What changed in this filing

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Item 9A. Controls and Procedures

2023-03-31 compared with 2022-03-16 · 483 added, 400 removed, 1194 unchanged (43% of the section changed)

13 unchanged sentences

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of Creative Media & Community Trust Corporation

To the stockholders and the Board of Directors of Creative Media & Community Trust Corporation

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Creative Media & Community Trust Corporation (formerly, CIM Commercial Trust Corporation) (the “Company”) as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

We have audited the internal control over financial reporting of Creative Media & Community Trust Corporation (the “Company”) as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

2 unchanged sentences

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting.

Management's Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

13 unchanged sentences

/s/ Deloitte & Touche LLP

Los Angeles, CA

Tempe, Arizona

March 30, 2023

38 unchanged sentences

The following documents are included or incorporated by reference in this Annual Report on Form 10-K:

3.1 Articles of Amendment and Restatement of PMC Commercial Merger Sub, Inc.

(incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on May 2, 2014).

3.1 Articles of Amendment and Restatement (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on May 2, 2014).

3.1(a) Articles of Amendment (Name Change) (incorporated by reference to Exhibit 3.4 to the Registrant's Current Report on Form 8-K filed with the SEC on May 2, 2014).

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3.1(f) Articles of Amendment (Name Change) (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on March 10, 2022).

3.2 Articles Supplementary to the Articles of Amendment and Restatement of CIM Commercial Trust Corporation, designating the Series A Preferred Stock (incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed with the SEC on October 27, 2016).

3.2 Articles Supplementary , designating the Series A Preferred Stock (incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed with the SEC on October 27, 2016).

3.3 Amendment No.

1 to the Articles Supplementary to the Articles of Amendment and Restatement of CIM Commercial Trust Corporation, designating the Series A Preferred Stock (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on January 31, 2020).

3.4 Articles Supplementary to the Articles of Amendment and Restatement of CIM Commercial Trust Corporation, designating the Series D Preferred Stock (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on January 31, 2020).

3.5 Articles Supplementary to the Articles of Amendment and Restatement of CIM Commercial Trust Corporation, designating the Series L Preferred Stock (incorporated by reference to Exhibit 4.1 to the Registrant's Pre-Effective Amendment No.

1 to the Articles Supplementary , designating the Series A Preferred Stock (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on January 31, 2020).

3.4 Articles Supplementary , designating the Series D Preferred Stock (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on January 31, 2020).

3.5 Articles Supplementary , designating the Series L Preferred Stock (incorporated by reference to Exhibit 4.1 to the Registrant's Pre-Effective Amendment No.

4 to the Form S-11 Registration Statement (333-218019) filed with the SEC on November 15, 2017).

*3.6 Bylaws of CIM Commercial Trust Corporation

*4.1 Description of Securities of CIM Commercial Trust Corporation.

3.6 Articles Supplementary , designating the Series A1 Preferred Stock (incorporated by reference to Exhibit 3.

1 to the Registrant’s Current Report on Form 8-K filed with the SEC on June 16 , 202 2 ).

3.7 Bylaws of Creative Media & Community Trust Corporation (incorporated by reference to Exhibit 3.6 to the Registrant’s Annual Report on Form 10-K filed with the SEC on March 16, 2022).

*4.1 Description of Securities of Creative Media & Community Trust Corporation.

4.2 Purchase Agreement among PMC Commercial Trust, PMC Preferred Capital Trust-A and Taberna Preferred Funding I, Ltd.

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10.8 Assignment Agreement, dated as of January 1, 2019, by and among CIM Capital, LLC (formerly known as CIM Investment Advisors, LLC), CIM Capital Controlled Company Management, LLC, CIM Capital RE Debt Management, LLC, CIM Capital Real Property Management, LLC and CIM Capital Securities Management, LLC (incorporated by reference to Exhibit 10.12 to the Registrant's Annual Report on Form 10-K filed with the SEC on March 18, 2019).

10.9 Second Amended and Restated Dealer Manager Agreement, dated as of January 28, 2020, by and among CIM Commercial Trust Corporation, CIM Service Provider, LLC and CCO Capital, LLC (incorporated by reference to Exhibit 10.11 to the Registrant’s Annual Report on Form 10-K filed with the SEC on March 16, 2020).

10.10 Amendment No.

1, dated as of April 9, 2020, to Second Amended and Restated Dealer Manager Agreement, dated as of January 28, 2020, by and among CIM Commercial Trust Corporation, CIM Service Provider, LLC and CCO Capital, LLC (incorporated by reference to Exhibit 1.1 to the Registrant’s Current Report on Form 8 K filed with the SEC on April 9, 2020).

10.9 Third Amended and Restated Dealer Manager Agreement, dated as of June 16, 2022, by and among Creative Media & Community Trust Corporation, CIM Service Provider, LLC and CCO Capital, LLC (incorporated by reference to Exhibit 1.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on June 16, 2022).

10.10 Third Amended and Restated Dealer Manager Guaranty, dated as of June 16, 2022, by and among Creative Media & Community Trust Corporation, CIM Service Provider, LLC and CCO Capital, LLC (incorporated by reference to Exhibit 1.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on June 16, 2022).

10.11 Second Amended and Restated Agreement of Limited Partnership of CIM Urban Partners, L.P., dated as of December 22, 2005, by and among CIM Urban Partners GP, Inc.

and CIM Urban REIT, LLC (incorporated by reference to Exhibit 10.17 to the Registrant's Annual Report on Form 10-K filed with the SEC on March 16, 2015).

10.12 Credit Agreement, dated as of October 30, 2018, by and among certain subsidiary borrowers of CIM Commercial Trust Corporation, JPMorgan Chase Bank, N.A., as administrative agent, Bank of America, as syndication agent, and the other lenders party thereto (incorporated by reference to Exhibit 10.12 to the Registrant’s Registration Statement on Form S-11 (Reg.

333-232232) filed with the SEC on October 2, 2019).

10.12 Credit Agreement, dated as of December 16, 2022, by and among certain subsidiary borrowers of Creative Media & Community Trust Corporation, JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders party thereto (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 16, 2022).

10.13 Credit Guaranty, dated as of December 16, 2022, by and among certain subsidiary borrowers of Creative Media & Community Trust Corporation, JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders party thereto (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 16, 2022).

10.14 Modification Agreement, dated as of September 2, 2020, among certain subsidiary borrowers of CIM Commercial Trust Corporation, each Lender party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8‑K filed with the SEC on September 3, 2020).

6 unchanged sentences

and PMC Properties, Inc.

16.1 Letter from BDO USA, LLP dated November 9, 2020 (incorporated by reference to Exhibit 16.1 to the Registrant's Current Report on Form 8-K filed with the SEC on November 9, 2020).

(incorporated by reference to Exhibit 1 .1 to the Registrant’s Current Report on Form 8‑K filed with the SEC on January 6, 2023 )

10.19 Equity Interest Purchase and Sale Agreement, dated as of January 31, 2023, by and between Jack London Square Development (Oakland) Holdings, LLC and Channel House (Oakland) Owner, LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8‑K filed with the SEC on February 3, 2023 )

10.20 Equity Interest Purchase and Sale Agreement, dated as of January 31, 2023, by and between 466 Water Street (Oakland) Holdings, LLC, and Parcel D 466 Water Street (Oakland) Owner, LLC (incorporated by reference to Exhibit 10.

2 to the Registrant’s Current Report on Form 8‑K filed with the SEC on February 3, 2023)

10.21 Equity Interest Purchase and Sale Agreement, dated as of January 31, 2023, by and between JLS F-3 (Oakland) Holdings, LLC, and Parcel F-3 (Oakland) Owner, LLC (incorporated by reference to Exhibit 10.

3 to the Registrant’s Current Report on Form 8‑K filed with the SEC on February 3, 2023)

10.22 Equity Interest Purchase and Sale Agreement, dated as of January 31, 2023, by and between 1100 Clay Venture Holdings, LLC and CMCT 1100 Clay (Oakland) Owner, LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8‑K filed with the SEC on February 29 , 2023)

*10.23 Amended And Restated Limited Liability Company Operating Agreement of 4750 Co-Investor, LLC

*21.1 Subsidiaries of the Registrant.

17 unchanged sentences

March 30, 2023 By:

/s/ NATHAN D.

Chief Financial Officer

POWERS OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints David Thompson and Nathan D.

DeBacker and each of them severally, his true and lawful attorney-in-fact with power of substitution and resubstitution to sign in his name, place and stead, in any and all capacities, to do any and all things and execute any and all instruments that such attorney may deem necessary or advisable under the Securities Exchange Act of 1934 and any rules, regulations and requirements of the U.S.

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints David Thompson and Barry N.

Berlin and each of them severally, his true and lawful attorney-in-fact with power of substitution and resubstitution to sign in his name, place and stead, in any and all capacities, to do any and all things and execute any and all instruments that such attorney may deem necessary or advisable under the Securities Exchange Act of 1934 and any rules, regulations and requirements of the U.S.

Securities and Exchange Commission in connection with this Annual Report on Form 10-K and any and all amendments hereto, as fully for all intents and purposes as he might or could do in person, and hereby ratifies and confirms all said attorneys-in-fact and agents, each acting alone, and his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

3 unchanged sentences

David Thompson Officer)

/s/ Nathan D.

DeBacker Chief Financial Officer (Principal Financial March 16, 2022

DeBacker Officer and Principal Accounting Officer)

Berlin Chief Financial Officer (Principal Financial March 30, 2023

Berlin Officer and Principal Accounting Officer)

/s/ Douglas Bech Director March 30, 2023

/s/ John Hope Bryant Director March 30, 2023

John Hope Bryant

/s/ Marcie L.

Edwards Director March 30, 2023

/s/ Kelly Eppich Director March 16, 2022

/s/ Frank Golay Director March 16, 2022

/s/ Shaul Kuba Director March 30, 2023

3 unchanged sentences

Avraham Shemesh

/s/ Elaine Wong Director March 30, 2023

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

10 unchanged sentences

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of Creative Media & Community Trust Corporation

To the stockholders and the Board of Directors of Creative Media & Community Trust Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Creative Media & Community Trust Corporation (formerly, CIM Commercial Trust Corporation) (the “Company”) as of December 31, 2021 and 2020, the related consolidated statements of operations and comprehensive (loss) income, equity and cash flows, for each of the two years in the period ended December 31, 2021, and the related notes and schedules (collectively referred to as the “financial statements”).

We have audited the accompanying consolidated balance sheets of Creative Media & Community Trust Corporation (the "Company") as of December 31, 2022, and 2021, the related consolidated statements of operations, equity and cash flows, for each of the two years in the period ended December 31, 2022, and the related notes and schedules (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

17 unchanged sentences

The Company’s evaluation of investments in real estate for impairment involves an initial assessment of each real estate asset to determine whether events or changes in circumstances exist that may indicate that the carrying amounts of each investment in real estate is no longer recoverable.

Possible indications of impairment may include changes in real estate market conditions, property performance, and additional property valuation assumptions including discount and terminal capitalization rates.

Possible indications of impairment may include, but is not limited to, changes in anticipated holding periods, changes in real estate market conditions, property performance, and occupancy, and additional property valuation assumptions including discount and terminal capitalization rates.

When events or changes in circumstances exist, the Company evaluates its investment in real estate for impairment by comparing undiscounted future cash flows expected to be generated over the life of each asset to the respective carrying amount.

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Management concluded that the carrying value of the assets were recoverable and therefore were not subjected to a discounted cash flow analysis.

Estimates and assumptions used for the undiscounted future cash flows of the office property include rental rates, lease-up period, growth rates, hold period, and terminal capitalization rates.

We identified the determination of impairment indicators for investments in real estate and certain assumptions used for the undiscounted future cash flows of the properties as a critical audit matter because of (1) the significant assumptions management makes when determining whether events or changes in circumstances have occurred indicating that the carrying amounts of investments in real estate assets may not be recoverable and (2) for those investments in real estate where indications of impairment have been identified, the significant estimates and assumptions management makes to evaluate whether the undiscounted future cash flows expected to be generated over the life of the asset exceed the carrying amount of the property, including those related to rental rates, lease-up period, growth rates, hold period, and terminal capitalization rates.

This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate (1) whether management appropriately identified impairment indicators and (2) the reasonableness of management’s assumptions related to rental rates, lease-up period, growth rates, hold period, and terminal capitalization rates for the undiscounted future cash flows analysis.

Estimates and assumptions used for the undiscounted future cash flows of the office property include rental rates, lease-up period, growth rates, holding period, occupancy, capital expenditures and terminal capitalization rates.

This required a high degree of auditor judgment and an increased extent of effort , including the need to involve our fair value specialists, when performing audit procedures to evaluate (1) whether management appropriately identified impairment indicators and (2) the reasonableness of management’s assumptions related to rental rates, lease-up period, growth rates, holding period, occupancy, capital expenditures and terminal capitalization rates for the undiscounted future cash flows analysis.

How the Critical Audit Matter Was Addressed in the Audit

• We tested the effectiveness of controls over (1) management’s identification of possible circumstances that may indicate that the carrying amounts of investments in real estate are no longer recoverable and (2) the undiscounted cash flows, including review of the underlying inputs.

• We evaluated the accuracy and relevance of factors utilized in the Company’s qualitative assessment for a sample of properties.

• We performed corroborating inquiries with management, including property accounting, leasing and portfolio oversight to determine whether factors were identified in the current period that may be an impairment indicator or whether factors were identified in the current period that may result in a change to assumptions used in the undiscounted cash flow models.

• We evaluated whether the assumptions used in the Company’s undiscounted model relating to rental rates, lease-up period, growth rates, hold period, and terminal capitalization rates were consistent with evidence obtained in other areas of the audit.

• With the assistance of our fair value specialists, we evaluated the undiscounted cash flow analysis, including office asset estimates of rental rates, lease-up periods, growth rates, hold period and terminal capitalization rates by (1) evaluating the source of information and assumptions used by management and (2) testing the mathematical accuracy of the undiscounted cash flow analysis.

• We evaluated the accuracy, relevance, and completeness of factors utilized in the Company’s qualitative assessment for a sample of properties.

• We performed corroborating inquiries with management, including property accounting, leasing and portfolio oversight to determine whether factors were identified in the current period that may be an impairment indicator, including changes in expected holding periods, and corroborated these inquiries through review of third-party market reports and inspection of meeting minutes of the Board of Directors.

In addition, we evaluated whether factors were identified in the current period that may result in a change to assumptions used in the undiscounted cash flow models.

• We evaluated whether the assumptions used in the Company’s undiscounted model relating to rental rates, lease-up period, growth rates, holding period, occupancy, capital expenditures and terminal capitalization rates were consistent with evidence obtained in other areas of the audit.

• For properties in which we identified a change in expected holding period or the property was more likely than not to be disposed, we obtained the Company’s analysis to determine whether the expected proceeds were less than the carrying value.

• With the assistance of our fair value specialists, we evaluated the undiscounted cash flow analysis, including office asset estimates of rental rates, lease-up periods, growth rates, holding period, capital expenditures and terminal capitalization rates by (1) evaluating the source of information and assumptions used by management and (2) testing the mathematical accuracy of the undiscounted cash flow analysis.

• We evaluated the reasonableness of management’s undiscounted cash flow analysis by comparing management’s projections to the Company’s historical results and external market sources.

/s/ Deloitte & Touche LLP

Los Angeles, CA

Tempe, Arizona

March 30, 2023

4 unchanged sentences

Investments in real estate, net $ 502,006 $ 497,984

Investment in unconsolidated entity 12,381 —

Cash and cash equivalents 46,190 22,311

16 unchanged sentences

Series A cumulative redeemable preferred stock, $ 0.001 par value;

36,000,000 shares authorized;

1,633,965 and 1,631,965 shares issued and outstanding, respectively, as of December 31, 2021 and 2,008,256 and 2,007,856 shares issued and outstanding, respectively, as of December 31, 2020;

35,438,752 and 35,776,705 shares authorized as of December 31, 2022 and December 31, 2021, respectively;

693,741 shares issued and outstanding as of December 31, 2022 and 1,633,965 and 1,631,965 shares issued and outstanding, respectively, as of December 31, 2021;

liquidation preference of $ 25.00 per share, subject to adjustment

1 unchanged sentence

Series A cumulative redeemable preferred stock, $ 0.001 par value;

36,000,000 shares authorized;

35,438,752 and 35,776,705 shares authorized as of December 31, 2022 and December 31, 2021, respectively;

8,126,597 and 7,565,349 shares issued and outstanding, respectively, as of December 31, 2022 and 6,492,632 and 6,271,337 shares issued and outstanding, respectively, as of December 31, 2021;

1 unchanged sentence

189,048 156,431

Series D cumulative redeemable preferred stock, $ 0.001 par value;

Series A1 cumulative redeemable preferred stock, $ 0.001 par value;

27,990,070 shares authorized;

56,857 shares issued and outstanding as of December 31, 2021 and 19,145 shares issued and outstanding as of December 31, 2020;

5,966,077 and 5,956,147 shares issued and outstanding, respectively, as of December 31, 2022 and no shares issued, outstanding, or authorized as of December 31, 2021;

liquidation preference of $ 25.00 per share, subject to adjustment

Series D cumulative redeemable preferred stock, $ 0.001 par value;

26,992,000 and 32,000,000 shares authorized as of December 31, 2022 and December 31, 2021, respectively;

56,857 and 48,857 shares issued and outstanding, respectively, as of December 31, 2022 and 56,857 shares issued and outstanding as of December 31, 2021;

liquidation preference of $ 25.00 per share, subject to adjustment

Series L cumulative redeemable preferred stock, $ 0.001 par value;

9,000,000 shares authorized;

8,080,740 and 5,387,160 shares issued and outstanding, respectively, as of December 31, 2021 and 8,080,740 and 5,387,160 shares issued and outstanding as of December 31, 2020;

919,260 and 6,306,420 shares authorized as of December 31, 2022 and December 31, 2021, respectively;

No shares issued and outstanding, respectively, as of December 31, 2022 and 8,080,740 and 5,387,160 shares issued and outstanding as of December 31, 2021;

liquidation preference of $ 28.37 per share, subject to adjustment

152,834 152,834

Common stock, $ 0.001 par value;

24 unchanged sentences

Depreciation and amortization 20,348 20,112

Loss on early extinguishment of debt (Note 6) — 281

Impairment of real estate (Note 3) — —

Total Expenses 94,994 88,785

Gain on sale of real estate (Note 3) — —

INCOME (LOSS) BEFORE PROVISION (BENEFIT) FOR INCOME TAXES 2,141 ( 15,737 )

Provision (benefit) for income taxes 2,992 ( 722 )

NET (LOSS) INCOME ( 851 ) ( 15,015 )

