Advanced Flower Capital Inc. 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures The Company maintains disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in the Company’s reports under the Exchange Act is recorded, processed, and summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. An evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Annual Report was made under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer. Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (a) are effective to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is timely recorded, processed, summarized and reported and (b) include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Management’s Annual Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a‐15(f) and 15d-15(f) of the Exchange Act. 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 111 Table of Contents 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; and (iii) provide reasonable assurance regarding prevention or timely detection of the unauthorized acquisition, use or disposition of assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Management has assessed the effectiveness of our internal control over financial reporting as of December 31, 2025, using the framework specified in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on such assessment, management has concluded that our internal control over financial reporting was effective as of December 31, 2025. This Annual Report does not include an attestation report of our independent registered public accounting firm regarding control over financial reporting. Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to Section 989G of the Dodd-Frank Wall Street and Consumer Protection Act, which exempts non-accelerated filers from the auditor attestation requirement of Section 404(b) of the Sarbanes-Oxley Act. Effectiveness of Internal Control It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system will be met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there is only the reasonable assurance that our controls will succeed in achieving their goals under all potential future conditions. Changes in Internal Control over Financial Reporting There have been no changes to our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended December 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information Insider Trading Arrangements None of the Company’s directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company’s fiscal quarter ended December 31, 2025. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. PART III Item 10. Directors, Executive Officers and Corporate Governance Except as set forth below, the other information required by this item will be contained in the Company’s definitive proxy statement for its 2026 Annual Shareholder Meeting, to be filed with the SEC within 120 days after December 31, 2025, and is incorporated herein by reference. Code of Business Conduct and Ethics We have adopted a Code of Business Conduct and Ethics for our directors, officers (including our principal executive officer, principal financial officer and principal accounting officer) and employees. 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 112 Table of Contents 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/ . Item 11. Executive Compensation The information required by this item is incorporated by reference to the Company’s definitive proxy statement for its 2026 Annual Shareholder Meeting, to be filed with the SEC within 120 days after December 31, 2025 and is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by this item is incorporated by reference to the Company’s definitive proxy statement for its 2026 Annual Shareholder Meeting, to be filed with the SEC within 120 days after December 31, 2025 and is incorporated herein by reference. Item 13. Certain Relationships and Related Party Transactions, and Director Independence The information required by this item is incorporated by reference to the Company’s definitive proxy statement for its 2026 Annual Shareholder Meeting, to be filed with the SEC within 120 days after December 31, 2025 and is incorporated herein by reference. Item 14. Principal Accountant Fees and Services The information required by this item is incorporated by reference to the Company’s definitive proxy statement for its 2026 Annual Shareholder Meeting, to be filed with the SEC within 120 days after December 31, 2025 and is incorporated herein by reference. PART IV Item 15. Exhibits and Financial Statement Schedules (1) Financial Statements—See the Index to Consolidated Financial Statements, together with the report thereon of CohnReznick LLP dated March 4, 2026, beginning on Page F-1. (2) Financial Statement Schedules—None. We have omitted financial statement schedules because they are not required or are not applicable, or the required information is shown in the consolidated financial statements or notes to the consolidated financial statements. (3) Exhibits. Exhibit No. Description of Exhibits 2.1 Separation and Distribution Agreement, dated as of July 8, 2024, by and between Advanced Flower Capital Inc. (formerly known as AFC Gamma, Inc.) and Sunrise Realty Trust, Inc. (filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K on July 8, 2024 and incorporated herein by reference). 3.1 Articles of Amendment and Restatement of Advanced Flower Capital Inc. (f/k/a AFC Gamma, Inc.) (filed as Exhibit 3.2 to the Company’s Registration Statement on Form S-11 on January 22, 2021 and incorporated herein by reference). 3.1A Articles of Amendment, dated March 10, 2022 (filed as Exhibit 3.1A to the Company’s Annual Report on Form 10-K on March 10, 2022 and incorporated herein by reference). 3.1B 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). 3.2 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). 113 Table of Contents 3.4 Amended and Restated Bylaws of Advanced Flower Capital Inc. (f/k/a AFC Gamma, Inc.) (filed as Exhibit 3.4 to the Company’s Registration Statement on Form S-11 on January 22, 2021 and incorporated herein by reference). 3.4A 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). 3.4B 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). 4.1 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). 4.2 Indenture, dated as of November 3, 2021, by and between Advanced Flower Capital Inc. (f/k/a AFC Gamma, Inc.) and TMI Trust Company, as trustee (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K on November 3, 2021 and incorporated herein by reference). 4.3 Form of 5.750% Senior Notes due 2027 (included in Exhibit 4.2). 10.1 Amended and Restated Management Agreement, dated January 14, 2021 by and between Advanced Flower Capital Inc. (f/k/a AFC Gamma, Inc.) and AFC Management, LLC (filed as Exhibit 10.1 to the Company's Annual Report on Form 10-K on March 10, 2022 and incorporated herein by reference). 10.1A First Amendment to Amended and Restated Management Agreement, dated March 10, 2022, by and between Advanced Flower Capital Inc. (f/k/a AFC Gamma, Inc.) and AFC Management, LLC (filed as Exhibit 10.1A to the Company’s Annual Report on Form 10-K on March 10, 2022 and incorporated herein by reference). 10.1B Second Amendment to Amended and Restated Management Agreement, dated November 7, 2022, by and between Advanced Flower Capital Inc. (f/k/a AFC Gamma, Inc.) and AFC Management, LLC (filed as Exhibit 10.1B to the Company’s Quarterly Report on Form 10-Q on November 8, 2022 and incorporated herein by reference). 10.1C Third Amendment to Amended and Restated Management Agreement, dated March 6, 2023 by and between Advanced Flower Capital Inc. (f/k/a AFC Gamma, Inc.) and AFC Management, LLC (filed as Exhibit 10.1C to the Company’s Annual Report on Form 10-K on March 7, 2023 and incorporated herein by reference). 10.1D Fourth Amendment to Amended and Restated Management Agreement, dated September 11, 2023 by and between Advanced Flower Capital Inc. (f/k/a AFC Gamma, Inc.) and AFC Management, LLC (filed as Exhibit 10.1D to the Company’s Current Report on Form 8-K on September 12, 2023 and incorporated herein by reference). 10.1E Fifth Amendment to Amended and Restated Management Agreement, dated February 22, 2024 by and between Advanced Flower Capital Inc. (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). 10.1F 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). 10.2 Tax Matters Agreement, dated as of July 8, 2024, by and between Advanced Flower Capital Inc. (formerly known as AFC Gamma, Inc.) and Sunrise Realty Trust, Inc. (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K on July 8, 2024 and incorporated herein by reference). 10.3 Form of Indemnification Agreement between the Registrant and each of its directors and officers (filed as Exhibit 10.2 to the Company’s Registration Statement on Form S-11 on January 22, 2021 and incorporated herein by reference). 10.4 Form of Indemnification Agreement between Registrant and each of the Investment Committee members (filed as Exhibit 10.3 to the Company’s Registration Statement on Form S-11 on January 22, 2021 and incorporated herein by reference). 10.5 Form of Registration Rights Agreement, by and among Advanced Flower Capital Inc. (f/k/a AFC Gamma, Inc.) and the holders thereto (filed as Exhibit 10.4 to the Company’s Registration Statement on Form S-11 on December 28, 2020 and incorporated herein by reference). 10.6§ 2020 Stock Incentive Plan (filed as Exhibit 10.5 to the Company’s Registration Statement on Form S-11 on January 22, 2021 and incorporated herein by reference). 114 Table of Contents 10.7 Secured Revolving Credit Agreement, dated August 18, 2020, by and among Advanced Flower Capital Inc. (f/k/a AFC Gamma, Inc.), as borrower, AFC Finance, LLC, as agent, and AFC Finance, LLC and Gamma Lending Holdco LLC, as lenders (filed as Exhibit 10.6 to the Company’s Registration Statement on Form S-11 on December 28, 2020 and incorporated herein by reference). 10.7A Amendment to Revolving Credit Agreement, dated as of May 7, 2021, by and among Advanced Flower Capital Inc. (f/k/a AFC Gamma, Inc.), as borrower, AFC Finance, LLC, as agent, and AFC Finance, LLC and Gamma Lending Holdco LLC, as lenders (filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q on May 11, 2021 and incorporated herein by reference). 10.7B Second Amendment to Revolving Credit Agreement, dated as of November 3, 2021, by and among Advanced Flower Capital Inc. (f/k/a AFC Gamma, Inc.), as borrower, and AFC Finance, LLC, as and lender (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K on November 3, 2021 and incorporated herein by reference). 10.8 Unsecured Revolving Credit Agreement, dated December 17, 2024, by and among Advanced Flower Capital Inc., as borrower, the lenders party thereto from time to time, and AFC Finance, LLC, as agent and lender (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K on December 17, 2024 and incorporated herein by reference). 10.9† Loan and Security Agreement, dated April 29, 2022, 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 10.7 to the Company’s Current Report on Form 8-K on May 2, 2022 and incorporated herein by reference). 