 83,361,910 ) $ 175,567,987

6 unchanged sentences

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

Issuance of common stock, net of offering costs — 1,582,960 15,829 15,561,994 — 15,577,823

Stock-based compensation — 292,270 2,923 1,388,055 — 1,390,978

3 unchanged sentences

— — — — ( 7,500 ) ( 7,500 )

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

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

Net income — — — — 16,784,205 16,784,205

4 unchanged sentences

Operating activities:

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

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

Net (income) from discontinued operations, net of tax — ( 2,922,068 )

Net income from continuing operations 13,862,137 20,717,377

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Provision for (reversal of) current expected credit losses 4,161,456 12,132,718

Realized (gains) losses on investments, net 93,338 1,340,476

(Gain) loss on extinguishment of debt — ( 1,986,381 )

Change in unrealized (gains) losses on loans at fair value, net 9,806,916 8,513,364

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

Adjustments to reconcile net income to net cash provided by operating activities:

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

Accretion of deferred loan original issue discount and other discounts ( 3,450,808 ) ( 7,969,729 )

4 unchanged sentences

Changes in operating assets and liabilities:

Accounts receivable — ( 38,687 )

Interest receivable 1,083,515 1,733,098

Prepaid expenses and other assets ( 1,236,349 ) ( 634,683 )

Interest reserve — ( 4,700,944 )

Accrued interest ( 131,431 ) 611

2 unchanged sentences

Accounts payable and other liabilities 265,503 ( 213,040 )

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

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

Net cash provided by (used in) operating activities 21,557,675 21,228,934

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

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

Net cash provided by operating activities 11,235,352 21,557,675

Cash flows from investing activities:

2 unchanged sentences

Principal repayment of loans 80,365,080 58,788,329

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

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

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

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

Net cash provided by (used in) investing activities 34,904,497 ( 4,848,919 )

6 unchanged sentences

Borrowings on revolving credit facilities 91,600,000 285,000,000

Repayment of revolving credit facility ( 227,000,000 ) ( 81,000,000 )

Repayments on revolving credit facilities ( 170,600,000 ) ( 227,000,000 )

Dividends paid to common and preferred shareholders ( 19,345,396 ) ( 39,988,745 )

Repayment of senior notes ( 12,519,000 ) —

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

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

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

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

Net increase (decrease) in cash and cash equivalents ( 18,015,993 ) ( 18,746,388 )

Net cash used in financing activities ( 111,144,802 ) ( 34,724,749 )

Net (decrease) increase in cash and cash equivalents ( 65,004,953 ) ( 18,015,993 )

Cash and cash equivalents, beginning of period 103,610,460 121,626,453

1 unchanged sentence

Supplemental disclosure of non-cash activity:

Interest reserve withheld from funding of loans $ — $ 1,500,000

OID withheld from funding of loans $ 1,270,000 $ 6,231,309

4 unchanged sentences

Interest paid during the period $ 6,013,561 $ 5,310,554

Income taxes paid during the period $ 1,267,500 $ 1,655,821

Income taxes paid (net of refunds received) during the period $ 211,124 $ 1,267,500

See accompanying notes to the consolidated financial statements

3 unchanged sentences

Advanced Flower Capital Inc.

(formerly known as AFC Gamma, Inc.) (the “Company” or “AFC”) is an institutional lender that was founded in July 2020 by a veteran team of investment profe ssionals.

The Company primarily originates, structures, underwrites, invests in and manages senior secured mortgage loans and other types of loans and debt securities, with a specialization in loans to cannabis industry operators in states that have legalized medical and/or adult-use cannabis.

The Company is a Maryland corporation and completed its initial public offering (the “IPO”) in March 2021.

The Company is externally managed by AFC Management, LLC, a Delaware limited liability company (the Company’s “Manager”), pursuant to the terms of the Amended and Restated Management Agreement, dated January 14, 2021, between the parties (as amended from time to time, the “Management Agreement”).

(the “Company” or “AFC”) is an institutional lender that was founded in July 2020 by a veteran team of investment profe ssionals.

The Company is a Maryland corporation and externally managed by AFC Management, LLC.

On and effective January 1, 2026, we elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”).

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

The Company completed its initial public offering (the “IPO”) in March 2021.

During the year ended December 31, 2025, the Company was managed pursuant to the terms of the Amended and Restated Management Agreement, dated January 14, 2021 (as amended from time to time, the “Management Agreement”, by and between the Company and by AFC Management, LLC, a Delaware limited liability company (in its capacity as investment adviser under such agreement, the “Manager”).

The Company’s wholly-owned subsidiary, AFCG TRS1, LLC, a Delaware limited liability company (“TRS1”), operates as a taxable real estate investment trust subsidiary (a “TRS”).

7 unchanged sentences

For additional information, see Note 16, “Discontinued Operations.”

The Company operates in one operating segment.

The Company is solely focused on senior secured loans to cannabis industry operators in states where medical and/or adult-use cannabis is legal.

During the reporting period, the Company operated in one operating segment.

The Company focused on senior secured loans to cannabis industry operators in states where medical and/or adult-use cannabis is legal.

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

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

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

The Company elected to be taxed as a real estate investment trust (“REIT”) for United States federal income tax purposes under the Internal Revenue Code of 1986, as amended (the “Code”) for the year ended December 31, 2025.

At a meeting of the Board of Directors (the “Board”) on August 12, 2025 (the “August Meeting”), the Board approved the sixth amendment to the Company’s existing Management Agreement (the “Sixth Amendment”) to expand the Company’s investment strategy.

Accordingly, under the Sixth Amendment, the Company expanded its investment strategy and intends to additionally originate, structure, underwrite, invest in and manage senior secured mortgage loans and other types of loans and debt securities to companies ancillary to the cannabis industry as well as companies outside of the cannabis industry.

Businesses ancillary to the cannabis industry may include, but are not limited to, brand developers, business services providers, and equipment and consumables providers.

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

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

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

During 2025, the Company formed TCGDL LLC, a wholly-owned subsidiary of the Company, to facilitate direct lending transactions.

As of the December 31, 2025, the subsidiary had no operations or balances.

Subsequent to December 31,

2025, this subsidiary was utilized in connection with direct lending activities that align with the Company’s long term strategic initiatives.

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

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

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

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

On November 6, 2025, at the Special Meeting, the Company’s shareholders approved the Advisory Agreement, which was necessary for the Company to be able to operate as a BDC under the 1940 Act.

Subsequent to the reporting period, and 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 became subject to the provisions of the 1940 Act applicable to BDCs.

The Company’s election to be regulated as a BDC did not apply to, and has not been reflected in, the accompanying consolidated financial statements for the year ended December 31, 2025.

SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying consolidated financial statements and related notes have been prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company, and its wholly-owned subsidiary.

The consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary for the fair presentation of the Company’s results of operations and financial condition as of and for the periods presented.

43 unchanged sentences

The Company follows 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.

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.

ASC 825-10 also requires entities to display the fair value of the selected assets and liabilities on the face of the balance sheet.

18 unchanged sentences

In cases where quoted market prices are not available, fair values are based upon the application of discount rates to estimated future cash flows using market yields, or other valuation methodologies.

Any changes to the valuation methodology will be reviewed by the Company’s

management to ensure the changes are appropriate.

Any changes to the valuation methodology will be reviewed by the Company’s management to ensure the changes are appropriate.

The methods used may produce a fair value calculation that is not indicative of net realizable value or reflective of future fair values.

5 unchanged sentences

The CECL Reserve related to outstanding balances on loans held for investment required under Topic 326 is a valuation account that is deducted from the amortized cost basis of the Company’s loans held at carrying value and loan receivable held at carrying value in the Company’s consolidated balance sheets.