Net loss (income) attributable to noncontrolling interests 1 ( 1 )

NET (LOSS) INCOME ATTRIBUTABLE TO THE COMPANY ( 850 ) ( 15,016 )

Income from unconsolidated entity 164 —

INCOME BEFORE PROVISION FOR INCOME TAXES 7,076 2,141

Provision for income taxes 1,131 2,992

NET INCOME (LOSS) 5,945 ( 851 )

Net (income) loss attributable to noncontrolling interests ( 27 ) 1

NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY 5,918 ( 850 )

Redeemable preferred stock dividends declared or accumulated (Note 10) ( 18,558 ) ( 18,763 )

1 unchanged sentence

Redeemable preferred stock redemptions (Note 10) ( 13,126 ) ( 113 )

NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS $ ( 19,979 ) $ ( 33,467 )

NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS PER SHARE:

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ ( 25,785 ) $ ( 19,979 )

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS PER SHARE:

Basic $ ( 1.11 ) $ ( 1.04 )

14 unchanged sentences

Balances, December 31, 2020 14,827,410 $ 15 9,784,067 $ 262,036 $ 794,127 $ ( 778,519 ) $ 277,659 $ 455 $ 278,114

Contributions to noncontrolling interests — — — — — — — 9 9

Distributions to noncontrolling interests — — — — — — — ( 118 ) ( 118 )

Stock-based compensation expense 20,332 — — — 220 — 220 — 220

Issuance of shares of Common Stock in exchange for asset management fees 203,349 — — — 2,359 — 2,359 — 2,359

Issuance of Series A Preferred Warrants — — — — 28 — 28 — 28

Common dividends ($ 0.300 per share)

10 unchanged sentences

Redemption of Series A Preferred Stock — — ( 112,881 ) ( 2,806 ) 219 ( 113 ) ( 2,700 ) — ( 2,700 )

Net (loss) income — — — — — ( 15,016 ) ( 15,016 ) 1 ( 15,015 )

Issuance of Common Stock 8,521,589 9 — — 76,912 — 76,921 — 76,921

Net loss — — — — — ( 850 ) ( 850 ) ( 1 ) ( 851 )

Balances, December 31, 2021 23,369,331 $ 24 11,715,354 $ 310,661 $ 866,746 $ ( 804,227 ) $ 373,204 $ 345 $ 373,549

13 unchanged sentences

Stock based compensation expense 30,984 — — — 202 — 202 — 202

Repurchase of common stock ( 662,462 ) ( 1 ) — — ( 4,714 ) — ( 4,715 ) — ( 4,715 )

Common dividends ($ 0.340 per share)

— — — — — ( 7,838 ) ( 7,838 ) — ( 7,838 )

Dividends to holders of Series A Preferred Stock ($ 1.375 per share)

Issuance of A1 Preferred Stock — — 5,966,077 147,761 ( 12,370 ) — 135,391 — 135,391

Redemptions of Series A1 Preferred Stock — — ( 9,930 ) ( 247 ) 23 ( 3 ) ( 227 ) — ( 227 )

Dividends to holders of A1 Preferred Stock ($ 1.125 per share)

— — — — — ( 2,463 ) ( 2,463 ) — ( 2,463 )

Issuance of Series D Preferred Stock — — 37,712 923 ( 30 ) — 893 — 893

Redemptions of Series D Preferred Stock — — ( 8,000 ) ( 196 ) 7 9 ( 180 ) — ( 180 )

Dividends to holders of Series D Preferred Stock ($ 1.413 per share)

— — — — — ( 62 ) ( 62 ) — ( 62 )

Repurchase and Redemption of Series L Preferred Stock — — ( 5,387,160 ) ( 152,834 ) 14,270 ( 12,692 ) ( 151,256 ) — ( 151,256 )

Dividends to holders of Series L Preferred Stock ($ 1.560 per share)

3 unchanged sentences

Redemption of Series A Preferred Stock — — ( 336,753 ) ( 8,381 ) 789 ( 440 ) ( 8,032 ) — ( 8,032 )

Issuance of Common Stock 8,521,589 9 — — 76,912 — 76,921 — 76,921

Net loss — — — — — ( 850 ) ( 850 ) ( 1 ) ( 851 )

Dividends to holders of Series A Preferred Stock ($ 1.375 per share)

— — — — — ( 8,700 ) ( 8,700 ) — ( 8,700 )

Net income — — — — — 5,918 5,918 27 5,945

Balances, December 31, 2022 22,737,853 $ 23 13,570,353 $ 337,762 $ 861,721 $ ( 837,846 ) $ 361,660 $ 373 $ 362,033

5 unchanged sentences

CASH FLOWS FROM OPERATING ACTIVITIES:

Net (loss) income $ ( 851 ) $ ( 15,015 )

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

Net income (loss) $ 5,945 $ ( 851 )

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

Depreciation and amortization, net 20,497 20,188

Loss on early extinguishment of debt — 281

Amortization of deferred loan costs 1,066 1,068

2 unchanged sentences

Amortization of deferred costs and accretion of fees on loans receivable, net ( 688 ) ( 622 )

(Recoveries) write-offs of uncollectible receivables ( 82 ) 2,622

Write-offs (recoveries) of uncollectible receivables 259 ( 82 )

Deferred income taxes ( 3 ) 72

Stock-based compensation 202 220

Income from unconsolidated entity ( 164 ) —

Loans funded, held for sale to secondary market ( 30,770 ) ( 96,991 )

2 unchanged sentences

Commitment fees remitted and other operating activity ( 1,086 ) ( 2,559 )

Return on investment from unconsolidated entity 164 —

Changes in operating assets and liabilities:

7 unchanged sentences

CASH FLOWS FROM INVESTING ACTIVITIES:

Additions to investments in real estate ( 4,047 ) ( 14,731 )

Capital expenditures ( 8,816 ) ( 4,047 )

Acquisition of real estate ( 10,787 ) ( 2,933 )

Investment in unconsolidated entity ( 22,652 ) —

Return of investment from unconsolidated entity

Loans funded ( 9,849 ) ( 36,299 )

Principal collected on loans 19,559 30,584

Other investing activity — 51

Net cash (used in) provided by investing activities ( 12,695 ) ( 38,320 )

Net cash used in investing activities ( 22,274 ) ( 12,695 )

CASH FLOWS FROM FINANCING ACTIVITIES:

7 unchanged sentences

Payment of Common Stock offering costs — ( 1,900 )

Net proceeds from issuance of Series A Preferred Warrants — 28

Repurchase of Common Stock ( 4,715 ) —

Net proceeds from issuance of Preferred Stock 148,007 29,829

Payment of preferred stock dividends ( 24,327 ) ( 18,045 )

Redemption of Preferred Stock ( 2,755 ) ( 2,084 )

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

2 unchanged sentences

Year Ended December 31,

Repurchase of Series L Preferred Stock ( 67,417 ) —

Redemption of Preferred Stock ( 8,527 ) ( 2,755 )

Noncontrolling interests’ distributions ( 4 ) ( 118 )

Noncontrolling interests’ contributions 5 9

Net cash (used in) provided by financing activities ( 43,584 ) 33,195

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH ( 9,998 ) 7,702

Net cash provided by (used in) financing activities 13,693 ( 43,584 )

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH 23,829 ( 9,998 )

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH:

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Reclassification of Series A Preferred Stock from temporary equity to permanent equity $ 37,766 $ 45,806

Reclassification of loans receivable, net to real estate owned $ — $ 174

Reclassification of Series A Preferred Stock from permanent equity to accounts payable and accrued expenses $ 48 $ 25

Reclassification of Preferred Stock from permanent equity to accounts payable $ 83,838 $ 48

Redeemable preferred stock deemed dividends $ 19 $ 253

7 unchanged sentences

Creative Media & Community Trust Corporation (formerly known as CIM Commercial Trust Corporation) (the “Company”), is a Maryland corporation and real estate investment trust (“REIT”).

The Company’s portfolio of investments currently consists of Class A and creative office real assets in vibrant and improving metropolitan communities throughout the United States.

The Company seeks to acquire, operate and develop premier multifamily and creative office assets that cater to rapidly growing industries such as technology, media and entertainment in vibrant and emerging communities throughout the United States.

The Company primarily acquires, develops, owns and operates both premier multifamily properties situated in vibrant communities throughout the United States and Class A and creative office real assets in markets with similar business and employment characteristics to its multifamily investments.

The Company also owns one hotel in northern California and a lending platform that originates loans under the Small Business Administration (“SBA”) 7(a) loan program.

The Company seeks to apply the expertise of CIM Group, L.P.

(“CIM Group”) to the acquisition, development and operation of top-tier multifamily properties situated in dynamic markets with similar business and employment characteristics to its creative office investments.

The Company was originally organized in 1993 as PMC Commercial Trust (“PMC Commercial”), a Texas real estate investment trust.

The Company’s common stock, $ 0.001 par value per share (“Common Stock”), is currently traded on the Nasdaq Global Market (“Nasdaq”) under the ticker symbol “CMCT”, and on the Tel Aviv Stock Exchange (the “TASE”) under the ticker symbol “CMCT-L.” The Company’s Series L preferred stock, $ 0.001 par value per share (“Series L Preferred Stock”), is currently traded on Nasdaq and on the TASE, in each case under the ticker symbol “CMCTP.” The Company has authorized for issuance 900,000,000 shares of common stock and 100,000,000 shares of preferred stock (“Preferred Stock”).

The Company filed Articles of Amendment (the “Reverse Stock Split Amendment”) to effectuate a one-for-three reverse stock split of the Company’s Common Stock, effective on September 3, 2019 (the “Reverse Stock Split”).

Pursuant to the Reverse Stock Split Amendment, every three shares of Common Stock issued and outstanding immediately prior to the effective time of the Reverse Stock Split were converted into one share of Common Stock, par value $ 0.003 per share.

In connection with the Reverse Split Amendment, the Company filed Articles of Amendment to revert the par value of the Common Stock issued and outstanding from $ 0.003 per share to $ 0.001 per share, effective as of September 3, 2019, following the effective time of the Reverse Split Amendment.

All Common Stock and per share of Common Stock amounts set forth in this Annual Report on Form 10-K have been adjusted to give retroactive effect to the Reverse Stock Split, unless otherwise stated.

The Company conducted a continuous public offering of Series A Preferred Units from October 2016 through January 2020, where each Series A Preferred Unit consisted of one share of Series A Preferred Stock, par value $ 0.001 per share, of the Company (collectively, the “Series A Preferred Stock”) with an initial stated value of $ 25.00 per share, subject to adjustment (the “Series A Preferred Stock Stated Value”), and one warrant (collectively, the “Series A Preferred Warrants”) to purchase 0.25 of a share of Common Stock, subject to adjustment (Note 10).

Proceeds and expenses from the sale of the Series A Preferred Units were allocated to the Series A Preferred Stock and Series A Preferred Warrants using their relative fair values on the date of issuance.

Since February 2020, the Company has been conducting a continuous public offering of Series A Preferred Stock and Series D preferred stock, par value $ 0.001 per share (the “Series D Preferred Stock”), with an initial stated value of $ 25.00 per share, subject to adjustment (the “Series D Preferred Stock Stated Value”).

The selling price of the Series A Preferred Stock in the offering has been, and is expected to continue to be, $ 25.00 per share and the selling price of the Series D Preferred Stock was $ 25.00 per share for all sales that occurred from the beginning of the offering to and including June 28, 2020 and is expected to be, and since June 29, 2020, has been, $ 24.50 per share through the end of the life of the offering.

During the year ended December 31, 2021, the Company conducted a rights offering (the “Rights Offering”) pursuant to which the Company issued an aggregate of 8,521,589 shares of Common Stock at a subscription price of $ 9.25 per share for aggregate gross proceeds of $ 78.8 million before issuance costs of $ 1.9 million.

(“CIM Group”) to the acquisition, development and operation of premier multifamily properties and creative office assets that cater to rapidly growing industries such as technology, media and entertainment in vibrant and emerging communities throughout the United States.

Subsequent to December 31, 2022, the Company acquired two multifamily properties in Oakland, California and acquired a 50 % interest in a multifamily property in.Los Angeles, California (see Note 18 for more details).

The Company’s common stock, $ 0.001 par value per share (“Common Stock”), is currently traded on the Nasdaq Global Market (“Nasdaq”) under the ticker symbol “CMCT”, and on the Tel Aviv Stock Exchange (the “TASE”) under the ticker symbol “CMCT.” The Company has authorized for issuance 900,000,000 shares of common stock and 100,000,000 shares of preferred stock (“Preferred Stock”).

Since June 2022, the Company has been conducting a continuous public offering with respect to shares of its Series A1 Preferred Stock, par value $ 0.001 per share with an initial stated value of $ 25.00 per share, subject to adjustment (Note 10).

The Company has qualified and intends to continue to qualify as a REIT, as defined in the Internal Revenue Code of 1986, as amended.

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Basis of Presentation —The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”).

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements as of December 31, 2021 and 2020

and for the Years Ended December 31, 2021 and 2020 (Continued)

Principles of Consolidation —The consolidated financial statements include the accounts of the Company and its subsidiaries.

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The Company’s ability to correctly assess its influence or control over an entity affects the presentation of these investments in real estate on the Company’s consolidated financial statements.

As of December 31, 2021, the Company has determined that the trust formed for the benefit of the note holders (the “Trust”) for the securitization of the unguaranteed portion of certain of the Company’s SBA 7(a) loans receivable is considered a VIE.

For the year ended December 31, 2022, the Company has determined that the trust formed for the benefit of the note holders (the “Trust”) for the securitization of the unguaranteed portion of certain of the Company’s SBA 7(a) loans receivable was considered a VIE.

Applying the consolidation requirements for VIEs, the Company determined that it is the primary beneficiary based on its power to direct activities through its role as servicer and its obligations to absorb losses and right to receive benefits.

As of December 31, 2022, the Trust held no assets or liabilites as the note holders had been paid in full.

In addition, as of December 31, 2022, the Company has determined that its Unconsolidated Joint Venture (as defined below) is considered a VIE.

Applying the consolidation requirements for VIEs, the Company determined that it is not the primary beneficiary based on its lack of power to direct activities and its obligations to absorb losses and right to receive benefits, and therefore the Unconsolidated joint venture does not qualify for consolidation.

The Company accounts for the investment in the Unconsolidated Joint Venture as an equity method investment.

Investments in Real Estate —Investments in real estate are stated at depreciated cost.

Depreciation and amortization are recorded on a straight-line basis over the estimated useful lives as follows:

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements as of December 31, 2022 and 2021

and for the Years Ended December 31, 2022 and 2021 (Continued)

Buildings and improvements 15 - 40 years

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The Company did no t recognize any impairment of long-lived assets during the years ended December 31, 2022 and 2021 (Note 3).

Investment in Unconsolidated Entity —In February 2022, the Company invested in an unconsolidated joint venture arrangement (the “Unconsolidated Joint Venture”) with a CIM-managed separate account (the “CIM JV Partner”) to purchase an office property in Los Angeles, California for a gross purchase price of approximately $ 51.0 million, of which the Company initially contributed approximately $ 22.4 million and the CIM JV Partner initially contributed the remaining balance.

The Company accounts for its approximately 44 % investment in the Unconsolidated Joint Venture under the equity method, as the Company has the ability to exercise significant influence over the investment.

The Unconsolidated Joint Venture records its assets and liabilities at fair value.

As such, the Company records its share of the Unconsolidated Joint Venture’s unrealized gains or losses as well as its share of the revenues and expenses on a quarterly basis as an adjustment to the carrying value of the investment on the Company’s consolidated balance sheet and such share is recognized within the Company’s income from unconsolidated entity on the consolidated statements of operations.

The Company recorded income of $ 164,000 related to its investment in the Unconsolidated Joint Venture during the year ended December 31, 2022, in the consolidated statements of operations.

In connection with the closing of the financing of the property owned by the Unconsolidated Joint Venture, the Company received a distribution from the Unconsolidated Joint Venture of $ 10.4 million during the year ended December 31, 2022, 164,000 of which was recognized as a return on investment and 10.3 million of which was recognized as a return of investment.

The Company also made additional contributions during the year ended December 31, 2022 totaling $ 242,000 .

The Company’s investment in the Unconsolidated Joint Venture was $ 12.4 million and its ownership percentage remained unchanged as of December 31, 2022.

Cash and Cash Equivalents —Cash and cash equivalents include short-term liquid investments with initial maturities of three months or less.

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Restricted cash also includes cash required to be segregated in connection with certain of the Company’s loans receivable.

Loans Receivable —The Company’s loans receivable are carried at their unamortized principal balance less unamortized acquisition discounts and premiums, deferred origination fees, retained loan discounts and loan loss reserves.

Loans Receivable —The Company’s loans receivable are carried at their unamortized principal balance less unamortized acquisition discounts and premiums, retained loan discounts and loan loss reserves.

Acquisition discounts or premiums, origination fees and retained loan discounts are amortized as a component of interest and other income using the effective interest method over the life of the respective loans, or on a straight-line basis when it approximates the effective interest method.

All loans were originated pursuant to programs sponsored by the Small Business Administration (the “SBA”).

The programs consist of loans originated under the SBA 7(a) Small Business Loan Program (the “SBA 7(a) Program”) and, commencing with the quarter ended June 30, 2020, the Paycheck Protection Program (the “PPP”).

The programs consist of loans originated under the SBA 7(a) Small Business Loan Program (the “SBA 7(a) Program”) and, commencing with the quarter ended June 30, 2020 and ending during the quarter ended June 30, 2021, the Paycheck Protection Program (the “PPP”).

Pursuant to the SBA 7(a) Program, the Company sells the portion of the loan that is guaranteed by the SBA.

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Unamortized retained loan discounts were $ 9.0 million and $ 9.6 million as of December 31, 2022 and 2021, respectively.

At the closing of the merger between CIM Urban REIT, LLC (“CIM REIT”), an affiliate of CIM Group, and certain of its subsidiaries and PMC Commercial Trust, the predecessor to the Company, the carrying value of the Company’s loans was adjusted to estimated fair market value and acquisition discounts of $ 33.9 million were recorded, which are being accreted to interest and other income using the effective interest method.

Acquisition discounts of $ 381,000 and $ 492,000 remained as of December 31, 2021 and 2020, respectively.

A loan receivable is generally classified as non-accrual (a “Non-Accrual Loan”) if (i) it is past due as to payment of principal or interest for a period of 60 days or more, (ii) any portion of the loan is classified as doubtful or is charged-off or (iii) the repayment in full of the principal and or interest is in doubt.

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Interest income, included in interest and other income, on a Non-Accrual Loan is recognized on the cost recovery basis.