10.9A† Amendment Number One to Loan and Security Agreement, dated March 26, 2024, by and among AFC Gamma, Inc., as Borrower, and the lenders that are party thereto (filed as Exhibit 10.7A to the Company’s Current Report on Form 8-K on March 29, 2024 and incorporated herein by reference). 10.9B† Amendment Number Two to Loan and Security Agreement, dated July 18, 2024, by and among Advanced Flower Capital Inc. (formerly known as AFC Gamma, Inc.), as Borrower, and the lenders that are party thereto (filed as Exhibit 10.7B to the Company’s Quarterly Report on Form 10-Q on August 7, 2024 and incorporated herein by reference). 10.9C† 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 (filed as Exhibit 10.9C to the Company’s Annual Report on Form 10-K on March 13, 2025 and incorporated herein by reference). 10.9D† 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). 10.9E† 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). 10.9F† 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). 10.10† 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). 10.11§ 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). 10.12§ 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). 10.13§ 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). 10.14§ 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). 115 Table of Contents 10.15§ 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). 10.16§ 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). 10.17§ 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). 19 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). 21.1 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). 23.1* Consent of CohnReznick LLP, independent registered public accounting firm. 31.1* Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2* Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1** Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2** Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 97 Clawback Policy (filed as Exhibit 97 to the Company’s Annual Report on Form 10-K on March 7, 2024 and incorporated herein by reference). 101.INS Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101.SCH Inline XBRL Taxonomy Extension Schema Document. 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document. 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document. 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document. 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document. 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) § Management contract or compensatory plan or arrangement * Filed herewith ** Furnished herewith † The registrant has omitted portions of the referenced exhibit pursuant to Item 601(b) of Regulation S-K because such portions are both (i) not material and (ii) the type of information that the registrant customarily and actually treats as private and confidential. Item 16. Form 10-K Summary None. 116 Table of Contents INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm CohnReznick LLP (PCAOB ID 596 ), Baltimore, Maryland F- 2 Consolidated Balance Sheets as of December 31, 2025 and 2024 F- 3 Consolidated Statements of Operations for the years ended December 31, 2025 and 2024 F- 4 Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2025 and 2024 F- 5 Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024 F- 6 Notes to Consolidated Financial Statements F- 8 F-1 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors and Shareholders Advanced Flower Capital Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Advanced Flower Capital Inc. and subsidiary as of December 31, 2025 and 2024, and the related consolidated statements of operations, shareholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Advanced Flower Capital Inc. and subsidiary as of December 31, 2025 and 2024, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the entity’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to Advanced Flower Capital Inc. in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Advanced Flower Capital Inc. is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Emphasis of Matter As further described in Note 9, Advanced Flower Capital Inc. is subject to significant risks and uncertainties due to originating, structuring, underwriting and managing senior secured loans and other types of loans for established cannabis industry operators. /s/ CohnReznick LLP We have served as Advanced Flower Capital Inc.’s auditor since 2020. Baltimore, Maryland March 4, 2026 F-2 Table of Contents ADVANCED FLOWER CAPITAL INC. CONSOLIDATED BALANCE SHEETS As of December 31, 2025 2024 Assets Loans held for investment at fair value (cost of $ 53,744,253 and $ 50,241,018 at December 31, 2025 and 2024, respectively, net) $ 26,080,763 $ 30,510,804 Loans held for investment at carrying value, net 253,625,119 293,262,374 Loan receivable held at carrying value, net — 1,895,638 Current expected credit loss reserve ( 46,059,838 ) ( 30,419,677 ) Loans held for investment at carrying value and loan receivable held at carrying value, net of current expected credit loss reserve 207,565,281 264,738,335 Cash and cash equivalents 38,605,507 103,610,460 Interest receivable 899,382 1,982,897 Prepaid expenses and other assets 2,443,814 1,214,817 Total assets $ 275,594,747 $ 402,057,313 Liabilities Accrued interest $ 763,180 $ 894,611 Due to affiliate — 6,754 Dividends payable — 7,369,866 Current expected credit loss reserve 76,469 166,702 Accrued management and incentive fees 716,181 1,932,246 Accrued direct administrative expenses 374,852 1,197,518 Accounts payable and other liabilities 773,585 501,328 Senior notes payable, net 76,322,493 88,612,150 Line of credit payable 21,000,000 60,000,000 Line of credit payable to affiliate — 40,000,000 Total liabilities 100,026,760 200,681,175 Commitments and contingencies (Note 9) Shareholders’ equity 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 235,288 223,329 Additional paid-in capital 258,694,609 251,865,763 Accumulated (deficit) earnings ( 83,361,910 ) ( 50,712,954 ) Total shareholders’ equity 175,567,987 201,376,138 Total liabilities and shareholders’ equity $ 275,594,747 $ 402,057,313 See accompanying notes to the consolidated financial statements F-3 Table of Contents ADVANCED FLOWER CAPITAL INC. CONSOLIDATED STATEMENTS OF OPERATIONS Years ended December 31, 2025 2024 Revenue Interest income $ 31,322,137 $ 51,991,789 Interest expense ( 6,758,536 ) ( 6,336,308 ) Net interest income 24,563,601 45,655,481 Expenses Management and incentive fees, net (less rebate of $ 854,432 and $ 947,969 , respectively) 2,927,867 10,361,821 General and administrative expenses 3,231,642 3,967,764 Stock-based compensation 6,840,805 1,390,978 Professional fees 1,451,361 1,563,484 BDC conversion expenses 1,234,054 — Total expenses 15,685,729 17,284,047 Provision for current expected credit losses ( 22,590,706 ) ( 4,161,456 ) Realized losses on investments, net — ( 93,338 ) Gain on extinguishment of debt 359,305 — Change in unrealized losses on loans at fair value, net ( 7,933,276 ) ( 9,806,916 ) Net (loss) income from continuing operations before income taxes ( 21,286,805 ) 14,309,724 Income tax (benefit) expense ( 613,379 ) 447,587 Net (loss) income from continuing operations ( 20,673,426 ) 13,862,137 Net income from discontinued operations, net of tax — 2,922,068 Net (loss) income $ ( 20,673,426 ) $ 16,784,205 Basic earnings per common share: Continuing operations $ ( 0.95 ) $ 0.64 Discontinued operations $ — $ 0.14 Total basic earnings per common share $ ( 0.95 ) $ 0.78 Diluted earnings per common share: Continuing operations $ ( 0.95 ) $ 0.64 Discontinued operations $ — $ 0.14 Total diluted earnings per common share $ ( 0.95 ) $ 0.78 Weighted average number of common shares outstanding: Basic weighted average shares of common stock outstanding 22,246,019 20,821,239 Diluted weighted average shares of common stock outstanding 22,282,784 20,888,980 See accompanying notes to the consolidated financial statements F-4 Table of Contents ADVANCED FLOWER CAPITAL INC. CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY Year ended December 31, 2025 Preferred Stock Common Stock Additional Paid-In- Capital Accumulated Earnings (Deficit) Total Shareholders’ Equity Shares Amount Balance at December 31, 2024 $ — 22,332,927 $ 223,329 $ 251,865,763 $ ( 50,712,954 ) $ 201,376,138 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 ) 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 Year ended December 31, 2024 Preferred Stock Common Stock Additional Paid-In- Capital Accumulated Earnings (Deficit) Total Shareholders’ Equity Shares Amount 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 Dividends declared on common shares ($ 1.77 per share) — — — — ( 37,531,416 ) ( 37,531,416 ) 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 Balance at December 31, 2024 $ — 22,332,927 $ 223,329 $ 251,865,763 $ ( 50,712,954 ) $ 201,376,138 See accompanying notes to the consolidated financial statements F-5 Table of Contents ADVANCED FLOWER CAPITAL INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Years ended December 31, 2025 2024 Operating activities: Net (loss) income $ ( 20,673,426 ) $ 16,784,205 Net (income) from discontinued operations, net of tax — ( 2,922,068 ) 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 ) Amortization of deferred financing costs - revolving credit facility 252,759 392,551 Amortization of deferred financing costs - senior notes 623,647 632,592 Stock-based compensation 6,840,805 1,390,978 Payment-in-kind interest ( 464,809 ) ( 3,141,777 ) Changes in operating assets and liabilities: Interest receivable 1,083,515 1,733,098 Prepaid expenses and other assets ( 1,236,349 ) ( 634,683 ) Accrued interest ( 131,431 ) 611 Accrued management and incentive fees, net ( 1,216,065 ) ( 1,539,480 ) Accrued direct administrative expenses ( 822,666 ) ( 288,738 ) Accounts payable and other liabilities 265,503 ( 213,040 ) 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: Issuance of and fundings on loans ( 45,460,583 ) ( 112,486,938 ) Proceeds from sales of loans — 96,061,029 Principal repayment of loans 80,365,080 58,788,329 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 ) Cash flows from financing activities: Proceeds from sale of common stock — 15,848,060 Payment of offering costs - equity offering — ( 270,237 ) Payment of financing costs ( 280,406 ) ( 275,612 ) Redemption of preferred shares — ( 125,000 ) Cash distribution in connection with the Spin-Off of SUNS — ( 67,913,215 ) Borrowings on revolving credit facilities 91,600,000 285,000,000 Repayments on revolving credit facilities ( 170,600,000 ) ( 227,000,000 ) Dividends paid to common and preferred shareholders ( 19,345,396 ) ( 39,988,745 ) F-6 Table of Contents Repayment of senior notes ( 12,519,000 ) — 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 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 Cash and cash equivalents, end of period $ 38,605,507 $ 103,610,460 Supplemental disclosure of non-cash activity: OID withheld from funding of loans $ 1,270,000 $ 6,231,309 Dividends declared and not yet paid $ — $ 7,369,866 Non-cash funding of new loan $ 4,821,000 $ 14,672,640 Non-cash net assets distribution in connection with the spin-off of SUNS $ — $ 46,851,962 Supplemental information: Interest paid during the period $ 6,013,561 $ 5,310,554 Income taxes paid (net of refunds received) during the period $ 211,124 $ 1,267,500 See accompanying notes to the consolidated financial statements F-7 Table of Contents ADVANCED FLOWER CAPITAL INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2025 1. ORGANIZATION Advanced Flower Capital 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 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”). TRS1 began operating in July 2021, and the financial statements of TRS1 are consolidated within the Company’s consolidated financial statements. On July 9, 2024, the Company completed the spin-off (the “Spin-Off”) of the Company’s wholly-owned subsidiary, Sunrise Realty Trust, Inc. (“SUNS”), which held the Company’s commercial real estate (“CRE”) loan portfolio, into an independent, publicly traded REIT, SUNS. In connection with 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. Unless otherwise noted, all amounts and disclosures included in the notes to consolidated financial statements reflect only the Company’s continuing operations. For additional information, see Note 16, “Discontinued Operations.” 