The CECL Reserve related to unfunded commitments on loans held at carrying value is recorded within the current expected credit loss reserve financial statement line in the Company’s consolidated balance sheets.

The CECL Reserve related to unfunded

commitments on loans held at carrying value is recorded within the current expected credit loss reserve financial statement line in the Company’s consolidated balance sheets.

The Company has elected not to measure an allowance for credit losses for accrued interest receivable.

29 unchanged sentences

Nonaccrual loans are restored to accrual status when past due principal and interest are paid and, in management’s judgment, are likely to remain current.

The Company may make exceptions to placing a loan on nonaccrual status if the loan has sufficient collateral value and is in the process of collection.

The Company may make exceptions to placing a loan on nonaccrual status if the loan has sufficient collateral value and is

in the process of collection.

Delayed draw loans earn interest or unused fees on the undrawn portion of the loan, which is recognized as interest income in the period earned.

Other fees, including prepayment fees and exit fees, are recognized as interest income when received.

Interest reserves

The Company utilizes interest reserves on certain loans to fund the interest payments.

Such reserves are established at the time of loan origination.

The interest reserve represents a deposit received from the borrower for future loan interest payments.

It is recorded as a liability as it represents unearned interest revenue.

The interest reserve is relieved when the interest on the loan is earned and interest income is recorded in the period when the interest is earned in accordance with the credit agreement.

The interest payment is deducted from the interest reserve deposit balance when the interest payment is due.

The decision to establish a loan-funded interest reserve is made during the underwriting process and considers the feasibility of the project, the creditworthiness and expertise of the borrower, and the debt coverage provided by the real estate and other pledged collateral.

It is the Company’s policy to recognize income for this interest component as long as the borrower is progressing as originally projected and if there has been no deterioration in the financial standing of the borrower or the underlying project.

The Company’s standard policies for interest income recognition are applied to all loans, including those with interest reserves.

The Company is a Maryland corporation and has elected to be taxed as a REIT under the Code, commencing with its taxable year ended December 31, 2020.

5 unchanged sentences

To the extent that the Company distributes less than 100% of its 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), the Company will pay tax at regular corporate rates on that undistributed portion.

Furthermore, the Company will be subject to a 4% nondeductible excise tax on any amount by which distributions the Company pays with respect to any calendar year (including any

distributions declared by the last day of the calendar year but paid in the subsequent year) are less than the sum of (1) 85% of our ordinary income, (2) 95% of our capital gain net income and (3) 100% of our undistributed income from prior years.

Furthermore, the Company will be subject to a 4% nondeductible excise tax on any amount by which distributions the Company pays with respect to any calendar year (including any distributions declared by the last day of the calendar year but paid in the subsequent year) are less than the sum of (1) 85% of our ordinary income, (2) 95% of our capital gain net income and (3) 100% of our undistributed income from prior years.

The annual expense is calculated in accordance with applicable tax regulations.

19 unchanged sentences

The Company calculates basic earnings (loss) per share by dividing net income (loss) allocable to common shareholders for the period by the weighted average shares of common stock outstanding for that period after consideration of the earnings (loss) allocated to the Company’s restricted stock, which are participating securities as defined in GAAP.

Diluted earnings (loss) per share takes into effect any dilutive instruments, such as stock options, restricted stock, restricted stock units (“RSUs”) and convertible debt, except when doing so would be anti-dilutive.

Diluted earnings (loss) per share takes into effect any dilutive instruments, such as stock options, restricted stock, restricted stock units

(“RSUs”) and convertible debt, except when doing so would be anti-dilutive.

As of December 31, 2025, there were dilutive instruments relating to stock options and restricted shares.

See Note 11 included in these consolidated financial statements for the earnings per share calculations.

BDC Conversion Expenses

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

During the year ended December 31, 2025, the Company incurred approximately $ 1.2 million in expenses related to the Conversion, respectively, which is recorded within BDC conversion expenses line item in the Company’s consolidated statements of operations.

Use of Estimates in the Preparation of Financial Statements

3 unchanged sentences

Recently Adopted Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023 - 07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, early adoption is permitted.

The amendments should be applied retrospectively to all prior period s presented in the financial statements.

Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption.

The Company has adopted ASU 2023-07 effective December 31, 2024 and concluded that the application of this guidance did not have any material impact on its consolidated financial statements.

See Note 18 for more information on the effects of the adoption of ASU 2023-07.

Recent Accounting Pronouncements Pending Adoption

In December 2023, the FASB issued ASU 2023-09—Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (“ASU 2023-09”).

ASU 2023-09 improves the transparency of income tax disclosures related to rate reconciliation and income taxes.

ASU 2023-09 improves the transparency of income tax disclosures related to rate reconciliation and income taxes paid.

ASU 2023-09 is effective for annual periods beginning after December 15, 2024.

2 unchanged sentences

The amendments should be applied prospectively, however, retrospective application is permitted.

The adoption of ASU 2023-09 is not expected to have a material impact on the Company’s consolidated financial statements.

The Company adopted ASU 2023-09 effective December 31, 2025, on a retrospective basis, and concluded that the application of this guidance did not have any material impact on its consolidated financial statements.

Recent Accounting Pronouncements Pending Adoption

In November 2024, the FASB issued ASU 2024-03—Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

4 unchanged sentences

LOANS HELD FOR INVESTMENT AT FAIR VALUE

As of December 31, 2024 and 2023, the Company’s portfolio included one and two loans held at fair value, respectively.

As of December 31, 2025 and 2024, the Company’s portfolio included three loans and one loan 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, the Company 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 the Company’s loans held at fair value had floating interest rates.

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

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

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

5 unchanged sentences

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

8 unchanged sentences

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

(3) As of 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 and the weighted average remaining life excludes the remaining life of the Private Company A Credit Facility.

The following table presents changes in loans held at fair value as of and for the year ended December 31, 2025:

4 unchanged sentences

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

3 unchanged sentences

Total loans held at fair value at December 31, 2023 $ 71,883,402 $ ( 239,399 ) $ ( 9,923,298 ) $ 61,720,705

Realized gains (losses) on loans at fair value, net ( 1,213,416 ) — — ( 1,213,416 )

Change in unrealized gains (losses) on loans at fair value, net — — ( 9,806,916 ) ( 9,806,916 )

2 unchanged sentences

Loan repayments ( 5,218,919 ) — — ( 5,218,919 )

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, 2024 $ 53,108,449 $ ( 2,867,431 ) $ ( 19,730,214 ) $ 30,510,804

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

Effective March 1, 2024, the Company placed Private Company A on nonaccrual status with an outstanding principal amount of approximately $ 53.1 million and an unrealized loss of approximately $( 19.7 ) million as of December 31, 2024 .

During the year ended December 31, 2023, the credit facility with Public Company A matured without repayment.

The agent on the credit facility has placed the borrower in default, and the Company recorded a realized loss of approximately $( 1.2 ) million for the year ended December 31, 2023 .

A more detailed listing of the Company’s loan held at fair value portfolio based on information available as of December 31, 2024 is as follows:

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

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

As of December 31, 2025 , the loan with Private Company A had an outstanding principal balance of approximately $ 46.8 million and an unrealized loss of approximately $( 27.7 ) million.

During the year ended December 31, 2025, approximately $ 6.3 million of payments were received and applied as a reduction to the amortized cost of the Private Company A loan.

