What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-11-14 compared with 2023-08-10 · 339 added, 265 removed, 1024 unchanged (37% of the section changed)

3 unchanged sentences

(In thousands, except share and per share amounts) (Unaudited)

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Investments in real estate, net $ 708,178 $ 502,006

19 unchanged sentences

34,873,861 shares authorized;

no shares issued or outstanding as of June 30, 2023 and 693,741 and 693,741 shares issued and outstanding, respectively, as of December 31, 2022;

no shares issued or outstanding as of September 30, 2023 and 693,741 shares issued and outstanding as of December 31, 2022;

liquidation preference of $ 25.00 per share, subject to adjustment

1 unchanged sentence

34,873,861 shares authorized;

8,820,338 and 7,881,958 shares issued and outstanding, respectively, as of June 30, 2023 and 8,126,597 and 7,565,349 shares issued and outstanding, respectively, as of December 31, 2022;

8,820,338 and 7,694,199 shares issued and outstanding, respectively, as of September 30, 2023 and 8,126,597 and 7,565,349 shares issued and outstanding, respectively, as of December 31, 2022;

liquidation preference of $ 25.00 per share, subject to adjustment

2 unchanged sentences

27,935,059 shares authorized;

8,194,099 and 8,160,099 shares issued and outstanding, respectively, as of June 30, 2023 and 5,966,077 and 5,956,147 shares issued and outstanding, respectively, as of December 31, 2022;

9,288,485 and 9,223,544 shares issued and outstanding, respectively, as of September 30, 2023 and 5,966,077 and 5,956,147 shares issued and outstanding, respectively, as of December 31, 2022;

liquidation preference of $ 25.00 per share, subject to adjustment

2 unchanged sentences

26,991,590 shares authorized;

56,857 and 48,447 shares issued and outstanding, respectively, as of June 30, 2023 and 56,857 and 48,857 shares issued and outstanding, respectively, as of December 31, 2022;

56,857 and 48,447 shares issued and outstanding, respectively, as of September 30, 2023 and 56,857 and 48,857 shares issued and outstanding, respectively, as of December 31, 2022;

liquidation preference of $ 25.00 per share, subject to adjustment

1 unchanged sentence

900,000,000 shares authorized;

22,737,853 shares issued and outstanding as of June 30, 2023 and 22,737,853 shares issued and outstanding as of December 31, 2022.

22,786,741 shares issued and outstanding as of September 30, 2023 and 22,737,853 shares issued and outstanding as of December 31, 2022.

Additional paid-in capital 854,377 861,721

8 unchanged sentences

(In thousands, except per share amounts) (Unaudited)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

12 unchanged sentences

Total Expenses 45,400 24,694 133,562 70,398

(Loss) income from unconsolidated entities ( 904 ) 260 ( 136 ) 380

Income (loss) from unconsolidated entities 1,189 ( 204 ) 1,053 176

Gain on sale of real estate (Note 3) — — 1,104 —

18 unchanged sentences

(In thousands, except share and per share amounts) (Unaudited)

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Common Stock Preferred Stock

7 unchanged sentences

— — — — — ( 619 ) ( 619 ) — ( 619 )

Adjustment to noncontrolling interests — — — — — — — 5,002 5,002

Acquisition of noncontrolling interests — — — — — — — 5,002 5,002

Stock based compensation expense — — — — 55 — 55 — 55

13 unchanged sentences

Balances, March 31, 2023 22,737,853 $ 23 14,789,488 $ 367,988 $ 859,029 $ ( 853,108 ) $ 373,932 $ 4,750 $ 378,682

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

Distributions to noncontrolling interests — — — — — — — — —

Stock based compensation expense — — — — 37 — 37 — 37

14 unchanged sentences

Balances, June 30, 2023 22,737,853 $ 23 16,090,504 $ 400,170 $ 856,235 $ ( 878,854 ) $ 377,574 $ 3,748 $ 381,322

Six Months Ended June 30, 2022

Distributions to noncontrolling interests — — — — — — — ( 38 ) ( 38 )

Stock based compensation expense 48,888 — — — 36 — 36 — 36

Common dividends ($ 0.085 per share)

— — — — — ( 1,937 ) ( 1,937 ) — ( 1,937 )

Issuance of Series A1 Preferred Stock — — 1,094,386 27,015 ( 2,314 ) — 24,701 — 24,701

Redemption of Series A1 Preferred Stock — — ( 30,941 ) ( 760 ) 64 ( 41 ) ( 737 ) — ( 737 )

Dividends to holders of Series A1 Preferred Stock ($ 0.47375 per share)

— — — — — ( 4,116 ) ( 4,116 ) — ( 4,116 )

Dividends to holders of Series D Preferred Stock ($ 0.35313 per share)

— — — — — ( 17 ) ( 17 ) — ( 17 )

Redemption of Series A Preferred Stock — — ( 187,759 ) ( 4,676 ) 356 ( 311 ) ( 4,631 ) — ( 4,631 )

Dividends to holders of Series A Preferred Stock ($ 0.34375 per share)

— — — — — ( 2,676 ) ( 2,676 ) — ( 2,676 )

Net loss — — — — — ( 15,773 ) ( 15,773 ) ( 874 ) ( 16,647 )

Balances, September 30, 2023 22,786,741 $ 23 16,966,190 $ 421,749 $ 854,377 $ ( 903,725 ) $ 372,424 $ 2,836 $ 375,260

Nine Months Ended September 30, 2022

Common Stock Preferred Stock

35 unchanged sentences

Balances, June 30, 2022 23,358,941 $ 24 12,530,231 $ 331,176 $ 864,602 $ ( 809,157 ) $ 386,645 $ 361 $ 387,006

Stock based compensation expense — — — — 55 — 55 — 55

Repurchase of common stock ( 621,088 ) ( 1 ) — — ( 4,411 ) — ( 4,412 ) — ( 4,412 )

Common dividends ($ 0.085 per share)

— — — — — ( 1,933 ) ( 1,933 ) — ( 1,933 )

Issuance of Series A1 Preferred Stock — — 2,667,001 64,720 ( 3,940 ) — 60,780 — 60,780

Dividends to holders of Series A1 Preferred Stock ($ 0.37500 )

— — — — — ( 1,708 ) ( 1,708 ) — ( 1,708 )

Dividends to holders of Series A Preferred Stock ($ 0.34375 per share)

— — — — — ( 2,880 ) ( 2,880 ) — ( 2,880 )

Dividends to holders of Series D Preferred Stock ($ 0.35313 per share)

— — — — — ( 22 ) ( 22 ) — ( 22 )

Dividends to holders of Series L Preferred Stock ($ 1.12 per share)

— — — — — ( 2,723 ) ( 2,723 ) — ( 2,723 )

Repurchase of Series L Preferred Stock — — ( 2,435,284 ) ( 69,089 ) 6,451 ( 4,779 ) ( 67,417 ) — ( 67,417 )

Reclassification of Series A Preferred stock to permanent equity — — 299,303 7,574 ( 536 ) — 7,038 — 7,038

Redeemable preferred stock accretion — — — — — — — — —

Redemption of Series A Preferred Stock — — ( 58,742 ) ( 1,463 ) 139 ( 84 ) ( 1,408 ) — ( 1,408 )

Net (loss) income — — — — — ( 237 ) ( 237 ) 5 ( 232 )

Balances, September 30, 2022 22,737,853 $ 23 13,002,509 $ 332,918 $ 862,360 $ ( 823,523 ) $ 371,778 $ 366 $ 372,144

The accompanying notes are an integral part of these consolidated financial statements.