Loan Loss Reserves —On a quarterly basis, and more frequently if indicators exist, the Company evaluates the collectability of its loans receivable.

Loan Loss Reserves —On a quarterly basis, the Company evaluates the collectability of its loans receivable.

The Company’s evaluation of collectability involves significant judgment, estimates, and a review of the ability of the borrower to make principal and interest payments, the underlying collateral and the borrowers’ business models and future operations.

For the years ended December 31, 2021 and 2020, the Company recorded net impairment losses of $ 19,000 and a net recovery of $ 16,000 , respectively, on its loans receivable.

For the years ended December 31, 2022 and 2021, the Company recorded net impairment losses of $ 0 and $ 19,000 , respectively, on its loans receivable.

There were no material loans receivable subject to credit risk which were considered to be impaired as of December 31, 2022 or 2021.

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These loss percentages are based on many factors, primarily cumulative and recent loss history and general economic conditions.

For the years ended December 31, 2021 and 2020, the Company has loan loss reserves of $ 943,000 and $ 885,000 , respectively.

Deferred Rent Receivable and Charges —Deferred rent receivable and charges consist of deferred rent, deferred leasing costs, deferred offering costs (Note 9) and other deferred costs.

For the years ended December 31, 2022 and 2021, the Company has loan loss reserves of $ 1.1 million and $ 943,000 , respectively.

Deferred Rent Receivable and Charges —Deferred rent receivable and charges consist of deferred rent, deferred leasing costs, deferred offering costs (Note 10), deferred financing costs and other deferred costs.

Deferred leasing costs, which represent lease commissions and other direct costs associated with the acquisition of tenants, are capitalized and amortized on a straight-line basis over the terms of the related leases.

Deferred offering costs represent direct costs incurred in connection with the Company’s offerings of Series A Preferred Units, and, after January 2020, Series A Preferred Stock and Series D Preferred Stock, excluding costs specifically identifiable to a closing, such as commissions, dealer-manager fees, and other offering fees and expenses.

Deferred offering costs represent direct costs incurred in connection with the Company’s offerings of Series A1 Preferred Stock (as defined below), Series A Preferred Stock (as defined below), and, after January 2020, Series A Preferred Stock (as defined below) and Series D Preferred Stock (as defined below), excluding costs specifically identifiable to a closing, such as commissions, dealer-manager fees, and other offering fees and expenses.

Generally, for a specific issuance of securities, issuance-specific offering costs are recorded as a reduction of proceeds raised on the issuance date and offering costs incurred but not directly related to a specifically identifiable closing of a security are deferred.

Deferred offering costs are first allocated to each issuance of a security on a pro-rata basis equal to the

Deferred offering costs are first allocated to each issuance of a security on a pro-rata basis equal to the ratio of the number of securities issued in a given issuance to the maximum number of securities that are expected to be issued in the related offering.

In the case of the Series A Preferred Stock issued prior to February 2020, the issuance-specific offering costs and the deferred offering costs allocated to such issuance were further allocated to the Series A Preferred Stock and Series A Preferred Warrants issued in such issuance based on the relative fair value of the instruments on the date of issuance.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

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and for the Years Ended December 31, 2022 and 2021 (Continued)

ratio of the number of securities issued in a given issuance to the maximum number of securities that are expected to be issued in the related offering.

In the case of the Series A Preferred Units, which were issued prior to February 2020, the issuance-specific offering costs and the deferred offering costs allocated to such issuance were further allocated to the Series A Preferred Stock and Series A Preferred Warrants issued in such issuance based on the relative fair value of the instruments on the date of issuance.

The deferred offering costs allocated to the Series A Preferred Stock and Series A Preferred Warrants are reductions to temporary equity and permanent equity, respectively.

deferred offering costs allocated to the Series A Preferred Stock and Series A Preferred Warrants are reductions to temporary equity and permanent equity, respectively.

Deferred financing costs related to the securing of a revolving line of credit are presented as an asset and amortized ratably over the term of the line of credit arrangement.

As such, the Company’s current and corresponding prior period total deferred costs, net in the accompanying consolidated balance sheets relate only to the revolving loan portion of the credit facilities.

As of December 31, 2022 and 2021, deferred rent receivable and charges, net consist of the following:

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Deferred offering costs 5,664 6,281

Deferred financing costs, net of accumulated amortization of $ 30 and $ 0 , respectively

Other deferred costs 491 491

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Noncontrolling Interests —Noncontrolling interests represent the interests in various properties owned by third parties.

Redeemable Preferred Stock —Beginning on the date of original issuance of any given shares of Series A Preferred Stock or Series D Preferred Stock, and from and after the fifth anniversary date of the original issuance of the Series L Preferred Stock, the holder of such shares has the right to require the Company to redeem such shares, subject to certain limitations as discussed in Note 9.

The Company records the activity related to the Series A Preferred Warrants, Series D Preferred Stock and Series L Preferred Stock in permanent equity.

Redeemable Preferred Stock —Beginning on the date of original issuance of any given shares of Series A1 Preferred Stock, par value $ .001 per share (“Series A1 Preferred Stock”), with an initial stated value of $ 25.00 per share, subject to adjustment (the “Series A1 Preferred Stock Stated Value”), Series A Preferred Stock, par value $ 0.001 per share (“Series A Preferred Stock”) with an initial stated value of $ 25.00 per share, subject to adjustment (the “Series A Preferred Stock Stated Value”), or Series D Preferred Stock, par value $ 0.001 per share (“Series D Preferred Stock”), with an initial stated value of $ 25.00 per share, subject to adjustment (the “Series D Preferred Stock Stated Value”), and from and after the fifth anniversary date of the original issuance of the Series L Preferred Stock, the holder of such shares has the right to require the Company to redeem such shares, subject to certain limitations as discussed in Note 10.

The Company records the activity related to the Series A1 Preferred Stock, Series A Preferred Warrants, Series D Preferred Stock and Series L Preferred Stock in permanent equity.

In the event a holder of Series A Preferred Stock requests redemption of such shares and such redemption takes place prior to the first anniversary of the date of original issuance, the Company is required to pay such redemption in cash.

As a result, the Company records issuances of Series A Preferred Stock in temporary equity.

As a result, the Company recorded issuances of Series A Preferred Stock in temporary equity.

On the first anniversary of the date of original issuance of a particular share of Series A Preferred Stock, the Company reclassifies such share of Series A Preferred Stock from temporary equity to permanent equity because the feature giving rise to temporary equity classification, the requirement to satisfy redemption requests in cash, lapses on the first anniversary date.

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Factors considered by management in performing these analyses include an estimate of carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases.

In estimating carrying costs, management includes real estate taxes, insurance and other operating expenses, and estimates of lost rental revenue during the expected lease-up periods based on current market demand.

Management also estimates costs to execute similar leases, including leasing commissions, legal, and other related costs.

In estimating carrying costs, management includes real estate taxes, insurance and other operating expenses, and estimates of lost rental

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

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and for the Years Ended December 31, 2022 and 2021 (Continued)

to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases measured over a period equal to the remaining non-cancelable term of the lease, and for below-market leases, over a period equal to the initial term plus any below-market fixed-rate renewal periods.

revenue during the expected lease-up periods based on current market demand.

Management also estimates costs to execute similar leases, including leasing commissions, legal, and other related costs.

In allocating the purchase consideration of the identified intangible assets and liabilities of an acquired property, above-market, below-market, and in-place lease values are recorded based on the present value (using an interest rate that reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases measured over a period equal to the remaining non-cancelable term of the lease, and for below-market leases, over a period equal to the initial term plus any below-market fixed-rate renewal periods.

Acquired above-market and below-market leases are amortized and recorded to rental and other property income over the initial terms of the respective leases.

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The Company has elected not to separate lease and non-lease components as the pattern of revenue recognition does not differ for the two components, and the non-lease component is not the primary component in the Company’s leases.

In addition to minimum rents, certain leases, including the Company’s parking leases with third-party operators, provide for additional rents based upon varying percentages of tenants’ sales in excess of annual minimums.

Percentage rent is recognized once lessees’ specified sales targets have been met.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

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and for the Years Ended December 31, 2022 and 2021 (Continued)

Percentage rent is recognized once lessees’ specified sales targets have been met.

For the years ended December 31, 2022 and 2021, the Company recognized rental income as follows:

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The Company does not use a general reserve approach.

As of December 31, 2021 and 2020, the Company had identified certain tenants where collection was no longer considered probable and decreased outstanding receivables by $ 579,000 and $ 1.9 million, respectively, across all operating leases.

As of December 31, 2022 and 2021, the Company had identified certain tenants where collection was no longer considered probable and decreased outstanding receivables by $ 387,000 and $ 579,000 , respectively, across all operating leases.

Revenue from lending activities

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The Company satisfies its performance obligation and recognizes revenues associated with these reservations over time as services are rendered to the customer.

The Company satisfies its performance obligation and recognizes revenues associated with noncancelable reservations at the earlier of (i) the date on which the customer cancels the reservation or (ii) over time as services are rendered to the customer.

The Company satisfies its performance obligation and recognizes revenues associated with

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

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and for the Years Ended December 31, 2022 and 2021 (Continued)

noncancelable reservations at the earlier of (i) the date on which the customer cancels the reservation or (ii) over time as services are rendered to the customer.

Ancillary services include facilities usage and providing food and beverage.

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The Company satisfies its performance obligation and recognizes revenues associated with these services over time as the construction is completed.

No amounts were recognized for tenant recoveries outside of the lease agreements for the years ended December 31, 2021 and 2020.

No such amounts were recognized for tenant recoveries outside of the lease agreements for the years ended December 31, 2022 and 2021.

As of December 31, 2022, there were no remaining performance obligations associated with tenant recoveries outside of the lease agreements.

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Net income attributable to common stockholders includes a deduction for dividends due to preferred stockholders.

Diluted EPS is computed by dividing net income attributable to common stockholders by the weighted average number of shares of Common Stock outstanding adjusted for the dilutive effect, if any, of securities such as stock-based compensation awards, warrants, including the Series A Preferred Warrants and preferred stock, including the Series A Preferred Stock, Series D Preferred Stock and Series L Preferred Stock, whose redemption is payable in shares of Common Stock or cash, at the discretion of the Company.

Diluted EPS is computed by dividing net income attributable to common stockholders by the weighted average number of shares of Common Stock outstanding adjusted for the dilutive effect, if any, of securities such as stock-based compensation awards, warrants, including the Series A Preferred Warrants and preferred stock, including the Series A1 Preferred Stock, Series A Preferred Stock, Series D Preferred Stock and Series L Preferred Stock, whose redemption is payable in shares of Common Stock or cash, at the discretion of the Company.

The dilutive effect of stock-based compensation awards and warrants, including the Series A Preferred Warrants, is reflected in the weighted average diluted shares calculation by application of the treasury stock method.

The dilutive effect of preferred stock, including the Series A Preferred Stock, Series D Preferred Stock and Series L Preferred Stock, whose redemption is payable in shares of Common Stock or cash, at the discretion of the Company, is reflected in the weighted average diluted shares calculation by application of the if-converted method.

The dilutive effect of preferred stock, including the Series A1 Preferred Stock, Series A Preferred Stock, Series D Preferred Stock and Series L Preferred

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

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and for the Years Ended December 31, 2022 and 2021 (Continued)

Distributions —Distributions on the Company’s Series A Preferred Stock, Series D Preferred Stock, Series L Preferred Stock and Common Stock are recorded when they are authorized by its Board of Directors and declared by the Company.

Stock, whose redemption is payable in shares of Common Stock or cash, at the discretion of the Company, is reflected in the weighted average diluted shares calculation by application of the if-converted method.

Distributions —Distributions on the Company’s Series A1 Preferred Stock, Series A Preferred Stock, Series D Preferred Stock, Series L Preferred Stock and Common Stock are recorded when they are authorized by its Board of Directors and declared by the Company.

Assets Held for Sale and Discontinued Operations —In the ordinary course of business, the Company may periodically enter into agreements to dispose of its assets.

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ASC 740, Income Taxes , provides guidance for how uncertain tax positions should be recognized, measured, presented, and disclosed in the financial statements.

ASC 740 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Company’s tax returns to determine whether the tax positions are “more likely than not” of being sustained by the applicable tax authority.

Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current period.

The Company has reviewed all open tax years and concluded that the application of ASC 740 resulted in no material effect to its consolidated financial position or results of operations.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

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and for the Years Ended December 31, 2022 and 2021 (Continued)

being sustained by the applicable tax authority.

Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current period.

The Company has reviewed all open tax years and concluded that the application of ASC 740 resulted in no material effect to its consolidated financial position or results of operations.

Use of Estimates —The preparation of consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period.

The Company bases such estimates on historical experience, information available at the time, and assumptions the Company believes to be reasonable under the circumstances and at such time, including the impact of extraordinary events such as COVID-19.

The Company bases such estimates on historical experience, information available at the time, and assumptions the Company believes to be reasonable under the circumstances and at such time.

Actual results could differ from those estimates.

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Early adoption is permitted for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2018.

The Company has not yet adopted ASU 2016-13 and the related updates and remains in the process of evaluating the impact of adoption of this new accounting guidance on its consolidated financial statements.

The Company adopted ASU 2016-13 and the related updates on January 1, 2023 and the adoption did not have a material impact.

On April 10, 2020, the FASB issued a question-and-answer document (the “Q&A”) to address stakeholder questions on the application of the lease accounting guidance for lease concessions related to the effects of COVID-19.

The lease modification guidance in Topic 842, Leases , (or Topic 840, Leases ) would require the Company to determine, on a lease by lease basis, if a lease concession was the result of a new arrangement reached with the tenant (treated within the lease modification accounting framework) or if a lease concession was made pursuant to the enforceable rights and obligations of the existing lease agreement (precluded from applying the lease modification accounting framework).

However, the Q&A provides

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

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and for the Years Ended December 31, 2022 and 2021 (Continued)

that the Company may bypass the lease by lease analysis if certain criteria are met, and instead elect to either consistently apply, or consistently not apply, the lease modification framework to groups of leases with similar characteristics and similar circumstances.

As described below, the Company has elected not to apply the lease modification guidance to concessions related to the effects of COVID-19 that do not result in a substantial increase in the Company’s rights as lessor, including concessions that result in the total payments required by the modified lease being substantially the same as or less than the total payments required by the original lease.

modification accounting framework) or if a lease concession was made pursuant to the enforceable rights and obligations of the existing lease agreement (precluded from applying the lease modification accounting framework).

However, the Q&A provides that the Company may bypass the lease by lease analysis if certain criteria are met, and instead elect to either consistently apply, or consistently not apply, the lease modification framework to groups of leases with similar characteristics and similar circumstances.

The Company has elected not to apply the lease modification guidance to concessions related to the effects of COVID-19 that do not result in a substantial increase in the Company’s rights as lessor, including concessions that result in the total payments required by the modified lease being substantially the same as or less than the total payments required by the original lease.

INVESTMENTS IN REAL ESTATE

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For the years ended December 31, 2022 and 2021, the Company recorded depreciation expense of $ 17.3 million and $ 16.9 million, respectively.

2021 Transactions — During the year ended December 31, 2021, the Company acquired a 100 % fee-simple interest in the following property from an unrelated third-party.

The purchase was accounted for as an asset acquisition.

2022 Transactions — During the year ended December 31, 2022, the Company acquired a 100 % fee-simple interest in the following properties from unrelated third-parties which were accounted for as asset acquisitions.

Asset Date of Purchase

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(in thousands)

1037 North Sycamore, Los Angeles, CA Office July 13, 2021 4,900 $ 2,900

(1) Transaction costs that were capitalized as a component of the assets acquired and liabilities assumed in connection with the acquisition of this property totaled $ 33,000 , which are not included in the purchase price above.

There were no dispositions during the year ended December 31, 2021.

3109 S Western Avenue, Los Angeles, CA (1)(5)

Multifamily (5)

August 4, 2022 5,900 $ 700

1007 E 7th Street, Austin, TX (2) (6)

July 1, 2022 1,352 $ 1,900

3022 S Western Avenue, Los Angeles, CA (3) (7)

Multifamily (7)

May 20, 2022 6,000 $ 5,650

3101 S Western Avenue, Los Angeles, CA (4) (8)

Multifamily (8)

February 11, 2022 3,752 $ 2,260

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

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and for the Years Ended December 31, 2022 and 2021 (Continued)

(1) Transaction costs that were capitalized as a component of the assets acquired and liabilities assumed in connection with the acquisition of this property totaled $ 11,000 , which are not included in the purchase price above.

(2) Transaction costs that were capitalized as a component of the assets acquired and liabilities assumed in connection with the acquisition of this property totaled $ 52,000 , which are not included in the purchase price above.

(3) Transaction costs that were capitalized as a component of the assets acquired and liabilities assumed in connection with the acquisition of this property totaled $ 192,000 , which are not included in the purchase price above.

(4) Transaction costs that were capitalized as a component of the assets acquired and liabilities assumed in connection with the acquisition of this property totaled $ 22,000 , which are not included in the purchase price above.

(5) The Company intends to redevelop approximately seven commercial units totaling 5,635 rentable square feet and six parking stalls starting in 2024.

(6) The property is located on a land site of approximately 7,450 square feet.

The Company intends to complete pre-development and entitlement work to provide optionality for future development.

(7) The property is located on a land site of approximately 28,300 square feet.

The Company intends to entitle the property and develop approximately 119 residential units starting in 2024.

(8) The property is located on a land site of approximately 11,300 square feet.

The Company intends to entitle the property and develop approximately 40 residential units starting in 2023.

Please refer to “Investments in Unconsolidated Entities” (Note 4) for information on the Company’s acquisition of an approximate 44 % interest in an office property in February 2022.

There were no dispositions during the year ended December 31, 2022.

2021 Transactions — During the year ended December 31, 2021, the Company acquired a 100 % fee-simple interest in the following property from an unrelated third-party.

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(in thousands)

1021 East 7th Street, Austin, TX Office November 30, 2020 11,180 $ 6,079

1037 North Sycamore, Los Angeles, CA (1)

Office July 13, 2021 4,900 $ 2,900

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The results of operations of the properties the Company acquired have been included in the consolidated statements of operations from the date of acquisition.

The purchase price of the acquisitions completed during the years ended December 31, 2021 and 2020 were less than 10% of the Company’s total assets as of the respective most recent annual consolidated financial statements filed at or prior to the date of acquisition.

The following table summarizes the purchase price allocation of the aforementioned acquisitions during the years ended December 31, 2022 and 2021.

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Net assets acquired $ 10,787 $ 2,933

(1) Acquired in-place leases have a weighted average amortization period of 3 years for the 2020 acquisition.

(2) Acquired above-market leases have a weighted average amortization period of 3 years for the 2020 acquisition.