A more detailed listing of the Company’s loans held at fair value portfolio based on information available as of December 31, 2025 is as follows:

Collateral Location Collateral

1 unchanged sentence

Rate Maturity Date (4)

A AZ, GA, MA, NM C, D $ 30,510,804 $ 50,241,018 $ 53,108,449 15.5 % (6)

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

A AZ, MA, NM C, D $ 16,259,763 $ 43,923,253 $ 46,790,684 15.5 % (6)

W MI C, D 4,821,000 4,821,000 6,000,000 10.0 % (7)

12/8/2028 P/I

of Public Co.

T AZ, CA, CT, FL, GA, MD, OH, PA, WV C, D 5,000,000 5,000,000 5,000,000 10.5 % (8)

12/17/2030 I/O

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

(1) C = Cultivation Facilities, D = Dispensary/Retail Facilities.

11 unchanged sentences

In November 2023, Private Company A was placed into receivership to maintain the borrower’s operations and maximize value for the benefit of its creditors.

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.

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

(7) Base interest rate of 10.0 %.

(8) Base interest rate of 10.5 %.

LOANS HELD FOR INVESTMENT AT CARRYING VALUE

As of December 31, 2024 and 2023, t he Company’s portfolio included fourteen and nine loans held at carrying value, respectively.

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

During the year ended December 31, 2024, the Company 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 the Company’s investments in Subsidiary of Public Company H and Subsidiary of Public Company M.

As of December 31, 2025 and 2024, t he Company’s 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, the Company 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 the Company’s loans held at carrying value had floating interest rates.

As of December 31, 2024, t hese 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, 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 the Company’s loans held at carrying value as of December 31, 2025 and 2024:

20 unchanged sentences

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

12 unchanged sentences

Total loans held at carrying value at December 31, 2024 $ 301,755,791 $ ( 8,493,417 ) $ 293,262,374

As of December 31, 2024 and 2023 , the Company had two and three loans held at carrying value on nonaccrual status, respectively.

During the year ended December 31, 2024, the Company successfully exited its loan with Private Company I, which was previously placed on nonaccrual status, effective May 1, 2023.

The Company was repaid on all remaining principal and past interest due upon exiting the loan.

The Company placed Subsidiary of Private Company G on nonaccrual status effective December 1, 2023, with an outstanding principal amount of approximately $ 79.2 million and an amortized cost of approximately $ 77.8 million as of December 31, 2024 .

Subsidiary of Private Company G was previously placed on nonaccrual status during various periods in 2023.

The Company will recognize income related to loan activity only upon receipt of cash.

As of December 31, 2025 and 2024 , the Company had two loans held at carrying value on nonaccrual status, with a total amortized cost of approximately $ 88.8 million and $ 89.3 million, respectively.

During the year ended December 31, 2025, the Company recognized interest income of $ 0.7 million on loans on nonaccrual status.

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 to be 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 a $ 5.3 million CECL Reserve.

During the fourth quarter of 2025, the Company realized a taxable loss of approximately $ 5.3 million and wrote off the CECL Reserve of $ 5.3 million.

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

As of December 31, 2025, the loan with Subsidiary of Private Company G had an outstanding principal amount of approximately $ 78.8 million and an amortized cost of approximately $ 77.3 million, respectively.

During the year ended December 31, 2025, the Company recognized interest income of approximately $ 0.7 million related to this loan, which was received in cash.

The Company placed Private Company K on nonaccrual status effective December 1, 2023, with an outstanding principal amount of approximately $ 12.2 million and an amortized cost of approximately $ 11.5 million as of December 31, 2024 .

The Company will recognize income related to loan activity only upon receipt of cash.

During the year ended December 31, 2024, the Company received a $ 1.3 million payment applied to the outstanding principal balance and recognized interest income of approximately $ 0.5 million related to this loan received in cash.

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

During the year ended December 31, 2025, approximately $ 0.4 million of contractual interest payments were received and applied as a reduction to this loan’s amortized cost.

AFC Agent, on our behalf and the other lenders, initiated a foreclosure proceeding on Subsidiary of Private Company G.

Foreclosure processes are often lengthy and expensive.

Results of foreclosure processes may be uncertain, as claims may be asserted by the relevant borrower or by other creditors or investors in such borrower that interfere with enforcement of our rights, such as claims that challenge the validity or enforceability of the loan or the priority or perfection of the Company’s security interests.

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

The Company placed Private Company K on nonaccrual status effective December 1, 2023, which has an outstanding principal amount of approximately $ 12.2 million and an amortized cost of approximately $ 11.5 million as of December 31, 2025 .

During the year ended December 31, 2025, the Company recognized no interest income related to this loan.

A more detailed listing of the Company’s loans held at carrying value portfolio based on information available as of December 31, 2025 is as follows:

6 unchanged sentences

K MA C, D 12,195,762 ( 682,619 ) 11,513,143 17.7 % (6)

J MO C, D 24,290,184 ( 131,197 ) 24,158,987 18.3 % (7)

L OH C, D 25,146,957 ( 117,433 ) 25,029,524 13.0 % (7)

of Public Co.

M IL, MA, MD, MI, NJ, OH, PA C, D 2,797,527 ( 138,061 ) 2,659,466 9.5 % (9)

8/27/2025 I/O

M AZ D 23,599,497 ( 931,092 ) 22,668,405 9.0 % (8)

3 unchanged sentences

O AZ, MD, MO, NJ, NV, NY, OH, OR, Canada C 5,358,890 ( 247,159 ) 5,111,731 13.5 % (11)

P MI C, D 15,609,914 ( 376,000 ) 15,233,914 13.0 % (14)

Q GA C, D 7,479,626 ( 293,333 ) 7,186,293 13.8 % (12)

1 unchanged sentence

11/1/2027 P/I

U GA, OH C, D 15,000,000 ( 263,514 ) 14,736,486 14.0 % (14)

Sub of Private Co.

V MO, OH, UT C, D 12,370,245 ( 341,250 ) 12,028,995 14.0 % (15)

of Public Co.

1 unchanged sentence

8/13/2030 I/O

T UT C, D 8,704,144 — 8,704,144 11.3 % (18)

7/26/2027 P/I

Total loans held at carrying value $ 259,626,556 $ ( 6,001,437 ) $ 253,625,119

7 unchanged sentences

(5) Base interest rate of 12.5 %.

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.

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

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

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.

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

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

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

(8) Base interest rate of 9.0 %.

(10) Base interest rate of 9.0 %.

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

(9) Base interest rate of 8.0 % plus SOFR (SOFR floor of 4.5 %).

1 unchanged sentence

(11) Base interest rate of 8.5 % plus SOFR (SOFR floor of 5.0 %).

(14) Base interest rate of 13.0 %.

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.

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.

(12) Base interest rate of 8.75 % plus SOFR (SOFR floor of 5.0 %).

1 unchanged sentence

(14) Base interest rate of 14.0 %.

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

(16) Base interest rate of 12.5 %.

LOAN RECEIVABLE HELD AT CARRYING VALUE

As of December 31, 2024 and 2023, the Company’s 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, the Company had approximately $ 0.1 million of principal repayments of loan receivable held at carrying value.

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

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

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

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

3 unchanged sentences

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 $ — $ — $ —

5 unchanged sentences

Total loan receivable held at carrying value at December 31, 2024 $ 1,897,324 $ ( 1,686 ) $ 1,895,638

As of December 31, 2024 and 2023 , the Company had one loan receivable held at carrying value on nonaccrual status with an outstanding principal amount of approximately $ 1.9 million and $ 2.0 million, and amortized cost of approximately $ 1.9 million and $ 2.0 million, respectively.

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

During the year ended December 31, 2025, the Company recognized no interest income related to this loan.