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 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. 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 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, F-8 Table of Contents 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. 2. 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 subsidiaries. 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. All intercompany balances and transactions have been eliminated in consolidation. Cash and Cash Equivalents Cash and cash equivalents include funds on deposit with financial institutions, including demand deposits with financial institutions. Cash and short-term investments with an original maturity of three months or less when acquired are considered cash and cash equivalents for the purpose of the consolidated balance sheets and consolidated statements of cash flows. Concentration of Credit Risks Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, loans and interest receivable. The Company places its cash and cash equivalents with financial institutions, and, at times, cash held exceeds the Federal Deposit Insurance Corporation insured limit. The Company and the Manager seek to manage this credit risk by monitoring the financial institutions and their ability to continue in business for the foreseeable future. The Company has exposure to credit risk on its loans and interest receivable. The Company and the Manager seek to manage credit risk by performing due diligence prior to origination or acquisition and through the use of non-recourse financing, when and where available and appropriate. Investments in Loans The Company originates commercial real estate (“CRE”) debt and related instruments generally to be held for investment. F-9 Table of Contents The Company accretes or amortizes any discounts or premiums on loans held for investment over the life of the related loan held for investment utilizing the effective interest method. Loans are generally collateralized by real estate, equipment, cash flows and the value associated with licenses (where applicable) and/or other assets of borrowers. The extent of any credit deterioration associated with the performance and/or value of the underlying collateral property and the financial and operating capability of the borrower could impact the expected amounts received. The Company monitors performance of its portfolio of loans held for investment under the following methodology: (1) borrower review, which analyzes the borrower’s ability to execute on its original business plan, reviews its financial condition, assesses pending litigation and considers its general level of responsiveness and cooperation; (2) economic review, which considers underlying collateral (i.e., leasing performance, unit sales and cash flow of the collateral and its ability to cover debt service, as well as the residual loan balance at maturity); (3) property review, which considers current environmental risks, changes in insurance costs or coverage, current site visibility, capital expenditures and market perception; and (4) market review, which analyzes the collateral from a supply and demand perspective of similar property types, as well as from a capital markets perspective. Loans are generally placed on nonaccrual status when principal or interest payments are past due 30 days or more or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed against interest income in the period the loan is placed on nonaccrual status. Interest payments received on nonaccrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding the borrower’s ability to make pending principal and interest payments. 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 modifications to loans, including loans that are in default. Loan terms that may be modified include interest rates, required prepayments, maturity dates, covenants, principal amounts and other loan terms. The terms and conditions of each modification vary based on individual circumstances and will be determined on a case-by-case basis. The Manager monitors and evaluates each of the Company’s loans held for investment and has maintained regular communications with borrowers. Loans Held at Fair Value Investments in loans at fair value are carried at fair value in the Company’s consolidated balance sheets, with changes in fair value recorded through earnings. Refer to Note 13 for more information on the valuations of the investments. Although the Company generally holds its target loans as long-term investments, the Company may occasionally classify some of its loans as held for sale. Loans held for sale are carried at fair value, with changes in fair value recorded through earnings. Loan transactions are recorded on the trade date at cost, net of any original issue discounts. Realized gains or losses are measured by the difference between the net proceeds from the repayment or sale and the amortized and/or accreted cost basis of the investment using the specific identification method without regard to unrealized gains or losses previously recognized, and include loans charged off during the period, net of recoveries. An unrealized gain arises when the value of the loan portfolio exceeds its cost and an unrealized loss arises when the value of the loan portfolio is less than its cost. The change in unrealized gains or losses primarily reflect the change in loan values, including the reversal of previously recorded unrealized gains or losses when gains or losses are realized. Loans Held at Carrying Value Investments in loans held at carrying value are carried at cost, net of unamortized loan original issue discount and origination costs and other original issue discounts (the “carrying value”) in the Company’s consolidated balance sheets. The Company follows Accounting Standards Codification (“ASC”) 842 for certain loans which are considered financial assets not eligible to elect the fair value option due to the structure of the loans. These loans are carried at cost, net of unamortized loan original issue discount and origination costs and other original issue discounts (the “carrying value”) in the Company’s consolidated balance sheets. Fair Value Measurements 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 F-10 Table of Contents 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. The Company has elected the ASC 825-10 option to report selected financial assets and liabilities at fair value. The Company also follows ASC 820-10, Fair Value Measurements Overall (“ASC 820-10”), which defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands disclosure of fair value measurements. ASC 820-10 determines fair value to be the price that would be received for an investment in a current sale, which assumes an orderly transaction between market participants on the measurement date. ASC 820-10 requires the Company to assume that the transaction is sold in its principal market to market participants or, in the absence of a principal market, the most advantageous market, which may be a hypothetical market. Market participants are defined as buyers and sellers in the principal or most advantageous market that are independent, knowledgeable, and willing and able to transact. In accordance with ASC 820-10, the Company has considered its principal market as the market in which the Company exits its loans with the greatest volume and level of activity. ASC 820-10 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. In accordance with ASC 820-10, these inputs are summarized in the three broad levels listed below: • Level 1—Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. • Level 2—Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. • Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement. If inputs used to measure fair value fall into different levels of the fair value hierarchy, a loan’s level is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the loan. This includes loans that are valued using “bid” and “ask” prices obtained from independent third-party pricing services or directly from brokers. Financial instruments with readily available quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment inherent in measuring fair value. As such, the Company obtains and analyzes readily available market quotations provided by pricing vendors and brokers for all of the Company’s loans for which quotations are available. In determining the fair value of a particular loan, pricing vendors and brokers use observable market information, including both binding and non-binding indicative quotations. GAAP requires disclosure of fair value information about financial and nonfinancial assets and liabilities, whether or not recognized in the financial statements, for which it is practical to estimate the value. 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. The methods used may produce a fair value calculation that is not indicative of net realizable value or reflective of future fair values. Furthermore, while the Company anticipates that the valuation methods are appropriate and consistent with other market participants, the use of different methodologies, or assumptions, to determine the fair value of certain financial and nonfinancial assets and liabilities could result in a different estimate of fair value at the reporting date. The Company uses inputs that are current as of the measurement date, which may fall within periods of market dislocation, during which price transparency may be reduced. Current Expected Credit Losses The Company measures current expected credit losses (“CECL”) in accordance with Accounting Standards Codification (“ASC”) Topic 326, Financial Instruments - Credit Losses (Topic 326), which requires a methodology that reflects on both the outstanding balances and unfunded commitments on loans held for investment and requires consideration of a broader range of historical experience adjusted for current conditions and reasonable and supportable forecast information to derive credit loss estimates (the “CECL Reserve”). Subsequent period increases and decreases to expected credit losses impact earnings and are recorded within the provision for current expected credit losses in the Company’s consolidated statements of operations. 