2 unchanged sentences

(In thousands) (Unaudited)

Six Months Ended

Nine Months Ended

September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

Net (loss) income $ ( 42,584 ) $ 5,001

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

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

Depreciation and amortization, net 46,153 15,181

5 unchanged sentences

Write-offs of uncollectible receivables 160 215

Gain on interest rate caps ( 275 ) —

Loss on interest rate caps 349 —

Deferred income taxes 28 15

Stock-based compensation 128 147

Loss (income) from unconsolidated entities 136 ( 380 )

Income from unconsolidated entities ( 1,053 ) ( 176 )

Loans funded, held for sale to secondary market ( 13,468 ) ( 27,205 )

2 unchanged sentences

Commitment fees remitted and other operating activity ( 314 ) ( 961 )

Return on investment from unconsolidated entity — 176

Changes in operating assets and liabilities:

11 unchanged sentences

Investment in unconsolidated entity ( 7,218 ) ( 22,408 )

Distributions from unconsolidated entity — 10,259

Loans funded ( 8,550 ) ( 8,751 )

12 unchanged sentences

Payment of preferred stock dividends ( 22,303 ) ( 20,075 )

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

Redemption of Preferred Stock ( 99,031 ) ( 4,781 )

1 unchanged sentence

Noncontrolling interests’ contributions — 5

Net cash provided by financing activities 59,133 4,495

Net cash provided by (used in) financing activities 51,836 ( 11,508 )

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

1 unchanged sentence

(In thousands) (Unaudited)

Six Months Ended

Nine Months Ended

September 30,

NET DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH ( 14,269 ) ( 6,851 )

19 unchanged sentences

Reclassification of Series A Preferred Stock from temporary equity to permanent equity $ 15,616 $ 24,373

Reclassification of Series A Preferred Stock from permanent equity to accounts payable and accrued expenses $ 328 $ —

Mortgage notes assumed in connection with our acquisition of real estate $ 181,318 $ —

1 unchanged sentence

Accrued redeemable preferred stock fees $ 369 $ 509

Adjustment to noncontrolling interests $ 5,002 $ —

Acquisition of noncontrolling interests $ 5,002 $ —

Equity-based payment for management fees $ — $ 4,083

The accompanying notes are an integral part of these consolidated financial statements.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023 (Unaudited)

September 30, 2023 (Unaudited)

ORGANIZATION AND OPERATIONS

2 unchanged sentences

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 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.

The Company seeks to apply the expertise of CIM Group Management, LLC (“CIM Group”) and its affiliates 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.

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”).

6 unchanged sentences

The accompanying financial information reflects all adjustments which are, in the opinion of the Company’s management, of a normal recurring nature and necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the interim periods.

Operating results for the three and six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

Operating results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

The accompanying interim consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto, included in the 2022 Form 10-K.

4 unchanged sentences

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 June 30, 2023, 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.

As of September 30, 2023, 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.

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.

In addition, as of June 30, 2023, the Company has determined that its Unconsolidated Joint Ventures (as defined below) are considered VIEs.

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.

Therefore, the Unconsolidated Joint Ventures do not qualify for consolidation.

The Company accounts for its investments in Unconsolidated Joint Ventures as equity method investments.

In addition, as of September 30, 2023, the Company has determined that its Unconsolidated Joint Ventures (as defined below) are considered VIEs.

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

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023 (Unaudited) – (Continued)

September 30, 2023 (Unaudited) – (Continued)

obligations to absorb losses and right to receive benefits.

Therefore, the Unconsolidated Joint Ventures do not qualify for consolidation.

The Company accounts for its investments in Unconsolidated Joint Ventures as equity method investments.

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

19 unchanged sentences

When an asset is identified by the Company as held for sale, the Company will cease recording depreciation and amortization of the asset.

The Company did no t recognize any impairment of long-lived assets during the three and six months ended June 30, 2023 and 2022 (Note 3).

The Company did no t recognize any impairment of long-lived assets during the three and nine months ended September 30, 2023 and 2022 (Note 3).

Investments in Unconsolidated Entities —The Company accounts for its investments in the unconsolidated joint ventures (the “Unconsolidated Joint Ventures”) under the equity method, as the Company has the ability to exercise significant influence over the investments.

6 unchanged sentences

The Company has interest rate caps that are used to manage exposure to interest rate movements, but do not meet the requirements to be designated as hedging instruments.

The change in fair value of the derivative instruments that are not designated as hedges is recorded directly to earnings as interest expense on the accompanying consolidated statements of operations.

See Note 8 for further disclosures about our derivative financial instruments and hedging activities.

The change in fair value of the derivative instruments that

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023 (Unaudited) – (Continued)

September 30, 2023 (Unaudited) – (Continued)

are not designated as hedges is recorded directly to earnings as interest expense on the accompanying consolidated statements of operations.

See Note 8 for further disclosures about our derivative financial instruments and hedging activities.

Revenue Recognition —At the inception of a revenue-producing contract, the Company determines if a contract qualifies as a lease and if not, then as a customer contract.

15 unchanged sentences

Lease incentives paid to tenants are included in other assets and amortized as a reduction to rental revenue on a straight-line basis over the term of the related lease.

As of June 30, 2023 and December 31, 2022, lease incentives of $ 3.9 million and $ 3.9 million, respectively, are presented net of accumulated amortization of $ 3.1 million and $ 3.0 million, respectively.

As of September 30, 2023 and December 31, 2022, lease incentives of $ 3.9 million and $ 3.9 million, respectively, are presented net of accumulated amortization of $ 3.2 million and $ 3.0 million, respectively.

Reimbursements from tenants, consisting of amounts due from tenants for common area maintenance, real estate taxes, insurance, and other recoverable costs, are recognized as revenue and are included in rental and other property income in the period the expenses are incurred, with the corresponding expenses included in rental and other property operating expense.

5 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023 (Unaudited) – (Continued)

For the three and six months ended June 30, 2023 and 2022, the Company recognized rental income as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

September 30, 2023 (Unaudited) – (Continued)

For the three and nine months ended September 30, 2023 and 2022, the Company recognized rental income as follows (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

15 unchanged sentences

The Company does not use a general reserve approach.

As of June 30, 2023 and December 31, 2022, the Company had identified certain tenants where collection was no longer considered probable and decreased outstanding receivables by $ 663,000 and $ 387,000 , respectively, across all operating leases.

As of September 30, 2023 and December 31, 2022, the Company had identified certain tenants where collection was no longer considered probable and decreased outstanding receivables by $ 703,000 and $ 387,000 , respectively, across all operating leases.

Revenue from lending activities

15 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023 (Unaudited) – (Continued)

September 30, 2023 (Unaudited) – (Continued)

At inception of a contract with a customer for hotel goods and services, the contractual price is equivalent to the transaction price as there are no elements of variable consideration to estimate.

1 unchanged sentence

Below is a reconciliation of the hotel revenue from contracts with customers to the total hotel segment revenue disclosed in Note 17 (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

10 unchanged sentences

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

No such amounts were recognized for tenant recoveries outside of the lease agreements for each of the three and six months ended June 30, 2023 and 2022.

As of June 30, 2023, there were no remaining performance obligations associated with tenant recoveries outside of the lease agreements.

No such amounts were recognized for tenant recoveries outside of the lease agreements for each of the three and nine months ended September 30, 2023 and 2022.

As of September 30, 2023, there were no remaining performance obligations associated with tenant recoveries outside of the lease agreements.

Loans Receivable —The Company’s loans receivable are carried at their unamortized principal balance less

4 unchanged sentences

Upon sale of the SBA guaranteed portion of the loans, which are accounted for as sales, the unguaranteed portion of the loan retained by the Company is recorded at fair value and a discount is recorded as a reduction in basis of the retained portion of the loan.

Unamortized retained loan discounts were $ 8.7 million and $ 9.0 million as of June 30, 2023 and December 31, 2022, respectively.

Unamortized retained loan discounts were $ 8.3 million and $ 9.0 million as of September 30, 2023 and December 31, 2022, 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.

6 unchanged sentences

however subsequent changes to the current expected credit losses are recognized through net income on the Company’s consolidated statements of operations.

While ASU 2016-13 does not require any particular method for determining the current expected credit losses, it does specify the allowance should be based on relevant information about past events, including historical loss experience, current portfolio and market conditions, and reasonable and supportable forecasts

While ASU 2016-13 does not require any particular method for determining the current expected credit losses, it does specify the allowance should be based on relevant information about past

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023 (Unaudited) – (Continued)

for the duration of each respective loan.

September 30, 2023 (Unaudited) – (Continued)

events, including historical loss experience, current portfolio and market conditions, and reasonable and supportable forecasts for the duration of each respective loan.

In addition, other than a few narrow exceptions, ASU 2016-13 requires that all financial instruments subject to the credit loss model have some amount of loss reserve to reflect the GAAP principal underlying the credit loss model that all loans, debt securities, and similar assets have some inherent risk of loss, regardless of credit quality, subordinate capital, or other mitigating factors.

11 unchanged sentences

As of December 31, 2022, the Company had loan loss reserves of $ 1.1 million, which is recorded as a reduction to the loans receivable, net balance on the consolidated balance sheet.

As of June 30, 2023, the Company had a total current expected credit loss of $ 1.7 million.

As of September 30, 2023, the Company had a total current expected credit loss of $ 1.7 million.

Deferred Rent Receivable and Charges —Deferred rent receivable and charges consist of deferred rent, deferred leasing costs, deferred offering costs (Note 11) deferred financing costs and other deferred costs.