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

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

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

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

During the year ended December 31, 2025, the Company wrote off $ 1.8 million, which was equal to the carrying value of the loan receivable, excluding the CECL Reserve at the time the loan was written off.

CURRENT EXPECTED CREDIT LOSSES

As of December 31, 2024 and 2023, the Company’s CECL Reserve for its loans held at carrying value and loan receivable held at carrying value is approximately $ 30.6 million and $ 26.4 million, respectively, or 10.36 % and 8.71 %, respectively, of the Company’s total loans held at carrying value and loan receivable held at carrying value of approximately $ 295.2 million and $ 303.3 million, respectively, and is bifurcated between the current expected credit loss reserve (contra-asset) related to outstanding balances on loans held at carrying value and loan receivable held at carrying value of approximately $ 30.4 million and $ 26.3 million, respectively, and a liability for unfunded commitments of approximately $ 0.2 million and $ 0.1 million, respectively.

As of December 31, 2025 and 2024, the Company’s CECL Reserve for its loans held at carrying value and loan receivable held at carrying value was approximately $ 46.1 million and $ 30.6 million, respectively, or 18.19 % and 10.36 %, respectively, of the Company’s total loans held at carrying value and loan receivable held at carrying value of approximately $ 253.6 million and $ 295.2 million, respectively, and is bifurcated between the current expected credit loss reserve (contra-asset) related to outstanding balances on loans held at carrying value and loan receivable held at carrying value of approximately $ 46.1 million and $ 30.4 million, respectively, and a liability for unfunded commitments of approximately $ 0.1 million and $ 0.2 million, respectively.

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

Management considered the likelihood that funding will occur and, if funded, the expected credit loss on the funded portion.

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

Activity related to the CECL Reserve for outstanding balances and unfunded commitments on the Company’s loans held at carrying value and loan receivable held at carrying value as of and for the years ended December 31, 2025 and 2024 was as follows:

14 unchanged sentences

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

Risk factors include property type, geographic and local market dynamics, physical condition, projected cash flow, loan structure and exit plan, loan-to-value ratio, fixed charge coverage ratio, project sponsorship, and other factors deemed necessary by the Company.

Such factors may include property type, geographic and local market dynamics, physical condition, projected cash flow, loan structure and exit plan, loan-to-value ratio, fixed charge coverage ratio, project sponsorship, and other factors deemed necessary by the Company.

Based on a 5-point scale, the Company’s loans are rated “1” through “5,” from less risk to greater risk, which ratings are defined as follows:

19 unchanged sentences

Total $ 36,398,814 $ 80,691,524 $ 22,668,405 $ 36,542,667 $ 77,323,709 $ — $ 253,625,119

Gross write-offs $ — $ ( 5,263,532 ) $ — $ — $ — $ ( 1,777,246 ) $ ( 7,040,778 )

During the year ended December 31, 2025, the Company resolved two loans that were on nonaccrual status during 2025.

In connection with the resolutions, the Company incurred write-offs of approximately $ 7.0 million.

During the year ended December 31, 2025 , the Company deemed its equipment loan receivable with Public Company A uncollectible and wrote off the remaining balance and related CECL Reserve of $ 1.8 million.

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 risk rating of “5” and was fully reserved for.

During the year ended December 31, 2025 , the Company settled its non-performing loan with Private Company P and wrote off the related CECL Reserve of $ 5.3 million.

The loan with Private Company P was placed on nonaccrual status effective June 1, 2025 after certain payment defaults and had a risk rating of “5”.

The $ 5.3 million write-off was equal to the CECL Reserve at the time of resolution.

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.

INTEREST RECEIVABLE

4 unchanged sentences

Total interest receivable $ 899,382 $ 1,982,897

INTEREST RESERVE

At December 31, 2024 and 2023, the Company had zero loans that included a loan-funded interest reserve.

For the years ended December 31, 2024 and 2023, approximately zero and $ 4.7 million , respectively, of aggregate interest income was earned and disbursed from the interest reserves.

The following table presents changes in interest reserve as of and for the years ended December 31, 2024 and 2023:

Beginning reserves $ — $ 3,200,944

New reserves — 1,526,065

Reserves disbursed — ( 4,727,009 )

Ending reserves $ — $ —

Revolving Credit Facility

On April 29, 2022, the Company entered into the Loan and Security Agreement (the “Revolving Credit Agreement”) by and among the Company, the other loan parties from time to time party thereto, the lenders party thereto, and the lead arranger, bookrunner and administrative agent party thereto, pursuant to which, the Company obtained a $ 60.0 million senior secured revolving credit facility (as amended from time to time, the “Revolving Credit Facility”).

The Revolving Credit Facility has a maturity date of April 29, 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) 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.

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.

The Revolving Credit Facility contains aggregate commitments of $ 60.0 million from two FDIC-insured banking institutions (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 Agreement.

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, the Company incurred a one-time commitment fee expense of approximately $ 0.5 million, which was included in prepaid expenses and other assets on the Company’s consolidated balance sheets and amortized over the life of the facility.

In connection with entering the Revolving Credit Agreement, the Company incurred a one-time commitment fee expense of approximately $ 0.5 million, which was included in prepaid expenses and other assets on the Company’s consolidated balance sheets and amortized over the life of the facility.

The Company is required to pay certain fees to the agent and the lenders under the Revolving Credit Agreement, including a $ 75.0 thousand agent fee payable to the agent and a 0.25 % per annum loan fee payable ratably to the lenders, in each case, payable on the closing date and on the annual anniversary thereafter.

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 the Company’s consolidated statements of operations.

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

As of December 31, 2024 and 2023, outstanding borrowings under the Revolving Credit Facility were $ 60.0 million and $ 42.0 million, respectively, and zero and $ 18.0 million was available for borrowing as of December 31, 2024 and 2023, respectively.

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

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

During the year ended December 31, 2025, the Company incurred an unused line fee of approximately $ 134.1 thousand.

No unused line fee was incurred in the prior year, as the Company’s estimated average cash balance exceeded the minimum balance required to waive the unused line fee.

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

2 unchanged sentences

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.

In March 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.

In July 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.

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

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

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

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

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

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

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

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

As of December 31, 2025 and 2024, outstanding borrowings under the Revolving Credit Facility were $ 21.0 million and $ 60.0 million, respectively, and $ 29.0 million and zero were available for borrowing as of December 31, 2025 and 2024, respectively.

As of December 31, 2025 and 2024, the interest rate on the Company’s borrowings under the Revolving Credit Facility was 7.25 % and 8.00 %, respectively.

AFCF Credit Facility

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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.

As of December 31, 2024, outstanding borrowings under the AFCF Credit Facility were $ 40.0 million and zero was available for borrowing as of December 31, 2024.

As of December 31, 2024, the interest rate on the Company’s borrowings under the AFCF Credit Facility was 8.00 %.

In April 2025, in conjunction with the entry by the Company into Amendment Number Four to the Revolving Credit Agreement, the Company terminated that certain AFCF Credit Agreement, by and among the Company, as borrower, the lenders party thereto from time to time, and AFC Finance, LLC, as agent and lender.

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

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

As of December 31, 2025, the AFCF Credit Facility had been terminated and no amounts were outstanding or available for borrowing thereunder.

In January 2026, the Company entered into an unsecured revolving credit agreement (the “TCGSL Credit Agreement”), by and among the Company, as borrower, the lenders party thereto from time to time, and TCGSL LLC, as agent and lender.

TCGSL is wholly owned by Leonard M.

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

The TCGSL Credit Agreement provides for an unsecured revolving credit facility (the “TCGSL 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.

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

2027 Senior Notes

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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.