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 F-11 Table of Contents 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. The Company estimates CECL Reserve using a model that considers multiple datapoints and methodologies that may include the likelihood of default and expected loss given default for each individual loan, discounted cash flows (“DCF”), and other inputs which may include the risk rating of the loan, how recently the loan was originated compared to the measurement date, and expected prepayment if applicable. Calculation of the CECL Reserve requires loan specific data, which may include fixed charge coverage ratio, loan-to-value, property type and geographic location. Estimating the CECL Reserve also requires significant judgment with respect to various factors, including but not limited to (i) the appropriate historical loan loss reference data, (ii) the expected timing of loan repayments, (iii) calibration of the likelihood of default to reflect the risk characteristics of the Company’s loan portfolio and (iv) the Company’s current and future view of the macroeconomic environment. The Company may consider loan-specific qualitative factors on certain loans to estimate its CECL Reserve, which may include (i) whether cash from the borrower’s operations is sufficient to cover the debt service requirements currently and into the future, (ii) the ability of the borrower to refinance the loan and (iii) the liquidation value of collateral. For loans where the Company has deemed the borrower/sponsor to be experiencing financial difficulty, the Company may elect to apply a practical expedient in which the fair value of the underlying collateral is compared to the amortized cost of the loan in determining a specific CECL allowance. See Note 6 included in these consolidated financial statements for CECL related disclosures. Stock-Based Compensation The Company accounts for stock-based compensation issued to employees and the Board of Directors pursuant to the Amended and Restated Stock Incentive Plan (the “2020 Plan”) under the fair value method. This method measures compensation cost at the date of grant based on the value of the award and recognizes the cost over the service period, which is usually the vesting period. The fair value of equity-based compensation awards is based on the estimated fair value of the Company’s common stock, as determined by management using a valuation model and approved by the Board of Directors. Fair values of award grants also recognize any ongoing restrictions on the sale of securities. Debt Issuance Costs Debt issuance costs related to the Company’s indebtedness are capitalized and amortized over the term of the respective debt instrument utilizing the effective interest method. Unamortized debt issuance costs are expensed when the associated debt is repaid prior to maturity. Amortization of debt issuance costs is included within interest expense in the Company’s consolidated statements of operations. The unamortized balance for the senior notes is recorded within senior notes payable in these consolidated financial statements. The unamortized balance for the revolving credit facility is recorded as within prepaid expenses and other assets on these consolidated financial statements. See Note 8 included in these consolidated financial statements for further consideration. Payment-in-Kind Interest The Company has loans in its portfolio that contain payment-in-kind (“PIK”) provisions. The PIK interest computed at the contractual rate specified in each applicable agreement is accrued and added to the principal balance of the loan monthly in arrears and recorded as interest income. The PIK income added to the principal balance is generally collected upon repayment of the outstanding principal. To maintain the Company’s status as a REIT, this non-cash source of income is included in taxable income and will increase the dividend paid to shareholders for the year earned, even though the Company has not yet collected the cash. Revenue Recognition Interest income from loans is accrued based on the outstanding principal amount and the contractual terms of each loan. Origination fees, direct loan origination costs, and other discounts (in aggregate the “Original Issue Discount” or “OID”) are also recognized in interest income from loans over the initial loan term as a yield adjustment using the effective interest method. Management places loans on nonaccrual status when principal or interest payments are past due 30 days or more or when full recovery of interest and principal is doubtful. Accrued and unpaid interest is generally reversed against interest income in the period the loan is placed on nonaccrual status. Interest payments received on nonaccrual loans are generally recognized on a cash basis and may be recognized as income or applied to principal depending upon management’s judgment regarding the borrower’s ability to make pending principal and interest payments. 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 F-12 Table of Contents 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. Income Taxes 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. The Company believes that its proposed method of operation will enable it to qualify as a REIT. However, no assurances can be given that the Company’s beliefs or expectations will be fulfilled, since qualification as a REIT depends on the Company satisfying numerous asset, income and distribution tests which depend, in part, on the Company’s operating results. To qualify as a REIT, the Company must meet a number of organizational and operational requirements. Those qualification tests involve the percentage of income that the Company earns from specified sources, the percentage of the Company’s assets that fall within specified categories, the diversity of the ownership of the Company’s shares, and the percentage of the Company’s taxable income that the Company distributes. The Company is required to distribute annually to its shareholders at least 90% of the Company’s REIT taxable income prior to the deduction for dividends paid. 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. The annual expense is calculated in accordance with applicable tax regulations. Excise tax expense is included in the financial statement line item income tax expense. The Company’s wholly-owned subsidiary, TRS1, operates as a TRS and began operating in July 2021. 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. A TRS generally may engage in any business, including investing in assets and engaging in activities that could not be held or conducted directly by the Company without jeopardizing its qualification as a REIT. A TRS is subject to applicable United States federal, state and local income tax on its taxable income. In addition, as a REIT, the Company also may be subject to a 100% excise tax on certain transactions between it and its TRS that are not conducted on an arm’s-length basis. The income tax provision is included in the line item income tax expense, including excise tax. The Company accounts for income taxes related to any TRS under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the income statement in the period that includes the enactment date. FASB ASC Topic 740, Income Taxes (“ASC 740”), prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company has analyzed its various federal and state filing positions and believes that its income tax filing positions and deductions are well documented and supported as of December 31, 2025. Based on the Company’s evaluation, there is no reserve for any uncertain income tax positions. Accrued interest and penalties, if any, are included within other liabilities in the consolidated balance sheets. The Company files income tax returns in the United States federal jurisdiction as well as various state and local jurisdictions. The filings are subject to normal reviews by tax authorities until the related statute of limitations expires. As of December 31, 2025 , tax years since 2022 remain subject to examination by taxing authorities. Earnings per Share 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 F-13 Table of Contents (“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 The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Actual results could differ from those estimates. Significant estimates include the valuation of loans held for investment at fair value and current expected credit losses. Recently Adopted Accounting Pronouncements 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 paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. For entities other than public business entities, the amendments are effective for annual periods beginning after December 15, 2025. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments should be applied prospectively, however, retrospective application is permitted. 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): Disaggregation of Income Statement Expenses (“ASU 2024-03”) and in January 2025, the FASB issued ASU 2025-01—Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”), which requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement. ASU 2024-03, as clarified by ASU 2025-01, is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The adoption of ASU 2024-03 is not expected to have a material impact on the Company’s consolidated financial statements. 3. LOANS HELD FOR INVESTMENT AT FAIR VALUE 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, 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. F-14 Table of Contents The following tables summarize the Company’s loans held at fair value as of December 31, 2025 and 2024: As of December 31, 2025 Fair Value (1) Carrying Value (2) Outstanding Principal (2) Weighted Average Remaining Life (Years) (3) 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 Fair Value (1) Carrying Value (2) Outstanding Principal (2) Weighted Average Remaining Life (Years) (3) Senior term loans $ 30,510,804 $ 50,241,018 $ 53,108,449 0.0 Total loans held at fair value $ 30,510,804 $ 50,241,018 $ 53,108,449 0.0 (1) Refer to Note 13. (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, 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: Principal Original Issue Discount Unrealized Gains (Losses) Fair Value Total loans held at fair value at December 31, 2024 $ 53,108,449 $ ( 2,867,431 ) $ ( 19,730,214 ) $ 30,510,804 Change in unrealized gains (losses) on loans at fair value, net — — ( 7,933,276 ) ( 7,933,276 ) New fundings 11,000,000 ( 1,179,000 ) — 9,821,000 Loan repayments ( 6,317,765 ) — — ( 6,317,765 ) Total loans held at fair value at December 31, 2025 $ 57,790,684 $ ( 4,046,431 ) $ ( 27,663,490 ) $ 26,080,763 F-15 Table of Contents The following table presents changes in loans held at fair value as of and for the year ended December 31, 2024: Principal Original Issue Discount Unrealized Gains (Losses) Fair Value Total loans held at fair value at December 31, 2023 $ 71,883,402 $ ( 239,399 ) $ ( 9,923,298 ) $ 61,720,705 Change in unrealized gains (losses) on loans at fair value, net — — ( 9,806,916 ) ( 9,806,916 ) New fundings 4,594,027 ( 2,756,416 ) — 1,837,611 Accretion of original issue discount — 128,384 — 128,384 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, 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 Type (1) Fair Value (2) Carrying Value (3) Outstanding Principal (3) Interest Rate Maturity Date (4) Payment Terms (5) Private Co. A AZ, MA, NM C, D $ 16,259,763 $ 43,923,253 $ 46,790,684 15.5 % (6) 5/8/2024 I/O Private Co. W MI C, D 4,821,000 4,821,000 6,000,000 10.0 % (7) 12/8/2028 P/I Sub. 