9 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023 (Unaudited) – (Continued)

As of June 30, 2023 and December 31, 2022, deferred rent receivable and charges consist of the following (in thousands):

June 30, 2023 December 31, 2022

September 30, 2023 (Unaudited) – (Continued)

As of September 30, 2023 and December 31, 2022, deferred rent receivable and charges consist of the following (in thousands):

September 30, 2023 December 31, 2022

Deferred rent receivable $ 16,771 $ 20,949

31 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023 (Unaudited) – (Continued)

September 30, 2023 (Unaudited) – (Continued)

Instead, impairment of receivables arising from operating leases should be accounted for in accordance with ASU No.

7 unchanged sentences

The ASU also enhances existing disclosure requirements and introduces new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty.

The ASU became effective for the Company beginning January 1, 2023 and is generally to be applied prospectively.

ASU 2022-02 did not have an impact on the Company’s consolidated financial statements for the three and six months ended June 30, 2023.

The ASU became effective for the Company beginning January 1, 2023 and was applied prospectively.

ASU 2022-02 did not have an impact on the Company’s consolidated financial statements for the three and nine months ended September 30, 2023.

In August 2023, the FASB issued ASU No.

2023-05, Business Combinations-Joint Venture Formations (Subtopic 805-60):

Recognition and Initial Measurement (“ASU 2023-05”).

ASU 2023-05 applies to the formation of a joint venture and requires a joint venture to initially measure all contributions received upon its formation at fair value.

The guidance is intended to reduce diversity in practice and provide users of joint venture financial statements with more decision-useful information.

The amendments are effective prospectively for all joint venture formations with a formation date on or after January 1, 2025.

The Company does not believe the adoption of ASU 2023-05 will have a material impact on its consolidated financial statements and disclosures.

INVESTMENTS IN REAL ESTATE

Investments in real estate consist of the following (in thousands):

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Land $ 175,709 $ 151,727

7 unchanged sentences

Net investments in real estate $ 708,178 $ 502,006

For the three months ended June 30, 2023 and 2022, the Company recorded depreciation expense of $ 5.9 million and $ 4.2 million, respectively.

For the six months ended June 30, 2023 and 2022, the Company recorded depreciation expense of $ 10.7 million and $ 8.4 million, respectively.

2023 Transactions — During the six months ended June 30, 2023, the Company acquired an interest in the following properties from subsidiaries indirectly wholly-owned by a fund that is managed by affiliates of CIM Group Management, LLC.

For the three months ended September 30, 2023 and 2022, the Company recorded depreciation expense of $ 5.9 million and $ 4.3 million, respectively.

For the nine months ended September 30, 2023 and 2022, the Company recorded depreciation expense of $ 16.6 million and $ 12.8 million, respectively.

2023 Transactions — During the nine months ended September 30, 2023, the Company acquired an interest in the following properties from subsidiaries indirectly wholly-owned by a fund that is managed by affiliates of CIM Group.

The purchases were accounted for as asset acquisitions.

12 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023 (Unaudited) – (Continued)

September 30, 2023 (Unaudited) – (Continued)

(1) Transaction costs that were capitalized as a component of the assets acquired and liabilities assumed in connection with the acquisition of these property totaled $ 37,000 , which are not included in the purchase prices above.

4 unchanged sentences

In addition, please see “Investments in Unconsolidated Entities” (Note 4) for information on the Company’s real estate acquisitions through its investments in unconsolidated entities.

The Company sold an interest in the following property during the six months ended June 30, 2023.

The Company sold an interest in the following property during the nine months ended September 30, 2023.

Asset Date of Interest Sales Gain on

4 unchanged sentences

(1) The Company sold 80 % of its interest in 4750 Wilshire Boulevard (excluding a vacant land parcel which was not included in the sale) to co-investors with whom it formed the 4750 Wilshire JV (defined in Note 4).

At the acquisition date, the Company received net proceeds of $ 16.7 million and recorded a receivable of $ 17.7 million, which the Company expects to collect over a six month period.

As of June 30, 2023, the receivable was $ 5.2 million and is included in other assets on the consolidated balance sheet.

The Company owns a 20 % interest in the 4750 Wilshire JV and accounts for its investment as an equity method investment as of June 30, 2023.

2022 Transactions — During the six months ended June 30, 2022, the Company acquired a 100 % fee-simple interest in the following properties from unrelated third-parties which transaction was accounted for as an asset acquisition.

At the acquisition date, the Company received net proceeds of $ 16.7 million and recorded a receivable of $ 17.7 million.

As of September 30, 2023, the remaining receivable was $ 3.0 million and is included in other assets on the consolidated balance sheet.

The Company owns a 20 % interest in the 4750 Wilshire JV and accounts for its investment as an equity method investment as of September 30, 2023.

2022 Transactions — During the nine months ended September 30, 2022, the Company acquired a 100 % fee-simple interest in the following properties from unrelated third-parties which transaction was accounted for as an asset acquisition.

Asset Date of Purchase

2 unchanged sentences

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

Multifamily (3)

May 20, 2022 6,000 $ 5,650

Multifamily August 4, 2022 5,900 $ 700

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

Office July 1, 2022 1,352 $ 1,900

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

Multifamily Development Site (4)

February 11, 2022 3,752 $ 2,260

Multifamily May 20, 2022 6,000 $ 5,650

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

Multifamily Development Site February 11, 2022 3,752 $ 2,260

(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.

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

(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.

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

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

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

(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.

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

2 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023 (Unaudited) – (Continued)

There were no dispositions during the six months ended June 30, 2022.

September 30, 2023 (Unaudited) – (Continued)

(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.

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.

There were no dispositions during the nine months ended September 30, 2022.

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

The following table summarizes the purchase price allocation of the aforementioned acquisitions during the six months ended June 30, 2023 and 2022.

Six months ended June 30,

The following table summarizes the purchase price allocation of the aforementioned acquisitions during the nine months ended September 30, 2023 and 2022.

Nine months ended September 30,

(in thousands)

2 unchanged sentences

Buildings and improvements 206,717 164

Tenant improvements — 47

Furniture, fixtures, and equipment 8,140 —

3 unchanged sentences

Net assets acquired $ 283,051 $ 10,776

(1) The amortization period for the acquired in-place leases was approximately 6 months at the date of acquisition.

(2) The amortization period for the acquired above-market leases was approximately 7 months at the date of acquisition.

(3) The amortization period for the acquired below-market leases was approximately 5 months at the date of acquisition.

(1) The amortization period for the in-place leases acquired during the nine months ended September 30, 2023 was approximately 6 months at the date of acquisition.

(2) The amortization period for the above-market leases acquired during the nine months ended September 30, 2023 was approximately 7 months at the date of acquisition.

(3) The amortization period for the below-market leases acquired during the nine months ended September 30, 2023 was approximately 5 months at the date of acquisition.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

INVESTMENT IN UNCONSOLIDATED ENTITIES

2 unchanged sentences

Carrying Value

Property Asset Type Location Acquisition Date Ownership Interest June 30, 2023 December 31, 2022

Property Asset Type Location Acquisition Date Ownership Interest September 30, 2023 December 31, 2022

1910 Sunset Boulevard (1)

Office Los Angeles, CA February 11, 2022 44.2 % $ 12,100 $ 12,381

Office / Multifamily Los Angeles, CA February 11, 2022 44.2 % $ 11,986 $ 12,381

4750 Wilshire Boulevard (2)

4 unchanged sentences

______________________

(1) 1910 Sunset Boulevard is an office building with 96,406 square feet of office space and 2,760 square feet of retail space The plan for the property is 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.

(1) 1910 Sunset Boulevard is an office building with 104,764 square feet of office space and 2,760 square feet of retail space.

The plan for the property is to undertake a capital improvement program to renovate and modernize the building into creative office space as well as to build 36 multifamily units on the 1915 Park Avenue land parcel adjacent to the office building, for which the 1910 Sunset JV has received all necessary entitlements.

(2) 4750 Wilshire Boulevard is a three-story office building with 30,335 square feet of office space located on the first floor.

1 unchanged sentence

(3) 1902 Park Avenue is a 75 -unit four-story multifamily building.

1910 Sunset Boulevard — In February 2022, the Company invested in a joint venture (the “1910 Sunset JV”) with a CIM-managed separate account (the “1910 Sunset 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.

1910 Sunset Boulevard — In February 2022, the Company invested in a joint venture (the “1910 Sunset JV”) with a CIM-managed separate account (the “1910 Sunset 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 1910 Sunset JV Partner initially contributed the remaining balance.

In September 2022, the 1910 Sunset JV obtained financing through a mortgage loan of $ 23.9 million secured by the office property (the “1910 Sunset Mortgage Loan”).