The Indenture contains customary terms and restrictions, subject to a number of exceptions and qualifications, including restrictions on the Company’s ability to (1) incur additional indebtedness unless the Annual Debt Service Charge (as defined in the Indenture) is no less than 1.5 to 1.0, (2) incur or maintain total debt in an aggregate principal amount greater than 60 % of the Company’s consolidated Total Assets (as defined in the Indenture), (3) incur or maintain secured debt in an aggregate principal amount greater than 25 % of the Company’s consolidated Total Assets (as defined in the Indenture), and (4) merge, consolidate or sell substantially all of the Company’s assets.

an aggregate principal amount greater than 25 % of the Company’s consolidated Total Assets (as defined in the Indenture), and (4) merge, consolidate or sell substantially all of the Company’s assets.

In addition, the Indenture also provides for customary events of default.

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

As of December 31, 2024 and 2023 , the Company had $ 90.0 million in principal amount of the 2027 Senior Notes outstanding.

As of December 31, 2024, the interest rate on the Company’s borrowings under the 2027 Senior Notes was 5.75 %

As of December 31, 2025 and 2024, the Company had $ 77.0 million and $ 90.0 million in principal amount of the 2027 Senior Notes outstanding, respectively.

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

3 unchanged sentences

Total principal 77,000,000

Deferred financing costs included in senior notes ( 1,387,850 )

Total due senior notes, net $ 88,612,150

The following tables reflect a summary of interest expense incurred during the years ended December 31, 2024 and 2023:

Deferred financing costs included in senior notes payable ( 677,507 )

Senior notes payable, net $ 76,322,493

December 31, 2025

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Interest expense $ 5,106,479 $ 632,687 $ 8,889 $ 5,748,055

Unused fee expense — 134,075 — 134,075

Amortization of deferred financing costs 623,647 252,759 — 876,406

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Total undrawn commitments $ 10,291,239 $ 10,334,599

The Company from time to time may be a party to litigation in the normal course of business.

As of December 31, 2024, the Company is not aware of any legal claims that could materially impact its business, financial condition or results of operations.

On March 17, 2023, the Company appointed Brandon Hetzel to serve as its Chief Financial Officer and Treasurer in place of Brett Kaufman, effective as of such date, with Mr.

Kaufman’s employment with AFC Management, LLC, the Company’s external manager (the “Manager”), terminated, effective as of April 17, 2023 (the “Separation Date”).

In connection with his termination, Mr.

Kaufman received (i) twelve (12) months’ worth of his current base salary, (ii) his annual target bonus, (iii) continued payment by our Manager of 100 % of the COBRA premiums for him and his dependents for a period of twelve (12) months following his Separation Date, (iv) accelerated vesting of one ( 1 ) additional tranche of each of Mr.

Kaufman’s outstanding equity awards, and (v) extension of the exercise period for Mr.

Kaufman’s outstanding options until one (1) year following the Separation Date, contingent on Mr.

Kaufman executing and not revoking a release of claims in favor of the Company.

During the year ended December 31, 2024 and 2023 , the Company recorded zero and approximately $ 0.7 million in severance expense within general and administrative expenses within the consolidated statements of operations, respectively.

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

As of December 31, 2025, the Company was not subject to any material pending legal proceedings to which the Company is a party or any of the Company’s assets are subject that could materially impact its business, financial condition or results of operations.

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

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Series A Preferred Stock

As of December 31, 2024 and 2023, the Company has authorized 10,000 preferred shares and previously issued 125 of the preferred shares designated as 12.0 % Series A Cumulative Non-Voting Preferred Stock, par value $ 0.01 per share (the “Series A Preferred Stock”).

As of December 31, 2024 and December 31, 2023, there were zero and 125 shares of Series A Preferred Stock issued and outstanding, respectively.

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

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

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

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The Series A Preferred Stock is senior to all other classes and series of shares of the Company’s stock as to dividend and redemption rights and rights upon the Company’s liquidation, dissolution and winding up.

Upon written notice to each record holder of the Series A Preferred Stock as to the effective date of redemption, the Company may redeem the shares of the outstanding Series A Preferred Stock at the Company’s option, in whole or in part, at any time for cash at a redemption price equal to $ 1,000 per share, plus all accrued and unpaid dividends thereon up to and including the date fixed for redemption.

and including the date fixed for redemption.

Shares of the Series A Preferred Stock that are redeemed shall no longer be deemed outstanding shares of the Company and all rights of the holders of such shares will terminate.

On June 30, 2024, the Company redeemed all 125 outstanding shares of its Series A Preferred Stock.

In June 2024, the Company redeemed all 125 outstanding shares of its Series A Preferred Stock.

The Series A Preferred Stock was redeemed at a price of $ 1,000 per share, plus all accrued and unpaid dividends thereon to and including the date fixed for redemption.

As the shares were redeemed on June 30, 2024, there were no accrued and unpaid dividends.

During the year ended December 31, 2024 and 2023 , the Company did not issue any shares of its common stock, other than shares of common stock sold under the ATM Program (hereinafter defined) and restricted stock awards granted under the 2020 Plan.

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

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

As of December 31, 2025 and 2024 , 23,528,844 and 22,332,927 shares of Common Stock were issued and outstanding, respectively.

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

Shelf Registration Statement

On April 5, 2022, the Company filed a shelf registration statement on Form S-3 (File No.

333-264144) (the “Prior Shelf Registration Statement”), which was declared effective on April 18, 2022.

Under the Prior Shelf Registration Statement, the Company was able, from time to time, issue and sell up to $ 1.0 billion of the Company’s common stock, preferred stock, debt securities, warrants and rights (including as part of a unit) to purchase shares of the Company’s common stock or preferred stock.

The Prior Shelf Registration Statement expired on April 18, 2025.

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

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

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

During the year ended December 31, 2024, the Company sold an aggregate of 1,582,960 shares of the Company’s 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.

As of December 31, 2024 , the shares of common stock sold under the ATM Program are the only offerings that have been initiated under the 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.

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

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 the Company’s Prior Shelf Registration Statement.

The Company does not currently have an ATM program, but 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.

Stock Incentive Plan

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Any award may be structured to be paid or settled in cash.

The Company has granted, and currently intends to continue to continue to grant, stock options and restricted stock awards to participants in the 2020 Plan, but it may also grant any other type of award available under the 2020 Plan in the future.

The Company has granted, and currently intends to continue to grant, stock options and restricted stock awards to participants in the 2020 Plan, but it may also grant any other type of award available under the 2020 Plan in the future.

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

In December 2024, the Company’s Board of Directors approved grants of 82,873 shares of restricted stock to Daniel Neville, the Company’s CEO, which vest over a three-year period with approximately 33 % vesting on each of the first, second and third anniversaries of December 20, 2024.

In January 2024, the Company’s Board of Directors approved grants of restricted stock to the Company’s directors and certain officers, as well as certain employees of the Manager, with an aggregate of 209,397 shares of restricted stock granted to such eligible persons.

The restricted stock granted in January 2024 under the 2020 Plan contain vesting periods that vary from immediately vested to vesting over a three-year period, with approximately 33 % vesting on each of the first, second and third anniversaries of the vesting commencement date.

In January 2023, the Company’s Board of Directors approved grants of restricted stock to the Company’s directors and certain officers, as well as certain employees of the Manager, with an aggregate of 125,234 shares of restricted stock granted to such eligible persons.

The restricted stock granted in January 2023 under the 2020 Plan contain vesting periods that vary from immediately vested to vesting over a three-year period, with approximately 33 % vesting on each of the first, second and third anniversaries of the vesting commencement date.

In June 2023, the Company granted 1,159 shares of restricted stock to James C.