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. (2) Refer to Note 13. (3) The difference between the carrying value and the outstanding principal amount of the loans consists of OID and loan origination costs. (4) Certain loans are subject to contractual extension options and may be subject to performance based or other conditions as stipulated in the loan agreement. Actual maturities may differ from contractual maturities stated herein as certain borrowers may have the right to prepay with or without paying a prepayment penalty. The Company may also extend contractual maturities and amend other terms of the loans in connection with loan modifications. (5) I/O = interest-only, P/I = principal and interest. P/I loans may include interest-only periods for a portion of the loan term. (6) Base weighted average interest rate of 13.0 % and payment-in-kind (“PIK”) weighted average interest rate of 2.5 %. In October 2023, AFC Agent LLC (“AFC Agent”) delivered a notice of default to Private Company A based on certain financial and other covenant defaults and began charging additional default interest of 5.0 %, beginning as of July 1, 2023, in accordance with the terms of the Private Company A Credit Facility. Effective March 1, 2024, the Company placed the borrower on nonaccrual status. The maturity date passed on the credit facility to Private Company A without repayment. 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 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 %. F-16 Table of Contents 4. LOANS HELD FOR INVESTMENT AT CARRYING VALUE 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, 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: As of December 31, 2025 Outstanding Principal (1) Original Issue Discount Carrying Value (1) Weighted Average Remaining Life (Years) (2) Senior term loans $ 259,626,556 $ ( 6,001,437 ) $ 253,625,119 1.4 Total loans held at carrying value $ 259,626,556 $ ( 6,001,437 ) $ 253,625,119 1.4 As of December 31, 2024 Outstanding Principal (1) Original Issue Discount Carrying Value (1) Weighted Average Remaining Life (Years) (2) Senior term loans $ 301,755,791 $ ( 8,493,417 ) $ 293,262,374 1.9 Total loans held at carrying value $ 301,755,791 $ ( 8,493,417 ) $ 293,262,374 1.9 (1) The difference between the carrying value and the outstanding principal amount of the loans consists of unaccreted OID and loan origination costs. (2) Weighted average remaining life is calculated based on the carrying value of the loans as of December 31, 2025 and 2024 . The following table presents changes in loans held at carrying value as of and for the year ended December 31, 2025: Principal Original Issue Discount Carrying Value Total loans held at carrying value at December 31, 2024 $ 301,755,791 $ ( 8,493,417 ) $ 293,262,374 New fundings 41,730,583 ( 1,270,000 ) 40,460,583 Accretion of original issue discount — 3,450,808 3,450,808 Loan repayments ( 60,585,298 ) — ( 60,585,298 ) Loan write-off ( 5,574,704 ) 311,172 ( 5,263,532 ) PIK interest 464,809 — 464,809 Loan amortization payments ( 18,164,625 ) — ( 18,164,625 ) Total loans held at carrying value at December 31, 2025 $ 259,626,556 $ ( 6,001,437 ) $ 253,625,119 F-17 Table of Contents The following table presents changes in loans held at carrying value as of and for the year ended December 31, 2024: Principal Original Issue Discount Carrying Value Total loans held at carrying value at December 31, 2023 $ 314,376,929 $ ( 13,111,531 ) $ 301,265,398 New fundings 128,796,860 ( 3,474,893 ) 125,321,967 Accretion of original issue discount — 7,841,345 7,841,345 Loan repayments ( 46,126,637 ) — ( 46,126,637 ) Sale of loans ( 90,000,000 ) 251,662 ( 89,748,338 ) PIK interest 2,006,992 — 2,006,992 Loan amortization payments ( 7,298,353 ) — ( 7,298,353 ) Total loans held at carrying value at December 31, 2024 $ 301,755,791 $ ( 8,493,417 ) $ 293,262,374 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. 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. F-18 Table of Contents 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: Collateral Location Collateral Type (1) Outstanding Principal (2) Original Issue Discount Carrying Value (2) Interest Rate Maturity Date (3) Payment Terms (4) Sub. of Private Co. G NJ, PA C, D $ 78,768,556 $ ( 1,444,847 ) $ 77,323,709 12.5 % (5) 5/1/2026 I/O Private Co. K MA C, D 12,195,762 ( 682,619 ) 11,513,143 17.7 % (6) 5/3/2027 P/I Private Co. L OH C, D 25,146,957 ( 117,433 ) 25,029,524 13.0 % (7) 5/1/2026 P/I Private Co. M AZ D 23,599,497 ( 931,092 ) 22,668,405 9.0 % (8) 7/31/2026 P/I Private Co. N - Real Estate FL C, D 19,327,505 ( 438,955 ) 18,888,550 12.5 % (9) 4/1/2028 P/I Private Co. N - Non-Real Estate FL C, D 17,200,000 ( 387,000 ) 16,813,000 12.5 % (10) 4/1/2028 P/I Private Co. O AZ, MD, MO, NJ, NV, NY, OH, OR, Canada C 5,358,890 ( 247,159 ) 5,111,731 13.5 % (11) 6/1/2028 P/I Private Co. Q GA C, D 7,479,626 ( 293,333 ) 7,186,293 13.8 % (12) 9/1/2028 P/I Private Co. R MD C, D 33,179,518 ( 487,568 ) 32,691,950 12.0 % (13) 11/1/2027 P/I Private Co. U GA, OH C, D 15,000,000 ( 263,514 ) 14,736,486 14.0 % (14) 3/1/2028 P/I Sub of Private Co. V MO, OH, UT C, D 12,370,245 ( 341,250 ) 12,028,995 14.0 % (15) 4/1/2029 P/I Sub. of Public Co. S FL, IL, MA, NY, OH, PA C, D 10,000,000 ( 366,667 ) 9,633,333 12.5 % (16) 8/13/2030 I/O Total loans held at carrying value $ 259,626,556 $ ( 6,001,437 ) $ 253,625,119 (1) For cannabis operators, C = Cultivation Facilities, D = Dispensary/Retail Facilities. (2) The difference between the carrying value and the outstanding principal amount of the loans consists of unaccreted OID and loan origination costs. (3) Certain loans are subject to contractual extension options and may be subject to performance based or other conditions as stipulated in the loan agreement. Actual maturities may differ from contractual maturities stated herein as certain borrowers may have the right to prepay with or without paying a prepayment penalty. The Company may also extend contractual maturities and amend other terms of the loans in connection with loan modifications. (4) I/O = interest-only, P/I = principal and interest. P/I loans may include interest-only periods for a portion of the loan term. (5) Base interest rate of 12.5 %. 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 %. Effective December 1, 2023, the Company placed the borrower on nonaccrual status. (7) Base interest rate of 8.0 % plus SOFR (SOFR floor of 5.0 %). (8) Base interest rate of 9.0 %. (9) Base interest rate of 8.0 % plus SOFR (SOFR floor of 4.5 %). (10) Base interest rate of 8.0 % plus SOFR (SOFR floor of 4.5 %). (11) Base interest rate of 8.5 % plus SOFR (SOFR floor of 5.0 %). (12) Base interest rate of 8.75 % plus SOFR (SOFR floor of 5.0 %). (13) Base interest rate of 7.5 % plus SOFR (SOFR floor of 4.5 %). (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 %. 5. 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. F-19 Table of Contents The following table presents changes in loans receivable as of and for the year ended December 31, 2025: Principal Original Issue Discount Carrying Value Total loan receivable held at carrying value at December 31, 2024 $ 1,897,324 $ ( 1,686 ) $ 1,895,638 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 $ — $ — $ — The following table presents changes in loans receivable as of and for the year ended December 31, 2024: Principal Original Issue Discount Carrying Value Total loan receivable held at carrying value at December 31, 2023 $ 2,041,744 $ ( 1,686 ) $ 2,040,058 Loan repayments ( 144,420 ) — ( 144,420 ) Total loan receivable held at carrying value at December 31, 2024 $ 1,897,324 $ ( 1,686 ) $ 1,895,638 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. 6. CURRENT EXPECTED CREDIT LOSSES 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 when determining the amount to allocate to its CECL Reserve. F-20 Table of Contents 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: Outstanding (1) Unfunded (2) Total Balance at December 31, 2024 $ 30,419,677 $ 166,702 $ 30,586,379 Provision for (reversal of) current expected credit losses 22,680,939 ( 90,233 ) 22,590,706 Write-offs ( 7,040,778 ) — ( 7,040,778 ) Recoveries — — — Balance at December 31, 2025 $ 46,059,838 $ 76,469 $ 46,136,307 Outstanding (1) Unfunded (2) Total Balance at December 31, 2023 $ 26,309,450 $ 115,473 $ 26,424,923 Provision for (reversal of) current expected credit losses 4,110,227 51,229 4,161,456 Write-offs — — — Recoveries — — — Balance at December 31, 2024 $ 30,419,677 $ 166,702 $ 30,586,379 (1) As of December 31, 2025 and 2024, the CECL Reserve related to outstanding balances on loans held at carrying value and loan receivable held at carrying value is recorded within current expected credit loss reserve in the Company’s consolidated balance sheets. (2) As of December 31, 2025 and 2024, the CECL Reserve related to unfunded commitments on loans held at carrying value is recorded within current expected credit loss reserve as a liability in the Company’s consolidated balance sheets. The Company continuously evaluates the credit quality of each loan by assessing the risk factors of each loan and assigning a risk rating based on a variety of factors. 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: Rating Definition 1 Very Low Risk — Materially exceeds performance metrics included in original or current credit underwriting and business plan 2 Low Risk — Collateral and business performance exceeds substantially all performance metrics included in original or current credit underwriting and business plan 3 Medium Risk — Collateral and business performance meets, or is on track to meet underwriting expectations; business plan is met or can reasonably be achieved 4 High Risk/ Potential for Loss — Collateral performance falls short of underwriting, material differences from business plans, defaults may exist, or may soon exist absent material improvement. Risk of recovery of interest exists 5 Impaired/ Loss Likely — Performance is significantly worse than underwriting with major variances from business plan observed. Loan covenants or financial milestones have been breached; exit from loan or refinancing is uncertain. Full recovery of principal is unlikely F-21 Table of Contents The risk ratings are primarily based on historical data as well as taking into account future economic conditions. As of December 31, 2025, the carrying value, excluding the CECL Reserve, of the Company’s loans held at carrying value and loan receivable held at carrying value within each risk rating by year of origination is as follows: Risk Rating: 2025 2024 2023 2022 2021 2020 Total 1 $ — $ — $ — $ — $ — $ — $ — 2 — — — — — — — 3 36,398,814 80,691,524 22,668,405 25,029,524 — — 164,788,267 4 — — — — — — — 5 — — — 11,513,143 77,323,709 — 88,836,852 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. 