What changed in this filing

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Item 1. Financial Statements

2024-05-15 compared with 2023-11-14 · 422 added, 526 removed, 837 unchanged (53% of the section changed)

3 unchanged sentences

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

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Investments in real estate, net $ 700,618 $ 704,762

11 unchanged sentences

Accounts payable and accrued expenses 25,639 26,426

Intangible liabilities, net — 20

Due to related parties 3,333 3,463

2 unchanged sentences

COMMITMENTS AND CONTINGENCIES (Note 15)

REDEEMABLE PREFERRED STOCK:

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

34,873,861 shares authorized;

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

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

34,873,861 shares authorized;

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;

34,211,995 and 34,611,501 shares authorized as of March 31, 2024 and December 31, 2023, respectively;

8,820,338 and 7,042,333 shares issued and outstanding, respectively, as of March 31, 2024 and 8,820,338 and 7,431,839 shares issued and outstanding, respectively, as of December 31, 2023;

liquidation preference of $ 25.00 per share, subject to adjustment

1 unchanged sentence

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

27,935,059 shares authorized;

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;

27,880,928 and 27,904,974 shares authorized as of March 31, 2024 and December 31, 2023, respectively;

11,327,248 and 11,208,176 shares issued and outstanding, respectively, as of March 31, 2024 and 10,473,369 and 10,378,343 shares issued and outstanding, respectively, as of December 31, 2023;

liquidation preference of $ 25.00 per share, subject to adjustment

1 unchanged sentence

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

26,991,590 shares authorized;

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;

26,991,590 shares authorized as of March 31, 2024 and December 31, 2023;

56,857 and 48,447 shares issued and outstanding, respectively, as of March 31, 2024 and 56,857 and 48,447 shares issued and outstanding, respectively, as of December 31, 2023;

liquidation preference of $ 25.00 per share, subject to adjustment

1 unchanged sentence

900,000,000 shares authorized;

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.

22,786,741 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

Additional paid-in capital 851,234 852,476

1 unchanged sentence

Total stockholders’ equity 369,888 374,403

Noncontrolling interests 2,836 373

Non-controlling interests 2,191 2,366

Total equity 372,079 376,769

4 unchanged sentences

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

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

2023 2022 2023 2022

Three Months Ended March 31,

Rental and other property income $ 18,773 $ 14,886

11 unchanged sentences

Total Expenses 37,307 38,104

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

(Loss) income from unconsolidated entities ( 326 ) 768

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

(LOSS) INCOME BEFORE PROVISION FOR INCOME TAXES ( 16,093 ) ( 45 ) ( 41,615 ) 5,816

LOSS BEFORE PROVISION FOR INCOME TAXES ( 3,635 ) ( 7,320 )

Provision for income taxes 270 256

NET (LOSS) INCOME ( 16,647 ) ( 232 ) ( 42,584 ) 5,001

Net loss (income) attributable to noncontrolling interests 874 ( 5 ) 2,501 ( 19 )

NET (LOSS) INCOME ATTRIBUTABLE TO THE COMPANY ( 15,773 ) ( 237 ) ( 40,083 ) 4,982

NET LOSS ( 3,905 ) ( 7,576 )

Net loss attributable to non-controlling interests 175 625

NET LOSS ATTRIBUTABLE TO THE COMPANY ( 3,730 ) ( 6,951 )

Redeemable preferred stock dividends declared or accumulated (Note 11) ( 7,759 ) ( 5,391 )

Redeemable preferred stock deemed dividends (Note 11) — — — ( 19 )

Redeemable preferred stock redemptions (Note 11) ( 806 ) ( 373 )

10 unchanged sentences

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

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

Common Stock Preferred Stock

5 unchanged sentences

Balances, December 31, 2023 22,786,741 $ 23 17,858,629 $ 443,829 $ 852,476 $ ( 921,925 ) $ 374,403 $ 2,366 $ 376,769

Cumulative-effect adjustment upon adoption of ASU 2016-13 (Note 2)

— — — — — ( 619 ) ( 619 ) — ( 619 )

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

Stock-based compensation expense

Common dividends ($ 0.085 per share)

— — — — 55 — 55 — 55

Issuance of Series A1 Preferred Stock — — 1,032,433 25,569 ( 2,291 ) — 23,278 — 23,278

Redemption of Series A1 Preferred Stock — — ( 12,870 ) ( 319 ) 28 ( 11 ) ( 302 ) — ( 302 )

Dividends to holders of Series A1 Preferred Stock ($ 0.39563 per share)

— — — — — ( 2,559 ) ( 2,559 ) — ( 2,559 )

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

— — — — — ( 17 ) ( 17 ) — ( 17 )

Reclassification of Series A Preferred stock to permanent equity — — 389,325 9,699 ( 887 ) — 8,812 — 8,812

Redemption of Series A Preferred Stock — — ( 189,753 ) ( 4,723 ) 403 ( 362 ) ( 4,682 ) — ( 4,682 )

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

— — — — — ( 2,810 ) ( 2,810 ) — ( 2,810 )

Net loss — — — — — ( 6,951 ) ( 6,951 ) ( 625 ) ( 7,576 )

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

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

Common dividends ($ 0.085 per share)

4 unchanged sentences

— — — — — ( 5,251 ) ( 5,251 ) — ( 5,251 )

Redemption of Series D Preferred Stock — — ( 410 ) ( 10 ) — — ( 10 ) — ( 10 )

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

— — — — — ( 17 ) ( 17 ) — ( 17 )

Reclassification of Series A Preferred stock to permanent equity — — 300,846 7,462 ( 658 ) — 6,804 — 6,804

Redemption of Series A Preferred Stock — — ( 389,506 ) ( 9,698 ) 831 ( 776 ) ( 9,643 ) — ( 9,643 )

2 unchanged sentences

Net loss — — — — — ( 3,730 ) ( 3,730 ) ( 175 ) ( 3,905 )

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

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

Balances, March 31, 2024 22,786,741 $ 23 18,298,956 $ 454,782 $ 851,234 $ ( 936,151 ) $ 369,888 $ 2,191 $ 372,079

Three Months Ended March 31, 2023

Common Stock Preferred Stock

5 unchanged sentences

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

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

Common dividends ($ 0.085 per share)

— — — — — ( 1,986 ) ( 1,986 ) — ( 1,986 )

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

— — — — — ( 2,896 ) ( 2,896 ) — ( 2,896 )

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

Cumulative-effect adjustment upon adoption of ASU 2016-13 — — — — — ( 619 ) ( 619 ) — ( 619 )

Acquisition of non-controlling interests

— — — — — — — 5,002 5,002

Reclassification of Series A Preferred stock to permanent equity — — 329,921 8,304 ( 637 ) — 7,667 — 7,667

Redeemable preferred stock accretion — — — — — ( 15 ) ( 15 ) — ( 15 )

Redemption of Series A Preferred Stock — — ( 49,341 ) ( 1,228 ) 108 ( 75 ) ( 1,195 ) — ( 1,195 )

Net income — — — — — 2,297 2,297 5 2,302

Balances, March 31, 2022 23,369,331 $ 24 11,995,934 $ 317,737 $ 866,272 $ ( 806,923 ) $ 377,110 $ 350 $ 377,460

Contributions to noncontrolling interests — — — — — — — 5 5

Distributions to noncontrolling interests — — — — — — — ( 3 ) ( 3 )

Stock-based compensation expense

Repurchase of common stock ( 41,374 ) — — — ( 303 ) — ( 303 ) — ( 303 )

— — — — 55 — 55 — 55

Common dividends ($ 0.085 per share)

1 unchanged sentence

Issuance of Series A1 Preferred Stock — — 1,032,433 25,569 ( 2,291 ) — 23,278 — 23,278

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

— — — — — ( 79 ) ( 79 ) — ( 79 )

Redemption of Series A1 Preferred Stock — — ( 12,870 ) ( 319 ) 28 ( 11 ) ( 302 ) — ( 302 )