(3) Acquired below-market leases have a weighted average amortization period of 3 years for the 2020 acquisition.

Property Concentrations —Kaiser Foundation Health Plan, Incorporated (“Kaiser”), which occupied space in one of the Company’s Oakland, California properties accounted for 30.9 % of its annualized rental income for the year ended December 31, 2021.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

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and for the Years Ended December 31, 2022 and 2021 (Continued)

INVESTMENT IN UNCONSOLIDATED ENTITY

In February 2022, the Company invested in the Unconsolidated Joint Venture with the CIM JV Partner to purchase an office property in Los Angeles, California for a gross purchase price of approximately $ 51.0 million, of which the Company initially contributed approximately $ 22.4 million and the CIM JV Partner initially contributed the remaining balance.

The Unconsolidated Joint Venture records its assets and liabilities at fair value.

The following table details the Company’s equity method investment in the Unconsolidated Joint Venture.

See to Note 2 - Basis of Presentation and Summary of Significant Accounting Policies (dollars in thousands):

Carrying Value

Property Asset Type Location Date of Acquisition Ownership Interest December 31, 2022 December 31, 2021

1910 Sunset Boulevard (1)

Office Los Angeles, CA February 11, 2022 44 % $ 12,381 $ —

______________________

(1) 1910 Sunset Boulevard is an office building with 97,746 square feet of office space and 2,760 square feet of retail space.

The Unconsolidated Joint Venture plans to undertake a capital improvement program to renovate and modernize the building into creative office space as well as a limited number of multifamily units.

The Company recorded income of $ 164,000 related to its investment in the Unconsolidated Joint Venture during the year ended December 31, 2022 in the consolidated statements of operations.

In September 2022, the Unconsolidated Joint Venture obtained financing through a mortgage loan of $ 23.9 million secured by its investment in real estate with an estimated fair value of $ 52.5 million as of December 31, 2022 (the “1910 Sunset Mortgage Loan”).

The 1910 Sunset Mortgage Loan has a three-year term with interest-only monthly payments.

The Company entered into a guaranty with the lender, under which the Company agreed to guarantee the Unconsolidated Joint Venture’s obligations under the 1910 Sunset Mortgage Loan (the “1910 Sunset Guarantee”).

Under the terms of the Unconsolidated Joint Venture, the Company and the CIM JV Partner are subject to cross indemnity obligations pursuant to which the CIM JV Partner agrees to reimburse the Company for its share of any indemnity payment, to the extent any such indemnity payment did not result from the Company’s fraud, gross neglect, or willful misconduct.

In connection with the closing of the financing of the property owned by the Unconsolidated Joint Venture, the Company received a distribution from the Unconsolidated Joint Venture of $ 10.4 million during the year ended December 31, 2022, $ 164,000 of which was recognized as a return on investment and $ 10.3 million of which was recognized as a return of investment.

The Company also made additional contributions during the year ended December 31, 2022 totaling $ 242,000 .

The Company’s investment in the Unconsolidated Joint Venture was $ 12.4 million and its ownership percentage remained unchanged as of December 31, 2022.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements as of December 31, 2022 and 2021

and for the Years Ended December 31, 2022 and 2021 (Continued)

LOANS RECEIVABLE

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SBA 7(a) Loans Receivable, Subject to Loan-Backed Notes —Represents the unguaranteed portions of loans originated under the SBA 7(a) Program which were transferred to a trust and are held as collateral in connection with a securitization transaction.

The proceeds received from the transfer are reflected as loan-backed notes payable (Note 6).

These loans are subject to credit risk.

The proceeds received from the transfer were reflected as loan-backed notes payable (Note 7).

These loans were subject to credit risk.

SBA 7(a) Loans Receivable, Paycheck Protection Program —As an SBA 7(a) licensee, the Company originated loans under the PPP.

As of December 31, 2021, a significant portion of these loans have been either forgiven or repaid, and the Company expects that all of the outstanding PPP loans will be forgiven, either in part or in full, by the SBA or be repaid by the borrower, including both principal and accrued interest.

As of December 31, 2022, all of the loans originated under the PPP have been repaid in full.

SBA 7(a) Loans Receivable, Subject to Secured Borrowings —Represents the government guaranteed portions of loans originated under the SBA 7(a) Program which were sold with the proceeds received from the sale reflected as secured borrowings—government guaranteed loans.

There is no credit risk associated with these loans since the SBA has guaranteed payment of the principal.

There was no credit risk associated with these loans since the SBA has guaranteed payment of the principal.

SBA 7(a) Loans Receivable, Held for Sale — Represents the government guaranteed portion of loans held for sale at the end of the period or that had been sold but in respect of which proceeds had not been received as of the end of the period.

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Trade name and license 2,957 2,957

Total intangible lease assets, net $ 5,251 $ 6,313

Total intangible assets, net $ 4,461 $ 5,251

Intangible lease liabilities:

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2023 $ 10 $ 503 $ ( 20 )

2023 10 470 ( 1 )

Thereafter — 194 —

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2018 revolving credit facility 60,000 110,000 ( 170,000 ) — —

2020 unsecured revolving credit facility — — — — —

2022 credit facility revolver — — — — —

2022 credit facility term loan — 56,230 — — 56,230

Junior subordinated notes 27,070 — — — 27,070

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These loans included cash premiums that are amortized as a reduction to interest expense over the life of the loan using the effective interest method and are fully amortized when the underlying loan is repaid in full.

As of December 31, 2021, the Company’s secured borrowings-government guaranteed loans included $ 4.0 million of loans sold for a premium and excess spread, with a variable rate, reset quarterly, based on prime rate with weighted average coupon rate of 3.89 %, and $ 2.6 million of loans sold for an excess spread, with a variable rate, reset quarterly, based on prime rate with weighted average coupon rate of 1.56 %.

2018 Revolving Credit Facility —In October 2018, the Company entered into a secured revolving credit facility with a bank syndicate that, as amended, allows the Company to borrow up to $ 209.5 million, subject to a borrowing base calculation (the “2018 revolving credit facility”).

As of December 31, 2022, the Company’s secured borrowings-government guaranteed loans included $ 3.6 million of loans sold for a premium and excess spread, with a variable rate, reset quarterly, based on prime rate with weighted average coupon rate of 6.88 % at December 31, 2022, and $ 2.4 million of loans sold for an excess spread, with a variable rate, reset quarterly, based on prime rate with weighted average coupon rate of 4.57 % at December 31, 2022.

2018 Revolving Credit Facility —In October 2018, the Company entered into a secured revolving credit facility with a bank syndicate that, as amended, allowed the Company to borrow up to $ 209.5 million, subject to a borrowing base calculation (the “2018 revolving credit facility”).

The 2018 revolving credit facility was secured by properties in the Company’s

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

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and for the Years Ended December 31, 2022 and 2021 (Continued)

credit facility during the period from September 2, 2020 through August 14, 2021 (the “Deferral Period”).

The 2018 revolving credit facility bore interest during the Deferral Period at (A) the base rate plus 1.05 % or (B) LIBOR plus 2.05 % and (ii) bears interest after the Deferral Period, at (A) the base rate plus 0.55 % or (B) LIBOR plus 1.55 %.

As of December 31, 2021 and 2020, the variable interest rate was 2.15 % and 2.20 %, respectively.

The 2018 revolving credit facility is also subject to an unused commitment fee of 0.15 % or 0.25 % depending on the amount of aggregate unused commitments.

The 2018 revolving credit facility is secured by deeds of trust on certain of the Company’s properties.

The 2018 revolving credit facility contains customary covenants and is not subject to any financial covenants (though the amount the Company may borrow under the 2018 revolving credit facility is determined by a borrowing base calculation).

The 2018 revolving credit facility matures in October 2022 and provides for one one-year extension option under certain conditions, including providing notice of the election and paying an extension fee of 0.15 % of each lender’s commitment being extended on the effective date of such extension.

As of December 31, 2021 and 2020, $ 60.0 million and $ 166.5 million, respectively, was outstanding under the 2018 revolving credit facility, and approximately $ 117.6 million and $ 28.0 million, respectively, was available for future borrowings.

2020 Unsecured Revolving Credit Facility —In May 2020, the Company entered into an unsecured revolving credit facility with a bank (the “2020 unsecured revolving credit facility”) pursuant to which the Company can borrow up to a maximum of $ 10.0 million.

Outstanding advances under the 2020 unsecured revolving credit facility bear interest at the rate of 1.00 %.

The Company also pays a revolving credit facility fee of 1.12 % with each advance under the 2020 unsecured revolving credit facility, which fee is subject to a cap of $ 112,000 in the aggregate.

The 2020 unsecured revolving credit facility contains certain customary covenants including a maximum leverage ratio and a minimum fixed charge coverage ratio, as well as certain other conditions.

The 2020 unsecured revolving credit facility matures in May 2022.

As of December 31, 2021, no amounts were outstanding under the 2020 unsecured revolving credit facility and $ 10.0 million was available for future borrowings.

real estate portfolio:

eight office properties and one hotel property.

In September 2020, the 2018 revolving credit facility was amended (the “2018 Credit Facility Modification”) to remedy the effect that COVID-19 had on the Company’s ability to borrow under the 2018 revolving credit facility during the period from September 2, 2020 through August 14, 2021 (the “Deferral Period”).

The 2018 revolving credit facility bore interest during the Deferral Period at (A) the base rate plus 1.05 % or (B) LIBOR plus 2.05 % and (ii) bore interest after the Deferral Period, at (A) the base rate plus 0.55 % or (B) LIBOR plus 1.55 %.

The 2018 revolving credit facility was also subject to an unused commitment fee of 0.15 % or 0.25 % depending on the amount of aggregate unused commitments.

In October 2022, the Company executed a one-year extension of the 2018 revolving credit facility to extend its maturity to October 2023.

In connection with the extension, the Company paid 25 % of the extension fee specified in the 2018 revolving credit facility (i.e., 25 % of 0.15 % of each lender’s commitment being extended) on October 30, 2022.

On December 16, 2022, the 2018 revolving credit facility was refinanced and replaced by the 2022 credit facility (as described below) and the remaining 75 % of the extension fee specified in the 2018 revolving credit facility was not incurred.

2022 Credit Facility —In December 2022 the Company refinanced its 2018 credit facility and replaced it with a new 2022 credit facility, entered into with a bank syndicate, that includes a $ 56.2 million term loan (the “2022 Credit Facility Term Loan”) as well as a revolver allowing the Company to borrow up to $ 150.0 million (the “2022 Credit Facility Revolver”), both of which are collectively subject to a borrowing base calculation.

The 2022 credit facility is secured by properties in the Company’s real estate portfolio:

six office properties and one hotel property (as well as the hotel’s adjacent parking garage and retail property).

The 2022 credit facility bears interest at (A) the base rate plus 1.50 % or (B) SOFR plus 2.60 %.

As of December 31, 2022, the variable interest rate was 6.93 %.

The 2022 Credit Facility Revolver is also subject to an unused commitment fee of 0.15 % or 0.25 % depending on the amount of aggregate unused commitments.

The 2022 credit facility guaranteed by the Company and the Company is subject to certain financial maintenance covenants.

The 2022 credit facility matures in December 2025 and provides for two one-year extension options under certain conditions, including providing notice of the election and paying an extension fee of 0.15 % of each lender’s commitment being extended on the effective date of such extension.

As of December 31, 2022, $ 56.2 million was outstanding on the 2022 Credit Facility Term Loan and no amount was outstanding on the 2022 Credit Facility Revolver, while $ 150.0 million was available for future borrowings.

Junior Subordinated Notes —The Company has junior subordinated notes with a variable interest rate which resets quarterly based on the three-month LIBOR plus 3.25 %, with quarterly interest only payments.

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The SBA 7(a) loan-backed notes are secured by deeds of trust or mortgages and are collateralized solely by the right to receive payments and other recoveries attributable to the unguaranteed portions of certain of the Company’s SBA 7(a) loans receivable.

The SBA 7(a) loan-backed notes mature on March 20, 2043, with monthly payments due as payments on the collateralized loans are received.

Based on the anticipated repayments of the Company’s collateralized SBA 7(a) loans, at issuance, the Company estimated the weighted average remaining life of the SBA 7(a) loan-backed notes to be approximately two years .

The SBA 7(a) loan-backed notes bear interest at the lower of the one-month LIBOR plus 1.40 % or the prime rate less 1.08 %.

As of December 31, 2021 and 2020, the variable interest rate was 1.49 % and 1.55 %, respectively.

The Company reflects the SBA 7(a) loans receivable as assets on its consolidated balance sheets and the SBA 7(a) loan-backed notes as debt on its consolidated balance sheets.

The restricted cash on the Company’s consolidated balance sheets included funds related to the Company’s SBA 7(a) loan-backed notes of $ 1.9 million and $ 1.2 million, as of December 31, 2021 and 2020, respectively.

The SBA 7(a) loan-backed notes had monthly payments due as payments on the collateralized loans were received.

As of December 31, 2022 all of the SBA 7(a) loan-backed notes had been paid off.

The SBA 7(a) loan-backed notes bore interest at the lower of the one-month LIBOR plus 1.40 % or the prime rate less 1.08 %.

As of December 31, 2021, the variable interest rate was 1.49 %.

The Company reflected the SBA 7(a) loans receivable as assets on its consolidated balance sheets and the SBA 7(a) loan-backed notes as debt on its consolidated balance sheets.

The restricted cash on the Company’s consolidated balance sheets included funds related to the Company’s SBA 7(a) loan-backed notes of $ 0 and $ 1.9 million, as of December 31, 2022 and 2021, respectively.

Paycheck Protection Program Liquidity Facility —In June 2020, the Company commenced borrowing funds from the Federal Reserve through the PPP Liquidity Facility (the “PPPLF”) to finance all the loans the Company originated under the PPP.

Advances under the PPPLF carry an interest rate of 0.35 %, are made on a dollar-for-dollar basis based on the amount of loans originated under the PPP and are secured by loans made by the Company under the PPP.

The PPPLF contains customary covenants but is not subject to any financial covenants.

The maturity date of PPPLF borrowings is the same as the maturity date of the loans pledged to secure the extension of credit, generally two years.

At maturity, both principal and accrued interest are due.

The maturity date of a PPPLF borrowing will be accelerated if, among other things, the Company has been reimbursed by the SBA for a loan forgiveness (to the extent of the forgiveness), the Company has received payment from the SBA representing exercise of the loan guarantee or the Company has received payment from the underlying borrower (to the extent of the payment received).

As of December 31, 2021 and 2020, $ 5.0 million and $ 14.5 million, respectively, was outstanding under the PPPLF.

As the PPP has ended, no new extensions of credit may be made under the PPPLF.

Advances under the PPPLF carried an interest rate of 0.35 %, were made on a dollar-for-dollar basis based on the amount of loans originated under the PPP and were secured by loans made by the Company under the PPP.

The maturity date of PPPLF borrowings was the same as the maturity date of the loans pledged to secure the extension of credit, generally two years.

As of December 31, 2022 and 2021, $ 0 and $ 5.0 million, respectively, was outstanding under the PPPLF.

As the PPP has ended all borrowings from the Federal Reserve have been repaid in full as of December 31, 2022.

Deferred debt issuance costs, which represent legal and third-party fees incurred in connection with the Company’s borrowing activities, are capitalized and amortized to interest expense on a straight-line basis over the life of the related loan, approximating the effective interest method.

Deferred debt issuance costs are presented net of accumulated amortization and are a reduction to total debt.

As of December 31, 2022 and 2021, accrued interest and unused commitment fees payable of $ 562,000 and $ 467,000 , respectively, are included in accounts payable and accrued expenses.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

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and for the Years Ended December 31, 2022 and 2021 (Continued)

As of December 31, 2021 and 2020, accrued interest and unused commitment fees payable of $ 467,000 and $ 564,000 , respectively, are included in accounts payable and accrued expenses.

Future principal payments on the Company’s debt (face value) as of December 31, 2022 are as follows:

Years Ending December 31, Mortgage Payable Secured Borrowings Principal (1)

2018 Revolving Credit Facility Other (1) (2)

2022 Credit Facility Junior Subordinated Notes Total

(in thousands)

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$ 97,100 $ 5,979 $ 56,230 $ 27,070 $ 186,379

(1) Principal payments on secured borrowings and SBA 7(a) loan-backed notes, which are included in Other, are generally dependent upon cash flows received from the underlying loans.

(1) Principal payments on secured borrowings are generally dependent upon cash flows received from the underlying loans.

The Company’s estimate of their repayment is based on scheduled payments on the underlying loans.

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No payment is due unless payments are received from the borrowers on the underlying loans.

(2) Represents the junior subordinated notes, SBA 7(a) loan-backed notes, and borrowed funds from the Federal Reserve through the PPPLF.

STOCK-BASED COMPENSATION PLANS

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Compensation expense related to these restricted shares of Common Stock is recognized over the vesting period, and generally vests based on one year of continuous service.

The Company recorded compensation expense related to these

The Company recorded compensation expense related to these restricted shares of Common Stoc k in the amount of $ 202,000 and $ 220,000 for the years ended December 31, 2022 and 2021, respectively.

As of December 31, 2022, there was $ 92,000 of total unrecognized compensation expense related to shares of Common Stock which will be recognized ratably over the remaining vesting period.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

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and for the Years Ended December 31, 2022 and 2021 (Continued)

restricted shares of Common Stoc k in the amount of $ 220,000 and $ 222,000 for the years ended December 31, 2021 and 2020, respectively.

As of December 31, 2021, there was $ 73,000 of total unrecognized compensation expense related to shares of Common Stock which will be recognized ratably over the remaining vesting period.

The estimated fair value of restricted shares vested during 2021 and 2020 was $ 220,000 and $ 220,000 , respectively.

EARNINGS PER SHARE (“EPS”)

The computations of basic EPS are based on the Company’s weighted average shares outstanding.

In order to calculate the diluted weighted average number of shares of Common Stock outstanding for the year ended December 31, 2022, the basic weighted average number of shares of Common Stock outstanding was increased by 1,000 to reflect the dilutive effect of certain shares of the Company’s Series D Preferred Stock.

No shares of Series A Preferred Stock, Series A1 Preferred Stock, or Series L Preferred Stock outstanding as of December 31, 2022 or 2021 were included in the computation of diluted EPS because they had no dilutive effect.

Outstanding Series A Preferred Warrants were not included in the computation of diluted EPS for the years ended December 31, 2022 and 2021 because their impact was either anti-dilutive or such warrants were not exercisable during such periods (Note 11).

No shares of Series D Preferred Stock outstanding as of December 31, 2021 and December 31, 2020 had a dilutive effect.

Outstanding shares of Series L Preferred Stock were not included in the computation of diluted EPS for the years ended December 31, 2021 and 2020 because such shares were not redeemable during such periods.