The Company provided a limited guarantee to the lender under the 1910 Sunset Mortgage Loan.

The Company recorded a loss of $ 220,000 and $ 281,000 related to its investment in the 1910 Sunset JV during the three and six months ended June 30, 2023, respectively, and income of $ 260,000 and $ 380,000 during the three and six months

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023 (Unaudited) – (Continued)

ended June 30, 2022, respectively, in the consolidated statements of operations.

The Company’s investment in the 1910 Sunset JV was $ 12.1 million and its ownership percentage remained unchanged as of June 30, 2023.

The Company recorded a loss of $ 402,000 and $ 683,000 related to its investment in the 1910 Sunset JV during the three and nine months ended September 30, 2023, respectively, and a loss of $ 204,000 and income of $ 176,000 during the three and nine months ended September 30, 2022, respectively, in the consolidated statements of operations.

The Company’s investment in the 1910 Sunset JV was $ 12.0 million and its ownership percentage remained unchanged as of September 30, 2023.

4750 Wilshire Boulevard — In February 2023, three co-investors (the “4750 Wilshire JV Partners”) acquired an 80 % interest in a property owned by a subsidiary of the Company located at 4750 Wilshire Boulevard in Los Angeles, California (“4750 Wilshire”) for a gross sales price of $ 34.4 million (excluding transaction costs).

5 unchanged sentences

In addition, the Company may earn incentive fees based on the performance of 4750 Wilshire after the conversion.

The Company recorded a loss of $ 490,000 and $ 493,000 related to its investment in the 4750 Wilshire JV during the three and six months ended June 30, 2023, respectively, in the consolidated statements of operations.

The Company’s investment in the 4750 Wilshire JV was $ 8.1 million and its ownership percentage remained unchanged as of June 30, 2023.

The Company recorded income of $ 2.0 million and $ 1.5 million related to its investment in the 4750 Wilshire JV during the three and nine months ended September 30, 2023, respectively, in the consolidated statements of operations.

The Company’s investment in the 4750 Wilshire JV was $ 10.1 million and its ownership percentage remained unchanged as of September 30, 2023.

1902 Park Avenue — In February 2023, the Company and a CIM-managed interval fund (the “1902 Park JV Partner) purchased a multifamily property in the Echo Park neighborhood of Los Angeles, California for a gross purchase price of $ 19.1 million (excluding transaction costs) (the “1902 Park JV”).

The Company owns 50 % of the 1902 Park JV.

In connection with the closing in February 2023, the 1902 Park JV obtained financing through a mortgage loan of $ 9.6 million secured by the multifamily property (the “1902 Park Mortgage Loan”).

In connection

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

with the closing in February 2023, the 1902 Park JV obtained financing through a mortgage loan of $ 9.6 million secured by the multifamily property (the “1902 Park Mortgage Loan”).

The Company provided a limited guarantee to the lender under the 1902 Park Mortgage Loan.

The Company recorded a loss of $ 194,000 and income of $ 638,000 related to its investment in the 1902 Park JV during the three and six months ended June 30, 2023, respectively, in the consolidated statements of operations.

The Company’s investment in the 1902 Park JV was $ 7.3 million as of June 30, 2023.

The Company recorded a loss of $ 422,000 and income of $ 216,000 related to its investment in the 1902 Park JV during the three and nine months ended September 30, 2023, respectively, in the consolidated statements of operations.

The Company’s investment in the 1902 Park JV was $ 7.1 million as of September 30, 2023.

LOANS RECEIVABLE

Loans receivable consist of the following (in thousands):

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

SBA 7(a) loans receivable, subject to credit risk $ 5,329 $ 56,116

8 unchanged sentences

(1) On January 1, 2023, the Company adopted ASU 2016-13.

As such, the amounts as of June 30, 2023 reflect the Company’s current estimate of potential credit losses related to the Company’s loans receivable .

As such, the amounts as of September 30, 2023 reflect the Company’s current estimate of potential credit losses related to the Company’s loans receivable .

SBA 7(a) Loans Receivable, Subject to Credit Risk —Represents the unguaranteed portions of loans originated under the SBA 7(a) Program which were retained by the Company.

2 unchanged sentences

These loans were subject to credit risk.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023 (Unaudited) – (Continued)

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.

2 unchanged sentences

Current Expected Credit Losses

Current expected credit losses (“CECL”) reflect the Company’s current estimate of potential credit losses related to loans receivable included in the Company’s consolidated balance sheets as of June 30, 2023 pursuant to ASU 2016-13 as implemented effective January 1, 2023.

Current expected credit losses (“CECL”) reflect the Company’s current estimate of potential credit losses related to loans receivable included in the Company’s consolidated balance sheets as of September 30, 2023 pursuant to ASU 2016-13 as implemented effective January 1, 2023.

Refer to Note 2 for further discussion of CECL.

The following table presents the activity in the Company’s current expected credit losses for the six months ended June 30, 2023 (dollar amounts in thousands):

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

The following table presents the activity in the Company’s current expected credit losses for the nine months ended September 30, 2023 (dollar amounts in thousands):

Loans Receivable

6 unchanged sentences

Current expected credit losses as of June 30, 2023 $ 1,713

Reserve for expected credit losses ( 9 )

Current expected credit losses as of September 30, 2023 $ 1,704

The Company’s initial estimate of its current expected credit losses against the loans receivable of $ 783,000 , net of a $ 164,000 deferred tax asset, was recorded on January 1, 2023 directly to distributions in excess of earnings on the Company’s consolidated statements of equity.

Subsequent changes to the allowance for credit losses are recognized through net income on the Company’s consolidated statements of operations.

During the three and six months ended June 30, 2023, the Company recorded a decrease of $ 142,000 and $ 91,000 , respectively, in its current expected credit losses related to its loans receivable, which is recorded in general and administrative in the consolidated statement of operations, and recorded a decrease due to write-offs of $ 85,000 , bringing the total current expected credit loss to $ 1.7 million as of June 30, 2023.

As of June 30, 2023 and December 31, 2022, the Company’s loans subject to credit risk were 100.0 % and 99.9 %, respectively, concentrated in the hospitality industry.

As of June 30, 2023 and December 31, 2022, 99.4 % and 98.4 %, respectively, of the Company’s loans subject to credit risk were current.

During the three and nine months ended September 30, 2023, the Company recorded a decrease of $ 9,000 and $ 100,000 , respectively, in its current expected credit losses related to its loans receivable, which is recorded in general and administrative expenses in the consolidated statement of operations, and recorded a decrease due to write-offs of $ 85,000 during the nine months ended September 30, 2023, bringing the total current expected credit loss to $ 1.7 million as of September 30, 2023.

As of September 30, 2023 and December 31, 2022, the Company’s loans subject to credit risk were 100.0 % and 99.9 %, respectively, concentrated in the hospitality industry.

As of September 30, 2023 and December 31, 2022, 99.0 % and 98.4 %, respectively, of the Company’s loans subject to credit risk were current.

The Company classifies loans with negative characteristics in substandard categories ranging from special mention to doubtful.

As of June 30, 2023 and December 31, 2022, $ 1.1 million and $ 1.0 million, respectively, of loans subject to credit risk were classified in substandard categories.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023 (Unaudited) – (Continued)

As of September 30, 2023 and December 31, 2022, $ 1.3 million and $ 1.0 million, respectively, of loans subject to credit risk were classified in substandard categories.

OTHER INTANGIBLE ASSETS AND LIABILITIES

A schedule of the Company’s intangible assets and liabilities and related accumulated amortization and accretion as of June 30, 2023 and December 31, 2022 is as follows (in thousands):

June 30, 2023 December 31, 2022

A schedule of the Company’s intangible assets and liabilities and related accumulated amortization and accretion as of September 30, 2023 and December 31, 2022 is as follows (in thousands):

September 30, 2023 December 31, 2022

Intangible assets:

5 unchanged sentences

Intangible lease liabilities:

Acquired below-market leases, net of accumulated amortization of $ 173 and $ 22 , respectively, both with an average useful life of 1 year

Acquired below-market leases, net of accumulated amortization of $ 5 and $ 22 , respectively, with an average useful life of 1 year as of December 31, 2022.

Amortization of the acquired above-market leases is recorded as a reduction to rental and other property income, and amortization of the acquired in-place leases is included in depreciation and amortization in the accompanying consolidated statements of operations.

Amortization of the acquired below-market leases is recorded as an increase to rental and other property income in the accompanying consolidated statements of operations.