Dividends to holders of Series A1 Preferred Stock ($ 0.39563 per share)

3 unchanged sentences

Reclassification of Series A Preferred stock to permanent equity — — 389,325 9,699 ( 887 ) — 8,812 — 8,812

Redeemable preferred stock accretion — — — — — ( 4 ) ( 4 ) — ( 4 )

Redemption of Series A Preferred Stock — — ( 189,753 ) ( 4,723 ) 403 ( 362 ) ( 4,682 ) — ( 4,682 )

Net income — — — — — 2,922 2,922 9 2,931

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)

— — — — — ( 2,810 ) ( 2,810 ) — ( 2,810 )

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

Net loss — — — — — ( 6,951 ) ( 6,951 ) ( 625 ) ( 7,576 )

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

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

2 unchanged sentences

(In thousands) (Unaudited)

Nine Months Ended

September 30,

Three Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

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

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

Net loss $ ( 3,905 ) $ ( 7,576 )

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

Depreciation and amortization, net 6,567 9,604

5 unchanged sentences

Write-offs of uncollectible receivables 411 13

Loss on interest rate caps 349 —

(Gain) loss on interest rate caps ( 55 ) 339

Deferred income taxes 13 ( 11 )

Stock-based compensation 55 55

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

Income (loss) from unconsolidated entities 326 ( 768 )

Loans funded, held for sale to secondary market ( 5,799 ) ( 7,849 )

2 unchanged sentences

Commitment fees remitted and other operating activity ( 160 ) ( 150 )

Return on investment from unconsolidated entity — 176

Changes in operating assets and liabilities:

11 unchanged sentences

Investment in unconsolidated entity ( 530 ) ( 6,626 )

Distributions from unconsolidated entity — 10,259

Loans funded ( 1,934 ) ( 2,932 )

4 unchanged sentences

Proceeds from revolving credit facilities, term notes and mortgages 5,000 212,000

Proceeds from the issuance of SBA 7(a) loan-backed notes 54,141 —

Proceeds from SBA 7(a) loan-backed notes — 54,141

Payment of principal on secured borrowings ( 560 ) ( 607 )

2 unchanged sentences

Payment of common dividends ( 1,937 ) ( 1,933 )

Repurchase of Common Stock — ( 4,715 )

Net proceeds from issuance of Preferred Stock 19,549 23,644

Payment of preferred stock dividends ( 7,651 ) ( 9,820 )

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

Redemption of Preferred Stock ( 10,223 ) ( 88,884 )

Noncontrolling interests’ distributions ( 38 ) ( 3 )

Noncontrolling interests’ contributions — 5

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

Net cash provided by financing activities 191 77,655

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

1 unchanged sentence

(In thousands) (Unaudited)

Nine Months Ended

September 30,

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

Three Months Ended

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH 1,414 ( 10,647 )

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH:

19 unchanged sentences

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

Redeemable preferred stock deemed dividends $ — $ 19

Accrued redeemable preferred stock fees $ 246 $ 413

Acquisition of noncontrolling interests $ 5,002 $ —

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

Acquisition of non-controlling interests $ — $ 5,002

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

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited)

March 31, 2024 (Unaudited)

ORGANIZATION AND OPERATIONS

4 unchanged sentences

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

Since June 2022, the Company has been conducting a continuous public offering with respect to shares of its Series A1 Preferred Stock, par value $ 0.001 per share with an initial stated value of $ 25.00 per share, subject to adjustment (Note 11).

Commencing in June 2022, the Company conducted a public offering with respect to shares of its Series A1 Preferred Stock, par value $ 0.001 per share with an initial stated value of $ 25.00 per share, subject to adjustment (Note 11).

The Company has filed a Registration Statement on Form S-11 in respect of such offering and anticipates continuing the offering upon effectiveness of such Registration Statement on Form S-11.

Nothing contained in this Quarterly Report on Form 10-Q is or shall be deemed to be an offer to sell any securities of the Company, or the solicitation of any offer to buy any securities of

the Company, in any jurisdiction, which may only be made pursuant to appropriate offering documentation.

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

4 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 nine months ended September 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 months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

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 2023 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 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.

As of March 31, 2024, 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 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

In addition, as of March 31, 2024, the Company has determined that its

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

obligations to absorb losses and right to receive benefits.

March 31, 2024 (Unaudited) – (Continued)

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.

21 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 nine months ended September 30, 2023 and 2022 (Note 3).

The Company did no t recognize any impairment of long-lived assets during the three months ended March 31, 2024 and 2023 (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.

4 unchanged sentences

On the date that we enter into a derivative contract, we designate the derivative as a fair value hedge, a cash flow hedge, a foreign currency fair value or cash flow hedge, a hedge of a net investment in a foreign operation, or a trading or non-hedging instrument.

Accounting for changes in the fair value of a derivative instrument depends on the intended use and designation of the derivative instrument.

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

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

March 31, 2024 (Unaudited) – (Continued)

Accounting for changes in the fair value of a derivative instrument depends on the intended use and designation of the derivative instrument.

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.

16 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 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.

As of March 31, 2024 and December 31, 2023, lease incentives of $ 3.9 million and $ 3.9 million, respectively, are presented net of accumulated amortization of $ 3.4 million and $ 3.3 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

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

March 31, 2024 (Unaudited) – (Continued)

For the three months ended March 31, 2024 and 2023, the Company recognized rental income as follows (in thousands):

Three Months Ended March 31,

Rental and other property income

2 unchanged sentences

Variable lease payments (2)

2,482 2,545 7,748 7,651

Rental and other property income $ 18,773 $ 14,886

9 unchanged sentences

The Company does not use a general reserve approach.

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.

As of March 31, 2024 and December 31, 2023, the Company had identified certain tenants where collection was no longer considered probable and decreased outstanding receivables by $ 1.2 million and $ 868,000 , respectively, across all operating leases.

Revenue from lending activities

15 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

March 31, 2024 (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 September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

Hotel properties

9 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 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.

No such amounts were recognized for tenant recoveries outside of the lease agreements for each of the three months ended March 31, 2024 and 2023.

As of March 31, 2024, 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 $ 8.3 million and $ 9.0 million as of September 30, 2023 and December 31, 2022, respectively.

Unamortized retained loan discounts were $ 8.3 million and $ 8.4 million as of March 31, 2024 and December 31, 2023, 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.

4 unchanged sentences

The current expected credit losses (“CECL”) required under ASU 2016-13 reflects the Company’s current estimate of potential credit losses related to the Company’s loans receivable included in the consolidated balance sheets.

The initial current expected credit losses recorded on January 1, 2023 is reflected as a direct charge to distributions in excess of earnings on the Company’s consolidated statements of equity;

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

The initial expected credit losses recorded on January 1, 2023 is reflected as a direct charge to distributions in excess of earnings on the Company’s consolidated statements of equity;

however, subsequent changes to CECL 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 CECL, 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 for the duration of each respective loan.

In addition, other than a

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

The Company estimates the current expected credit loss for its loans primarily using its historical experience with loan write-offs, historical charge-offs from third-party firms, and the Weighted Average Remaining Maturity method, which has been identified as an acceptable method for estimating CECL reserves in the Financial Accounting Standards Board (“FASB”) Staff Q&A Topic 326, No.

March 31, 2024 (Unaudited) – (Continued)

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.

The Company adopted ASU 2016-13 using the modified retrospective method for all financial assets measured at amortized cost.

The Company recorded a cumulative-effective adjustment to the opening distributions in excess of earnings in its consolidated statement of equity as of January 1, 2023 of $ 619,000 .

This represents a total CECL reserve transition adjustment of approximately $ 783,000 , net of a $ 164,000 deferred tax asset.

As of March 31, 2024 and December 31, 2023, the Company had a total CECL of $ 1.6 million and $ 1.7 million, respectively.

The Company estimates CECL for its loans primarily using its historical experience with loan write-offs, historical charge-offs from third-party firms, and the weighted average remaining maturity method, which has been identified as an acceptable method for estimating CECL reserves in the Financial Accounting Standards Board (“FASB”) Staff Q&A Topic 326, No.