EPS for the year-to-date period may differ from the sum of quarterly EPS amounts due to the required method for computing EPS in the respective periods.

In addition, EPS is calculated independently for each component and may not be additive due to rounding.

The following table reconciles the numerator and denominator used in computing the Company’s basic and diluted per-share amounts for net (loss) income attributable to common stockholders for the years ended December 31, 2021 and 2020:

The following table reconciles the numerator and denominator used in computing the Company’s basic and diluted per-share amounts for net loss attributable to common stockholders for the years ended December 31, 2022 and 2021:

Year Ended December 31,

(in thousands, except per share amounts)

Net (loss) income attributable to common stockholders $ ( 19,979 ) $ ( 33,467 )

Net loss attributable to common stockholders $ ( 25,785 ) $ ( 19,979 )

Redeemable preferred stock dividends declared on dilutive shares

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Preferred Stock

Series A Series D Series L Total

Shares Amount Shares Amount Shares Amount Shares Amount

Series A1 Series A Series D Series L Total

Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount

Balances, December 31, 2020 — $ — 4,377,762 $ 108,729 19,145 $ 473 5,387,160 $ 152,834 9,784,067 $ 262,036

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Balances, December 31, 2021 — $ — 6,271,337 $ 156,431 56,857 $ 1,396 5,387,160 $ 152,834 11,715,354 $ 310,661

Issuance of Series D Preferred Stock — — 37,712 923 — — 37,712 923

Reclassification of Series A Preferred Stock to permanent equity 2,006,456 50,508 — — — — 2,006,456 50,508

Issuance of A1 Preferred Stock 5,966,077 147,761 — $ — — — — — 5,966,077 147,761

Redemption of Series A1 Preferred Stock ( 9,930 ) ( 247 ) — — — — — — ( 9,930 ) ( 247 )

Redemption of Series D Preferred Stock — — — — ( 8,000 ) ( 196 ) — — ( 8,000 ) ( 196 )

Repurchase of Series L Preferred Stock — — — — — — ( 5,387,160 ) ( 152,834 ) ( 5,387,160 ) ( 152,834 )

Reclassification of Series A Preferred stock to Perm Equity — — 1,630,765 40,998 — — — — 1,630,765 40,998

Redemption of Series A Preferred Stock — — ( 336,753 ) ( 8,381 ) — — — — ( 336,753 ) ( 8,381 )

Balances, December 31, 2022 5,956,147 $ 147,514 7,565,349 $ 189,048 48,857 $ 1,200 — $ — 13,570,353 $ 337,762

As of December 31, 2021, the Company had issued in registered public offerings 7,557,916 shares of Series A Preferred Stock, 4,603,287 Series A Preferred Warrants and 56,857 shares of Series D Preferred Stock and received gross proceeds of $ 190.3 million ($ 188.2 million of which was allocated to the Series A Preferred Stock, $ 761,000 of which was allocated to the Series A Preferred Warrants, and $ 1.4 million of which was allocated to the Series D Preferred Stock) and, additionally, had issued 568,681 shares of Series A Preferred Stock as payment for services to the Administrator, for which no cash proceeds were received.

In connection with such issuance, costs specifically identifiable to the offering of Series A Preferred Stock, Series A Preferred Warrants and Series D Preferred Stock, such as commissions, dealer manager fees and other offering fees and expenses, totaled $ 15.9 million ($ 15.7 million of which was allocated to the Series A Preferred Stock, $ 142,000 of which was allocated to the Series A Preferred Warrants, and $ 35,000 of which was allocated to the Series D Preferred Stock).

In addition, as of December 31, 2021, non-issuance-specific costs related to this offering totaled $ 8.0 million.

As of December 31, 2021, the Company has reclassified and allocated $ 1.7 million, $ 5,000 and $ 13,000 from deferred charges to Series A Preferred Stock, Series A Preferred Warrants and Series D Preferred Stock, respectively, as a reduction to the gross proceeds received.

Series A1 Preferred Stock —Since June 2022, the Company has been conducting a continuous public offering with respect to shares of its Series A1 Preferred Stock, par value $ 0.001 per share with an initial stated value of $ 25.00 per share, subject to adjustment.

Shares of Series A1 Preferred Stock are recorded in permanent equity at the time of their issuance.

As of December 31, 2022, the Company had issued in registered public offerings 5,766,077 shares of the Series A1 Preferred Stock and received gross proceeds of $ 142.8 million and additionally, had issued 200,000 shares of Series A1 Preferred Stock as payment for services to the CIM Service Provider, LLC (the “Administrator”), for which no cash proceeds were received.

In connection with such issuance, $ 10.5 million of costs specifically identifiable to the offering of Series A1 Preferred Stock was allocated to the Series A1 Preferred Stock.

Such costs include commissions, dealer manager fees and other offering fees and expenses but do not include non-issuance-specific costs of $ 9.5 million related to the Company’s offering of Series A Preferred Stock, Series A Preferred Warrants, Series A1 Preferred Stock and Series D Preferred Stock.

As of December 31, 2022, the Company had reclassified and allocated $ 1.9 million from deferred charges to Series A1 Preferred Stock as a reduction to the gross proceeds received.

Such reclassification was based on the cumulative number of securities issued relative to the maximum number of securities expected to be issued under the offering.

As of December 31, 2021, there were 7,903,302 shares of Series A Preferred Stock outstanding, 4,541,852 Series A Preferred Warrants to purchase 1,178,125 shares of Common Stock outstanding, and 56,857 shares of Series D Preferred Stock outstanding.

As of December 31, 2021, 223,295 shares of Series A Preferred Stock and no shares of Series D Preferred Stock have been redeemed.

Series A Preferred Stock —The Company conducted a continuous public offering of Series A Preferred Units from October 2016 through January 2020, where each Series A Preferred Unit consisted of one share of Series A Preferred Stock, par value $ 0.001 per share, of the Company with an initial stated value of $ 25.00 per share, subject to adjustment, and one warrant to purchase 0.25 of a share of Common Stock.

Since February 2020, the Company has been conducting a continuous public offering with respect to shares of the Company’s Series A Preferred Stock, which, since such time, is no longer being issued as a unit with an accompanying Series A Preferred Warrant.

As of December 31, 2022, there were 5,956,147 shares of Series A1 Preferred Stock outstanding and 9,930 shares of Series A1 Preferred Stock had been redeemed.

Series A Preferred Stock —The Company conducted a continuous public offering of Series A Preferred Stock (with each issued share of Series A Preferred Stock initially accompanied by one warrant (“Series A Preferred Warrant”) to purchase 0.25 of a share of Common Stock, subject to adjustment) from October 2016 through January 2020.

Proceeds and expenses from the sale were allocated to the Series A Preferred Stock and Series A Preferred Warrants using their relative fair values on the date of issuance.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

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and for the Years Ended December 31, 2022 and 2021 (Continued)

Net proceeds from the issuance of shares of Series A Preferred Stock are initially recorded in temporary equity at an amount equal to the gross proceeds allocated to such shares of Series A Preferred Stock minus the costs specifically identifiable to the issuance of such shares and the non-issuance specific offering costs allocated to such shares.

If the net proceeds from the issuance of shares of Series A Preferred Stock are less than the redemption value of such shares at the time they are issued, or if the redemption value of such shares subsequently becomes greater than the carrying value of such shares, an adjustment is recorded to increase the carrying amount of such shares to their redemption value as of the balance sheet date.

Such adjustment is considered a deemed dividend for purposes of calculating basic and diluted EPS.

From February 2020 through June 2022, the Company conducted a continuous public offering with respect to shares of the Company’s Series A Preferred Stock, which, since February 2020, was no longer being issued as a unit with an accompanying Series A Preferred Warrant.

In June 2022, the Company concluded the offering of Series A Preferred Stock.

As of December 31, 2022, the Company had issued in registered public offerings 8,251,657 shares of Series A Preferred Stock and 4,603,287 Series A Preferred Warrants and received gross proceeds of $ 205.4 million and $ 761,000 , respectively, and additionally, had issued 568,681 shares of Series A Preferred Stock as payment for services to the CIM Service Provider, LLC (the “Administrator”), for which no cash proceeds were received.

In connection with the cumulative issuance of Series A Preferred Stock Series A Preferred Warrants, $ 17.0 million and $ 142,000 of costs specifically identifiable to the offering of the Series A Preferred Stock and Series A Preferred Warrants, respectively, were allocated to the Series A Preferred Stock and Series A Preferred Warrants, respectively.

As of December 31, 2022, the Company had reclassified and allocated $ 1.9 million and $ 5,000 from deferred charges to Series A Preferred Stock and Series A Preferred Warrants, respectively, as a reduction to the gross proceeds received.

Such reclassification was based on the cumulative number of securities issued relative to the maximum number of securities expected to be issued under the offering.

Net proceeds from the issuance of shares of Series A Preferred Stock were initially recorded in temporary equity at an amount equal to the gross proceeds allocated to such shares of Series A Preferred Stock minus the costs specifically identifiable to the issuance of such shares and the non-issuance specific offering costs allocated to such shares.

If the net proceeds from the issuance of shares of Series A Preferred Stock were less than the redemption value of such shares at the time they were issued, or if the redemption value of such shares subsequently becomes greater than the carrying value of such shares, an adjustment was recorded to increase the carrying amount of such shares to their redemption value as of the balance sheet date.

Such adjustment was considered a deemed dividend for purposes of calculating basic and diluted EPS.

During the years ended December 31, 2022 and December 31, 2021, the Company recorded redeemable preferred stock deemed dividends of $ 19,000 and $ 253,000 , respectively, related to such adjustments.

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As of December 31, 2022, the Company had reclassified an aggregate of $ 184.0 million in net proceeds from temporary equity to permanent equity.

Series D Preferred Stock —Since February 2020, the Company has been conducting a continuous public offering with respect to shares of its Series D Preferred Stock, par value $ 0.001 per share, subject to adjustment.

The selling price of the Series D Preferred Stock was $ 25.00 per share for all sales that occurred from the beginning of the offering to and including June 28, 2020 and is expected to be, and since June 29, 2020, has been, $ 24.50 per share through the end of the life of the offering.

Shares of Series D Preferred Stock are recorded in permanent equity at the time of their issuance.

As of December 31, 2022, there were 8,259,090 shares of Series A Preferred Stock outstanding and 561,248 shares of Series A Preferred Stock had been redeemed.

Series D Preferred Stock —From February 2020 through June 2022, the Company conducted a continuous public offering with respect to shares of its Series D Preferred Stock, par value $ 0.001 per share, subject to adjustment.

The selling price of the Series D Preferred Stock was $ 25.00 per share for all sales that occurred from the beginning of the offering to and including June 28, 2020 and $ 24.50 per share thereafter.

Shares of Series D Preferred Stock were recorded in permanent equity at the time of their issuance.

In June 2022, the Company concluded the offering of its Series D Preferred Stock.

As of December 31, 2022, the Company had issued in registered public offerings 56,857 shares of Series D Preferred Stock and received gross proceeds of $ 1.4 million.

In connection with such issuance, $ 33,000 of costs specifically identifiable to the offering of Series D Preferred Stock were allocated to the Series D Preferred Stock.

As of December 31, 2022, the Company had reclassified and allocated $ 13,000 from deferred charges to Series D Preferred Stock as a reduction to the gross proceeds received.

Such reclassification was based on the cumulative number of securities issued relative to the maximum number of securities expected to be issued under the offering.

As of December 31, 2022, there were 48,857 shares of Series D Preferred Stock outstanding and 8,000 shares of Series D Preferred Stock had been redeemed.

Series L Preferred Stock —On November 21, 2017, the Company issued 8,080,740 shares of Series L Preferred Stock having an initial stated value of $ 28.37 per share (“Series L Preferred Stock Stated Value”), subject to adjustment.

The Company received gross proceeds of $ 229.3 million from the sale of the Series L Preferred Stock, which was reduced by issuance-specific offering costs, such as commissions, dealer manager fees, and other offering fees and expenses, totaling $ 15.9 million, a discount of $ 2.9 million, and non-issuance-specific costs of $ 2.5 million.

These fees have been recorded as a reduction to the gross proceeds in permanent equity.

On October 22, 2019, the Company commenced a tender offer for the purchase of up to 2,693,580 shares of Series L Preferred Stock (the “Tender Offer”), representing one-third of the then-outstanding shares of Series L Preferred Stock.

The Tender Offer was oversubscribed, and pursuant to the terms of the Tender Offer, shares of Series L Preferred Stock were accepted for purchase on a pro rata basis.

The Company repurchased 2,693,580 shares of Series L Preferred Stock at a purchase price of $ 29.12 per share, as converted to and paid in ILS.

The shares of Series L Preferred Stock accepted for payment by the Company were restored to the status of authorized but unissued shares of preferred stock without designation as to class or series.

Until the fifth anniversary of the date of original issuance of the Series L Preferred Stock, the Company is prohibited from issuing any shares of preferred stock ranking senior to or on parity with the Series L Preferred Stock with respect to the payment of dividends, other distributions, liquidation, and or dissolution or winding up of the Company unless the Minimum Fixed Charge Coverage Ratio, calculated in accordance with the Articles Supplementary describing the Series L Preferred Stock, is equal to or greater than 1.25 :1.00.

As of December 31, 2021 and 2020, the Company was in compliance with the Series L Preferred Stock Minimum Fixed Charge Coverage Ratio.

Refer to Note 12 for a discussion of certain payments the Company has made in shares of Common Stock and in shares of Preferred Stock and may make in shares of Preferred Stock in lieu of cash payments in order to remain in compliance with the Series L Preferred Stock Minimum Fixed Charge Coverage Ratio.

Dividends —With respect to the payment of dividends, the Series A Preferred Stock ranks senior to the Series L Preferred Stock and the Common Stock, and on parity with the Series D Preferred Stock.

The Series L Preferred Stock ranks senior to the Common Stock (except with respect to and only to the extent of the Initial Dividend) and junior to the Series A Preferred Stock, Series D Preferred Stock and Common Stock (with respect to and only to the extent of the Initial Dividend).

With respect to the distribution of amounts upon liquidation, dissolution or winding-up, the Series A Preferred Stock ranks on parity with the Series D Preferred Stock and Series L Preferred Stock, to the extent of the Series L Preferred Stock Stated Value, and otherwise ranks senior to the Series L Preferred Stock and the Common Stock.

With respect to the distribution of amounts upon liquidation, dissolution or winding-up, the Series L Preferred Stock ranks senior to the Common Stock, both (i) to the extent of the Series L Preferred Stock Stated Value and (ii) following payment to holders of the Common Stock of an

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

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and for the Years Ended December 31, 2022 and 2021 (Continued)

amount equal to any unpaid Initial Dividend, to the extent of any accrued and unpaid dividends on the Series L Preferred Stock, on parity with the Series A Preferred Stock and Series D Preferred Stock, to the extent of the Series L Preferred Stock Stated Value and junior to the Series A Preferred Stock, Series D Preferred Stock and Common Stock (to the extent of the Initial Dividend), in all instances with respect to any accrued and unpaid dividends on the Series L Preferred Stock.

Company received gross proceeds of $ 229.3 million from the sale of the Series L Preferred Stock, which was reduced by issuance-specific offering costs, such as commissions, dealer manager fees, and other offering fees and expenses, totaling $ 15.9 million, a discount of $ 2.9 million, and non-issuance-specific costs of $ 2.5 million.

These fees have been recorded as a reduction to the gross proceeds in permanent equity.

On September 15, 2022, the Company repurchased 2,435,284 shares of its Series L Preferred Stock in a privately negotiated transaction (the “Series L Repurchase”).

The shares were repurchased at a purchase price of $ 27.40 per share (a 3.4 % discount to the stated value of $ 28.37 per share) plus $ 1.12 per share of accrued and unpaid dividends (or $ 2.7 million accrued and unpaid dividends in the aggregate).

The total cost to complete the Series L Repurchase, including transactions costs of $ 700,000 (or $ 0.29 per share), was $ 70.1 million.

In connection with the Series L Repurchase, the Company recognized redeemable preferred stock redemptions of $ 4.8 million on its consolidated statement of operations for the year ended December 31, 2022.

The $ 4.8 million of redeemable preferred stock redemptions represents the difference between the repurchase price (including $ 0.29 per share of transaction costs) and the carrying value of the repurchased Series L Preferred Stock (representing the stated value of $ 28.37 per share reduced by $ 2.65 per share of stock offering costs).

Refer to Note 13 for a discussion of certain payments the Company has made in shares of Common Stock and in shares of Preferred Stock and may make in shares of Preferred Stock in lieu of cash payments in order to remain in compliance with the Series L Preferred Stock Minimum Fixed Charge Coverage Ratio.

Dividends —With respect to the payment of dividends, the Series A1 Preferred Stock, the Series A Preferred Stock and Series D Preferred Stock rank on parity with respect to each other and senior to the Common Stock.

With respect to the distribution of amounts upon liquidation, dissolution or winding-up, the Series A1 Preferred Stock, the Series A Preferred Stock and the Series D Preferred Stock rank on parity with respect to each other and senior to the Common Stock.

Holders of Series A1 Preferred Stock are entitled to receive, if, as and when authorized by the Company’s Board of Directors, and declared by the Company out of legally available funds, cumulative cash dividends (the “Series A1 Dividend”) on each share of Series A1 Preferred Stock at the greater of (i) an annual rate of 6.0 % of the Series A1 Preferred Stock Stated Value (i.e., the equivalent of $ 0.3750 per share per quarter) and (ii) the Federal Funds (Effective) Rate for such quarter and plus 2.5 % of the Series A1 Preferred Stock Stated Value divided by four, up to a maximum of 2.5 % of the Series A1 Preferred Stock Stated Value per quarter.

Holders of Series A Preferred Stock are entitled to receive, if, as and when authorized by the Company’s Board of Directors, and declared by the Company out of legally available funds, cumulative cash dividends on each share of Series A Preferred Stock at an annual rate of 5.50 % of the Series A Preferred Stock Stated Value (i.e., the equivalent of $ 0.34375 per share per quarter) (the “Series A Dividend”).

Holders of Series D Preferred Stock are entitled to receive, if, as and when authorized by the Company’s Board of Directors, and declared by the Company out of legally available funds, cumulative cash dividends on each share of Series D Preferred Stock at an annual rate of 5.65 % of the Series D Preferred Stock Stated Value (i.e., the equivalent of $ 0.35313 per share per quarter) (the “Series D Dividend”).

Dividends on each share of Series A Preferred Stock and Series D Preferred Stock begin accruing on, and are cumulative from, the date of issuance.