Fagan in connection with his appointment to the Company’s Board of Directors, which vested upon the one-year anniversary of the grant date.

During the year ended December 31, 2025, the Company’s Board of Directors approved grants of an aggregate of 1,205,800 shares of restricted stock to the Company’s directors and certain officers, as well as certain employees of the Manager and its affiliates.

The restricted stock awards granted during the year ended December 31, 2025 under the 2020 Plan are subject to vesting periods that vary from immediately vested, one-year vesting and to vesting over a three-year period, with approximately 33 % vesting on each of the first, second and third anniversaries of the vesting commencement date.

During the year ended December 31, 2024, the Company’s Board of Directors approved grants of an aggregate of 292,270 shares of restricted stock to the Company’s directors and certain officers, as well as certain employees of the Manager and its affiliates.

The restricted stock awards granted during the year ended December 31, 2024, under the 2020 Plan contain vesting periods that vary from immediately vested to vesting over a three-year period, with approximately 33 % vesting on each of the first, second and third anniversaries of the vesting commencement date.

Because externally managed BDCs are not permitted under the 1940 Act to issue or have outstanding restricted stock or stock options, the Company’s Board, in advance of the Conversion, approved the accelerated vesting of its outstanding restricted stock and cancelled its outstanding stock options.

The Company accounted for this modification as a Type I modification (probable to probable) and the previously remaining unrecognized compensation expense of approximately $ 2.8 million was fully recognized during the year ended December 31, 2025.

As of December 31, 2025, there were 1,646,127 shares of common stock granted under the 2020 Plan, underlying 900 options and 1,645,227 shares of restricted stock.

As of December 31, 2025, the maximum number of shares of the Company’s common stock that may be delivered pursuant to awards under the 2020 Plan (the “Share Limit”) equaled 4,056,381 shares, of which 2,410,254 shares remained available for future issuance under the 2020 Plan.

The Share Limit increased during the year ended December 31, 2024 under the evergreen provision in the 2020 Plan in connection with the shares issued under the ATM Program during such time and in connection with the Minimum Annual Increase (as defined in the 2020 Plan) under the 2020 Plan for the 2024 fiscal year.

The Share Limit increased during the year ended December 31, 2025 under the evergreen provision in the 2020 Plan in connection with the Minimum Annual Increase (as defined in the 2020 Plan) for the 2025 fiscal year.

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

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The fair value of such unvested stock option awards remained constant pre- and post-Spin-Off, resulting in no incremental compensation cost.

The Company will recognize the remaining unrecognized compensation cost of the original stock option awards over the remaining vesting period.

The Company recognized the remaining unrecognized compensation cost of the original stock option awards over the remaining vesting period.

The Company used the Black-Scholes option pricing model to value stock options in determining the stock-based compensation expense.

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The expected term is based on the remaining contractual term of each option’s life as of the date of Spin-Off.

The expected dividend yield was based on the Company’s most recent quarterly dividend divided by the three-month average stock price as of the Spin-Off date, annualized.

The expected dividend yield was based on the Company’s most recent quarterly dividend, annualized, divided by the three-month average stock price as of the Spin-Off date.

Expected volatility is based on the remaining contractual term-matched historical volatility.

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Restricted Stock

Restricted stock awards originally granted under the 2020 Plan include awards granted to employees of the Company’s manager that perform shared fun ctions pre- and post-Spin-Off.

Restricted stock awards originally granted under the 2020 Plan include awards granted to employees of the Manager that perform shared fun ctions pre- and post-Spin-Off.

In co nnection with the Spin-Off transaction and as a result of the related modification, approximately 33 % of the remaining unrecognized compensation cost of unvested restricted stock awards will be recognized over the remaining vesting period of the Company’s former wholly-owned subsidiary, SUNS.

The Company will recognize the remaining 67 % of unrecognized compensation cost of unvested restricted stock awards over the remaining vesting period.

The Company recognized the remaining 67 % of unrecognized compensation cost of unvested restricted stock awards over the remaining vesting period.

Stock Compensation

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Stock Options

The following table summarizes the (i) non-vested options granted, (ii) vested options granted, (iii) exercised and (iv) forfeited options granted for the Company’s directors and officers and employees of the Manager as of December 31, 2024 and 2023:

Non-vested 129,862 149,133

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Unvested as of December 31, 2025 — $ — 0.00 years $ —

T he Company did not grant any options d uring the year ended December 31, 2024 and 2023 .

No options were exercised during the year ended December 31, 2024 and 2023 .

As of December 31, 2024 , there was approximately $ 16.1 thousand of total unrecognized compensation cost related to stock options, which is expected to be recognized over a weighted-average period of 0.96 years.

T he Company did not grant any options d uring the years ended December 31, 2025 and 2024 .

No options were exercised during the years ended December 31, 2025 and 2024 .

Restricted Stock

The following table summarizes restricted stock (i) granted, (ii) vested and (iii) forfeited for the Company’s directors and officers and employees of the Manager as of December 31, 2024 and 2023:

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

Granted 1,689,044 483,244

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Balance — 346,530

The following tables summarize the restricted stock activity as of and during the year ended December 31, 2024:

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

The following table summarizes the restricted stock activity as of and during the year ended December 31, 2025:

Number of shares of restricted stock Weighted-average

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Balance as of December 31, 2025 — $ —

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

The weighted-average grant date fair value of the remaining unvested restricted stock awards as of December 31, 2024 has been adjusted to give effect to the Spin-Off transaction, which was completed July 9, 2024.

The total fair value of shares vested during the year ended December 31, 2024 and 2023, was approximately $ 0.8 million and $ 0.5 million, respectively.

During the year ended December 31, 2023, 126,393 shares of restricted stock were granted with a weighted-average grant date fair value of $ 15.55 .

During the year ended December 31, 2023, 38,028 shares of restricted stock vested with a weighted-average grant date fair value of $ 18.03 .

As of December 31, 2024 , there was approximately $ 2.1 million of total unrecognized compensation cost related to non-vested restricted stock.

That cost is expected to be recognized over a weighted-average period of 2.15 years.

The total fair value of shares vested during the years ended December 31, 2025 and 2024, was approximately $ 5.1 million and $ 0.8 million, respectively.

During the year ended December 31, 2024, 292,270 shares of restricted stock were granted with a weighted-average grant date fair value of $ 10.95 per share.

During the year ended December 31, 2024, 64,752 shares of restricted stock vested with a weighted-average grant date fair value of $ 14.50 per share.

As of December 31, 2025 , there was no unrecognized compensation cost related to non-vested restricted stock or options.

EARNINGS PER SHARE

The following information sets forth the computations of basic and diluted weighted average earnings per common share for the years ended December 31, 2024 and 2023:

Net income from continuing operations $ 13,862,137 $ 20,717,377

The following information sets forth the computations of basic and diluted earnings per common share for the years ended December 31, 2025 and 2024:

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

Dividends paid on preferred stock — ( 7,500 )

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Discontinued operations $ — $ 0.14

Total basic weighted average earnings per common share $ 0.78 $ 1.02

Total basic earnings per common share $ ( 0.95 ) $ 0.78

Diluted earnings per share

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Discontinued operations $ — $ 0.14

Total diluted weighted average earnings per common share $ 0.78 $ 1.02

Diluted earnings per share was computed using the treasury stock method for stock options and restricted stock.

Diluted weighted average earnings per common share excluded 1,499,209 and 2,336,146 weighted average unvested restricted stock and stock options due to anti-dilutive effect for the years ended December 31, 2024 and 2023, respectively .

