−Removed: Except as disclosed below, during the quarter ended September 30, 2024 , there were no material changes to the Risk Factors disclosed in Item 1A - “Risk Factors” in the Company’s Annual Report for the fiscal year ended December 31, 2023.
−Removed: Maintenance of our exemption from registration under the Investment Company Act may impose significant limits on our operations.
−Removed: Your investment return in our common stock may be reduced if we are required to register as an investment company under the Investment Company Act.
−Removed: We intend to conduct our operations so that (i) we will be exempt from the provisions of the Investment Company Act pursuant to an exemption contained in Section 3(c)(5)(C) thereunder and (ii) any wholly owned or majority owned subsidiary does not come within the definition of an investment company or will be exempt from the provisions of the Investment Company Act pursuant to an exemption contained in Section 3(c)(1), 3(c)(5) or 3(c)(7) thereunder.
−Removed: The Investment Company Act provides certain protection to investors and imposes certain restrictions on registered investment companies (including, for example, limitations on the ability of registered investment companies to incur leverage), none of which will be applicable to us.
−Removed: The exemption contained in Section 3(c)(5)(C) is available for entities “primarily engaged in the business of purchasing or otherwise acquiring mortgages and other liens on and interests in real estate.” On the basis of no-action letters and interpretive guidance provided by the SEC and its staff, this exemption generally requires that at least 55% of an entity’s assets be comprised of qualifying assets and at least 80% of such entity’s assets be comprised of qualifying assets and real estate-related assets (and no more than 20% of such entity’s assets may be comprised of non-qualifying or non-real estate-related assets).
−Removed: “Qualifying assets” for this purpose include, for example, certain mortgage loans, certain B-Notes and certain mezzanine loans that satisfy various conditions as interpreted by the SEC staff in various no-action letters and other SEC interpretive guidance.
−Removed: Investments that do not satisfy the “qualifying asset” conditions set forth in the relevant SEC staff no-action letters and other guidance, may be classified as real estate-related or non-real estate-related assets, depending upon applicable SEC guidance, if any.
−Removed: Pursuant to this guidance, and depending on the characteristics of the specific investments, certain mortgage loans, participations in mortgage loans, mortgage-backed securities, and mezzanine loans may not constitute qualifying assets and therefore our investments in these types of assets may be limited.
−Removed: We classify our assets for purposes of our Section 3(c)(5)(C) exemption based upon no-action positions taken by the SEC staff and interpretive guidance provided by the SEC and its staff.
−Removed: These no-action positions are based on specific factual situations that may be substantially or entirely different from the factual situations we may face and a number of these no-action positions were issued more than twenty years ago.
−Removed: There may be no guidance from the SEC or its staff that applies directly to our factual situations and as a result we may have to apply SEC staff guidance that relates to other factual situations by analogy.
−Removed: No assurance can be given that the SEC or its staff will concur with our classification of our assets.
−Removed: In addition, the SEC or its staff may, in the future, issue further guidance that may require us to re-classify our assets for purposes of the Investment Company Act and/or adjust our strategy accordingly.
−Removed: If we are required to reclassify our assets, we may no longer be in compliance with the exemption from the definition of an investment company provided by Section 3(c)(5)(C) of the Investment Company Act.
−Removed: Any additional guidance from the SEC or its staff could further inhibit our ability to pursue our chosen strategies.
+Added: There have been no material changes to the risk factors disclosed in Item 1A - “Risk Factors” in the Company’s Annual Report for the fiscal year ended December 31, 2024, excepted as noted below:
+Added: Changes to U.S.
+Added: tariff regulations may have an adverse effect on our business, financial condition and results of operations.
+Added: The United States recently announced a list of tariffs on specific countries and commodities which have contributed to heightened trade policy uncertainty and market volatility in the debt and equity capital markets.
+Added: These market and economic disruptions, have affected, and may in the future continue to affect the U.S.
+Added: imports and capital markets, which could adversely affect our borrowers, financial condition or results of operations.
+Added: Specifically, the imposition of tariffs on certain foreign goods used in construction in the commercial real estate market could adversely affect us, our borrowers and the value of the real estate assets related to our investments.
Unregistered Sales of Equity Securities and Use of Proceeds
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