This method requires the Company to reference historical loan loss data across a comparable data set and apply such loss rate to each loan investment over its expected remaining term, taking into consideration expected economic conditions over the relevant timeframe.

The Company considers loans that are both (i) expected to be substantially repaid through the operation or sale of the underlying collateral and (ii) for which the borrower is experiencing financial difficulty, to be “collateral-dependent” loans.

For such loans that the Company determines that foreclosure of the collateral is probable, the Company measures the expected losses based on the difference between the fair value of the collateral less costs to sell and the amortized cost basis of the loan as of the measurement date.

For loans that the Company determines that foreclosure of the collateral is probable, the Company measures the expected losses based on the difference between the fair value of the collateral less costs to sell and the amortized cost basis of the loan as of the measurement date.

For collateral-dependent loans with respect to which the Company determines foreclosure is not probable, the Company applies a practical expedient to estimate expected losses using the difference between the collateral’s fair value (less costs to sell the asset if repayment is expected through the sale of the collateral) and the amortized cost basis of the loan.

The Company may use other acceptable alternative approaches in the future depending on, among other factors, the type of loan, underlying collateral and availability of relevant historical market loan loss data.

The Company adopted ASU 2016-13 using the modified retrospective method for all financial assets measured at amortized cost.

The Company recorded a cumulative-effective adjustment to the opening distributions in excess of earnings in its consolidated statement of equity as of January 1, 2023 of $ 619,000 .

This represents a total CECL reserve transition adjustment of approximately $ 783,000 , net of a $ 164,000 deferred tax asset.

Prior to adoption, the Company considered a loan to be impaired when the Company did not expect to collect all of the contractual interest and principal payments as scheduled in the loan agreements .

The Company also established a general loan loss reserve when available information indicated that it was probable a loss had occurred based on the carrying value of the portfolio and if the amount of the loss could be reasonably estimated.

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

Quarterly, the Company evaluates the risk of all loans receivable and assigns a risk rating based on a variety of factors, which are grouped as follows:

(i) loan and credit structure, including the as-is loan-to-value (“LTV”) ratio and structural features;

(ii) quality and stability of real estate value and operating cash flow, including debt yield, dynamics of the geography, local market, physical condition and stability of cash flow;

and (iii) quality, experience and financial condition of the borrower.

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

1- Acceptable — These are assets of high quality;

2- Other Assets Especially Mentioned (“OAEM”) — These are assets that are generally profitable but exhibit potential weakness or weaknesses, including, but not limited to, no significant pay history as detailed below for loans originated generally within the last year.

Such weaknesses could result in deterioration if not corrected ;

3- Substandard — These assets generally have a well-defined weakness or weaknesses which could hinder collection efforts;

4- Doubtful — These assets have weakness or weaknesses similar to substandard loans;

however, the weakness or weaknesses are so extreme that significant loss potential exists in all cases and

5- Loss — Assets assigned this classification have no value and thus have been or are in the process of being charged off.

The Company generally assigns a risk rating of “2” to all newly originated loans (generally within one year of origination) due to lack of management experience and/or lack of adequate historical debt coverage at the origination date.

These loans likely will be classified to acceptable within two years of origination.

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.

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

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

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

costs specifically identifiable to a closing, such as commissions, dealer-manager fees, and other offering fees and expenses.

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

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

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, deferred rent receivable and charges consist of the following (in thousands):

September 30, 2023 December 31, 2022

As of March 31, 2024 and December 31, 2023, deferred rent receivable and charges consist of the following (in thousands):

March 31, 2024 December 31, 2023

Deferred rent receivable $ 14,783 $ 14,757

8 unchanged sentences

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

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

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

Non-controlling Interests —Non-controlling interests represent the interests in various properties owned by third parties.

Restricted Cash —The Company’s mortgage loan and hotel management agreements provide for depositing cash into restricted accounts reserved for capital expenditures, free rent, tenant improvement and leasing commission obligations.

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Actual results could differ from those estimates.

Recently Issued Accounting Pronouncements —In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2016-13, Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments , which was subsequently amended by ASU No.

2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses (“ASU 2018-19”) in November 2018.

Subsequently, the FASB issued ASU No.

2019-04, ASU No.

2019-05, ASU No.

2019-10, ASU No.

2019-11 and ASU No.

2020-02 to provide additional guidance on the credit losses standard.

ASU 2016-13 and the related updates improve financial reporting requiring more timely recognition of credit losses on loans and other financial instruments that are not accounted for at fair value through net income, including loans held-for-investment, held-to-maturity debt securities, net investment in leases and other such commitments.

ASU 2016-13 requires that financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis.

The amendments in ASU 2016-13 require the Company to measure all expected credit losses based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the financial assets and eliminates the “incurred loss” methodology under current GAAP.

ASU 2018-19 clarified that receivables arising from operating leases are not within the scope of Topic 326.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

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

2016-02, Leases (Topic 842).

For smaller reporting companies, public entities that are not SEC filers, and entities that are not public business entities, the ASU is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2022.

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

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

On March 31, 2022, the FASB issued ASU No.

2022-02, Troubled Debt Restructurings and Vintage Disclosures (Topic 326) (“ASU 2022-02”).

ASU 2022-02 eliminates the recognition and measurement guidance for troubled debt restructurings (“TDRs”) and, instead, requires that an entity evaluate (consistent with the accounting for other loan modifications) whether the modification represents a new loan or a continuation of an existing loan.

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 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.

Recently Issued Accounting Pronouncements —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.

ASU 2023-05 applies to the formation of a joint venture and requires a joint venture to initially measure all contributions received

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

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.

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

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”).

ASU 2023-07 enhances the disclosures required for reportable segments on an annual and interim basis.

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

The Company does not expect the adoption of ASU 2023-07 to 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):

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Land $ 175,682 $ 175,715

7 unchanged sentences

Net investments in real estate $ 700,618 $ 704,762

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.

For the three months ended March 31, 2024 and 2023, the Company recorded depreciation expense of $ 5.8 million and $ 4.8 million, respectively.

2024 Transactions —There were no acquisitions or dispositions during the three months ended March 31, 2024.

2023 Transactions — During the three months ended March 31, 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.

10 unchanged sentences

March 28, 2023 288 98.1 % $ 145,500

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

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

The building at Channel House also includes approximately 1,864 square feet of retail space.

The F3 Land Site is c urrently being utilized as a surface parking lot.

The F3 Land Site is c urrently being utilized as a surface parking lot and being evaluated for future development options including hotel development but there are no formal plans in place to begin development as of March 31, 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 $ 149,000 , which are not included in the purchase price above.

The building also includes approximately 3,968 square feet of retail space.

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 nine months ended September 30, 2023.

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

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

The Company sold an interest in the following property during the three months ended March 31, 2023.

Asset Date of Interest Sales Gain on

3 unchanged sentences

Office / Multifamily February 17, 2023 80.0 % $ 34,400 $ 1,104

(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.

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

Property Type Acquisition Square Feet Price

(in thousands)

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

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 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 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.

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

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

(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 the Company 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, all of which has been collected as of March 31, 2024.

Additionally, as of March 31, 2024, the Company has a receivable of $ 1.4 million due from the 4750 Wilshire JV included in other assets on the Company’s consolidated balance sheet related to development costs incurred by the Company at 4750 Wilshire Boulevard prior to the sale of 80 % of its interest in the property to the 4750 Wilshire JV.

The Company owns a 20 % interest in the 4750 Wilshire JV and accounts for its investment as an equity method investment as of March 31, 2023.

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 nine months ended September 30, 2023 and 2022.

Nine months ended September 30,

The following table summarizes the purchase price allocation of the aforementioned acquisitions during the three months ended March 31, 2024 and 2023.

Three Months Ended March 31,

(in thousands)

2 unchanged sentences

Buildings and improvements — 206,717

Tenant improvements — 47

Furniture, fixtures, and equipment — 8,140

3 unchanged sentences

Net assets acquired $ — $ 283,051

(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.