7. INTEREST RECEIVABLE The following table summarizes the interest receivable by the Company as of December 31, 2025 and 2024: As of December 31, 2025 2024 Interest receivable $ 859,123 $ 1,923,914 PIK receivable 15,977 40,000 Unused fees receivable 24,282 18,983 Total interest receivable $ 899,382 $ 1,982,897 8. DEBT 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’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. F-22 Table of Contents 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. 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 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. In addition, the Company is subject to various financial and other covenants, including: (1) liquidity of at least $ 5.0 million, (2) annual debt service coverage of at least 1.5 to 1.0 and (3) secured debt not to exceed 25 % of total consolidated assets of the Company and its subsidiaries. To the best of our knowledge, as of December 31, 2025, we were in compliance in all material respects with all covenants contained in our Revolving Credit Agreement. In January 2025, the Company entered into Amendment Number Three to Loan and Security Agreement, by and among the Company, as borrower, the lenders party thereto, and the lead arranger, bookrunner and administrative agent party thereto, pursuant to which, among other things, the parties agreed to reduce the procedural requirements for obligor loan receivables to become eligible under the borrowing base. In April 2025, the Company entered into Amendment Number Four to Loan and Security Agreement (“Amendment Number Four”), by and among the Company, as borrower, the lenders party thereto, and the lead arranger, bookrunner and administrative agent party thereto. 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. F-23 Table of Contents AFCF Credit Facility In December 2024, the Company entered into an unsecured revolving credit agreement (the “AFCF Credit Agreement”), by and among the Company, as borrower, the lenders party thereto from time to time, and AFC Finance, LLC, as agent and lender. AFC Finance, LLC is wholly owned by Leonard M. Tannenbaum, Chairman of the Company’s Board of Directors. The AFCF Credit Agreement provides for an unsecured revolving credit facility (the “AFCF Credit Facility”) with a $ 40.0 million commitment, which may be borrowed, repaid and redrawn, subject to a draw fee and the other conditions provided in the AFCF Credit Agreement. Interest is payable on the AFCF Credit Facility at a rate per annum equal to 8.00 %. The AFCF Credit Facility matures on the earlier of (i) December 31, 2025 and (ii) the date of the closing of any unsecured debt with principal of at least $ 40.0 million used to refinance the AFCF Credit Agreement. In April 2025, in conjunction with the entry by the Company into Amendment Number Four to the Revolving Credit 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. TCGSL 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 On November 3, 2021, the Company issued $ 100.0 million in aggregate principal amount of senior unsecured notes due in May 2027 (the “2027 Senior Notes”). The 2027 Senior Notes accrue interest at a rate of 5.75 % per annum. Interest on the 2027 Senior Notes is due semi-annually on May 1 and November 1 of each year, which began on May 1, 2022. The net proceeds from the offering were approximately $ 97.0 million, after deducting the initial purchasers’ discounts and commissions and estimated offering fees and expenses payable by the Company. The Company used the proceeds from the issuance of the 2027 Senior Notes (i) to fund loans related to unfunded commitments to existing borrowers, (ii) to originate and participate in commercial loans to companies operating in the cannabis industry that are consistent with the Company’s investment strategy and (iii) for working capital and other general corporate purposes. The terms of the 2027 Senior Notes are governed by an indenture, dated November 3, 2021, among us, as issuer, and TMI Trust Company, as trustee (the “Indenture”). Under the Indenture, the Company is required to cause all of its existing and future subsidiaries to guarantee the 2027 Senior Notes, other than certain immaterial subsidiaries as set forth in the Indenture. TRS1 is currently a subsidiary guarantor under the Indenture. Prior to February 1, 2027, the Company may redeem the 2027 Senior Notes in whole or in part, at a price equal to the greater of 100 % of the principal amount of the 2027 Senior Notes being redeemed or a make-whole premium set forth in the Indenture, plus accrued and unpaid interest thereon to, but excluding, the applicable redemption date. On or after February 1, 2027, we may redeem the 2027 Senior Notes in whole or in part at a price equal to 100 % of the principal amount of the 2027 Senior Notes being redeemed, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date. 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 F-24 Table of Contents 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. If any event of default occurs, any amount then outstanding under the Indenture may immediately become due and payable. These events of default are subject to a number of important exceptions and qualifications set forth in the Indenture. During the year ended December 31, 2025, the Company repurchased $ 13.0 million in principal amount of the Company’s 2027 Senior Notes at 96.3 % of par value, plus accrued interest. This resulted in a gain on extinguishment of debt of approximately $ 0.4 million, recorded within the consolidated statements of operations. No repurchases took place during the year ended December 31, 2024. 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. Scheduled principal payments on the 2027 Senior Notes as of December 31, 2025 are as follows: 2027 Senior Notes Year 2026 $ — 2027 77,000,000 2028 — 2029 — 2030 — Thereafter — Total principal 77,000,000 Deferred financing costs included in senior notes payable ( 677,507 ) Senior notes payable, net $ 76,322,493 Year ended December 31, 2025 2027 Senior Notes Revolving Credit Facility AFCF Revolving Credit Facility Total Borrowings 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 Total interest expense $ 5,730,126 $ 1,019,521 $ 8,889 $ 6,758,536 Year ended December 31, 2024 2027 Senior Notes Revolving Credit Facility AFCF Revolving Credit Facility Total Borrowings Interest expense $ 5,175,000 $ 117,387 $ 18,778 $ 5,311,165 Unused fee expense — — — — Amortization of deferred financing costs 632,592 392,551 — 1,025,143 Total interest expense $ 5,807,592 $ 509,938 $ 18,778 $ 6,336,308 F-25 Table of Contents 9. COMMITMENTS AND CONTINGENCIES As of December 31, 2025 and 2024, the Company had the following commitments to fund various investments: As of December 31, 2025 2024 Total loan commitments $ 332,631,207 $ 361,278,431 Less: drawn commitments ( 322,339,968 ) ( 350,943,832 ) Total undrawn commitments $ 10,291,239 $ 10,334,599 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. The Company’s ability to grow or maintain its business with respect to the loans it makes to companies operating in the cannabis industry depends on state laws pertaining to the cannabis industry. New laws that are adverse to the Company’s borrowers may be enacted, and current favorable state or national laws or enforcement guidelines relating to cultivation, production and distribution of cannabis may be modified or eliminated in the future, which would impede the Company’s ability to grow and could materially adversely affect the Company’s business. Management’s plan to mitigate risks include monitoring the legal landscape as deemed appropriate. Also, should a loan default or otherwise be seized, the Company may be prohibited from owning cannabis assets and thus could not take possession of collateral, in which case the Company would look to sell the loan, which could result in the Company realizing a loss on the transaction. 10. SHAREHOLDERS’ EQUITY Series A Preferred Stock 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. The Company generally may not declare or pay, or set apart for payment, any dividend or other distribution on any shares of the Company’s stock ranking junior to the Series A Preferred Stock as to dividends, including the Company’s common stock, or redeem, repurchase or otherwise make payments on any such shares, unless full, cumulative dividends on all outstanding shares of Series A Preferred Stock have been declared and paid or set apart for payment for all past dividend periods. The holders of the Series A Preferred Stock generally have no voting rights except in limited circumstances, including certain amendments to the Company’s charter and the authorization or issuance of equity securities senior to or on parity with the Series A Preferred Stock. The Series A Preferred Stock is not convertible into shares of any other class or series of our stock. 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 F-26 Table of Contents 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. 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. There were no accrued and unpaid dividends at the time of redemption. Common Stock 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. Under the Shelf Registration Statement, the Company may, 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. At-the-Market Offering Program (“ATM Program”) On April 5, 2022, the Company entered into an Open Market Sales Agreement (the “Sales Agreement”) with Jefferies LLC and Citizens JMP Securities LLC, as Sales Agents, under which the Company may, from time to time, offer and sell shares of common stock, having an aggregate offering price of up to $ 75.0 million. Under the terms of the Sales Agreement, the Company has agreed to pay the Sales Agents a commission of up to 3.0 % of the gross proceeds from each sale of common stock sold through the Sales Agents. 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, 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 The Company has established a stock incentive compensation plan (the “2020 Plan”). The 2020 Plan authorizes stock options, stock appreciation rights, restricted stock, stock bonuses, stock units and other forms of awards granted or denominated in the Company’s common stock or units of common stock. The 2020 Plan retains flexibility to offer competitive incentives and to tailor benefits to specific needs and circumstances. Any award may be structured to be paid or settled in cash. 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. F-27 Table of Contents 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, 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. Modification of Stock Options and Restricted Stock Outstanding at Spin-Off Stock Options On July 9, 2024, the Company completed the separation of its CRE portfolio through the Spin-Off of SUNS. As a result, the strike price for the outstanding stock options of the Company were adjusted to give effect to the Spin-Off. All adjustments were made with the intent to preserve the intrinsic value of each award immediately before and after the Spin-Off. The Company accounted for the modification as Type I modification (probable to probable). The number of awards remained constant, while the strike prices were modified to preserve the intrinsic value of each award. The modified stock option awards otherwise retained substantially the same terms and conditions, including term and vesting provisions. The fair value of such unvested stock option awards remained constant pre- and post-Spin-Off, resulting in no incremental compensation cost. 