The Company expects to pay the Series A Dividend and Series D Dividend in arrears on a monthly basis in accordance with the foregoing provisions, unless the Company’s results of operations, general financing conditions, general economic conditions, applicable requirements of the MGCL or other factors make it imprudent to do so.

The timing and amount of the Series A Dividend and the Series D Dividend will be determined by the Company’s Board of Directors, in its sole discretion, and may vary from time to time.

Holders of Series L Preferred Stock are entitled to receive, if, as and when authorized by the Company’s Board of Directors, and declared by the Company out of legally available funds, cumulative cash dividends on each share of Series L Preferred Stock at an annual rate of 5.50 % of the Series L Preferred Stock Stated Value (i.e., the equivalent of $ 1.56035 per share per year).

Dividends on each share of Series L Preferred Stock began accruing on, and are cumulative from, the date of issuance.

The Company expects to pay dividends on the Series L Preferred Stock in arrears on an annual basis in accordance with the foregoing provisions, unless the Company’s results of operations, general financing conditions, general economic conditions, applicable requirements of the MGCL or other factors make it imprudent to do so.

If the Company fails to timely declare distributions or fails to timely pay distributions on the Series L Preferred Stock, the annual dividend rate of the Series L Preferred Stock will temporarily increase by 1.00 % per year, up to a maximum rate of 8.50 % per annum.

However, prior to the payment of any distributions on Series L Preferred Stock in respect of a given year, the Company must first declare and pay dividends on the Common Stock in respect of such year in an aggregate amount equal to the Initial Dividend announced by the Company’s Board of Directors at the end of the prior fiscal year.

On December 29, 2021, the Company announced an Initial Dividend on shares of its Common Stock for fiscal year 2021 in the aggregate amount of $ 7,010,799 .

During the year ended December 31, 2021, the Company paid $ 9.6 million, $ 50,000 and $ 8.4 million of cash dividends on its Series A Preferred Stock, Series D Preferred Stock and Series L Preferred Stock, respectively.

Dividends on each share of Series A1 Preferred Stock, Series A Preferred Stock and Series D Preferred Stock begin accruing on, and are cumulative from, the date of issuance.

The Company expects to pay the Series A1 Dividend, Series A Dividend and Series D Dividend in arrears on a monthly basis in accordance with the foregoing provisions, unless the Company’s results of operations, general financing conditions, general economic conditions, applicable requirements of the MGCL or other factors make it imprudent to do so.

The timing and amount of the Series A1 Dividend, Series A Dividend and the Series D Dividend will be determined by the Company’s Board of Directors, in its sole discretion, and may vary from time to time.

During the year ended December 31, 2022, the Company paid $ 1.8 million, $ 11.4 million, $ 78,000 and $ 11.1 million of cash dividends on its Series A1 Preferred Stock, Series A Preferred Stock, Series D Preferred Stock and Series L Preferred Stock, respectively.

Redemptions —The Company’s Series A Preferred Stock and Series D Preferred Stock are redeemable at the option of the holder or the Company.

The redemption schedule of the Series A Preferred Stock and Series D Preferred Stock allows redemptions at the option of the holder of Series A Preferred Stock or Series D Preferred Stock from the date of original issuance of any such shares at the Series A Preferred Stock Stated Value or Series D Preferred Stock Stated Value, respectively, less a redemption fee applicable prior to the fifth anniversary of the issuance of such shares, plus accrued and unpaid dividends.

The Company has the right to redeem the Series A Preferred Stock or Series D Preferred Stock after the fifth anniversary of the date of original issuance of such shares at the Series A Preferred Stock Stated Value or Series D Preferred Stock Stated Value, respectively, plus accrued and unpaid dividends.

At the Company’s discretion, the redemption price will be paid in cash or in Common Stock based on the volume weighted average price of the Company’s Common Stock for the 20 trading days prior to the redemption;

provided that the redemption price of any shares of Series A Preferred Stock redeemed prior to the first anniversary of the date of original issuance of such shares must be paid in cash.

From and after the fifth anniversary of the date of original issuance of the Series L Preferred Stock, each holder will have the right to require the Company to redeem, and the Company will also have the option to redeem (subject to certain conditions), such shares of Series L Preferred Stock at a redemption price equal to the Series L Preferred Stock Stated Value, plus, provided certain conditions are met, all accrued and unpaid distributions.

Notwithstanding the foregoing, a holder of

Redemptions —The Company’s Series A1 Preferred Stock, Series A Preferred Stock and Series D Preferred Stock are redeemable at the option of the holder or the Company.

The redemption schedule of the Series A1 Preferred Stock, Series A Preferred Stock and Series D Preferred Stock allows redemptions at the option of the holder of Series A1 Preferred Stock, Series A Preferred Stock or Series D Preferred Stock from the date of original issuance of any such shares at the Series A1 Preferred Stock Stated Value, Series A Preferred Stock Stated Value or Series D Preferred Stock Stated Value, respectively, less a redemption fee applicable prior to the fifth anniversary of the issuance of such shares, plus accrued and unpaid dividends.

The Company has the right to redeem the Series A1 Preferred Stock after the date that is twenty-four months following the

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

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and for the Years Ended December 31, 2022 and 2021 (Continued)

shares of the Company’s Series L Preferred Stock may require the Company to redeem such shares at any time prior to the fifth anniversary of the date of original issuance of the Series L Preferred Stock if (1) the Company does not declare and pay in full the distribution on the Series L Preferred Stock for any annual period prior to such fifth anniversary or (2) the Company does not declare and pay all accrued and unpaid distributions on the Series L Preferred Stock for all past dividend periods prior to the applicable holder redemption date.

The applicable redemption price payable upon redemption of any Series L Preferred Stock will be made, in the Company’s sole discretion, in the form of (A) cash in ILS at the then-current currency exchange rate determined in accordance with the Articles Supplementary defining the terms of the Series L Preferred Stock, (B) in equal value through the issuance of shares of Common Stock, with the value of such Common Stock to be deemed the lower of (i) the NAV per share of the Company’s Common Stock as most recently published by the Company as of the effective date of redemption and (ii) the volume-weighted average price of the Company’s Common Stock, determined in accordance with the Articles Supplementary defining the terms of the Series L Preferred Stock, or (C) in a combination of cash in ILS and the Company’s Common Stock, based on the conversion mechanisms set forth in (A) and (B), respectively.

original issuance of such shares of Series A1 Preferred Stock at the Series A1 Preferred Stock Stated Value, plus accrued and unpaid dividends.

With respect to redemptions of the Series A1 Preferred Stock, Series A Preferred Stock or Series D Preferred Stock, at the Company’s discretion, the redemption price will be paid in cash and/or in Common Stock based on the volume weighted average price of the Company’s Common Stock for the 20 trading days prior to the redemption;

provided that the redemption price of any shares of Series A Preferred Stock redeemed prior to the first anniversary of the date of original issuance of such shares must be paid in cash.

From and after the fifth anniversary of the date of original issuance of the Series L Preferred Stock, each holder had the right to require the Company to redeem, and the Company also had the option to redeem (subject to certain conditions), such shares of Series L Preferred Stock at a redemption price equal to the Series L Preferred Stock Stated Value, plus, provided certain conditions are met, all accrued and unpaid distributions.

As announced on December 23, 2022, the Company redeemed all remaining outstanding shares of its Series L Preferred Stock in cash on January 25, 2023 at its stated value of $ 28.37 .

The total cost to complete the Series L Redemption, including transaction costs of $ 93,000 (or $ 0.03 per share), was $ 83.8 million.

In connection with the Series L Redemption, the Company recognized redeemable preferred stock redemptions of $ 7.9 million on its consolidated statement of operations for the year ended December 31, 2022.

The $ 7.9 million of redeemable preferred stock redemptions represents the difference between the repurchase price (including $ 0.03 per share of transaction costs) and the carrying the value of the repurchased Series L Preferred Stock (representing the stated value of $ 28.37 per share reduced by $ 2.65 per share of stock offering costs).

As of December 31, 2022, $ 83.8 million was recorded in accounts payable and accrued expenses on the Company’s consolidated balance sheet in connection with the Series L Redemption.

The accrued and unpaid dividends on the redeemed shares of Series L Preferred Stock through December 31, 2022 of $ 1.56 per share (or $ 4.6 million accrued and unpaid dividends in the aggregate) were also paid on January 25, 2023.

No additional dividends will be owed on the redeemed shares of Series L Preferred Stock subsequent to December 31, 2022.

STOCKHOLDERS’ EQUITY

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Share of Common Stock

September 7, 2021 September 29, 2021 Regular Quarterly $ 0.075

June 7, 2021 June 30, 2021 Regular Quarterly $ 0.075

March 5, 2021 March 30, 2021 Regular Quarterly $ 0.075

December 2, 2020 December 29, 2020 Regular Quarterly $ 0.075

September 22, 2022 October 17, 2022 Regular Quarterly $ 0.085

June 10, 2022 July 5, 2022 Regular Quarterly $ 0.085

March 8, 2022 April 1, 2022 Regular Quarterly $ 0.085

December 9, 2021 January 5, 2022 Regular Quarterly $ 0.075

September 7, 2021 September 29, 2021 Regular Quarterly $ 0.075

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On March 20, 2023, the Company declared a cash dividend of $ 0.085 per share of its Common Stock, to be paid on April 11, 2023 to stockholders of record at the close of business on March 30, 2023.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements as of December 31, 2022 and 2021

and for the Years Ended December 31, 2022 and 2021 (Continued)

Rights Offering

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At the time of issuance, the exercise price of each Series A Preferred Warrant was at a 15.0 % premium to the per share estimated NAV of the Company’s Common Stock then most recently published and designated as the applicable NAV.

However, in accordance with the terms of the Series A Preferred Warrants, the exercise

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements as of December 31, 2021 and 2020

and for the Years Ended December 31, 2021 and 2020 (Continued)

price of each Series A Preferred Warrant issued prior to the Reverse Stock Split was automatically adjusted to reflect the effect of the Reverse Stock Split and, in the discretion of the Company’s Board of Directors, the exercise price and the number of shares issuable upon exercise of each Series A Preferred Warrant issued prior to the Special Dividend was adjusted to reflect the effect of the Special Dividend.

As of December 31, 2021, there were 4,541,852 Series A Preferred Warrants outstanding to purchase 1,178,125 shares of Common Stock in connection with the Company’s offering of Series A Preferred Units and allocated net proceeds of $ 610,000 to the warrants outstanding as of December 31, 2021 , after specifically identifiable offering costs and allocated general offering costs, to the Series A Preferred Warrants in permanent equity.

However, in accordance with the terms of the Series A Preferred Warrants, the exercise price of each Series A Preferred Warrant issued prior to the Reverse Stock Split was automatically adjusted to reflect the effect of the Reverse Stock Split and, in the discretion of the Company’s Board of Directors, the exercise price and the number of shares issuable upon exercise of each Series A Preferred Warrant issued prior to the Special Dividend was adjusted to reflect the effect of the Special Dividend.

Proceeds and expenses from the sale of the Series A Preferred Stock and Series A Preferred Warrants were allocated to the Series A Preferred Stock and Series A Preferred Warrants using their relative fair values on the date of issuance.

As of December 31, 2022, the Company had 3,316,118 Series A Preferred Warrants outstanding to purchase 858,208 shares of Common Stock and allocated net proceeds of $ 484,000 after specifically identifiable offering costs and allocated general offering costs, to the Series A Preferred Warrants in permanent equity.

Share Repurchase Program

In May 2022, the Company’s Board of Directors approved a repurchase program of up to $ 10.0 million of the Company’s Common Stock (the “SRP”).

Under the SRP, the Company, in its discretion, may purchase shares of its Common Stock from time to time in the open market or in privately negotiated transactions.

The amount and timing of purchases of shares will depend on a number of factors, including, without limitation, the price and availability of shares, trading volume, general market conditions and compliance with applicable securities law.

The SRP has no termination date and may be suspended or discontinued at any time.

As of December 31, 2022, share repurchases executed under the SRP were as follows:

Period Shares Repurchased Average price paid per share Cost of shares repurchased

(in thousands)

41,374 $ 7.32 $ 303

August 2022 33,374 $ 7.15 $ 239

September 2022 587,714 $ 7.10 $ 4,173

Total as of December 31, 2022 662,462 $ 4,715

FAIR VALUE OF FINANCIAL INSTRUMENTS

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Level 3 Inputs —Unobservable inputs

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements as of December 31, 2022 and 2021

and for the Years Ended December 31, 2022 and 2021 (Continued)

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy.

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The following describes the methods the Company uses to estimate the fair value of the Company’s financial assets and liabilities.

Debt —The carrying amounts of the Company’s secured borrowings—government guaranteed loans, SBA 7(a) loan-backed notes, 2018 revolving credit facility and borrowed funds from the Federal Reserve through the PPPLF approximate their fair values, as the interest rates on these securities are variable and approximate current market interest rates.

Debt —The carrying amounts of the Company’s secured borrowings—government guaranteed loans, SBA 7(a) loan-backed notes, 2022 Credit Facility and borrowed funds from the Federal Reserve through the PPPLF approximate their fair values, as the interest rates on these securities are variable and approximate current market interest rates.

The Company determines the fair value of mortgage notes payable and junior subordinated notes by performing discounted cash flow analyses using an appropriate market discount rate.

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The rate used to estimate the fair value of the Company’s junior subordinated notes was 9.02 % and 4.46 % as of December 31, 2022 and 2021, respectively.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements as of December 31, 2021 and 2020

and for the Years Ended December 31, 2021 and 2020 (Continued)

Loans Receivable —The Company determines the fair value of loans receivable by performing a present value analysis for the anticipated future cash flows using an appropriate market discount rate taking into consideration the credit risk and using an anticipated prepayment rate.

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5.00 % - 17.50 %

SBA 7(a) loans receivable, subject to loan-backed notes 5.75 % - 7.75 %

5.00 % - 17.50 %

5.50 % - 8.00 %

SBA 7(a) loans receivable, subject to loan-backed notes N/A N/A 5.75 % - 7.75 %

5.00 % - 17.50 %

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5.00 % - 17.50 %

SBA 7(a) loans receivable, paycheck protection program 1.00 %

SBA 7(a) loans receivable, paycheck protection program N/A N/A 1.00 %

Other Financial Instruments —The carrying amounts of the Company’s cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and accrued expenses approximate their fair values due to their short-term maturities at December 31, 2022 and 2021.

Due to the short-term maturities of these instruments, Level 1 inputs are utilized to estimate the fair value of these financial instruments.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements as of December 31, 2022 and 2021

and for the Years Ended December 31, 2022 and 2021 (Continued)

The estimated fair values of those financial instruments which are not recorded at fair value on a recurring basis on the Company’s consolidated balance sheets are as follows:

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Asset Management and Other Fees to Related Parties

Asset Management Fees —CIM Urban and CIM Capital, LLC, an affiliate of CIM REIT and CIM Group (“CIM Capital”), have an investment management agreement, pursuant to which CIM Urban engaged CIM Capital to provide certain services to CIM Urban (the “Investment Management Agreement”).

Asset Management Fees;

Administrative Fees and Expenses —CIM Urban and CIM Capital, LLC, an affiliate of CIM REIT and CIM Group (“CIM Capital”), have an investment management agreement, pursuant to which CIM Urban engaged CIM Capital to provide certain services to CIM Urban (the “Investment Management Agreement”).

CIM Capital has assigned its duties under the Investment Management Agreement to its four wholly-owned subsidiaries:

CIM Capital Securities Management, LLC, a securities manager, CIM Capital RE Debt Management, LLC, a debt manager, CIM Capital Controlled Company Management, LLC, a

CIM Capital Securities Management, LLC, a securities manager, CIM Capital RE Debt Management, LLC, a debt manager, CIM Capital Controlled Company Management, LLC, a controlled company manager, and CIM Capital Real Property Management, LLC, a real property manager.

The “Operator” refers to CIM Capital and its four wholly-owned subsidiaries.

The Company and its subsidiaries have a master services agreement (the “Master Services Agreement”) with CIM Service Provider, LLC (the “Administrator”), an affiliate of CIM Group, pursuant to which the Administrator provides, or arranges for other service providers to provide, management and administration services to the Company and its subsidiaries.

Pursuant to the Master Services Agreement, the Company appointed an affiliate of CIM Group as the administrator of Urban Partners GP, LLC.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

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and for the Years Ended December 31, 2022 and 2021 (Continued)

controlled company manager, and CIM Capital Real Property Management, LLC, a real property manager.

The “Operator” refers to CIM Capital and its four wholly-owned subsidiaries.

CIM Urban pays asset management fees to the Operator on a quarterly basis in arrears.

The fee is calculated as a percentage of the daily average adjusted fair value of CIM Urban’s assets:

On January 5, 2022, the Company and certain of its subsidiaries entered into a Fee Waiver (the “Fee Waiver”) with the Operator and the Administrator with respect to fees that are payable to them.

The Fee Waiver is effective retroactively to January 1, 2022 (the “Effective Date”).

Pursuant to the Fee Waiver, the Administrator agreed to voluntarily waive any fees in excess of those set forth in the Fee Waiver, to the extent it would otherwise have been entitled to such additional compensation under the Master Service Agreement, and the Operator agreed to voluntarily waive any fees in excess of those set forth in the Fee Waiver, to the extent it would otherwise have been entitled to such additional compensation under the Investment Management Agreement.

Following the end of each quarter, the Administrator will deliver to the Company (i) a calculation of the cumulative fees earned by the Operator and the Administrator under the methodology prescribed by the Fee Waiver from the Effective Date through the end of such quarter and (ii) a calculation of the cumulative fees that would have been earned by the Operator and the Administrator during such period under the Master Services Agreement and the Investment Management Agreement without giving effect to the Fee Waiver.

If, in respect of any quarter, the aggregate fees that are payable under the methodology prescribed by the Fee Waiver exceed the aggregate fees that would have been payable under the Master Services Agreement and the Investment Management Agreement, without giving effect to the Fee Waiver, such quarter will be deemed an “Excess Quarter”.

For any quarter following an Excess Quarter, the Company (upon the direction of the independent members of the Board) may, at its option and upon written notice to Administrator, elect to calculate all fees due to the Administrator and the Operator in accordance with the Master Services Agreement and the Investment Management Agreement, without giving effect to the Fee Waiver, from and after such Excess Quarter.

Any such election by the Company will be irrevocable, and all fees due to the Administrator and the Operator from and after such election will be calculated in accordance with the Master Services Agreement and the Investment Management Agreement, without giving effect to the Fee Waiver.

The fees payable to the Operator and the Administrator are determined as follows under the Fee Waiver.

A base asset management fee (the “Base Fee”) is payable quarterly in arrears to the Operator in an amount equal to an annual rate of 1 % (or 0.25 % per quarter) of the average of the “Net Asset Value Attributable to Common Stockholders” as of the first and last day of the applicable quarter.