(1) The amortization period for the in-place leases acquired during the three months ended March 31, 2023 was approximately 6 months at the date of acquisition.

(2) The amortization period for the above-market leases acquired during the three months ended March 31, 2023 was approximately 7 months at the date of acquisition.

(3) The amortization period for the below-market leases acquired during the three months ended March 31, 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)

March 31, 2024 (Unaudited) – (Continued)

INVESTMENT IN UNCONSOLIDATED ENTITIES

2 unchanged sentences

Carrying Value

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

Property Asset Type Location Acquisition Date Ownership Interest March 31, 2024 December 31, 2023

1910 Sunset Boulevard (1)

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

Office / Multifamily (Development)

Los Angeles, CA February 11, 2022 44.2 % $ 11,739 $ 12,040

4750 Wilshire Boulevard (2)

Office / Multifamily Los Angeles, CA February 17, 2023 20.0 % 10,124 —

Office / Multifamily (Development)

Los Angeles, CA February 17, 2023 20.0 % 9,950 9,119

1902 Park Avenue (3)

Multifamily Los Angeles, CA February 28, 2023 50.0 % 6,739 7,082

1015 N Mansfield Avenue (4)

Office (Development)

Los Angeles, CA October 10, 2023 28.8 % 5,281 5,264

Total investments in unconsolidated entities $ 33,709 $ 33,505

1 unchanged sentence

(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.

The 1910 Sunset JV (defined below) has plans to begin a development program to renovate and modernize the building’s creative office space but the 1910 Sunset JV has not yet finalized the formal development plan for the property.

The 1910 Sunset JV has begun the 1915 Park Project (defined below) to build multifamily units on the 1915 Park Avenue land parcel adjacent to the office building.

(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 1910 Sunset JV Partner initially contributed the remaining balance.

(4) 1015 N Mansfield Avenue is an office building with a 44,141 square foot site area and a parking garage.

The site is being evaluated for different development options, including creative office or other commercial space.

As of March 31, 2024, this property was in pre-development phase and the Company has not finalized the formal development plan for the property.

1910 Sunset Boulevard — In February 2022, the Company invested in an Unconsolidated Joint Venture (the “1910 Sunset JV”) with a CIM-managed separate account (the “1910 Sunset JV Partner) to purchase an office property located at 1910 Sunset Boulevard in Los Angeles, California along with an adjacent vacant land parcel located at 1915 Park Avenue, 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 $ 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.

The 1910 Sunset JV plans to begin a development program to renovate and modernize the building’s creative office space but the 1910 Sunset JV has not yet finalized the formal development plan for the property.

Additionally, the 1910 Sunset JV has begun construction to build 36 multifamily units on the 1915 Park Avenue land parcel adjacent to the office building (the “1915 Park Project”).

The 1915 Park Project is expected to be completed by the third quarter of 2025 and to cost approximately $ 19.3 million (the Company’s share of which will be $8.5 million).

The 1910 Sunset JV plans to finance the project through a combination of cash from operations at its office property, additional equity contributions from existing investors, and proceeds from a mortgage loan from a third-party lender (which is in-place but currently has no outstanding borrowings and is subject to additional equity contribution requirements which have not yet been met).

As of March 31, 2024, the 1910 Sunset JV had incurred total costs of $ 2.3 million in connection with the 1915 Park Project.

The Company recorded a loss of $ 301,000 and $ 61,000 related to its investment in the 1910 Sunset JV during the three months ended March 31, 2024 and March 31, 2023, respectively.

The Company’s investment in the 1910 Sunset JV was $ 11.7 million and its ownership percentage remained unchanged as of March 31, 2024.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

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).

The Company retained a 20 % interest in 4750 Wilshire through a joint venture arrangement between the Company and the 4750 Wilshire JV Partners (the “4750 Wilshire JV”).

The 4750 Wilshire JV Partners is converting two of the three floors of 4750 Wilshire from office-use into for-lease multifamily units, with the first floor of 4750 Wilshire continuing to function as 30,335 square feet of office space.

The total cost of the conversion is expected to be approximately $ 31.0 million, which will be financed by a combination of equity contributions from the 4750 Wilshire JV Partners and a third-party construction loan, secured by 4750 Wilshire, which closed in March 2023, that allows for total draws of $ 38.5 million (the “4750 Wilshire Construction Loan”).

The Company retained a 20 % interest in 4750 Wilshire through an Unconsolidated Joint Venture arrangement between the Company and the 4750 Wilshire JV Partners (the “4750 Wilshire JV”).

The 4750 Wilshire JV is converting two of the three floors of 4750 Wilshire from office-use into 68 for-lease multifamily units (the 4750 Wilshire Project), with the first floor of 4750 Wilshire continuing to function as 30,335 square feet of office space.

The 4750 Wilshire Project is expected to be completed by the fourth quarter of 2024 and the total cost of the conversion is expected to be approximately $ 31.0 million (the Company’s share of which will be $ 6.2 million), which will be financed by a combination of equity contributions from the 4750 Wilshire JV Partners and a third-party construction loan, secured by 4750 Wilshire, which closed in March 2023 and that allows for total draws of $ 38.5 million (the “4750 Wilshire Construction Loan”).

The Company provided a limited guarantee to the lender under the 4750 Wilshire Construction Loan.

Pursuant to the co-investment agreement, the 4750 Wilshire JV Partners will pay an on-going management fee to the Company.

As of March 31, 2024, total costs of $ 17.3 million had been incurred by the 4750 Wilshire JV in connection with the 4750 Wilshire Project.

Pursuant to the co-investment agreement, the 4750 Wilshire JV pays an on-going management fee to the Company.

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

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.

The Company recorded income of $ 401,000 and a loss of $ 3,000 related to its investment in the 4750 Wilshire JV during the three months ended March 31, 2024 and March 31, 2023, respectively, in the consolidated statements of operations.

The Company’s investment in the 4750 Wilshire JV was $ 10.0 million and its ownership percentage remained unchanged at 20% as of March 31, 2024.

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

In connection with the closing of this transaction 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 $ 443,000 and income of $ 832,000 related to its investment in the 1902 Park JV during the three months ended March 31, 2024 and March 31, 2023, respectively, in the consolidated statements of operations.

The Company’s investment in the 1902 Park JV was $ 6.7 million as of March 31, 2024.

1015 N Mansfield Avenue — In October, 2023, the Company and a co-investor affiliated with CIM Group (the “1015 N Mansfield JV Partner”) 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 (excluding transaction costs) (the “1015 N Mansfield JV”).

The property has a site area of approximately 44,141 square feet and contains a parking garage that has been leased to a third-party tenant.

The site is being evaluated for different creative office or other commercial space development options and was in pre-development phase as the Company has not finalized the formal development plan for the property.The Company owns 28.8 % of the 1015 N Mansfield JV.

The Company recorded income of $ 17,000 related to its investment in the 1015 N Mansfield JV during the three months ended March 31, 2024 in the consolidated statements of operations.

The Company’s investment in the 1015 N Mansfield JV was $ 5.3 million as of March 31, 2024.

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 $ 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.

March 31, 2024 (Unaudited) – (Continued)

LOANS RECEIVABLE

Loans receivable consist of the following (in thousands):

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

SBA 7(a) loans receivable, subject to credit risk $ 12,102 $ 10,393

4 unchanged sentences

Deferred capitalized costs, net 1,125 1,130

Loan loss reserves (1) ( 1,704 ) ( 1,106 )

Current expected credit losses ( 1,644 ) ( 1,680 )

Loans receivable, net $ 56,229 $ 57,005

____________________

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

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.

1 unchanged sentence

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

These loans were subject to credit risk.

These loans are subject to credit risk.

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

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

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

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

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 September 30, 2023 pursuant to ASU 2016-13 as implemented effective January 1, 2023.

CECL reflects the Company’s current estimate of potential credit losses related to loans receivable included in the Company’s consolidated balance sheets as of March 31, 2024 pursuant to ASU 2016-13 as implemented effective January 1, 2023.