During the three and six months ended June 30, 2023 and 2022, the Company recognized amortization related to its intangible assets and liabilities as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

During the three and nine months ended September 30, 2023 and 2022, the Company recognized amortization related to its intangible assets and liabilities as follows (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

2 unchanged sentences

Acquired below-market lease amortization $ 93 $ 67 $ 243 $ 196

A schedule of future amortization and accretion of acquired intangible assets and liabilities as of June 30, 2023, is as follows (in thousands):

Assets Liabilities

A schedule of future amortization and accretion of acquired intangible assets and liabilities as of September 30, 2023, is as follows (in thousands):

Years Ending December 31, Acquired

Leases Acquired

2023 $ 2 $ 93

Thereafter — 194

$ 29 $ 10,566 $ ( 93 )

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023 (Unaudited) – (Continued)

The following table summarizes the debt balances as of June 30, 2023 and December 31, 2022, and the debt activity for the six months ended June 30, 2023 (in thousands):

During the Six Months Ended June 30, 2023

Balances as of December 31, 2022 Debt Issuances & Assumptions Repayments Accretion & (Amortization) Balances as of June 30, 2023

September 30, 2023 (Unaudited) – (Continued)

The following table summarizes the debt balances as of September 30, 2023 and December 31, 2022, and the debt activity for the nine months ended September 30, 2023 (in thousands):

During the Nine Months Ended September 30, 2023

Balances as of December 31, 2022 Debt Issuances & Assumptions Repayments Accretion & (Amortization) Balances as of September 30, 2023

Mortgages Payable:

17 unchanged sentences

Fixed Rate Mortgage Payable —The Company’s fixed rate mortgage payable is secured by a deed of trust on a property and assignments of rents receivable.

As of June 30, 2023, the Company’s fixed rate mortgage payable had a fixed interest rate of 4.14 % per annum, with monthly payments of interest only, due on July 1, 2026.

As of September 30, 2023, the Company’s fixed rate mortgage payable had a fixed interest rate of 4.14 % per annum, with monthly payments of interest only, due on July 1, 2026.

The loan is nonrecourse.

Variable Rate Mortgages Payable —The Company’s variable rate mortgages payable are secured by a deed of trust on the respective properties and assignments of rents receivable.

As of June 30, 2023, the Company’s variable rate mortgages payable had a variable interest rates ranging from SOFR plus 3.25 % - 3.35 %, with monthly payments of interest only, due on various dates from June 7, 2024 to July 7, 2025 with extension options subject to certain conditions being met.

As of September 30, 2023, the Company’s variable rate mortgages payable had a variable interest rates ranging from SOFR plus 3.25 % - 3.35 %, with monthly payments of interest only, due on various dates from June 7, 2024 to July 7, 2025 with extension options subject to certain conditions being met.

In regards to the variable rate mortgage payable maturing on June 7, 2024, the Company expects to exercise its extension option or refinance such indebtedness prior to maturity.

The loans are nonrecourse.

1 unchanged sentence

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 June 30, 2023, the Company’s secured borrowings-government guaranteed loans included $ 3.0 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 8.54 % at June 30, 2023, and $ 2.3 million of loans sold for an excess spread, with a variable rate, reset quarterly, based on prime rate with weighted average coupon rate of 6.32 % at June 30, 2023.

As of September 30, 2023, the Company’s secured borrowings-government guaranteed loans included $ 3.0 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 8.79 % at September 30, 2023, and $ 1.6 million of loans sold for an excess spread, with a variable rate, reset quarterly, based on prime rate with weighted average coupon rate of 6.63 % at September 30, 2023.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023 (Unaudited) – (Continued)

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.

September 30, 2023 (Unaudited) – (Continued)

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 certain properties in the Company’s real estate portfolio:

1 unchanged sentence

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

As of June 30, 2023, the variable interest rate was 7.69 %.

As of September 30, 2023, the variable interest rate was 7.92 %.

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.

1 unchanged sentence

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 June 30, 2023 and December 31, 2022, $ 58.0 million and $ 150.0 million, respectively, 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.

As of September 30, 2023 and December 31, 2022, $ 73.0 million and $ 150.0 million, respectively, 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 SOFR plus 3.51 %, with quarterly interest only payments.

The junior subordinated balance is due at maturity on March 30, 2035.

4 unchanged sentences

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 %.

As of June 30, 2023, the variable interest rate was 7.83 %.

As of September 30, 2023, the variable interest rate was 8.14 %.

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

The restricted cash on the Company’s consolidated balance sheets included funds related to the Company’s SBA 7(a) loan-backed notes was $ 7.3 million as of June 30, 2023.

The restricted cash on the Company’s consolidated balance sheets included funds related to the Company’s SBA 7(a) loan-backed notes was $ 6.4 million as of September 30, 2023.

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 June 30, 2023 and December 31, 2022, accrued interest and unused commitment fees payable of $ 1.7 million and $ 562,000 , respectively, were included in accounts payable and accrued expenses.

Future principal payments on the Company’s debt (face value) as of June 30, 2023 are as follows (in thousands):

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

As of September 30, 2023 and December 31, 2022, accrued interest and unused commitment fees payable of $ 1.6 million and $ 562,000 , respectively, were included in accounts payable and accrued expenses.

Future principal payments on the Company’s debt (face value) as of September 30, 2023 are as follows (in thousands):

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

2022 Credit Facility Other (1) (2)

2023 (Six months ending December 31, 2023) $ — $ 179 $ — $ 3,875 $ 4,054

2023 (Three months ending December 31, 2023) $ — $ 54 $ — $ 798 $ 852

2024 79,600 229 — 8,576 88,405

9 unchanged sentences

(2) Represents the junior subordinated notes and SBA 7(a) loan-backed notes.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023 (Unaudited) – (Continued)

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

In the normal course of business, the Company may use certain types of derivative instruments for the purpose of managing or hedging its interest rate risk.

During the six months ended June 30, 2023, the Company entered into two interest rate cap agreements in connection with the assumption of two mortgage loans.

The following table summarizes the terms of the Company’s interest rate cap agreements as of June 30, 2023 (dollar amounts in thousands):

During the nine months ended September 30, 2023, the Company entered into two interest rate cap agreements in connection with the assumption of two mortgage loans.

The following table summarizes the terms of the Company’s interest rate cap agreements as of September 30, 2023 (dollar amounts in thousands):

Outstanding Notional Fair Value of Assets as of

Balance Sheet Amount as of Strike Effective Maturity June 30,

Location June 30, 2023 Rates (1)

Balance Sheet Amount as of Strike Effective Maturity September 30,

Location September 30, 2023 Rates (1)

Dates Dates 2023

9 unchanged sentences

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

STOCK-BASED COMPENSATION PLANS

On April 3, 2015, the Company’s board of directors (the “Board of Directors”) unanimously approved the Company’s Equity Incentive Plan (the “Equity Incentive Plan”), which was approved by the Company’s stockholders.

Under the 2015 Equity Incentive Plan, the Company granted awards of restricted shares of Common Stock to each of the independent members of the Board of Directors as follows:

On June 27, 2023, the Equity Incentive Plan was amended by the Board of Directors, and subsequently approved by the Company’s stockholders, to authorize additional shares of Common Stock for issuance as compensation .

The Company has granted awards of restricted shares of Common Stock to each of the independent members of the Board of Directors under the Equity Incentive Plan as follows:

Grant Date (1) Vesting Date Restricted Shares of Common Stock - Individual Restricted Shares of Common Stock - Aggregate

May 2021 May 2022 (2) 5,083 20,332

June 2022 June 2023 7,746 30,984

August 2023 August 2024 12,222 48,888

______________________

(1) 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 restricted shares of Common Stock in the amount of $ 37,000 and $ 37,000 for the three months ended June 30, 2023 and 2022, respectively, and $ 92,000 and $ 92,000 for the six months ended June 30, 2023 and 2022.

(2) These shares vested after one year of continuous service, other than the shares granted to Mr.

Frank Golay, Jr., a former independent director of the Company, which vested on April 29, 2022.

Golay retired from the Board on May 2, 2022 and, in recognition of his service to the Company, the Board accelerated the vesting of Mr.

Golay’s shares.

As of June 30, 2023, there was $ 0 of total unrecognized compensation expense related to restricted shares of Common Stock which will be recognized ratably over the remaining vesting period.

The Company recorded compensation expense related to these restricted shares of Common Stock in the amount of $ 36,000 and $ 55,000 for the three months ended September 30, 2023 and 2022, respectively, and $ 128,000 and $ 147,000 for the nine months ended September 30, 2023 and 2022.

As of September 30, 2023, there was $ 183,000 of total unrecognized compensation expense related to restricted shares of Common Stock which will be recognized ratably over the remaining vesting period.