Net Asset Value Attributable to Common stockholders is defined as (a) the sum of the Company’s (1) investments in real estate at fair value, (2) cash, (3) loans receivable at fair value and (4) the book value of the other assets of the Company, excluding deferred costs and net of other liabilities at book value, less (b) the Company’s (i) debt at face value, (ii) outstanding preferred stock at stated value, and (iii) non-controlling interests at book value;

provided, that, non-controlling interests in any UPREIT operating partnership relating to the Company shall not be excluded.

Subject to applicable laws and regulations under Nasdaq and the TASE and the agreement of the Operator, the Company will pay the Base Fee owed with respect to the first quarter of 2022 in shares of its Series A Preferred Stock and it is likely that the Company will pay some or part of the remainder of the Base Fees incurred during the year ended December 31, 2022 in shares of Series A Preferred Stock.

Incentive Fee:

An incentive fee (the “Revised Incentive Fee”) is payable quarterly in arrears to the Administrator with respect to the quarterly core funds from operations in excess of a quarterly threshold equal to 1.75 % (i.e., 7.00 % on an annualized basis) of the Company’s “Adjusted Common Equity” (as defined below) for such quarter (“Excess Core FFO”) as follows:

(i) no Revised Incentive Fee in any quarter in which the Excess Core FFO is $ 0 ;

(ii) 100 % of any Excess Core FFO up to an amount equal to the product of (x) the average of the Adjusted Common Equity as of the first and last day of the applicable quarter and (y) 0.4375 %;

and (iii) 20 % of any Excess Core FFO thereafter.

Revised Incentive Fees payable for any partial quarter will be appropriately prorated.

“Adjusted Common Equity” means Common Equity plus Excluded Depreciation and Amortization.

“Common Equity” means Total Stockholders’ Equity minus Excluded Equity.

“Total Stockholders’ Equity” means the amount reflected as total stockholders’ equity in accordance with GAAP on the consolidated balance sheet of the Company and its subsidiaries as of the last day of a given quarter.

“Excluded Equity” means the sum of all preferred securities of the Company and its subsidiaries classified as permanent equity in accordance with GAAP on the consolidated balance sheet of the Company and its subsidiaries as of the last day of a given quarter.

“Excluded Depreciation and Amortization” means, for a given quarter, the amount of all accumulated depreciation and amortization of (i) the Company and its subsidiaries and (ii) to the extent allocable to the Company and its subsidiaries, the unconsolidated affiliates, in each case as of the last day of such quarter that corresponds to the periodic depreciation and amortization expense calculated in each case in accordance with GAAP that is a permitted add back to net income calculated in accordance with GAAP when calculating funds from operations.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements as of December 31, 2022 and 2021

and for the Years Ended December 31, 2022 and 2021 (Continued)

Capital Gains Fee:

A capital gains fee (the “Capital Gains Fee”) is payable quarterly in arrears to the Administrator in an amount equal to (i) 15 % of the cumulative aggregate realized capital gains minus the cumulative aggregate realized capital losses (in each case since the Effective Date), minus (ii) the aggregate capital gains fees paid since the Effective Date.

Realized capital gains and realized capital losses are calculated by subtracting from the sales price of a property:

(a) any costs incurred to sell such property, and (b) the current gross value of the property (meaning the property’s original acquisition price plus any subsequent, non-reimbursed capital improvements thereon paid for by the Company).

In lieu of cash payment of the Base Fee, the Company has issued to the Operator shares of its Series A1 Preferred Stock as payment for the quarterly Base Fee for the nine months ended September 30, 2022.

Pursuant to the Investment Management Agreement, the asset management fee prior to January 1, 2022 fee was calculated (without giving effect to the Fee Waiver) as a percentage of the daily average adjusted fair value of CIM Urban’s assets as follows:

Daily Average Adjusted Fair

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Asset management fees are included in asset management and other fees to related parties in the accompanying consolidated statements of operations.

In lieu of cash payment of the asset management fee, the Company has issued to the Operator shares of its Common Stock and shares of its Series A Preferred Stock.

The Company has issued shares of its Series A Preferred Stock to the Operator as payment for the quarterly asset management fee for the year ended December 31, 2021 .

Subject to applicable laws and regulations under Nasdaq and the TASE and the agreement of the Operator, it is likely that the Company will seek to pay some or part of the asset management fees for part of 2022 in shares of Series A Preferred Stock.

Under the Master Services Agreement, for fiscal quarters prior to April 1, 2020, the Company paid a base service fee (the “Base Service Fee”) to the Administrator initially set at $ 1.0 million per year (subject to an annual escalation by a specified inflation factor beginning on January 1, 2015), payable quarterly in arrears.

On May 11, 2020, the Master Services Agreement was amended to replace the Base Service Fee with an incentive fee pursuant to which the Administrator was entitled to receive, on a quarterly basis, 15.00 % of the Company’s quarterly core funds from operations in excess of a quarterly threshold equal to 1.75 % (i.e., 7.00 % on an annualized basis) of the Company’s average Adjusted Common Equity (defined above) for such quarter.

The amendment was effective as of April 1, 2020 and was further modified by the Fee Waiver described above.

No such incentive fee was paid by the Company.

In addition, pursuant to the terms of the Master Services Agreement, the Administrator may receive compensation and or reimbursement for performing certain services for the Company and its subsidiaries that are not covered by the Base Fee.

During the years ended December 31, 2022 and 2021, such services performed by the Administrator and its affiliates included accounting, tax, reporting, internal audit, legal, compliance, risk management, IT, human resources, corporate communications, operational and on-going support in connection with the Company’s offering of Preferred Stock.

The Administrator’s compensation is based on the salaries and benefits of the employees of the Administrator and or its affiliates who performed these services (allocated based on the percentage of time spent on the affairs of the Company and its subsidiaries).

The expense for such services is included in expense reimbursements to related parties—corporate in the accompanying consolidated statements of operations.

Property Management Fees and Reimbursements — CIM Management, Inc.

and certain of its affiliates (collectively, the “CIM Management Entities”), all affiliates of CIM REIT and CIM Group, provide property management, leasing, and development services to CIM Urban.

Property management fees earned by the CIM Management entities and onsite management costs incurred on behalf of CIM Urban are included in rental and other property operating expenses in the accompanying consolidated statements of operations.

Leasing commissions earned are capitalized to deferred charges on the accompanying consolidated balance sheets.

Construction management fees are capitalized to investments in real estate on the accompanying consolidated balance sheets.

Administrative Fees and Expenses — The Company and its subsidiaries have a master services agreement (the “Master Services Agreement”) with CIM Service Provider, LLC (the “Administrator”), an affiliate of CIM Group, pursuant to which the Administrator provides, or arranges for other service providers to provide, management and administration services to the Company and its subsidiaries.

Pursuant to the Master Services Agreement, the Company appointed an affiliate of CIM Group as the administrator of Urban Partners GP, LLC.

Under the Master Services Agreement, for fiscal quarters prior to April 1,2020, the Company paid a base service fee (the “Base Service Fee”) to the Administrator initially set at $ 1.0 million per year (subject to an annual escalation by a specified inflation factor beginning on January 1, 2015), payable quarterly in arrears.

On May 11, 2020, the Master Services Agreement was amended to replace the Base Service Fee with an incentive fee (the “Prior Incentive Fee”) pursuant to which the Administrator was entitled to receive, on a quarterly basis, 15.00 % of the Company’s quarterly core funds from operations in excess of a quarterly threshold equal to 1.75 % (i.e., 7.00 % on an annualized basis) of the Company’s average adjusted common stockholders’ equity (i.e., common stockholders’ equity plus accumulated depreciation and amortization) for such quarter.

The amendment was effective as of April 1, 2020.

Please see “—Fee Waiver” below for how the fees paid to the Administrator has been calculated since the beginning of 2022.

The Base Service Fee is included in asset management and other fees to related parties in the accompanying consolidated statements of operations.

During the years ended December 31, 2021 and 2020, such services performed by the Administrator and its affiliates included accounting, tax, reporting, internal audit, legal, compliance, risk management, IT, human resources, corporate communications, operational and on-going support in connection with the Company’s offering of Preferred Stock.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

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and for the Years Ended December 31, 2022 and 2021 (Continued)

spent on the affairs of the Company and its subsidiaries).

The expense for such services is included in expense reimbursements to related parties—corporate in the accompanying consolidated statements of operations.

Lending Segment Expenses — The Company has a Staffing and Reimbursement Agreement with CIM SBA Staffing, LLC (“CIM SBA”), an affiliate of CIM Group, and the Company’s subsidiary, PMC Commercial Lending, LLC.

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The expense for such services is included in expense reimbursements to related parties—lending segment in the accompanying consolidated statements of operations.

Offering-Related Fees — CCO Capital, LLC (“CCO Capital”) became the exclusive dealer manager for the Company’s public offering of the Series A Preferred Units effective as of May 31, 2019.

Offering-Related Fees — CCO Capital, LLC (“CCO Capital”) became the exclusive dealer manager for the Company’s public offering of the Series A Preferred Stock and and Series A Preferred Warrants effective as of May 31, 2019.

CCO Capital is a registered broker dealer and is under common control with the Operator and the Administrator.

The Company’s offering of the Series A Preferred Units ended at the end of January 2020.

On January 28, 2020, the Company entered into the Second Amended and Restated Dealer Manager Agreement, pursuant to which CCO Capital acts as the exclusive dealer manager for the Company’s public offering of its Series A Preferred Stock and Series D Preferred Stock.

The Company’s offering of the Series A Preferred Warrants ended at the end of January 2020.

On January 28, 2020, the Company entered into the Second Amended and Restated Dealer Manager Agreement, pursuant to which CCO Capital acted as the exclusive dealer manager for the Company’s public offering of its Series A Preferred Stock and Series D Preferred Stock.

The Second Amended and Restated Dealer Manager Agreement was subsequently amended by the Company and CCO Capital to address changes to, among other things, selling commissions and dealer manager fees.

On June 16, 2022, the Company entered into the Third Amended and Restated Dealer Manager Agreement, pursuant to which CCO Capital has been acting as the exclusive dealer manager for the Company’s public offering of its Series A1 Preferred Stock.

Thereunder, the Company agreed to compensate CCO Capital, as the dealer manager for the offering, as follows:

(1) an upfront dealer manager fee of up to 1.25 % of the selling price of each share of Preferred Stock sold, (2) selling commissions of up to 5.50 % of the selling price of each share of Series A Preferred Stock sold (with no selling commissions payable in respect of shares of Series D Preferred Stock sold) and (3) a trailing dealer manager fee that accrues daily in an amount equal to 1/365 th of 0.25 % per annum of the selling price of each share of Preferred Stock sold.

CCO Capital, in its sole discretion, may reallow to another broker-dealer authorized by it to sell shares in the offering a portion of the upfront dealer manager fee earned by it in respect of shares sold by such broker-dealer.

On April 9, 2020, the Company entered into Amendment No.

1 to the Second Amended and Restated Dealer Manager Agreement, pursuant to which the selling commissions were increased from up to 5.50 % to up to 7.00 % of the selling price of each share of Series A Preferred Stock sold thereafter.

The Company has been informed that CCO Capital generally reallows 100 % of the selling commissions on sales of Series A Preferred Stock and generally reallows substantially all of the upfront dealer manager fee on sales of Series A Preferred Stock and Series D Preferred Stock, to participating broker-dealers.

On September 22, 2021, the Company entered into Amendment No.

2 to the Second Amended and Restated Dealer Manager Agreement, pursuant to which the upfront dealer manager fee payable to the Dealer Manager was changed to up to 3.00 % and the trailing dealer manager fee with respect to the sale of shares of Series A Preferred Stock sold in the Offering on or after September 9, 2021 was eliminated.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements as of December 31, 2021 and 2020

and for the Years Ended December 31, 2021 and 2020 (Continued)

(1) a dealer manager fee of up to 3.00 % of the selling price of each share of Series A1 Preferred Stock sold and (2) selling commissions of up to 7.00 % of the selling price of each share of Series A1 Preferred Stock sold.

The Company has been informed that CCO Capital generally reallows 100 % of the selling commissions on sales of Series A1 Preferred Stock and generally reallows substantially all of the dealer manager fee on sales of Series A1 Preferred Stock to participating broker-dealers.

In addition, pursuant to the Third Amended and Restated Dealer Manager Agreement, CCO Capital will no longer solicit or make any offers for the sale of shares of Series A Preferred Stock or Series D Preferred Stock.

The Company recorded fees and expense reimbursements as shown in the table below for services provided by related parties related to the services described above during the periods indicated:

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Property management fees (2)

$ 1,747 $ 1,641

Onsite management and other cost reimbursement (3)

$ 2,838 $ 2,687

Leasing commissions (4)

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Administrative Fees and Expenses:

Base service fee (2)

Expense reimbursements to related parties - corporate $ 1,925 $ 2,050

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(1) The Company issued to the Operator an aggregate of 270,209 shares of its Series A Preferred Stock , in lieu of cash payment of the asset management fees incurred during the year ended December 31, 2021.

The Company issued to the Operator 203,349 shares of its Common Stock and 287,199 s hares of Series A Preferred Stock in lieu of cash payment of the asset management fees incurred during the year ended December 31, 2020.

(2) For the year ended December 31, 2020, the Company issued to the Administrator 11,273 shares of our Series A Preferred Stock, in lieu of cash as payment of the Base Service Fee for the first quarter of 2020.

(3) Expense reimbursements to related parties - lending segment do not include personnel costs capitalized to deferred loan origination costs of $ 347,000 and $ 136,000 for the years ended December 31, 2021 and 2020, respectively.

(4) Represents fees earned by CCO Capital and allocated to Series A Preferred Stock and Series D Preferred Stock.

(5) As of December 31, 2021 and 2020, $ 2.0 million and $ 1.5 million, respectively, was included in deferred costs as reimbursable expenses incurred pursuant to the Master Services Agreement and the then applicable dealer manager agreement with CCO Capital.

These non-issuance specific costs are allocated against the gross proceeds from the sale of the Series A Preferred Stock and the Series D Preferred Stock on a pro rata basis for each issuance as a percentage of the total offering.

The Company issued to the Operator 110,285 shares of Series A1 Preferred Stock in lieu of cash payment for the asset management fees incurred during the nine months ended September 30, 2022.

(2) Does not include the company’s share of the property management fees from the Unconsolidated Joint Venture of $ 40,000 for the year ended December 31, 2022.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

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and for the Years Ended December 31, 2022 and 2021 (Continued)

(3) Does not include the Company’s share of the onsite management and other cost reimbursements from the Unconsolidated Joint Venture of $ 94,000 for the year ended December 31, 2022.

(4) Does not include the Company’s share of the leasing commissions from the Unconsolidated Joint Venture of $ 4,000 for the year ended December 31, 2022.

(5) Does not include the Company’s share of the construction management fees from the Unconsolidated Joint Venture of $ 21,000 for the year ended December 31, 2022, respectively.

(6) Expense reimbursements to related parties - lending segment do not include personnel costs capitalized to deferred loan origination costs of $ 136,000 and $ 347,000 for the years ended December 31, 2022 and 2021, respectively.

(7) Represents fees earned by CCO Capital and allocated to Series A1 Preferred Stock, Series A Preferred Stock and Series D Preferred Stock.

(8) As of December 31, 2022 and 2021, $ 2.3 million and $ 2.0 million, respectively, was included in deferred costs as reimbursable expenses incurred pursuant to the Master Services Agreement and the then applicable dealer manager agreement with CCO Capital.

These non-issuance specific costs are allocated against the gross proceeds from the sale of the Series A1 Preferred Stock, Series A Preferred Stock and Series D Preferred Stock on a pro rata basis for each issuance as a percentage of the total offering.

As of December 31, 2022 and 2021, due to related parties consisted of the following:

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Total due to related parties $ 3,155 $ 4,541

On January 5, 2022, the Company and certain of its subsidiaries entered into a Fee Waiver (the “Fee Waiver”) with the Operator and the Administrator with respect to fees that are payable to them.

The Fee Waiver is effective retroactively to January 1, 2022 (the “Effective Date”).

Pursuant to the Fee Waiver, the Administrator agrees to voluntarily waive any fees in excess of those set forth in the Fee Waiver, to the extent it would otherwise have been entitled to such additional compensation under the Master Service Agreement, and the Operator agrees to voluntarily waive any fees in excess of those set forth in the Fee Waiver, to the extent it would otherwise have been entitled to such additional compensation under the Investment Management Agreement (the “Existing Methodology).

provided, that, non-controlling interests in any UPREIT operating partnership relating to the Company shall not be excluded.

Incentive Fee:

(i) no Incentive Fee in any quarter in which the Excess Core FFO is $ 0 ;

(ii) 100 % of any Excess Core FFO up to an amount equal to the product of (x) the average of the Adjusted Common Equity as of the first and last day of the applicable quarter and (y) 0.4375 %;

and (iii) 20 % of any Excess Core FFO thereafter.

Revised Incentive Fees payable for any partial quarter will be appropriately prorated.

“Adjusted Common Equity” means Common Equity plus Excluded Depreciation and Amortization.

“Common Equity” means Total Stockholders’ Equity minus Excluded Equity.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements as of December 31, 2021 and 2020

and for the Years Ended December 31, 2021 and 2020 (Continued)

Capital Gains Fee:

Realized capital gains and realized capital losses are calculated by subtracting from the sales price of a property:

Following the end of each quarter, the Administrator will deliver to the Company (i) a calculation of the cumulative fees earned by the Operator and the Administrator under the methodology prescribed by the Fee Waiver (the “Fee Waiver Methodology”) from the Effective Date through the end of such quarter and (ii) a calculation of the cumulative fees that would have been earned, in the absence of the Fee Waiver, by the Operator and the Administrator during such period under the Master Services Agreement and the Investment Management Agreement, without giving effect to the Fee Waiver (the “Pre-Fee Waiver Methodology”).

If, in respect of any quarter, the aggregate fees that are payable under the Fee Waiver Methodology exceed the aggregate fees that would have been payable under the Pre-Fee Waiver Methodology for the equivalent period, such quarter is deemed an “Excess Quarter”.

For any quarter following an Excess Quarter, the Company (upon the direction of the independent members of the Board) may, at its option and upon written notice to Administrator, elect to calculate all fees due to the Administrator and the Operator in accordance with the Pre-Fee Waiver Methodology from and after such Excess Quarter.

Any election by the Company to adopt the Pre-Fee Waiver Methodology is irrevocable, and all fees due to the Administrator and the Operator from and after such election will be calculated in accordance with the Pre-Fee Waiver Methodology .

During the year ended December 31, 2020, the Company’s President, Jan F.