Refer to Note 2 for further discussion of CECL.

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):

The following table presents the activity in the Company’s CECL for the three months ended March 31, 2024 and March 31, 2023 (dollar amounts in thousands):

Loans Receivable

Current expected credit losses as of December 31, 2023

Net adjustment to reserve for expected credit losses

Current expected credit losses as of March 31, 2024 $ 1,644

Allowance for credit losses as of December 31, 2022

Transition adjustment on January 1, 2023 783

Reserve for expected credit losses 51

Net adjustment to reserve for expected credit losses 51

Current expected credit losses as of March 31, 2023 $ 1,940

Write-offs ( 85 )

Reserve for expected credit losses ( 142 )

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 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 net adjustments to the reserve for expected credit losses are recognized through net income on the Company’s consolidated statements of operations.

During the three months ended March 31, 2024 and March 31, 2023, the Company recorded a decrease of $ 36,000 and an increase of $ 51,000 , respectively, in its CECL related to its loans receivable, which was recorded in general and administrative expenses in the consolidated statement of operations.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

As further described in Note 2 - Basis of Presentation and Summary of Significant Accounting Policies, the Company evaluates its loans receivable portfolio on a quarterly basis.

Each quarter, the Company assesses the risk factors of each loan and assigns a risk rating based on several factors.

Factors considered in the assessment include, but are not limited to, loan and credit structure, current LTV ratio, debt yield, collateral performance and the quality and condition of the sponsor, borrower and guarantor(s).

Loans are rated “1” (less risk) through “5” (greater risk), which ratings are defined in Note 2 - Basis of Presentation and Summary of Significant Accounting Policies.

The Company’s primary credit quality indicator is its risk ratings, which are further discussed above.

The following table presents the net book value of the Company’s loans receivable portfolio as of March 31, 2024 by year of origination, loan type and risk rating (dollar amounts in thousands):

Amortized Cost of Loans Receivable by Year of Origination

As of March 31, 2024

Number of Loans 2024 2023 2022 2021 2020 Prior Total

Loans by internal risk rating:

1 106 $ 1,170 $ 9,195 $ 3,814 $ 7,133 $ 3,223 $ 11,701 $ 36,236

2 59 476 809 4,298 3,431 2,106 6,240 $ 17,360

3 2 — — 242 — — — $ 242

4 — — — — — — — —

5 — — — — — — — —

Total 167 $ 1,646 $ 10,004 $ 8,354 $ 10,564 $ 5,329 $ 17,941 $ 53,838

SBA 7(a) loans receivable, subject to secured borrowings (1)

Deferred capitalized costs, net 1,125

Current expected credit losses

Held for sale guaranteed portion 402

Total loans receivable, net $ 56,229

Weighted average risk rating 1.4

____________________

(1) The Company does not assign a risk rating to its SBA 7(a) loans receivable that are subject to secured borrowings or the government guaranteed portion of loans held for sale.

The Company has determined there is no credit risk associated with these loans since the SBA has guaranteed payment of the principal.

As of March 31, 2024 and December 31, 2023, 100.0 % of the Company’s loans subject to credit risk were concentrated in the hospitality industry.

As of March 31, 2024 and December 31, 2023, 97.8 % and 99.3 %, 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 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.

As of March 31, 2024 and December 31, 2023, $ 1.6 million and $ 1.3 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

March 31, 2024 (Unaudited) – (Continued)

OTHER INTANGIBLE ASSETS AND LIABILITIES

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

A schedule of the Company’s intangible assets and liabilities and related accumulated amortization and accretion as of March 31, 2024 and December 31, 2023 is as follows (in thousands):

March 31, 2024 December 31, 2023

Intangible assets:

Acquired in-place leases, net of accumulated amortization of $ 4,727 and $ 7,795 , respectively, with an average useful life of 6 and 8 years, respectively.

$ 1,078 $ 1,488

Acquired above-market leases, net of accumulated amortization of $ 29 and $ 39 , respectively, with an average useful life of 7 and 6 years, respectively

Acquired in-place leases, net of accumulated amortization of $ 4,915 and $ 4,821 , respectively, both with an average useful life of 6 years, respectively.

Acquired above-market leases, net of accumulated amortization of $ 32 and $ 30 , respectively, both with an average useful life of 7 years, respectively

Trade name and license 2,957 2,957

Total intangible assets, net $ 3,852 $ 3,948

Intangible lease liabilities:

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.

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

During the three months ended March 31, 2024 and 2023, the Company recognized amortization related to its intangible assets and liabilities as follows (in thousands):

Three Months Ended March 31,

Acquired above-market lease amortization $ 2 $ 24

1 unchanged sentence

Acquired below-market lease amortization $ — $ 9

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

A schedule of future amortization and accretion of acquired intangible assets and liabilities as of March 31, 2024, is as follows (in thousands):

Years Ending December 31, Acquired

Leases Acquired

2023 $ 2 $ 93

2024 (Nine months ended December 31, 2024) $ 4 $ 279

Thereafter — 72

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

March 31, 2024 (Unaudited) – (Continued)

The following table summarizes the debt balances as of March 31, 2024 and December 31, 2023, and the debt activity for the three months ended March 31, 2024 (in thousands):

During the Three Months Ended March 31, 2024

Balances as of December 31, 2023 Debt Issuances & Assumptions Repayments Accretion & (Amortization) Balances as of March 31, 2024

Mortgages Payable:

Fixed rate mortgage payable $ 97,100 $ — $ — $ — $ 97,100

Variable rate mortgages payable — 182,600 ( 16,000 ) — 166,600

Fixed rate mortgages payable $ 163,700 $ — $ — $ — $ 163,700

Variable rate mortgage payable 87,000 — — — 87,000

250,700 — — — 250,700

13 unchanged sentences

Total Debt, Net $ 471,561 $ 5,000 $ ( 4,175 ) $ 427 $ 472,813

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 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 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.

Secured Borrowings — Government Guaranteed Loans —Secured borrowings—government guaranteed loans represent sold loans which are treated as secured borrowings because the loan sales did not meet the derecognition criteria provided for in ASC 860-30, Secured Borrowing and Collateral .

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 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.

Fixed Rate Mortgage Payable —The Company’s fixed rate mortgages payable are secured by a deed of trust on the properties underlying such mortgages and assignments of rents receivable.

As of March 31, 2024, the Company’s fixed rate mortgages payable had fixed interest rates of 4.14 % and 6.25 % per annum, respectively, with payments of interest only due on July 1, 2026 and June 7, 2024, respectively.

In regards to the mortgage payable maturing on June 7, 2024, the Company exercised its one-year extension option in April 2024, extending the maturity of the mortgage by one year.

These loans are non-recourse.

Variable Rate Mortgages Payable —The Company’s variable rate mortgage payable is secured by a deed of trust on the property and assignment of rents receivable.

As of March 31, 2024, the Company’s variable rate mortgage payable had a variable interest rate of SOFR plus 3.36 %, with monthly payments of interest only due on July 7, 2025 with an extension option subject to certain conditions being met.

The loan is non-recourse.

The Company has been in discussions with the lender under the variable rate mortgage to restructure the terms of the mortgage, as rent payments from the property will likely be insufficient to meet debt service payments under the mortgage.

There can be no assurance that such restructuring will occur.

If the Company and the lender under the variable rate mortgage cannot agree on a modification of the mortgage and the Company fails to make a required monthly debt service payment, such failure will constitute an event of default under the mortgage and the lender may, among other remedies, declare principal and interest under the mortgage loan to be immediately due and payable.

The mortgage relates to Channel House, a multifamily property in Oakland, California.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

March 31, 2024 (Unaudited) – (Continued)

As of March 31, 2024, the Company’s secured borrowings-government guaranteed loans included $ 898,000 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 9.29 % at March 31, 2024, and $ 1.5 million of loans sold for an excess spread, with a variable rate, reset quarterly, based on prime rate with weighted average coupon rate of 6.88 % at March 31, 2024.