Total diluted earnings per common share $ ( 0.95 ) $ 0.78

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

Diluted earnings per common share excluded 1,665,057 and 1,499,209 weighted average shares of unvested restricted stock and stock options due to anti-dilutive effect for the years ended December 31, 2025 and 2024, respectively.

For the year ended December 31, 2025 , the potential dilutive shares due to unvested restricted stock and stock options were not included in the computation of diluted loss per share since to do so would decrease the loss per share from continuing operations.

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

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

The income tax provision for the Company was approximately $ 0.4 million and $ 1.7 million for the years ended December 31, 2024 and 2023, respectively.

The income tax expense for the years ended December 31, 2024 and 2023 primarily related to activities of the Company’s taxable REIT subsidiary.

The income tax (benefit) provision for the Company was approximately $( 0.6 ) million and $ 0.4 million for the years ended December 31, 2025 and 2024 , respectively.

The income tax benefit/expense for the years ended December 31, 2025 and 2024 primarily related to activities of the Company’s taxable REIT subsidiary.

The income tax provision for the Company and TRS1 consisted of the following for the years ended December 31, 2025 and 2024:

Federal $ 134,461 $ 868,300

State 298,894 306,338

12,669 298,894

Total current income tax expense (benefit) 147,130 1,167,194

Federal ( 711,653 ) —

Total deferred income tax (benefit) expense ( 711,653 ) —

Total deferred income tax expense (benefit) ( 648,844 ) ( 711,653 )

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

Total income tax expense (benefit), including excise tax $ ( 613,379 ) $ 447,587

For the years ended December 31, 2024 and 2023, the Company incurred zero and $ 0.1 million for United States federal excise tax expense, respectively.

(a) State taxes from Arizona, Florida, Maryland, Missouri and New Jersey make up more than 50% of this category.

For the years ended December 31, 2025 and 2024, the Company did not incur United States federal excise tax expense.

During the year ended December 31, 2025, the Company received a partial refund of previously paid excise tax relating to the 2023 tax year.

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

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

The following table is a reconciliation of the income tax computed for continuing operations at the federal statutory rate of 21% for the years ended December 31, 2024 and 2023:

As of December 31, 2025, tax years 2022-2025 remain subject to examination by taxing authorities.

We applied ASU 2023-09 on a retrospective basis as discussed in Note 2.

Accordingly, the disaggregation of rate reconciliation categories in the table below provide the disclosures required by ASU 2023-09 for the years ended December 31, 2025 and 2024.

Income tax (benefit) expense for the years ended December 31, 2025 and 2024 differed from

the amounts computed by applying the U.S.

federal income tax rate of 21% to pre-tax income as a result of the following:

December 31, 2025

December 31, 2024

federal statutory tax rate $ ( 4,470,229 ) 21.0 $ 3,005,042 21.0

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

As of December 31, 2024 and 2023, the Company’s deferred tax assets were $ 0.7 million and zero , respectively, and are included in prepaid expenses and other assets in the Company’s consolidated balance sheets.

The federal statutory rate was 21% for the years ended December 31, 2025 and 2024.

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

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

As of December 31, 2025 and 2024, the Company’s deferred tax assets were $ 1.4 million and $ 0.7 million, respectively, and are included in prepaid expenses and other assets in the Company’s consolidated balance sheets.

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

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There were no valuation allowances for deferred tax assets during the years ended December 31, 2025 and 2024.

We applied ASU 2023-09 on a retrospective basis as discussed in Note 2.

Accordingly, the income taxes paid by jurisdiction (net of refunds received) in the table below provide the disclosures required by ASU 2023-09 for the years ended December 31, 2025 and 2024:

Income taxes paid, net of refunds:

Federal $ 250,000 $ 868,300

Arizona 50,100 83,050

Florida 15,000 51,500

States 27,525 139,917

Federal excise ( 131,501 ) 124,733

Income taxes paid (net of refunds received) during the period $ 211,124 $ 1,267,500

Loans Held for Investment

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Alternative valuation methodologies may be used as appropriate, and can include a market analysis, income analysis, or recovery analysis.

To determine fair value using a yield analysis, a current price is imputed for the loan based upon an assessment of the expected market yield for a similarly structured loan with a similar level of risk.

To determine fair value using a yield analysis, a current price is imputed for the loan based upon an assessment of the expected market yield

for a similarly structured loan with a similar level of risk.

In the yield analysis, the Company considers the current contractual interest rate, the maturity and other terms of the loan relative to risk of the company and the specific loan.

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

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

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

Additional fundings 11,000,000

1 unchanged sentence

Loan repayments ( 6,317,765 )

Sale of loans ( 19,284,846 )

Accretion of original issue discount 128,384

PIK interest 1,134,785

Total loans using Level 3 inputs at December 31, 2025 $ 26,080,763

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Fair Value Primary Valuation Techniques Input Estimated Range Weighted Average

Senior term loan $ 30,510,804 Recovery analysis Recovery rate 54.90 % - 60.00 %

Senior term loans $ 16,259,763 Recovery analysis Recovery rate 31.60 % - 37.90 %

Senior term loans 4,821,000 Yield analysis Market yield 19.50 % - 21.50 %

Senior term loans 5,000,000 Market quotes Broker/dealer bids or quotes N/A

Total investment $ 26,080,763

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Fair Value Primary Valuation Techniques Input Estimated Range Weighted Average

Senior term loans $ 47,627,845 Recovery analysis Recovery rate 86.10 % - 92.40 %

Senior term loans 14,092,860 Market approach Revenue multiple 0.50 x - 0.70 x

Total investments $ 61,720,705

Senior term loan $ 30,510,804 Recovery analysis Recovery rate 54.90 % - 60.00 %

Total investment $ 30,510,804

Changes in market yields, revenue multiples, and recovery rates may change the fair value of certain of the Company’s loans.

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

The following table details the book value and fair value of the Company’s financial instruments not recognized at fair value in the consolidated balance sheets as of December 31, 2024 :

The following table details the carrying value and fair value of the Company’s financial instruments not recognized at fair value in the consolidated balance sheets as of December 31, 2025 :

As of December 31, 2025

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Cash and cash equivalents $ 38,605,507 $ 38,605,507

Loans held for investment at carrying value $ 293,262,374 $ 264,774,699

Loan receivable held at carrying value $ 1,895,638 $ —

Loans held for investment at carrying value, net $ 253,625,119 $ 207,805,490

Financial liabilities:

Senior notes payable, net $ 76,322,493 $ 74,151,000

Estimates of fair value for cash and cash equivalents are measured using observable, quoted market prices, or Level 1 inputs.

Cash and cash equivalents have a carrying value which approximates their fair value due to the short-term nature of these instruments.

The Company categorizes the fair value measurement of these assets as Level 1.

The Company’s loans held for investment are measured using unobservable inputs, or Level 3 inputs.

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Under the Management Agreement, the Company pays Incentive Fees to the Manager based upon the Company’s achievement of targeted levels of Core Earnings.

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

The Incentive Compensation for the years ended December 31, 2024 and 2023 , was approximately $ 6.8 million and $ 10.4 million, respectively.

depreciation and amortization, (iv) any unrealized gains or losses or other non-cash items that are included in net income for the applicable reporting period, regardless of whether such items are included in other comprehensive income or loss, or in net income and (v) one-time events pursuant to changes in GAAP and certain non-cash charges, in each case after discussions between the Manager and the Company’s independent directors and approved by a majority of the independent directors.

There was no Incentive Compensation for the year ended December 31, 2025, respectively.

The Incentive Compensation for the year ended December 31, 2024 was approximately $ 6.8 million.