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. The Company has elected to recognize forfeitures as they occur. Previously recognized compensation expense related to forfeitures are reversed in the period the nonvested awards are forfeited. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the date of grant. The expected dividend yield was based on the Company’s expected dividend yield at the grant date. Expected volatility is based on the estimated average volatility of similar companies due to the lack of historical volatilities of the Company’s common stock. The expected term for each award is based on the contractual term for all awards granted thus far under the 2020 Plan. Restricted stock grant expense is based on the Company’s stock price at the time of the grant and amortized over the vesting period. The weighted-average exercise price of stock options have been retroactively adjusted to give effect to the Spin-Off for all periods presented. F-28 Table of Contents The following table presents the assumptions used in the Black-Scholes pricing model of options granted under the 2020 Plan during the years ended December 31, 2025 and 2024: Assumptions: Range Expected term 7.0 years Expected volatility 40 % - 50 % Expected dividend yield 10 % - 20 % Risk-free interest rate 0.5 % - 2.0 % Expected forfeiture rate 0 % The modification date fair value of the stock options was determined using the Binomial-Lattice Model with the following assumptions on July 9, 2024: Assumptions: Range Expected term 3.1 - 4.5 years Expected volatility 31.24 % - 32.41 % Expected dividend yield 15.65 % Risk-free interest rate 4.16 % - 4.25 % Expected forfeiture rate 0 % As additional Company history and information is available, the Company determined the use of the Binomial-Lattice Model to be appropriate compared to the closed-form Black-Scholes model. The risk-free interest rate is based on the continuously compounded rates from the U.S. Treasury yield curve in effect at the date of Spin-Off. 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, 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. In cases where the look back period exceeds the trading history of the Company’s Common Stock, the Company’s entire trading history was used. Restricted Stock 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 recognized the remaining 67 % of unrecognized compensation cost of unvested restricted stock awards over the remaining vesting period. Stock Compensation The following table summarize s the stock-based compensation expense incurred by the Company for the years ended December 31, 2025 and 2024: Years ended December 31, 2025 2024 Stock-based compensation $ 6,840,805 $ 1,390,978 F-29 Table of Contents Stock Options The following table summarizes the (i) non-vested options granted, (ii) vested options granted, (iii) exercised and (iv) forfeited options granted for the Company’s directors and officers and employees of the Manager and its affiliates as of December 31, 2025 and 2024: As of December 31, 2025 2024 Non-vested 129,862 149,133 Vested 2,244,770 2,225,499 Exercised ( 5,511 ) ( 5,511 ) Forfeited ( 2,369,121 ) ( 200,669 ) Balance — 2,168,452 The following tables summarize stock option activity as of and during the year ended December 31, 2025: Number of options Weighted-average exercise price Weighted-average remaining contractual term Aggregate intrinsic value Outstanding as of December 31, 2024 2,168,452 $ 11.46 Granted — — Exercised — — Forfeited ( 2,168,452 ) 11.46 Outstanding as of December 31, 2025 — $ — 0.00 years $ — Exercisable as of December 31, 2025 — $ — 0.00 years $ — Unvested as of December 31, 2025 — $ — 0.00 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 and its affiliates as of December 31, 2025 and 2024: As of December 31, 2025 2024 Granted 1,689,044 483,244 Vested ( 1,645,227 ) ( 102,780 ) Forfeited ( 43,817 ) ( 33,934 ) Balance — 346,530 F-30 Table of Contents 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 grant date fair value Balance as of December 31, 2024 346,530 $ 8.72 Granted 1,205,800 4.01 Vested ( 1,542,447 ) 5.04 Forfeited ( 9,883 ) 8.74 Balance as of December 31, 2025 — $ — 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. 11. EARNINGS PER SHARE The following information sets forth the computations of basic and diluted earnings per common share for the years ended December 31, 2025 and 2024: Years ended December 31, 2025 2024 Net (loss) income from continuing operations $ ( 20,673,426 ) $ 13,862,137 Dividends paid on preferred stock — ( 7,500 ) Dividends paid on unvested restricted stock ( 368,921 ) ( 440,028 ) Net income from continuing operations attributable to common shareholders ( 21,042,347 ) 13,414,609 Net income from discontinued operations — 2,922,068 Net income attributable to common shareholders ( 21,042,347 ) 16,336,677 Divided by: Basic weighted average shares of common stock outstanding 22,246,019 20,821,239 Weighted average unvested restricted stock and dilutive stock options 36,765 67,741 Diluted weighted average shares of common stock outstanding 22,282,784 20,888,980 Basic earnings per share Continuing operations $ ( 0.95 ) $ 0.64 Discontinued operations $ — $ 0.14 Total basic earnings per common share $ ( 0.95 ) $ 0.78 Diluted earnings per share Continuing operations $ ( 0.95 ) $ 0.64 Discontinued operations $ — $ 0.14 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. F-31 Table of Contents 12. INCOME TAX 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. A TRS generally may engage in any business, including investing in assets and engaging in activities that could not be held or conducted directly by the Company without jeopardizing its qualification as a REIT. A TRS is subject to applicable United States federal, state and local income tax on its taxable income. In addition, as a REIT, the Company also may be subject to a 100% excise tax on certain transactions between it and its TRS that are not conducted on an arm’s-length basis. The income tax provision is included in the line item income tax expense, including excise tax. The income tax (benefit) provision for the Company was approximately $( 0.6 ) 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: Years ended December 31, 2025 2024 Current: Federal $ 134,461 $ 868,300 State (a) 12,669 298,894 Total current income tax expense (benefit) 147,130 1,167,194 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 (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. If it is determined that an excise tax liability exists for the current period, the Company will accrue excise tax on estimated excess taxable income as such taxable income is earned. The expense is calculated in accordance with applicable tax regulations. The Company does not have any unrecognized tax benefits and the Company does not expect that to change in the next 12 months. As of 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 F-32 Table of Contents the amounts computed by applying the U.S. federal income tax rate of 21% to pre-tax income as a result of the following: Year ended December 31, 2025 Year ended December 31, 2024 $ % $ % U.S. federal statutory tax rate $ ( 4,470,229 ) 21.0 $ 3,005,042 21.0 State and local income taxes, net of federal income tax effect 12,669 ( 0.1 ) 298,894 2.1 REIT income not subject to corporate income tax ( 2,219,849 ) 10.4 ( 2,136,742 ) ( 14.9 ) Nontaxable items temporary differences 6,175,695 ( 29.0 ) ( 711,653 ) ( 5.0 ) Federal excise tax ( 111,665 ) 0.5 ( 7,954 ) ( 0.1 ) Effective tax rate $ ( 613,379 ) 2.9 $ 447,587 3.1 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. 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. Realization of the deferred tax assets is dependent upon the Company’s generation of sufficient taxable income in future years in appropriate tax jurisdictions to benefit from the reversal of temporary differences. The amount of deferred tax assets considered realizable is subject to adjustment in future periods if estimates of future taxable income change. The Company recorded deferred tax assets related to temporary differences on the fair value adjustments of the unrealized losses of loans held in the TRS and CECL allowance on loans held in the TRS. There were no valuation allowances for deferred tax assets during the 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: Years ended December 31, 2025 2024 Income taxes paid, net of refunds: Federal $ 250,000 $ 868,300 Arizona 50,100 83,050 Florida 15,000 51,500 Other U.S. 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 13. FAIR VALUE Loans Held for Investment The Company’s loans are typically valued using a yield analysis, which is typically performed for non-credit impaired loans to borrowers where the Company does not own a controlling equity position. 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 F-33 Table of Contents 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. A key determinant of risk, among other things, is the leverage through the loan relative to the enterprise value of the borrower. As loans held by the Company are substantially illiquid with no active loan market, the Company depends on primary market data, including newly funded loans, as well as secondary market data with respect to high-yield debt instruments and syndicated loans, as inputs in determining the appropriate market yield, as applicable. The following tables present fair value measurements of loans held at fair value as of December 31, 2025 and 2024: Fair Value Measurement as of December 31, 2025 Total Level 1 Level 2 Level 3 Loans held at fair value $ 26,080,763 $ — $ — $ 26,080,763 Total $ 26,080,763 $ — $ — $ 26,080,763 Fair Value Measurement as of December 31, 2024 Total Level 1 Level 2 Level 3 Loans held at fair value $ 30,510,804 $ — $ — $ 30,510,804 Total $ 30,510,804 $ — $ — $ 30,510,804 The following table presents changes in loans that use Level 3 inputs as of and for the year ended December 31, 2025: Year ended December 31, 2025 Total loans using Level 3 inputs at December 31, 2024 $ 30,510,804 Change in unrealized losses on loans at fair value, net ( 7,933,276 ) Additional fundings 11,000,000 Original issue discount and other discounts, net of costs ( 1,179,000 ) Loan repayments ( 6,317,765 ) Total loans using Level 3 inputs at December 31, 2025 $ 26,080,763 The change in unrealized losses included in the consolidated statements of operations attributable to loans held at fair value, categorized as Level 3, held as of December 31, 2025 is $( 7,933,276 ). The following tables summarize the significant unobservable inputs the Company used to value the loans categorized within Level 3 as of December 31, 2025 and 2024. The tables are not intended to be all-inclusive, but instead capture the significant unobservable inputs relevant to the Company’s determination of fair values. As