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.

2 unchanged sentences

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

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

As of March 31, 2024, the variable interest rate was 7.93 %.

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

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 September 30, 2023 and December 31, 2022, $ 73.0 million and $ 150.0 million, respectively, was available for future borrowings.

As of March 31, 2024 and December 31, 2023, $ 48.0 million and $ 53.0 million, respectively, was available for future borrowings.

As of March 31, 2024, the Company was not in compliance with a financial covenant under the 2022 credit facility.

Such non-compliance constituted an event of default under the 2022 credit facility.

On May 14, 2024, lenders under the 2022 credit facility and the Company entered into an agreement (the “Modification Agreement”) pursuant to which the lenders waived such event of default with respect to the test period ending March 31, 2024.

Pursuant to the Modification Agreement, the Company will not be able to borrow under the 2022 credit facility without the consent of the lenders until certain conditions are satisfied, including delivery of a revised business plan acceptable to the lenders and re-establishing compliance with the financial covenant.

There can be no assurance as to when or if such conditions will be satisfied.

The Company believes that it could rely on other sources for its liquidity needs, including (i) obtaining new or modifying existing credit facilities and term loans (ii) offerings of shares of Common Stock, preferred stock or other equity and or debt securities of the Company;

(iii) the addition of senior recourse or non-recourse debt using existing assets as collateral;

(iv) the sale of existing assets;

(v) partnering with co-investors;

and or (vi) cash flows from operations.

Among other restrictions, the Modification Agreement also prohibits subsidiaries of the Company that own properties that secured the 2022 credit facility from making any distributions to its parent entities.

The Modification Agreement did not waive compliance with the financial covenant for the test period ending June 30, 2024 or any future period.

The Company has been in discussion with the administrative agent of the 2022 credit facility to obtain a long-term amendment to the terms of the 2022 credit facility.

While the Company believes that it will be able to obtain such amendment, there can be no assurance that such amendment will be executed.

If the Company is unsuccessful in amending the 2022 credit facility, and is not able to re-establish compliance with the financial covenant for the test period ending June 30, 2024 or any future period, lenders thereunder may, among other remedies, declare their commitment thereunder to be terminated and/or declare the unpaid principal amount of all outstanding loans, all interest accrued and unpaid thereon, to be immediately due and payable, and foreclose on or take other secured creditor remedies with respect to the properties that secure the 2022 credit facility.

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.

4 unchanged sentences

The SBA 7(a) loan-backed notes mature on March 20, 2048, with monthly payments due as payments on the collateralized loans are received.

The SBA 7(a) loan-backed notes bear interest at a per annum rate equal to the lesser of (i) 30-day average compounded SOFR plus 2.90 % and (ii) prime rate minus 0.35 %.

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 $ 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.

The SBA 7(a) loan-backed notes bear interest at a per annum rate equal to the lesser of (i) 30-

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)

March 31, 2024 (Unaudited) – (Continued)

day average compounded SOFR plus 2.90 % and (ii) prime rate minus 0.35 %.

As of March 31, 2024, the variable interest rate was 8.15 %.

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 $ 4.6 million as of March 31, 2024.

Other —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 or effective interest method over the life of the related loan.

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

As of March 31, 2024 and December 31, 2023, accrued interest and unused commitment fees payable of $ 1.6 million and $ 1.8 million, respectively, were included in accounts payable and accrued expenses.

Future principal payments on the Company’s debt (face value) as of March 31, 2024 are as follows (in thousands):

Years Ending December 31, Mortgage Payable (1)

Secured Borrowings Principal (2)

2022 Credit Facility Other (2) (3)

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

2024 (Nine months ending December 31, 2024) $ 66,600 $ 114 $ — $ 8,424 $ 75,138

2025 87,000 163 158,230 9,947 255,340

5 unchanged sentences

______________________

(1) With regards to the $66.6 million mortgage payable maturing on June 7, 2024, the Company exercised its one-year extension option in April 2024, extending the maturity of the mortgage by one year.

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

3 unchanged sentences

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 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):

In the ordinary 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 year ended December 31, 2023, the Company entered into two interest rate cap agreements in connection with the assumption of two mortgage loans.

In December 2023, the Company terminated one of its interest rate cap agreements.

The following table summarizes the terms of the Company’s interest rate cap agreement as of March 31, 2024 (dollar amounts in thousands):

Outstanding Notional Fair Value of Assets as of

Balance Sheet Amount as of Strike Effective Maturity September 30,

Location September 30, 2023 Rates (1)

Balance Sheet Amount as of Strike Effective Maturity March 31,

Location March 31, 2024 Rates (1)

Dates Dates 2024

Interest Rate Caps Other assets $ 166,600 2.5 % to

8/07/2022 to 5/03/2023

6/07/2024 to 7/07/2025

Interest Rate Caps Other assets $ 87,000

____________________________________

(1) The index used for the Company’s interest rate cap agreements is 1-Month Term SOFR.

Additional disclosures related to the fair value of the Company’s derivative instruments are included in Note 13.

The notional amount under the derivative instruments is an indication of the extent of the Company’s involvement in each instrument, but does not represent exposure to credit, interest rate or market risks.

Accounting for changes in the fair value of a derivative instrument depends on the intended use and designation of the derivative instrument.

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.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

March 31, 2024 (Unaudited) – (Continued)

Additional disclosures related to the fair value of the Company’s derivative instrument is included in Note 13.

The notional amount under the derivative instrument is an indication of the extent of the Company’s involvement in the instrument, but does not represent exposure to credit, interest rate or market risks.

Accounting for changes in the fair value of a derivative instrument depends on the intended use and designation of the derivative instrument.

The Company has an interest rate cap that is used to manage exposure to interest rate movements but does not meet the requirements to be designated as a hedging instrument.

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

During the three months ended March 31, 2024, the Company recorded an unrealized gain of $ 55,000 , which was included in interest expense on the accompanying consolidated statements of operations related to its interest rate cap.

STOCK-BASED COMPENSATION PLANS

7 unchanged sentences

(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 $ 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.

The Company recorded compensation expense related to these restricted shares of Common Stock in the amount of $ 55,000 and $ 55,000 for the three months ended March 31, 2024 and 2023, respectively.

As of March 31, 2024, there was $ 73,000 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 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).

The computation 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 March 31, 2024 or 2023 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 months ended March 31, 2024 and 2023 because their impact was either anti-dilutive or such warrants were not exercisable during such periods (Note 12).

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.

2 unchanged sentences

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

March 31, 2024 (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 months ended March 31, 2024 and 2023 (in thousands, except per share amounts):

Three Months Ended March 31,

Net loss attributable to common stockholders $ ( 12,295 ) $ ( 12,715 )

7 unchanged sentences

Diluted $ ( 0.54 ) $ ( 0.56 )

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 nine months ended September 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 months ended March 31, 2024 and 2023 (dollar amounts in thousands):

Preferred Stock

Series A1 Series A Series D Series L Total

Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount

Series A1 Series A Series D Total

Shares Amount Shares Amount Shares Amount Shares Amount

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

Reclassification of Series A Preferred stock to permanent equity — — 329,921 8,304 — — — — 329,921 8,304

Redemption of Series A Preferred Stock — — ( 49,341 ) ( 1,228 ) — — — — ( 49,341 ) ( 1,228 )

Balances, March 31, 2022 — $ — 6,551,917 $ 163,507 56,857 $ 1,396 5,387,160 $ 152,834 11,995,934 $ 317,737

Issuance of Series A1 Preferred Stock 1,032,433 25,569 — — — — 1,032,433 25,569

Reclassification of Series A Preferred stock to permanent equity — — 430,082 10,857 — — — — 430,082 10,857

Redemption of Series A1 Preferred Stock ( 12,870 ) ( 319 ) — — — — ( 12,870 ) ( 319 )

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 — — 389,325 9,699 — — 389,325 9,699