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

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General and administrative expenses reimbursable to Manager 2,384,000 2,880,680

Professional fees reimbursable to Manager 47,801 33,576

Total $ 5,359,668 $ 13,276,077

Amounts payable to the Company’s Manager as of December 31, 2024 and 2023 were approximately $ 3.1 million and $ 5.0 million, respectively.

The Manager is a wholly-owned subsidiary of Castleground Holdings LLC (f/k/a Advanced Flower Capital Management, LLC) (the “Parent Manager”).

As of December 31, 2024, certain officers have ownership in the outstanding equity of the Parent Manager, including Leonard Tannenbaum, Chairman of the Board, Robyn Tannenbaum, President and Chief Investment Officer, Bernard Berman, a member of the Company’s Investment Committee, and Daniel Neville, Chief Executive Officer.

Due to Affiliate

Amounts due to an affiliate of the Company as of December 31, 2024 and 2023 were approximately $ 6.8 thousand and $ 16.4 thousand, respectively.

Amounts payable to the Manager as of December 31, 2025 and 2024 were approximately $ 1.1 million and $ 3.1 million, respectively, and are recorded within Accrued management fees and incentive fees and Accrued direct administrative expenses in the Company’s consolidated Balance Sheets.

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

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

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

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

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

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

Effective January 1, 2026, the Company elected to be regulated as a BDC beginning with its taxable year ending December 31, 2026.

Investments in Loans

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As such, the Company’s risk is limited to the carrying value of its investment in any such loan.

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

Additionally, the Manager or its affiliates, including AFC Agent, may from time to time serve as administrative

and collateral agent to the lenders under the Company’s loans.

As of December 31, 2025, there were two co-invested loans held by the Company and affiliates of the Company.

Unsecured Revolving Credit Facility with Affiliate

The Company entered the Revolving Credit Facility with AFC Finance LLC, an affiliate of the Company and Mr.

In December 2024, the Company entered into the AFCF Credit Facility with AFC Finance LLC, an affiliate of the Company and Mr.

The AFCF Credit Facility was terminated in April 2025.

Refer to Note 8 for more information.

In January 2026, the Company entered into the TCGSL Credit Facility with TCGSL LLC, an affiliate of the Company and Mr.

Refer to Note 8 for more information.

DIVIDENDS AND DISTRIBUTIONS

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9/13/2024 9/30/2024 10/15/2024 0.33 0.11 0.02 0.22 0.09

2023 Total cash dividend

12/13/2024 12/31/2024 1/15/2025 0.33 (1)

3/4/2024 3/31/2024 4/15/2024 $ 0.48 $ 0.48 $ 0.07 $ — $ 0.41

2024 Total cash dividend

$ 1.77 $ 0.92 $ 0.14 $ 0.52 $ 0.78

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$ 0.53 $ — $ — $ 0.53 $ —

(1) The fourth quarter 2024 dividend paid on January 15, 2025 to shareholders of record as of December 31, 2024 will be taxable to shareholders in 2025.

Holders of AFC Common Stock as of the close of business on July 8, 2024 (the “Record Date”) received one share of SUNS common stock for every three shares of AFC Common Stock held.

(1) The fourth quarter 2024 dividend paid on January 15, 2025 to shareholders of record as of December 31, 2024 was taxable to shareholders in 2025 as a return of capital.

During 2024, holders of AFC Common Stock as of the close of business on July 8, 2024 (the “Record Date”) received one share of SUNS common stock for every three shares of AFC Common Stock held.

federal income tax purposes, AFC reported the fair market value of the SUNS common stock distributed per each share of AFC common stock outstanding on the Record Date was $ 11.00 per share.

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The Spin-Off was completed July 9, 2024 (the “Distribution Date”).

On the Distribution Date, SUNS became an

independent, publicly-traded company, trading on the Nasdaq Capital Market under the symbol “SUNS”.

On the Distribution Date, SUNS became an independent, publicly-traded company, trading on the Nasdaq Capital Market under the symbol “SUNS”.

The Company retained no ownership interest in SUNS following the Spin-Off.

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In connection with the Spin-Off, the Company entered into several agreements with SUNS that govern the relationship between the Company and SUNS following the spin-off, including the Separation and Distribution Agreement and the Tax Matters Agreement.

These agreements provide for the allocation between the Company and SUNS of the assets, liabilities and obligations (including, among others, investments, property and tax-related assets and liabilities) of the Company and its subsidiaries attributable to periods prior to, at and after the Spin-Off.

These agreements provide for the allocation between the Company and SUNS

of the assets, liabilities and obligations (including, among others, investments, property and tax-related assets and liabilities) of the Company and its subsidiaries attributable to periods prior to, at and after the Spin-Off.

The operating results of the SUNS business through the date of the Spin-Off are reported in net income from discontinued operations, net of tax in the consolidated statements of operations for all periods presented.

The related assets and liabilities are reported as assets and liabilities of discontinued operations on the consolidated balance sheets.

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

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

During the year ended December 31, 2024, Spin-Off costs incurred were approximately $( 0.5 ) million.

No Spin-Off costs were incurred during the year ended December 31, 2023.

During the years ended December 31, 2025 and 2024, Spin-Off costs incurred were zero and approximately $ 1.1 million, respectively.

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

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

The following table summarizes the financial statement lines of assets and liabilities classified as discontinued operations as of December 31, 2023:

December 31, 2023

Cash and cash equivalents $ 31,244,622

Total assets of discontinued operations $ 31,244,622

Accounts payable and other liabilities $ 10,000

Total liabilities of discontinued operations $ 10,000

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

REPORTABLE SEGMENTS

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The Company generates revenue from loans to state law compliant cannabis operators in the United States.

These investments typically have maturities ranging from two to five years and may accrue interest at

either fixed or floating rates.

These investments typically have maturities ranging from two to five years and may accrue interest at either fixed or floating rates.

The accounting policies of the institutional lending segment are the same as those described in the summary of significant accounting policies.

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

During the year ended December 31, 2024 and 2023, interest income earned on the Company’s portfolio was concentrated with three and four borrowers, respectively, each comprising more than 10% of consolidated interest income for an aggregate amount of $ 22.7 million, or 44 %, and $ 45.7 million, or 65 %, of consolidated interest income, respectively.

During the years ended December 31, 2025 and 2024, interest income earned on the Company’s portfolio was concentrated with five and three borrowers, respectively, each comprising more than 10% of consolidated interest income for an aggregate amount of $ 22.3 million, or 71 %, and $ 22.7 million, or 44 %, of consolidated interest income, respectively.

SUBSEQUENT EVENTS

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

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, the Company 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.

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 the Company in the foreclosure proceeding.

The Company believes 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 .”

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

As a result of this election, the Company became subject to the regulatory framework applicable to BDCs.

The company was not regulated as a BDC during the year ended December 31, 2025, and the effects of this election are not reflected in the accompanying consolidated financial statements.

In connection with its election to be regulated as a BDC, the Company entered into a new Advisory Agreement and a new administration agreement.

These agreements replaced the Management Agreement that governed the Company’s operations during the year ended December 31, 2025.

The Advisory Agreement and the Administration Agreement became effective on January 1, 2026 and were not in effect during the year ended December 31, 2025.

Accordingly, the accompanying consolidated financial statements do not reflect any advisory fees, incentive fees, or administrative fees payable under these agreements.

In January 2026, the Company entered into Amendment Number Six to the Revolving Credit Facility (“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 REIT to a BDC.

TCGSL is wholly owned by Leonard M.

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

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

In January 2026, the Company was fully repaid on the 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.

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

In January 2026, the Company was fully repaid on the 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.

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

In January 2026, the Company, 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, the Company, 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.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.

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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 9A. Controls and Procedures