EARNINGS PER SHARE ("EPS")

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

No shares of Series D Preferred Stock, Series A Preferred Stock, or Series A1 Preferred Stock outstanding as of June 30, 2023 were included in the

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023 (Unaudited) – (Continued)

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 three and six months ended June 30, 2023 and 2022 because their impact was either anti-dilutive or such warrants were not exercisable during such periods (Note 12).

Outstanding shares of Series L Preferred Stock were not included in the computation of diluted EPS for the three and six months ended June 30, 2023 (because they were redeemed in January 2023) and 2022 (because such shares were not redeemable during such period).

No shares of Series D Preferred Stock, Series A Preferred Stock, or Series A1 Preferred Stock outstanding as of September 30, 2023 or 2022 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 three and nine months ended September 30, 2023 and 2022 because their impact was either anti-dilutive or such warrants were not exercisable during such periods (Note 12).

Outstanding shares of Series L Preferred Stock were not included in the computation of diluted EPS for the three and nine months ended September 30, 2023 (because they were redeemed in January 2023) and 2022 (because such shares were not redeemable during such period).

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 attributable to common stockholders for the three and six months ended June 30, 2023 and 2022 (in thousands, except per share amounts):

Three Months Ended June 30, Six Months Ended June 30,

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

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 three and nine months ended September 30, 2023 and 2022 (in thousands, except per share amounts):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

10 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023 (Unaudited) – (Continued)

September 30, 2023 (Unaudited) – (Continued)

REDEEMABLE PREFERRED STOCK

The table below provides information regarding the issuances, reclassifications and redemptions of each class of the Company’s preferred stock in permanent equity during the three and six months ended June 30, 2023 and 2022 (dollar amounts in thousands):

The table below provides information regarding the issuances, reclassifications and redemptions of each class of the Company’s preferred stock in permanent equity during the three and nine months ended September 30, 2023 and 2022 (dollar amounts in thousands):

Preferred Stock

9 unchanged sentences

Balances, June 30, 2022 192,440 4,770 6,893,774 172,176 56,857 1,396 5,387,160 152,834 12,530,231 331,176

Issuance of Series A1 Preferred Stock 2,667,001 64,720 — — — — — — 2,667,001 64,720

Repurchase of Series L Preferred Stock — — — — — — ( 2,435,284 ) ( 69,089 ) ( 2,435,284 ) ( 69,089 )

Reclassification of Series A Preferred stock to permanent equity — — 299,303 7,574 — — — — 299,303 7,574

Redemption of Series A Preferred Stock — — ( 58,742 ) ( 1,463 ) — — — — ( 58,742 ) ( 1,463 )

Balances, September 30, 2022 2,859,441 $ 69,490 7,134,335 $ 178,287 56,857 $ 1,396 2,951,876 $ 83,745 13,002,509 $ 332,918

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

10 unchanged sentences

Balances, June 30, 2023 8,160,099 $ 202,069 7,881,958 $ 196,911 48,447 $ 1,190 — $ — 16,090,504 $ 400,170

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

Preferred Stock

Series A1 Series A Series D Series L Total

Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount

Issuance of Series A1 Preferred Stock 1,094,386 27,015 — — — — — — 1,094,386 27,015

Redemption of Series A1 Preferred Stock ( 30,941 ) ( 760 ) — — — — — — ( 30,941 ) ( 760 )

Redemption of Series A Preferred Stock — — ( 187,759 ) ( 4,676 ) — — — — ( 187,759 ) ( 4,676 )

Balances, September 30, 2023 9,223,544 $ 228,324 7,694,199 $ 192,235 48,447 $ 1,190 — $ — 16,966,190 $ 421,749

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 June 30, 2023, the Company had issued in registered public offerings 7,994,099 shares of the Series A1 Preferred Stock and received gross proceeds of $ 197.9 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.

As of September 30, 2023, the Company had issued in registered public offerings 9,088,485 shares of the Series A1 Preferred Stock and received gross proceeds of $ 224.9 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 the issuance of shares of Series A1 Preferred Stock, $ 16.5 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 $ 10.2 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 June 30, 2023, the Company had reclassified and allocated $ 2.7 million from deferred charges to Series A1 Preferred Stock as a reduction to the gross proceeds received.

As of September 30, 2023, the Company had reclassified and allocated $ 3.1 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.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023 (Unaudited) – (Continued)

As of June 30, 2023, there were 8,160,099 shares of Series A1 Preferred Stock outstanding and 34,000 shares of Series A1 Preferred Stock had been redeemed.

As of September 30, 2023, there were 9,223,544 shares of Series A1 Preferred Stock outstanding and 64,941 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.

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

As of June 30, 2023, 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 Administrator, for which no cash proceeds were received.

As of September 30, 2023, 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 Administrator, for which no cash proceeds were received.

In connection with the cumulative issuance of Series A Preferred Stock and 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 June 30, 2023, 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.

As of September 30, 2023, 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.

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

During the three and six months ended June 30, 2023, the Company recorded no redeemable preferred stock deemed dividends related to such adjustments.

During the three and six months ended June 30, 2022, the Company recorded redeemable preferred stock deemed dividends of $ 4,000 and $ 19,000 , respectively, related to such adjustments.

During the three and nine months ended September 30, 2023, the Company recorded no redeemable preferred stock deemed dividends related to such

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

During the three and nine months ended September 30, 2022, the Company recorded redeemable preferred stock deemed dividends of $ 0 and $ 19,000 , respectively, related to such adjustments.

On the first anniversary of the 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.

As of June 30, 2023, the Company had reclassified an aggregate of $ 199.6 million in net proceeds from temporary equity to permanent equity.

As of June 30, 2023, there were 7,881,958 shares of Series A Preferred Stock outstanding and 938,380 shares of Series A Preferred Stock had been redeemed.

As of September 30, 2023, the Company had reclassified an aggregate of $ 199.6 million in net proceeds from temporary equity to permanent equity.

As of September 30, 2023, there were 7,694,199 shares of Series A Preferred Stock outstanding and 1,126,139 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.

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

As of June 30, 2023, the Company had issued in registered public offerings 56,857 shares of Series D Preferred Stock and received gross proceeds of $ 1.4 million.

As of September 30, 2023, 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, $ 35,000 of costs specifically identifiable to the offering of Series D Preferred Stock were allocated to the Series D Preferred Stock.

As of June 30, 2023, the Company had reclassified and allocated $ 13,000 from from deferred charges to Series D Preferred Stock as a reduction to the gross proceeds received.

As of September 30, 2023, the Company had reclassified and allocated $ 13,000 from 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.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023 (Unaudited) – (Continued)

As of June 30, 2023, there were 48,447 shares of Series D Preferred Stock outstanding and 8,410 shares of Series D Preferred Stock had been redeemed.

As of September 30, 2023, there were 48,447 shares of Series D Preferred Stock outstanding and 8,410 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.

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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”).

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

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

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

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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 six months ended June 30, 2023, the Company paid $ 5.5 million, $ 5.6 million, $ 35,000 and $ 4.6 million of cash dividends on the Series A1 Preferred Stock, Series A Preferred Stock, Series D Preferred Stock and Series L Preferred Stock, respectively.

During the six months ended June 30, 2022, the Company paid $ 0 , $ 5.6 million, $ 40,000 and $ 8.4 million of cash dividends on the Series A1 Preferred Stock, Series A Preferred Stock, Series D Preferred Stock and Series L Preferred Stock, respectively.

During the nine months ended September 30, 2023, the Company paid $ 9.3 million, $ 8.3 million, $ 52,000 and $ 4.6 million of cash dividends on the Series A1 Preferred Stock, Series A Preferred Stock, Series D Preferred Stock and Series L Preferred Stock, respectively.

During the nine months ended September 30, 2022, the Company paid $ 384,000 , $ 8.5 million, $ 60,000 and $ 11.1 million of cash dividends on the Series A1 Preferred Stock, Series A Preferred Stock, Series D Preferred Stock and Series L Preferred Stock, respectively.

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.

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The Company has the right to redeem the Series A1 Preferred Stock after the date that is twenty-four months following the original issuance of such shares of Series A1 Preferred Stock at the Series A1 Preferred Stock Stated Value, 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

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023 (Unaudited) – (Continued)

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.

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.

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;

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In determining the Company’s dividend policy, the Board of Directors considers many factors including the amount of cash resources available for dividend distributions, capital spending plans, cash flow, the Company’s financial position, applicable requirements of the MGCL, any applicable contractual restrictions, and future growth in NAV and cash flow per share prospects.