Redemption of Series A Preferred Stock — — ( 189,753 ) ( 4,723 ) — — ( 189,753 ) ( 4,723 )

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, March 31, 2023 6,975,710 $ 172,764 7,764,921 $ 194,024 48,857 $ 1,200 14,789,488 $ 367,988

Balances, December 31, 2023 10,378,343 $ 256,935 7,431,839 $ 185,704 48,447 $ 1,190 17,858,629 $ 443,829

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Redemption of Series A1 Preferred Stock ( 24,046 ) ( 595 ) — — — — ( 24,046 ) ( 595 )

Reclassification of Series A Preferred stock to permanent equity — — 389,325 9,699 — — — — 389,325 9,699

Redemption of Series A Preferred Stock — — ( 389,506 ) ( 9,698 ) — — ( 389,506 ) ( 9,698 )

Balances, March 31, 2024 11,208,176 $ 277,586 7,042,333 $ 176,006 48,447 $ 1,190 18,298,956 $ 454,782

Issuance of Series A1 Preferred Stock 1,195,589 29,582 — — — — — — 1,195,589 29,582

Redemption of Series A1 Preferred Stock ( 11,200 ) ( 277 ) — — — — — — ( 11,200 ) ( 277 )

Redemption of Series D Preferred Stock — — — — ( 410 ) ( 10 ) — — ( 410 ) ( 10 )

Reclassification of Series A Preferred stock to permanent equity — — 300,846 7,462 — — — — 300,846 7,462

Redemption of Series A Preferred Stock — — ( 183,809 ) ( 4,575 ) — — — — ( 183,809 ) ( 4,575 )

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.

Series A1 Preferred Stock —Commencing in June 2022, the Company conducted a 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.

The Company has filed a Registration Statement on Form S-11 in respect of such offering and anticipates continuing the offering upon effectiveness of such Registration Statement on Form S-11.

Nothing contained in this Quarterly Report on Form 10-Q is or shall be deemed to be an offer to sell any securities of the Company, or the solicitation of any offer

to buy any securities of the Company, in any jurisdiction, which may only be made pursuant to appropriate offering documentation.

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

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.

As of March 31, 2024, the Company had issued in registered public offerings 11,127,248 shares of the Series A1 Preferred Stock and received gross proceeds of $ 275.5 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, $ 20.3 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 $ 10.9 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 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.

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of March 31, 2024, the Company had reclassified and allocated $ 4.0 million from deferred charges to Series A1 Preferred Stock as a reduction to the gross proceeds received.

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

As of 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.

As of March 31, 2024, there were 11,208,176 shares of Series A1 Preferred Stock outstanding and 119,072 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 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.

As of March 31, 2024, 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 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.

As of March 31, 2024, 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 nine months ended September 30, 2023, the Company recorded no redeemable preferred stock deemed dividends related to such

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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.

During the three months ended March 31, 2024 and March 31, 2023, the Company recorded no redeemable preferred stock deemed dividends 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 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.

As of March 31, 2024, the Company had reclassified an aggregate of $ 199.6 million in net proceeds from temporary equity to permanent equity.

As of March 31, 2024, there were 7,042,333 shares of Series A Preferred Stock outstanding and 1,778,005 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 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.

As of March 31, 2024, 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.

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 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 costs include commissions, dealer manager fees and other offering fees and expenses but do not include non-issuance-specific costs of $ 10.9 million related

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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 March 31, 2024, the Company had reclassified and allocated $ 13,000 from deferred charges to Series D Preferred Stock as a reduction to the gross proceeds received.

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

As of 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.

As of March 31, 2024, 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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The total cost to complete the Series L Repurchase, including transactions costs of $ 700,000 (or $ 0.29 per share), was $ 70.1 million.

In connection with the Series L Repurchase, the Company recognized redeemable preferred stock redemptions of $ 4.8 million on its consolidated statement of operations for the three months ended September 30, 2022.

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

In December 2022, the Company announced the redemption of all remaining outstanding shares of its Series L Preferred Stock.

In January 2023, the Company completed such previously-announced redemption of all outstanding shares of its Series L Preferred Stock in cash at its stated value of $ 28.37 per share (plus accrued and unpaid dividends of $ 1.56 per share, or $ 4.6 million in the aggregate).

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

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

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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

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

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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”).

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

Dividends on each share of Series 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 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.

During the three months ended March 31, 2024, the Company paid $ 5.1 million, $ 2.5 million, and $ 17,000 of cash dividends on the Series A1 Preferred Stock, Series A Preferred Stock, and Series D Preferred Stock, respectively.

During the three months ended March 31, 2023, the Company paid $ 2.4 million, $ 2.8 million, $ 17,000 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.

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

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

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

Preferred Stock Stated Value, Series A Preferred Stock Stated Value or Series D Preferred Stock Stated Value, respectively, less a redemption fee applicable prior to the fifth anniversary of the issuance of such shares, plus accrued and unpaid dividends.

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

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

The Company redeemed all outstanding shares of Series L Preferred Stock in cash in January 2023.

The total cost to complete the redemption, including transaction costs of $ 93,000 , was $ 83.8 million.

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

STOCKHOLDERS’ EQUITY

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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

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

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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:

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 three months ended March 31, 2024 and 2023 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 27, 2024 April 8, 2024 Regular Quarterly $ 0.085

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

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

March 20, 2023 April 11, 2023 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 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.

As of March 31, 2024, the Company had 1,444,258 Series A Preferred Warrants outstanding to purchase 369,653 shares of Common Stock in connection with the Company’s offering of Series A Preferred Units and allocated net proceeds of $ 401,000 , 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

March 31, 2024 (Unaudited) – (Continued)

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 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.

There were no repurchases during the three months ended March 31, 2024.

As of March 31, 2024, 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

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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 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.

The Company calculates the market discount rate for its mortgage notes payable by obtaining period-end treasury or swap rates, as applicable, for maturities that correspond to the maturities of the Company’s debt and then adding an appropriate credit spread.

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 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.

Debt —The carrying amounts of the Company’s secured borrowings - government guaranteed loans, SBA 7(a) loan-backed notes, 2022 Credit Facility and variable rate mortgage 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 fixed rate mortgage notes payable and junior subordinated notes by discounting the expected cash flows based on estimated borrowing rates available to the Company as of the measurement date.

Current and prior period liabilities’ carrying and fair values exclude net deferred financing costs.

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.

The value of the government guaranteed portions of loans held for sale is based primarily on the anticipated proceeds to be received upon sale.

The value of the government guaranteed portions of loans held for sale is based

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

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March 31, 2024 (Unaudited) – (Continued)

primarily on the anticipated proceeds to be received upon sale.

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:

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Discount Rate Prepayment Rate Discount Rate Prepayment Rate

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4.88 % - 17.50 %

10.00 % - 11.00 %

4.88 % - 17.50 %

SBA 7(a) loans receivable, subject to secured borrowings 10.00 % - 10.50 %

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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

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

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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):

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Amount Estimated

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SBA 7(a) loans receivable, held for sale $ 422 $ 439 $ 98 $ 82 3

Fixed rate mortgage payable (1)

Mortgages payable (1)

$ 163,700 $ 159,052 $ 163,700 $ 158,529 2, 3

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(1) The carrying amounts for the mortgage payable and junior subordinated notes represents the principal outstanding amounts, excluding deferred debt issuance costs and discounts.

(1) The carrying amounts for the mortgages payable and junior subordinated notes represents the principal outstanding amounts, excluding deferred debt issuance costs and discounts.

RELATED-PARTY TRANSACTIONS

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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.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

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

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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”.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

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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.

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

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

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

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

Incentive Fee:

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Capital Gains Fee:

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

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

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

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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

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Daily Average Adjusted Fair

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No such incentive fee was paid by the Company.

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

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.

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

During the years ended December 31, 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 Company will also reimburse the Administrator for the Company’s share of broken deal expenses that are incurred by the Administrator and its affiliates (i.e., fees and expenses relating to investments that were contemplated but the Company did not make and/or transactions that could have been executed by the Company but that the Company did not consummate, including fees and expenses associated with performing due diligence review and negotiating the terms of such investments or transactions).