Salit, retired effective as of September 16, 2020.

Salit received a $ 450,000 payment, representing one year of his base salary, upon the satisfaction of certain conditions specified therein, including the execution of an agreement with the Company that contains, among other things, mutual release and non-disparagement provisions.

Related to this payment, $ 287,000 was borne by the Company based on the time that Mr.

Salit devoted to the Company relative to other matters relating to CIM Group.

On October 1, 2015, an affiliate of CIM Group entered into a five-year lease renewal with respect to a property owned by the Company, which was terminated in October 2020.

For the years ended December 31, 2021 and 2020, the Company recorded rental and other property income related to this tenant of $ 0 and $ 87,000 , respectively.

Affiliate Investments

In February 2022, the Company invested with the CIM JV Partner, a CIM-managed separate account, in the Unconsolidated Joint Venture, which purchased an office property in Los Angeles, California for a gross purchase price of approximately $ 51.0 million, of which the Company initially contributed approximately $ 22.4 million and the CIM JV Partner initially contributed the remaining balance.

See Note 2 and Note 4 for more information.

On May 15, 2019, CIM Group entered into an approximately 11-year lease for approximately 32,000 rentable square feet with respect to a property owned by the Company.

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Loan Commitments —Commitments to extend credit are agreements to lend to a customer when the terms established in the contract are met.

The Company’s outstanding commitments to fund loans were $ 32.6 million as of December 31, 2021, the majority of which are for prime-based loans to be originated by the Company’s subsidiary engaged in SBA 7(a) Small Business Loan Program lending, the government guaranteed portion of which is intended to be sold.

Commitments generally have fixed expiration dates.

The Company’s outstanding commitments to fund loans were $ 19.9 million as of December 31, 2022, all of which are for prime-based loans to be originated by the Company’s subsidiary engaged in SBA 7(a) Small Business Loan Program lending, the government guaranteed portion of which is intended to be sold.

Commitments generally have fixed

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements as of December 31, 2022 and 2021

and for the Years Ended December 31, 2022 and 2021 (Continued)

expiration dates.

Since some commitments are expected to expire without being drawn upon, total commitment amounts do not necessarily represent future cash requirements.

3 unchanged sentences

Employment Agreements —The Company has an employment agreement with one of its officers.

Under certain circumstances, this employment agreement provides for (1) severance payment equal to the annual base salary paid to the

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements as of December 31, 2021 and 2020

and for the Years Ended December 31, 2021 and 2020 (Continued)

officer and (2) death and disability payments in an amount equal to two times and one time, respectively, the annual base salary paid to the officer.

Under certain circumstances, this employment agreement provides for (1) severance payment equal to the annual base salary paid to the officer and (2) death and disability payments in an amount equal to two times and one time, respectively, the annual base salary paid to the officer.

Litigation —The Company is not currently involved in any material pending or threatened legal proceedings nor, to the Company’s knowledge, are any material legal proceedings currently threatened against the Company, other than routine litigation arising in the ordinary course of business.

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While the outcome of these legal actions and proceedings cannot be predicted with certainty, in management’s opinion, the resolution of these legal proceedings and actions will not have a material adverse effect on the Company’s business, financial condition, results of operations, cash flow or the Company’s ability to satisfy its debt service obligations or to maintain its level of distributions on Common Stock or Preferred Stock.

In September 2018, the Company filed a lawsuit against the City and County of San Francisco seeking a refund of the $ 11.8 million in penalties, interest and legal fees paid by the Company for real property transfer tax allegedly due for a transaction in a prior year.

The Company disputed that such penalties, interest and legal fees were payable but, in order to contest the asserted tax obligations, the Company had to pay such amounts to the City and County of San Francisco in August 2017.

The Company has been vigorously pursuing this litigation and intends to continue to do so.

A subsidiary of the Company is a defendant in a lawsuit in connection with injuries sustained by a third-party contractor at a property previously owned by such subsidiary.

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and for the Years Ended December 31, 2022 and 2021 (Continued)

Future minimum rental revenue under long-term operating leases as of December 31, 2021, excluding tenant reimbursements of certain costs, are as follows (in thousands):

Future minimum rental revenue under long-term operating leases as of December 31, 2022, excluding tenant reimbursements of certain costs, are as follows (excludes unconsolidated properties, in thousands):

Years Ending December 31, Total

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(in thousands)

(Loss) income from continuing operations before income taxes for TRSs $ 9,242 $ ( 7,995 )

Expected federal income tax (benefit) provision $ 1,941 $ ( 1,679 )

Income from continuing operations before income taxes for TRSs $ 6,128 $ 9,242

Expected federal income tax provision $ 1,287 $ 1,941

State income taxes 43 ( 40 )

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Other ( 499 ) 1,364

Income tax (benefit) provision $ 2,992 $ ( 722 )

Income tax provision $ 1,131 $ 2,992

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

14 unchanged sentences

The net operating loss carryforwards as of December 31, 2022 and 2021 were generated by TRSs and are available to offset future taxable income of these TRSs.

The decrease in the valuation allowance recorded in 2021 was $ 273,000 .

The increase in the valuation allowance recorded in 2022 was $ 300,000 .

The periods subject to examination for the Company’s federal and state income tax returns are 2019 through 2022.

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Total property expenses 26,762 23,778

Income from unconsolidated entity 164 —

Segment net operating income—office 29,330 29,511

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Total property expenses 24,099 15,969

Segment net operating income (loss)—hotel 1,880 ( 809 )

Segment net operating income—hotel 11,114 1,880

Revenues 10,765 19,787

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Depreciation and amortization ( 20,348 ) ( 20,112 )

Loss on early extinguishment of debt — ( 281 )

Impairment of real estate — —

Gain on sale of real estate — —

Income before provision for income taxes 7,076 2,141

(Provision) benefit for income taxes ( 2,992 ) 722

Net (loss) income ( 851 ) ( 15,015 )

Net loss (income) attributable to noncontrolling interests 1 ( 1 )

Net (loss) income attributable to the Company $ ( 850 ) $ ( 15,016 )

Provision for income taxes ( 1,131 ) ( 2,992 )

Net income (loss) 5,945 ( 851 )

Net (income) loss attributable to noncontrolling interests ( 27 ) 1

Net income (loss) attributable to the Company $ 5,918 $ ( 850 )

The condensed assets for each of the segments as of December 31, 2022 and 2021, along with capital expenditures and loan originations for the years ended December 31, 2022 and 2021 are as follows:

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Non-segment assets (1)

43,341 12,986

Total assets $ 690,248 $ 660,866

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements as of December 31, 2021 and 2020

and for the Years Ended December 31, 2021 and 2020 (Continued)

Year Ended December 31,

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Total capital expenditures and loan originations $ 50,127 $ 139,197

(1) Includes investments in real estate of $ 9.9 million representing three development sites which the Company intends to develop into multifamily assets.

(2) Represents additions and improvements to real estate investments, excluding acquisitions.

Includes the activity for dispositions through their respective disposition dates.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements as of December 31, 2022 and 2021

and for the Years Ended December 31, 2022 and 2021 (Continued)

SUBSEQUENT EVENTS

Property Acquisitions

In February 2022, the Company and a co-investor acquired from an unrelated third-party a 100 % fee-simple interest in an office property located in the Echo Park neighborhood of Los Angeles, California for a purchase price of $ 51.0 million, which excludes transaction costs of $ 51,000 that were incurred in connection with this acquisition.

The property has approximately 97,564 square feet of office space and 2,760 square feet of retail space.

The Company owns approximately 44 % of this property.

The Company plans to undertake a capital improvement program to renovate and modernize the building into creative office space as well as a limited number of multifamily units.

In February 2022, the Company acquired from an unrelated third-party a 100 % fee-simple interest in a 11,318 square feet land site with a 3,752 square feet building located in Los Angeles, California for a purchase price of $ 2.3 million, which excludes transaction costs of $ 8,000 that were incurred in connection with this acquisition.

The Company intends to pursue entitlements for residential use and develop into multifamily units.

On January 31, 2023, the Company acquired an 89.42 % interest in each of Channel House, an 8-story apartment building with 333 units in Jack London Square, Oakland, California, land parcel F-3 and land parcel Site D, in each case located in Oakland, California, from related party entities also managed by CIM Group (collectively the “JLS Sellers”) for $ 120.4 million, $ 200,000 and $ 2.2 million, respectively (including, in the case of Channel House, an assumption of a mortgage of $ 103.0 million).

The purchase price is based on bids received by the JLS Sellers in connection with a marketed sales process and is subject to customary post-closing adjustments and does not include transaction costs relating to the acquisition.

CMCT’s knowledge of the asset, the market in which it is located and the ability of CMCT to close the transaction rapidly and with certainty were key factors in securing this opportunity.

In March, 2023, the Company made a principal payment of $ 16.0 million on the Channel House mortgage.

On February 17, 2023, an indirect wholly owned subsidiary of the Company announced the closing of a co-investment transaction pursuant to which three international co-investors acquired an 80 % interest in a property owned by such subsidiary located at 4750 Wilshire Blvd in Los Angeles (“4750 Wilshire”) for an aggregate of approximately $ 34.4 million, excluding transaction costs.

The Company intends to convert two out of the three floors of 4750 Wilshire into for-lease multifamily units.

The total cost of the conversion is expected to be approximately $ 31.0 million, which will be financed by a combination of equity contributions from the Company and co-investors as well as a $ 38.5 million mortgage from a bank Pursuant to the co-investment agreement, each co-investor will pay an on-going management fee to the Company.

In addition, the Company may earn incentive fees from co-investors based on the performance of 4750 Wilshire after conversion.

The Company will account for its retained ownership interest in the 4750 Wilshire Project as an equity method investment.

On February 28, 2023, the Company and a co-investor acquired from an unrelated third-party a 100 % fee-simple interest in a 75 -unit four-story multifamily property located in the Echo Park neighborhood of Los Angeles, California for a purchase price of $ 19.1 million, excluding transaction costs.

The Company owns 50 % of this property.

A mortgage of $ 9.6 million on the property was obtained in connection with the acquisition.

The Company will account for its ownership interest as an equity method investment.

On March 9, 2023, our lending division completed a securitization of the unguaranteed portion of certain of our SBA 7(a) loans receivable with the issuance of $ 54.1 million of unguaranteed SBA 7(a) loan-backed notes (with net proceeds of approximately $ 43.3 million, after payment of fees and expenses in connection with the securitization and the funding of a reserve account and an escrow account).

The SBA 7(a) loan-backed notes are collateralized by the right to receive payments and other recoveries attributable to the unguaranteed portions of certain of our SBA 7(a) loans receivable.

The SBA 7(a) loan-backed notes mature on March 20, 2048, with monthly payments due as payments on the collateralized loans are received.

The SBA 7(a) loan-backed notes bear interest at a per annum rate equal to the lesser of (i) 30-day average compounded SOFR plus 2.90 % and (ii) prime rate minus 0.35 %.

The annual interest rate for the first interest payment date shall be 7.40 %.

We reflect the SBA 7(a) loans receivable as assets on our consolidated balance sheet and the SBA 7(a) loan-backed notes as debt on our consolidated balance sheet.

On March 28, 2023, an indirect wholly-owned subsidiary of the Company acquired a 98.05 % interest in Eleven Fifty Clay, a 16-story apartment building with 288 units in downtown Oakland, California, from a related party also managed by CIM Group (the “Clay Seller”).

The purchase price is $ 142.7 million (including an assumption of a mortgage of $ 78.3 million), exclusive of transactions costs.

The purchase price is based on bids received by the Clay Seller in connection with a marketed sales process and will be subject to customary adjustments at closing.

CMCT’s knowledge of the asset, the market in which it is located and the ability of CMCT to close the transaction rapidly and with certainty were key factors in securing this opportunity.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements as of December 31, 2022 and 2021

and for the Years Ended December 31, 2022 and 2021 (Continued)

Dividend Declaration

On March 20, 2023, the Company declared a cash dividend of $ 0.085 per share of its Common Stock, to be paid on April 11, 2023 to stockholders of record at the close of business on March 30, 2023.

On March 8, 2022, the Company declared a quarterly cash dividend of $ 0.34375 per share of the Series A Preferred Stock for the second quarter of 2022.

The dividend will be payable as follows:

$ 0.114583 per share to be paid on May 16, 2022 to Series A Preferred Stockholders of record on May 5, 2022;

$ 0.114583 per share to be paid on June 15, 2022 to Series A Preferred Stockholders of record on June 5, 2022;

and $ 0.114583 per share to be paid on July 15, 2022 to Series A Preferred Stockholders of record on July 5, 2022.

For shares of Series A Preferred Stock issued during the second quarter of 2021, the dividend will be prorated from the date of issuance, and the monthly dividend payments will reflect such proration, as applicable.

On March 8, 2022, the Company declared a quarterly cash dividend of $ 0.353125 per share of the Series D Preferred Stock for the second quarter of 2022.

The dividend will be payable as follows:

$ 0.117708 per share to be paid on May 16, 2022 to Series D Preferred Stockholders of record on May 5, 2022;

$ 0.117708 per share to be paid on June 15, 2022 to Series D Preferred Stockholders of record on June 5, 2022;

and $ 0.117708 per share to be paid on July 15, 2022 to Series D Preferred Stockholders of record on July 5, 2022.

For shares of Series D Preferred Stock issued during the second quarter of 2021, the dividend will be prorated from the date of issuance, and the monthly dividend payments will reflect such proration, as applicable.

On January 5, 2022, the Company and certain of its subsidiaries entered into the Fee Waiver with the Operator and the Administrator with respect to fees that are payable to them.

The Fee Waiver is effective retroactively to January 1, 2022.

See Note 12 “Related-Party Transactions— Fee Waiver.”

Schedule III—Real Estate and Accumulated Depreciation

30 unchanged sentences

Austin, TX — (1) 4,976 733 — 4,976 733 5,709 221 1972 / 2001 2020

3101 S Western Avenue

Los Angeles, CA — (1) 2,279 — 620 2,279 620 2,899 — N/A 2022

3022 S Western Avenue

Los Angeles, CA — (1) 5,637 156 439 5,637 595 6,232 5 N/A 2022

1007 E 7th Street

Austin, TX — (1) 1,866 6 138 1,866 144 2,010 23 1920 2022

3109 S Western Avenue

Los Angeles, CA — (1) 709 2 23 709 25 734 — N/A 2022

Sheraton Grand Hotel (1)

15 unchanged sentences

Property acquisitions 10,756 2,933

Assets held for sale — —

Asset sales — —

Impairment — —

Retirements ( 3,593 ) ( 3,343 )

18 unchanged sentences

SBA 7(a) Loans - States 2% or greater (2) (3) :

Texas 21 $ 10 $ 980 4.75 % to 6.00 % 05/22/23 — 08/20/46 $ 7,861 $ —

Ohio 21 $ 60 $ 880 7.75 % to 9.00 % 01/30/38 — 10/12/47 $ 8,208 $ —

Texas 20 $ 5 $ 860 7.75 % to 9.00 % 05/22/23 — 01/26/47 6,553 —

Indiana 12 $ 90 $ 950 7.75 % to 9.00 % 05/14/36 — 08/26/46 4,617 —

1 unchanged sentence

Florida 11 $ 20 $ 1,040 8.00 % to 9.00 % 06/29/32 — 05/19/47 3,942 —

Illinois 11 $ 50 $ 530 5.00 % to 6.00 % 09/08/39 — 10/15/46 2,278 —

West Virginia 7 $ 50 $ 860 7.75 % to 9.00 % 09/25/31 — 09/07/47 2,421 —

Pennsylvania 4 $ 310 $ 690 5.00 % to 6.00 % 03/05/40 — 11/29/43 2,077 —

Louisiana 7 $ 60 $ 580 8.00 % to 9.00 % 11/22/31 — 05/26/47 2,158 —

Pennsylvania 4 $ 300 $ 670 8.00 % to 9.00 % 03/05/40 — 11/29/43 2,016 —

Kentucky 9 $ 5 $ 440 8.00 % to 9.00 % 11/11/32 — 03/23/47 1,963 —

Illinois 11 $ 50 $ 290 8.00 % to 9.00 % 09/08/39 — 10/26/47 1,876 —

North Carolina 7 $ 60 $ 770 8.00 % to 9.00 % 09/08/32 — 04/25/47 1,793 —

New Mexico 5 $ 90 $ 760 7.75 % to 9.00 % 11/17/34 — 08/09/46 1,689 —

Virginia 5 $ 110 $ 640 8.00 % to 8.75 % 12/27/44 — 12/15/47 1,497 —

Colorado 4 $ 320 $ 520 4.75 % to 5.50 % 11/16/39 — 09/15/45 1,515 —

Kentucky 6 $ 130 $ 420 5.00 % to 6.00 % 01/04/41 — 10/29/46 1,498 —

Alabama 7 $ 20 $ 470 8.00 % to 8.75 % 07/27/25 — 09/10/46 1,427 —

North Carolina 7 $ 60 $ 350 5.25 % to 6.00 % 09/08/32 — 09/30/46 1,358 —

Georgia 6 $ 110 $ 320 8.25 % to 9.00 % 12/28/34 — 08/11/47 1,347 —

South Carolina 4 $ 270 $ 380 8.00 % to 9.00 % 11/06/40 — 07/30/44 1,284 —

Tennessee 4 $ 140 $ 440 8.50 % to 8.75 % 06/01/43 — 08/31/46 1,226 —

Wisconsin 5 $ 100 $ 500 8.00 % to 9.00 % 03/05/32 — 06/09/46 1,167 —

Colorado 3 $ 310 $ 510 7.75 % to 8.50 % 02/17/41 — 09/15/45 1,154 —

31 $ 30 $ 520 6.00 % to 9.00 % 07/26/26 — 11/11/47 7,144 104

1 unchanged sentence

SBA 7(a) loans, subject to secured borrowings (6)

Paycheck Protection Program loans, net (7)

General reserves ( 858 ) —

Total reserves ( 1,106 ) —

193 $ 62,547 (7)

7 unchanged sentences

For Federal income tax purposes, these proceeds are treated as sales and reduce the carrying value of loans receivable.

(7) PPP loans are 100% guaranteed.

As there is no risk of loss to us related to these loans, the geographic information is not presented as it is not meaningful.

Face value of these loans is $ 5.1 million.

(7) For Federal income tax purposes, the aggregate cost basis of the Company’s loans was approximately $ 56.2 million (unaudited).

10 unchanged sentences

Collections of principal ( 20,250 ) ( 32,370 )

Foreclosures — ( 174 )

Cost of mortgages sold, net ( 34,124 ) ( 114,437 )

2 unchanged sentences

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

What changed 10-K

Item 9A. Controls and Procedures