of December 31, 2025 Unobservable Input Fair Value Primary Valuation Techniques Input Estimated Range Weighted Average Senior term loans $ 16,259,763 Recovery analysis Recovery rate 31.60 % - 37.90 % 34.75 % Senior term loans 4,821,000 Yield analysis Market yield 19.50 % - 21.50 % 20.50 % Senior term loans 5,000,000 Market quotes Broker/dealer bids or quotes N/A N/A Total investment $ 26,080,763 As of December 31, 2024 Unobservable Input Fair Value Primary Valuation Techniques Input Estimated Range Weighted Average Senior term loan $ 30,510,804 Recovery analysis Recovery rate 54.90 % - 60.00 % 57.45 % Total investment $ 30,510,804 F-34 Table of Contents Changes in market yields, revenue multiples, and recovery rates may change the fair value of certain of the Company’s loans. Generally, an increase in market yields may result in a decrease in the fair value of certain of the Company’s loans, while a decrease in revenue multiples and recovery rates may result in a decrease in the fair value of certain of the Company’s loans. Due to the inherent uncertainty of determining the fair value of loans that do not have a readily available market value, the fair value of the Company’s loans may fluctuate from period to period. Additionally, the fair value of the Company’s loans may differ significantly from the values that would have been used had a ready market existed for such loans and may differ materially from the values that the Company may ultimately realize. Further, such loans are generally subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities. If the Company was required to liquidate a loan in a forced or liquidation sale, it could realize significantly less than the value at which the Company has recorded it. In addition, changes in the market environment and other events that may occur over the life of the loans may cause the gains or losses ultimately realized on these loans to be different than the unrealized gains or losses reflected in the valuations currently assigned. Fair Value of Financial Instruments 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 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 Carrying Value Fair Value Financial assets: Cash and cash equivalents $ 38,605,507 $ 38,605,507 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 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. The fair value of the Company’s 2027 Senior Notes is estimated using observable inputs based on the last available bid price in the market at the end of the period, or Level 2 inputs. 14. RELATED PARTY TRANSACTIONS Management Agreement Pursuant to the Management Agreement, the Manager manages the loans and day-to-day operations of the Company, subject at all times to the further terms and conditions set forth in the Management Agreement and such further limitations or parameters as may be imposed from time to time by the Company’s Board. The Manager receives base management fees (the “Base Management Fee”) that are calculated and payable quarterly in arrears, in an amount equal to 0.375 % of the Company’s Equity (as defined in the Management Agreement), subject to certain adjustments, less 50 % of the aggregate amount of any other fees (“Outside Fees”), including any agency fees relating to our loans, but excluding the Incentive Compensation (as defined below) and any diligence fees paid to and earned by the Manager and paid by third parties in connection with the Manager’s due diligence of potential loans. In addition to the Base Management Fee, the Manager is entitled to receive incentive compensation (the “Incentive Compensation” or “Incentive Fees”) under the Management Agreement. 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) F-35 Table of Contents 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. With respect to certain office expenses incurred by the Manager on behalf of the Company and other funds managed by the Manager or its affiliates, such as rent, the Manager determines each fund’s pro rata portion of such expenses in an amount equal to the proportional amount of time employees of the Manager spent providing services to the Company, as reasonably stipulated by time sheets. The following table summarizes the related party costs incurred by the Company for the years ended December 31, 2025 and 2024 : Years ended December 31, 2025 2024 Affiliate Costs Management fees $ 3,782,299 $ 4,541,310 Less: outside fees earned ( 854,432 ) ( 947,969 ) Base management fees 2,927,867 3,593,341 Incentive fees earned — 6,768,480 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 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 From time to time, the Company may co-invest with other investment vehicles managed by the Manager or its affiliates, including the Manager, and their portfolio companies, including by means of splitting loans, participating in loans or other means of syndicating loans. The Company is not obligated to provide, nor has it provided, any financial support to the other managed investment vehicles. As such, the Company’s risk is limited to the carrying value of its investment in any such loan. Additionally, the Manager or its affiliates, including AFC Agent, may from time to time serve as administrative F-36 Table of Contents 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 In December 2024, the Company entered into the AFCF Credit Facility with AFC Finance LLC, an affiliate of the Company and Mr. and Mrs. Tannenbaum. 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. and Mrs. Tannenbaum. Refer to Note 8 for more information. 16. DIVIDENDS AND DISTRIBUTIONS The following table summarizes the Company’s dividends declared during the years ended December 31, 2025 and 2024: Declaration Date Record Date Payment Date Per Common Share Distribution Amount Taxable Ordinary Income Qualified Dividends Return of Capital Section 199A Dividends 3/4/2024 3/31/2024 4/15/2024 $ 0.48 $ 0.48 $ 0.07 $ — $ 0.41 6/13/2024 6/24/2024 7/15/2024 0.48 0.28 0.04 0.20 0.24 6/27/2024 7/8/2024 7/15/2024 0.15 0.05 0.01 0.10 0.04 9/13/2024 9/30/2024 10/15/2024 0.33 0.11 0.02 0.22 0.09 12/13/2024 12/31/2024 1/15/2025 0.33 (1) — — — — 2024 Total cash dividend $ 1.77 $ 0.92 $ 0.14 $ 0.52 $ 0.78 3/11/2025 3/31/2025 4/15/2025 $ 0.23 $ — $ — $ 0.23 $ — 6/13/2025 6/30/2025 7/15/2025 0.15 — — 0.15 — 9/15/2025 9/30/2025 10/15/2025 0.15 — — 0.15 — 2025 Total cash dividend $ 0.53 $ — $ — $ 0.53 $ — (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. For U.S. 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. 16. DISCONTINUED OPERATIONS On July 9, 2024, the Company announced the completion of the previously announced separation and Spin-Off of the Company’s CRE portfolio into an independent, publicly-traded REIT, SUNS. The Spin-Off was effected by the distribution of all of the outstanding shares of SUNS common stock to the Company’s shareholders of record as of the close of business on July 8, 2024 (the “Record Date”). The Company’s shareholders of record as of the Record Date received one share of SUNS common stock for every three shares of the Company’s common stock held as of the Record Date. 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”. The Company retained no ownership interest in SUNS following the Spin-Off. On the Distribution Date, the Company recognized a reduction to additional paid-in capital of approximately $ 114.8 million in connection with the Spin-Off related to the transfer of certain assets and liabilities associated with its CRE portfolio to SUNS. 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 F-37 Table of Contents 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. Cash flows from the Company’s discontinued operations are presented as such in the consolidated statements of cash flows for all periods presented. The following table summarizes the financial statement lines included in net income from discontinued operations, net of tax for the years ended December 31, 2025 and 2024: Years ended December 31, 2025 2024 Interest income $ — $ 4,156,335 Expenses General and administrative expenses — ( 21,651 ) Professional fees — ( 1,140,762 ) (Provision for) reversal of current expected credit losses — ( 71,854 ) Net income from discontinued operations, net of tax $ — $ 2,922,068 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, 2025 or 2024. 17. REPORTABLE SEGMENTS ASC 280, Segment Reporting, establishes standards for reporting financial and descriptive information about an enterprise’s reportable segments. 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. The accounting policies of the institutional lending segment are the same as those described in the summary of significant accounting policies. The presentation of financial results as one reportable segment is consistent with the way the Company operates its business and is consistent with the manner in which the Company’s Chief Operating Decision Maker (“CODM”), the Company’s Chief Executive Officer, evaluates performance and makes resource and operating decisions for the business. The Company has no operations outside of the United States. The Company’s portfolio exhibits similar economic characteristics, similar yields and is operated using consistent business strategies. The Company operates as one operating segment and has one reportable operating segment for activities related to institutional lending. The CODM assesses performance and evaluates the allocation of resources of the Company on a consolidated basis, based on the Company’s net income from continuing operations, which is reported on the Company’s consolidated statements of operations. The CODM is regularly provided with only the consolidated expenses, as noted on the consolidated statements of operations. Significant segment expenses are listed on the accompanying consolidated statements of operations. The measure of segment assets is reported on the consolidated balance sheets as total assets. 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 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. F-38 Table of Contents 18. SUBSEQUENT EVENTS The Company has evaluated subsequent events through the date the consolidated financial statements were available to be issued. There were no material subsequent events, other than those described below, that required disclosure in these consolidated financial statements. 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. 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. 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. F-39 Table of Contents SIGNATURES 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. Date: March 4, 2026 ADVANCED FLOWER CAPITAL INC. By: /s/ Daniel Neville Daniel Neville Chief Executive Officer (Principal Executive Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Date: March 4, 2026 ADVANCED FLOWER CAPITAL INC. By: /s/ Daniel Neville Daniel Neville Chief Executive Officer (Principal Executive Officer) By: /s/ Brandon Hetzel Brandon Hetzel Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer) By: /s/ Alexander Frank Alexander Frank Director By: /s/ Thomas Harrison Thomas Harrison Director By: /s/ Robert Levy Robert Levy Director By: /s/ Marnie Sudnow Marnie Sudnow Director By: /s/ Leonard M. Tannenbaum Leonard M. Tannenbaum Chairman