Consequently, the dividend rate on a quarterly basis does not necessarily correlate directly to any individual factor.

Cash dividends per share of Common Stock paid in respect of the six months ended June 30, 2023 and 2022 consist of the following:

Consequently, the dividend rate on a quarterly basis

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

does not necessarily correlate directly to any individual factor.

Cash dividends per share of Common Stock paid in respect of the nine months ended September 30, 2023 and 2022 consist of the following:

Declaration Date Payment Date Type Cash Dividend Per Share of Common Stock

September 27, 2023 October 23, 2023 Regular Quarterly $ 0.085

June 27, 2023 July 24, 2023 Regular Quarterly $ 0.085

March 20, 2023 April 11, 2023 Regular Quarterly $ 0.085

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

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

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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 June 30, 2023, the Company had 2,449,039 Series A Preferred Warrants outstanding to purchase 631,901 shares of Common Stock in connection with the Company’s offering of Series A Preferred Units and allocated net proceeds of $ 443,000 , after specifically identifiable offering costs and allocated general offering costs, to the Series A Preferred Warrants in permanent equity.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023 (Unaudited) – (Continued)

As of September 30, 2023, the Company had 2,141,183 Series A Preferred Warrants outstanding to purchase 551,550 shares of Common Stock in connection with the Company’s offering of Series A Preferred Units and allocated net proceeds of $ 421,000 , after specifically identifiable offering costs and allocated general offering costs, to the Series A Preferred Warrants in permanent equity.

Share Repurchase Program

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

There were no repurchases during the three and six months ended June 30, 2023.

As of June 30, 2023, the Company had repurchased 662,462 shares of Common Stock for $ 4.7 million.

There were no repurchases during the three and nine months ended September 30, 2023.

As of September 30, 2023, the Company had repurchased 662,462 shares of Common Stock for $ 4.7 million.

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

September 30, 2023 (Unaudited) – (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, 2022 Revolving Credit Facility and variable rate mortgages payable 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 Revolver and variable rate mortgages payable 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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These credit spreads take into account factors such as the Company’s credit standing, the maturity of the debt, whether the debt is secured or unsecured, and the loan-to-value ratios of the debt.

When estimating the fair value of the Company’s mortgages payable as of June 30, 2023 and December 31, 2022, the Company used a rate of 6.86 % and 6.48 %, respectively.

The rate used to estimate the fair value of the Company’s junior subordinated notes was 9.80 % and 9.02 % as of June 30, 2023 and December 31, 2022, respectively.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023 (Unaudited) – (Continued)

When estimating the fair value of the Company’s mortgages payable as of September 30, 2023 and December 31, 2022, the Company used a rate of 7.69 % and 6.48 %, respectively.

The rate used to estimate the fair value of the Company’s junior subordinated notes was 9.91 % and 9.02 % as of September 30, 2023 and December 31, 2022, respectively.

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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The following summarizes the ranges of discount rates and prepayment rates used to arrive at the estimated fair values of the Company’s loans receivable:

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Discount Rate Prepayment Rate Discount Rate Prepayment Rate

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In addition, credit valuation adjustments are incorporated into the fair values to account for the Company’s potential nonperformance risk and the performance risk of the respective counterparties.

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 June 30, 2023 and December 31, 2022.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

September 30, 2023 and December 31, 2022.

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

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 (dollar amounts in thousands):

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Amount Estimated

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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”).

Administrative Fees and Expenses — CIM Urban Partners, L.P., a wholly-owned subsidiary of the Company, and CIM Capital, LLC, an affiliate of 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:

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

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023 (Unaudited) – (Continued)

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.

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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.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

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.

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“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

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023 (Unaudited) – (Continued)

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.

“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.

Capital Gains Fee:

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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 (dollar amounts in thousands):

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

Daily Average Adjusted Fair

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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 Service Fee.

During the six months ended June 30, 2023 and 2022, 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.

During the nine months ended September 30, 2023 and 2022, 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).

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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, with the exception of certain onsite management costs which are capitalized in some cases.

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

Property management fees earned by the CIM Management entities and onsite management costs incurred are included in rental and other property operating expenses in the accompanying consolidated statements of operations, with the exception of certain onsite management costs which are capitalized in some cases.

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

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

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023 (Unaudited) – (Continued)

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 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.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

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.

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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 (in thousands):

Three Months Ended June 30, Six Months Ended June 30, 2023

Three Months Ended September 30, Nine Months Ended September 30, 2023

2023 2022 2023 2022

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______________________

(1) The Company issued to the Operator 36,843 shares of Series A1 Preferred Stock in lieu of cash payment for the asset management fees incurred during the three months ended March 31, 2022.

(2) Does not include the company’s share of the property management fees from the Unconsolidated Joint Ventures of $ 20,000 and and $ 37,000 for the three and six months ended June 30, 2023, respectively, and $ 11,000 and $ 15,000 for the three and six months ended June 30, 2022, respectively.

(1) The Company issued to the Operator 36,843 and 36,779 shares of Series A1 Preferred Stock in lieu of cash payment for the asset management fees incurred during the three months ended March 31, 2022 and June 30, 2022, respectively.

(2) Does not include the company’s share of the property management fees from the Unconsolidated Joint Ventures of $ 20,000 and and $ 57,000 for the three and nine months ended September 30, 2023, respectively, and $ 13,000 and $ 28,000 for the three and nine months ended September 30, 2022, respectively.

(3) Does not include the Company’s share of the onsite management and other cost reimbursements from the Unconsolidated Joint Ventures of $ 114,000 and $ 255,000 for the three and nine months ended September 30, 2023, respectively, and $ 33,000 and $ 66,000 for the three and nine months ended September 30, 2022, respectively.

(4) Does not include the Company’s share of the leasing commissions from the Unconsolidated Joint Ventures of $ 18,000 and $ 32,000 for the three and nine months ended September 30, 2023, respectively, and $ 4,000 for the three and nine months ended September 30, 2022, respectively.

(5) Does not include the Company’s share of the construction management fees from the Unconsolidated Joint Ventures of $ 26,000 and $ 85,000 for the three and nine months ended September 30, 2023, respectively, and $ 6,000 and $ 9,000 for the three and nine months ended September 30, 2022.

(6) Does not include the Company’s share of the development management reimbursements from the Unconsolidated Joint Ventures of $ 135,000 and $ 322,000 for the three and nine months ended September 30, 2023, respectively.

(7) Expense reimbursements to related parties - lending segment do not include personnel costs capitalized to deferred loan origination costs of $ 6,000 and $ 67,000 for the three and nine months ended September 30, 2023, respectively, and $ 118,000 and $ 316,000 for the three and nine months ended September 30, 2022, respectively.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023 (Unaudited) – (Continued)

(3) Does not include the Company’s share of the onsite management and other cost reimbursements from the Unconsolidated Joint Ventures of $ 112,000 and $ 141,000 for the three and six months ended June 30, 2023, respectively, and $ 21,000 and $ 33,000 for the three and six months ended June 30, 2022, respectively.

(4) Does not include the Company’s share of the leasing commissions from the Unconsolidated Joint Ventures of $ 2,000 and $ 14,000 for the three and six months ended June 30, 2023, respectively.

(5) Does not include the Company’s share of the construction management fees from the Unconsolidated Joint Ventures of $ 55,000 and $ 59,000 for the three and six months ended June 30, 2023, respectively, and $ 2,000 and $ 3,000 for the three and six months ended June 30, 2022.

(6) Does not include the Company’s share of the development management reimbursements from the Unconsolidated Joint Ventures of $ 187,000 for the three and six months ended June 30, 2023.

(7) Expense reimbursements to related parties - lending segment do not include personnel costs capitalized to deferred loan origination costs of $ 30,000 and $ 61,000 for the three and six months ended June 30, 2023, respectively, and $ 105,000 and $ 174,000 for the three and six months ended June 30, 2022, respectively.

September 30, 2023 (Unaudited) – (Continued)

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

(9) As of June 30, 2023 and June 30, 2022, $ 2.5 million and $ 2.3 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.

(9) As of September 30, 2023 and September 30, 2022, $ 2.6 million and $ 2.6 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 June 30, 2023 and December 31, 2022, due to related parties consisted of the following (in thousands):

June 30, 2023 December 31, 2022

As of September 30, 2023 and December 31, 2022, due to related parties consisted of the following (in thousands):

September 30, 2023 December 31, 2022

Asset management fees $ 677 $ 812

7 unchanged sentences

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.

In February 2022, the Company invested with the 1910 Sunset JV Partner, a CIM-managed separate account, in the 1910 Sunset JV 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 1910 Sunset JV Partner initially contributed the remaining balance.