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).

6 unchanged sentences

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.

The agreement provides that CIM SBA will provide personnel and resources to the Company and that the Company will reimburse CIM SBA for the costs and expenses of providing such personnel and resources.

The agreement provides that CIM SBA will provide personnel and resources to the Company and that the Company will reimburse

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

CIM SBA for the costs and expenses of providing such personnel and resources.

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

4 unchanged sentences

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.

On November 22, 2022, the Company entered into the Fourth Amended and Restated Dealer Manager Agreement, pursuant to which CCO Capital has been acting as the exclusive dealer manager for the Company’s public offering of its Series A1 Preferred Stock.

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

3 unchanged sentences

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 September 30, Nine Months Ended September 30, 2023

2023 2022 2023 2022

Three Months Ended March 31,

Asset Management Fees:

Asset management fees $ 394 $ 720

$ 724 $ 916 $ 2,071 $ 2,757

Property Management Fees and Reimbursements:

Property management fees (1)

$ 551 $ 442 $ 1,579 $ 1,293

Onsite management and other cost reimbursements (2)

1 unchanged sentence

Leasing commissions (3)

$ 27 $ 635 $ 103 $ 740

Construction management fees (4)

$ 112 $ 102 $ 282 $ 300

Development management reimbursements (5)

$ 327 $ — $ 980 $ —

Administrative Fees and Expenses:

2 unchanged sentences

Expense reimbursements to related parties - lending segment (6)

$ 648 $ 539 $ 2,166 $ 1,612

Offering-Related Fees:

Upfront dealer manager and trailing dealer manager fees (7)

$ 337 $ 778 $ 1,027 $ 1,052

Non-issuance specific offering costs (8)

______________________

(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.

(1) Does not include the Company’s share of the property management fees from the Unconsolidated Joint Ventures of $ 25,000 and $ 17,000 for the three months ended March 31, 2024 and March 31, 2023, respectively.

(2) Does not include the Company’s share of the onsite management and other cost reimbursements from the Unconsolidated Joint Ventures of $ 107,000 and $ 29,000 for the three months ended March 31, 2024 and March 31, 2023, respectively.

(3) Does not include the Company’s share of the leasing commissions from the Unconsolidated Joint Ventures of $ 4,000 and $ 12,000 for the three months ended March 31, 2024 and March 31, 2023, respectively.

(4) Does not include the Company’s share of the construction management fees from the Unconsolidated Joint Ventures of $ 87,000 and $ 4,000 for the three months ended March 31, 2024 and March 31, 2023, respectively.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

March 31, 2024 (Unaudited) – (Continued)

(5) Does not include the Company’s share of the development management reimbursements from the Unconsolidated Joint Ventures of $ 179,000 for the three months ended March 31, 2024.

(6) Expense reimbursements to related parties - lending segment do not include personnel costs capitalized to deferred loan origination costs of $ 30,000 and $ 65,000 for the three months ended March 31, 2024 and March 31, 2023, respectively.

(7) 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 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.

(8) As of March 31, 2024 and March 31, 2023, $ 230,000 and $ 2.5 million, respectively, was included in deferred costs as reimbursable expenses incurred pursuant to the Master Services Agreement and the then applicable dealer manager agreement with CCO Capital.

These non-issuance specific costs are allocated against the gross proceeds from the sale of the Series 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 September 30, 2023 and December 31, 2022, due to related parties consisted of the following (in thousands):

September 30, 2023 December 31, 2022

As of March 31, 2024 and December 31, 2023, due to related parties consisted of the following (in thousands):

March 31, 2024 December 31, 2023

Asset management fees $ 394 $ 555

6 unchanged sentences

Total due to related parties $ 3,333 $ 3,463

Affiliate Investments

Investments with Affiliates of CIM Group

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.

5 unchanged sentences

See Note 2 and Note 4 for more information.

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) .

In October 2023, the Company and the 1015 N Mansfield JV Partner 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 (excluding transaction costs).

The property has a site area of approximately 44,141 square feet and contains a parking garage that has been leased to a third-party tenant.

The Company owns 28.8 % of the 1015 N Mansfield JV.

During the three months ended March 31, 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.

2 unchanged sentences

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 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.

Prior to the sale, for the three months ended March 31, 2023, the Company recorded rental and other property income related to this tenant

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

of $ 194,000 .

For the three months ended March 31, 2024 and March 31, 2023, the Company’s share of the income from the tenant earned by the 4750 Wilshire JV was $ 80,000 and $ 37,000 , 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 $ 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.

The Company’s outstanding commitments to fund loans were $ 8.2 million as of March 31, 2024, 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 $ 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.

The Company had a total of $ 4.4 million in future obligations under leases to fund tenant improvements and other future construction obligations as of March 31, 2024.

As of March 31, 2024, $ 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.

6 unchanged sentences

However, the Company maintains insurance coverage to mitigate the impact of adverse exposures in lawsuits of this nature and do not expect this lawsuit to have a material adverse effect on the Company’s business, financial condition, results of operations, cash flow or the Company ability to satisfy its debt service obligations or to maintain the level of distributions on the Company’s Common Stock or Preferred Stock.

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

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 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 March 31, 2024, the Company serviced an aggregate of $ 230.5 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.

5 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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):

March 31, 2024 (Unaudited) – (Continued)

Future minimum rental revenue under long-term operating leases as of March 31, 2024, excluding tenant reimbursements of certain costs, are as follows (excludes unconsolidated properties, in thousands):

Years Ending December 31, Total

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

2024 (Nine months ending December 31, 2024) $ 43,229

Thereafter 38,066

SEGMENT DISCLOSURE

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.

The Company’s reportable segments during the three months ended March 31, 2024 and March 31, 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.

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

5 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

March 31, 2024 (Unaudited) – (Continued)

The net operating income (loss) of the Company’s segments for the three months ended March 31, 2024 and 2023 is as follows (in thousands):

Three Months Ended March 31,

Revenues $ 14,611 $ 13,487

17 unchanged sentences

(Loss) income from unconsolidated entity ( 443 ) 832

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

Segment net operating income—multifamily 917 675

Revenues 2,640 2,710

8 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

March 31, 2024 (Unaudited) – (Continued)

A reconciliation of segment net operating income to net income attributable to the Company for the three months ended March 31, 2024 and 2023 is as follows (in thousands):

Three Months Ended March 31,

Total segment net operating income $ 13,633 $ 12,978

7 unchanged sentences

Gain on sale of real estate — 1,104

(Loss) income before provision for income taxes ( 16,093 ) ( 45 ) ( 41,615 ) 5,816

Loss before provision for income taxes ( 3,635 ) ( 7,320 )

Provision for income taxes ( 270 ) ( 256 )

Net (loss) income ( 16,647 ) ( 232 ) ( 42,584 ) 5,001

Net loss (income) attributable to noncontrolling interests 874 ( 5 ) 2,501 ( 19 )

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

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

Net loss ( 3,905 ) ( 7,576 )

Net loss attributable to non-controlling interests 175 625

Net loss attributable to the Company $ ( 3,730 ) $ ( 6,951 )

The condensed assets for each of the segments as of March 31, 2024 and December 31, 2023, along with capital expenditures and loan originations for the three months ended March 31, 2024 and 2023, are as follows (in thousands):

March 31, 2024 December 31, 2023

Condensed assets:

5 unchanged sentences

Total assets $ 887,503 $ 891,200

Nine Months Ended September 30,

Three Months Ended March 31,

Capital expenditures (1) and loan originations:

10 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 (Unaudited) – (Continued)

March 31, 2024 (Unaudited) – (Continued)

SUBSEQUENT EVENTS

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.

The Company evaluated events subsequent to March 31, 2024, and concluded that, other than those items already disclosed elsewhere in the notes to the consolidated financial statements, no subsequent events have occurred that would require recognition or disclosure in the consolidated unaudited financial statements.

Table o f Contents

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