See Note 2 and Note 4 for more information.

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See Note 2 and Note 4 for more information.

During the six months ended June 30, 2023, the Company acquired an interest in four assets from entities indirectly wholly-owned by a fund that is managed by affiliates of CIM Group Management, LLC for $ 282.9 million (exclusive of transactions costs) .

During the nine months ended September 30, 2023, the Company acquired an interest in four assets from entities indirectly wholly-owned by a fund that is managed by affiliates of CIM Group for $ 282.9 million (exclusive of transactions costs) .

See Note 3 and Note 7 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 (4750 Wilshire).

The lease was amended on August 7, 2019 to reduce

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023 (Unaudited) – (Continued)

the rentable square feet to approximately 30,000 rentable square feet.

On May 15, 2019, an affiliate of 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 (4750 Wilshire).

The lease was amended on August 7, 2019 to reduce the rentable square feet to approximately 30,000 rentable square feet.

In February 2023, the Company sold an 80 % interest in 4750 Wilshire and now holds its retained 20 % interest in the property through the 4750 Wilshire JV.

Prior to the sale, for the three months ended March 31, 2023, the Company recorded rental and other property income related to this tenant of $ 194,000 and for the three and six months ended June 30, 2022, recorded rental and other property income from the tenant of $ 370,000 and $ 740,000 respectively.

For the three and six months ended June 30, 2023, the Company’s share of the income from the tenant earned by the 4750 Wilshire JV was $ 53,000 and $ 90,000 , respectively.

Prior to the sale, for the three months ended March 31, 2023, the Company recorded rental and other property income related to this tenant of $ 194,000 and for the three and nine months ended September 30, 2022, recorded rental and other property income from the tenant of $ 370,000 and $ 1.1 million respectively.

For the three and nine months ended September 30, 2023, the Company’s share of the income from the tenant earned by the 4750 Wilshire JV was $ 80,000 and $ 170,000 , respectively.

COMMITMENTS AND CONTINGENCIES

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 $ 7.8 million as of June 30, 2023, 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.

The Company’s outstanding commitments to fund loans were $ 25.9 million as of September 30, 2023, 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 expiration dates.

Since some commitments are expected to expire without being drawn upon, total commitment amounts do not necessarily represent future cash requirements.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

General —In connection with the ownership and operation of real estate properties, the Company has certain obligations for the payment of tenant improvement allowances and lease commissions in connection with new leases and renewals.

The Company had a total of $ 6.5 million in future obligations under leases to fund tenant improvements and other future construction obligations as of June 30, 2023.

As of June 30, 2023, $ 2.5 million was funded to reserve accounts included in restricted cash on the Company’s consolidated balance sheet for these tenant improvement obligations in connection with the mortgage loan agreement entered into in June 2016.

The Company had a total of $ 5.8 million in future obligations under leases to fund tenant improvements and other future construction obligations as of September 30, 2023.

As of September 30, 2023, $ 2.5 million was funded to reserve accounts included in restricted cash on the Company’s consolidated balance sheet for these tenant improvement obligations in connection with the mortgage loan agreement entered into in June 2016.

Employment Agreements —The Company has an employment agreement with one of its officers.

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SBA Related —If the SBA establishes that a loss on an SBA guaranteed loan is attributable to significant technical deficiencies in the manner in which the loan was originated, funded or serviced under the PPP or the SBA 7(a) Small Business Loan Program, the SBA may seek recovery of the principal loss related to the deficiency from the Company.

As of June 30, 2023, the Company serviced an aggregate of $ 241.4 million of the guaranteed portion of SBA 7(a) loans.

As of September 30, 2023, the Company serviced an aggregate of $ 232.6 million of the guaranteed portion of SBA 7(a) loans.

With respect to the guaranteed portion of SBA loans that have been sold, the SBA will first honor its guarantee and then seek compensation from the Company in the event that a loss is deemed to be attributable to technical deficiencies.

2 unchanged sentences

Environmental Matters —In connection with the ownership and operation of real estate properties, the Company may be potentially liable for costs and damages related to environmental matters, including asbestos-containing materials.

The Company has not been notified by any governmental authority of any noncompliance, liability, or other claim in connection

The Company has not been notified by any governmental authority of any noncompliance, liability, or other claim in connection with any of the properties, and the Company is not aware of any other environmental condition with respect to any of the properties that management believes will 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.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023 (Unaudited) – (Continued)

with any of the properties, and the Company is not aware of any other environmental condition with respect to any of the properties that management believes will 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.

Future minimum rental revenue under long-term operating leases as of June 30, 2023, excluding tenant reimbursements of certain costs, are as follows (excludes unconsolidated properties, in thousands):

September 30, 2023 (Unaudited) – (Continued)

Future minimum rental revenue under long-term operating leases as of September 30, 2023, excluding tenant reimbursements of certain costs, are as follows (excludes unconsolidated properties, in thousands):

Years Ending December 31, Total

2023 (Six months ending December 31, 2023) $ 31,246

2023 (Three months ending December 31, 2023) $ 15,362

Thereafter 49,118

SEGMENT DISCLOSURE

The Company’s reportable segments during the three and six months ended June 30, 2023 consist of three types of commercial real estate properties, namely, office, hotel and multifamily, as well as a segment for the Company’s lending business.

The Company’s reportable segments during the three and six months ended June 30, 2022 consist of two types of commercial real estate properties, namely, office and hotel, as well as a segment for the Company’s lending business.

The Company’s reportable segments during the three and nine months ended September 30, 2023 consist of three types of commercial real estate properties, namely, office, hotel and multifamily, as well as a segment for the Company’s lending business.

The Company’s reportable segments during the three and nine months ended September 30, 2022 consist of two types of commercial real estate properties, namely, office and hotel, as well as a segment for the Company’s lending business.

Management internally evaluates the operating performance and financial results of the segments based on net operating income.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023 (Unaudited) – (Continued)

The net operating income (loss) of the Company’s segments for the three and six months ended June 30, 2023 and 2022 is as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

September 30, 2023 (Unaudited) – (Continued)

The net operating income (loss) of the Company’s segments for the three and nine months ended September 30, 2023 and 2022 is as follows (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

4 unchanged sentences

Total property expenses 6,342 7,320 19,391 19,968

(Loss) income from unconsolidated entities ( 710 ) 260 ( 774 ) 380

Income (loss) from unconsolidated entities 1,611 ( 204 ) 837 176

Segment net operating income—office 9,318 6,519 22,957 22,433

11 unchanged sentences

(Loss) income from unconsolidated entity ( 422 ) — 216 —

Segment net operating income—multifamily 522 — 1,197 —

Segment net operating (loss) income—multifamily ( 391 ) — 806 —

Revenues 2,570 2,353 8,243 7,987

8 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023 (Unaudited) – (Continued)

A reconciliation of segment net operating income to net income attributable to the Company for the three and six months ended June 30, 2023 and 2022 is as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

September 30, 2023 (Unaudited) – (Continued)

A reconciliation of segment net operating income to net income attributable to the Company for the three and nine months ended September 30, 2023 and 2022 is as follows (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

13 unchanged sentences

Net (loss) income attributable to the Company $ ( 15,773 ) $ ( 237 ) $ ( 40,083 ) $ 4,982

The condensed assets for each of the segments as of June 30, 2023 and December 31, 2022, along with capital expenditures and loan originations for the six months ended June 30, 2023 and 2022, are as follows (in thousands):

June 30, 2023 December 31, 2022

The condensed assets for each of the segments as of September 30, 2023 and December 31, 2022, along with capital expenditures and loan originations for the nine months ended September 30, 2023 and 2022, are as follows (in thousands):

September 30, 2023 December 31, 2022

Condensed assets:

5 unchanged sentences

Total assets $ 898,056 $ 690,248

Six Months Ended June 30,

Nine Months Ended September 30,

Capital expenditures (1) and loan originations:

10 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023 (Unaudited) – (Continued)

September 30, 2023 (Unaudited) – (Continued)

SUBSEQUENT EVENTS

On August 2, 2023, the Company granted stock awards totaling 48,888 restricted shares of its Common Stock to the independent members of the Board of Directors.

The shares will vest after one year of continuous service.

On October 10, 2023, the Company and a co-investor affiliated with CIM Group acquired from an unrelated third-party a 100 % fee-simple interest in a plot of land located in the Sycamore media district of Los Angeles, California for a gross purchase price of $ 18.0 million.

The property has a site area of approximately 44,141 square feet.

The Company owns approximately 28.8 % of this property.

The site is being evaluated for different development options.

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-Q

Item 1. Financial Statements