What changed in this filing

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Item 1. Financial Statements

2024-08-08 compared with 2024-05-15 · 359 added, 289 removed, 970 unchanged (40% of the section changed)

3 unchanged sentences

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Investments in real estate, net $ 699,329 $ 704,762

15 unchanged sentences

COMMITMENTS AND CONTINGENCIES (Note 15)

REDEEMABLE PREFERRED STOCK:

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

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;

27,848,926 and 27,904,974 shares authorized as of June 30, 2024 and December 31, 2023, respectively;

364,754 shares issued and outstanding as of June 30, 2024 and no shares issued or outstanding as of December 31, 2023;

liquidation preference of $ 25.00 per share, subject to adjustment

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

33,934,521 and 34,611,501 shares authorized as of June 30, 2024 and December 31, 2023, respectively;

8,820,338 and 6,754,859 shares issued and outstanding, respectively, as of June 30, 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

168,844 185,704

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

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;

27,848,926 and 27,904,974 shares authorized as of June 30, 2024 and December 31, 2023, respectively;

11,327,248 and 11,176,174 shares issued and outstanding, respectively, as of June 30, 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 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;

26,991,590 shares authorized as of June 30, 2024 and December 31, 2023;

56,857 and 48,447 shares issued and outstanding, respectively, as of June 30, 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 March 31, 2024 and December 31, 2023, respectively

22,786,741 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 851,979 852,476

8 unchanged sentences

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

Three Months Ended March 31,

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

2024 2023 2024 2023

Rental and other property income $ 19,249 $ 18,052 $ 38,022 $ 32,938

11 unchanged sentences

Total Expenses 36,126 50,058 73,433 88,162

(Loss) income from unconsolidated entities ( 326 ) 768

Income (loss) from unconsolidated entities 1,123 ( 904 ) 797 ( 136 )

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

5 unchanged sentences

Redeemable preferred stock dividends declared or accumulated (Note 11) ( 7,876 ) ( 6,141 ) ( 15,635 ) ( 11,532 )

Redeemable preferred stock deemed dividends (Note 11) ( 428 ) — ( 428 ) —

Redeemable preferred stock redemptions (Note 11) ( 567 ) ( 315 ) ( 1,373 ) ( 688 )

10 unchanged sentences

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

Three Months Ended March 31, 2024

Six Months Ended June 30, 2024

Common Stock Preferred Stock

20 unchanged sentences

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

Distributions to noncontrolling interests — — — — — — — ( 43 ) ( 43 )

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

Common dividends ($ 0.085 per share)

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

Redemption of Series A1 Preferred Stock — — ( 32,002 ) ( 791 ) 69 ( 16 ) ( 738 ) — ( 738 )

Dividends to holders of Series A1 Preferred Stock ($ 0.48938 per share)

— — — — — ( 5,491 ) ( 5,491 ) — ( 5,491 )

Redeemable preferred stock accretion — — — — — ( 428 ) ( 428 ) — ( 428 )

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

— — — — — ( 17 ) ( 17 ) — ( 17 )

Redemption of Series A Preferred Stock — — ( 287,474 ) ( 7,162 ) 621 ( 558 ) ( 7,099 ) — ( 7,099 )

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

— — — — — ( 2,368 ) ( 2,368 ) — ( 2,368 )

Net loss — — — — — ( 796 ) ( 796 ) ( 56 ) ( 852 )

Balances, June 30, 2024 22,786,741 $ 23 17,979,480 $ 446,829 $ 851,979 $ ( 947,762 ) $ 351,069 $ 2,092 $ 353,161

Six Months Ended June 30, 2023

Common Stock Preferred Stock

24 unchanged sentences

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

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

Common dividends ($ 0.085 per share)

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

Issuance of Series A1 Preferred Stock — — 1,195,589 29,582 ( 2,597 ) — 26,985 — 26,985

Redemption of Series A1 Preferred Stock — — ( 11,200 ) ( 277 ) 23 ( 24 ) ( 278 ) — ( 278 )

Dividends to holders of Series A1 Preferred Stock $ 0.4425 per share)

— — — — — ( 3,373 ) ( 3,373 ) — ( 3,373 )

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 — — ( 183,809 ) ( 4,575 ) 401 ( 291 ) ( 4,465 ) — ( 4,465 )

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

— — — — — ( 2,749 ) ( 2,749 ) — ( 2,749 )

Net loss — — — — — ( 17,359 ) ( 17,359 ) ( 1,002 ) ( 18,361 )

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

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

2 unchanged sentences

(In thousands) (Unaudited)

Three Months Ended

Six Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

7 unchanged sentences

Amortization of deferred costs and accretion of fees on loans receivable, net ( 92 ) ( 195 )

Write-offs of uncollectible receivables 411 13

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

Write-offs (recoveries) of uncollectible receivables 314 ( 136 )

Loss (gain) on interest rate caps 18 ( 275 )

Deferred income taxes 31 31

18 unchanged sentences

Investment in unconsolidated entity ( 530 ) ( 6,680 )

Distributions from unconsolidated entity 330 —

Loans funded ( 3,607 ) ( 4,769 )

12 unchanged sentences

Redemption of Preferred Stock ( 18,058 ) ( 93,330 )

Distributions to noncontrolling interests ( 43 ) —

Net cash provided by financing activities 2,460 59,133

2 unchanged sentences

(In thousands) (Unaudited)

Three Months Ended

Six Months Ended

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH 6,612 ( 9,136 )

17 unchanged sentences

Accrual of dividends payable to preferred stockholders $ 2,617 $ 2,088

Preferred stock offering costs offset against redeemable preferred stock $ 513 $ 403

Preferred stock offering costs offset against redeemable preferred stock in permanent equity $ 508 $ 842

Preferred stock offering costs offset against redeemable preferred stock in temporary equity $ 496 $ —

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

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

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

Redeemable preferred stock deemed dividends $ 428 $ —

Accrued redeemable preferred stock fees $ 204 $ 369

3 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited)

June 30, 2024 (Unaudited)

ORGANIZATION AND OPERATIONS

3 unchanged sentences

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

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

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

Operating results for the three and six months ended June 30, 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 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.

As of June 30, 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 March 31, 2024, the Company has determined that its

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

Unconsolidated Joint Ventures (as defined below) are considered VIEs.

In addition, as of June 30, 2024, the Company has determined that its Unconsolidated Joint Ventures (as defined below) are considered VIEs.

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

3 unchanged sentences

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

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

Buildings and improvements 15 - 40 years

1 unchanged sentence

Tenant improvements Lesser of useful life or lease term

The fair value of real estate acquired is recorded to acquired tangible assets, consisting primarily of land, land improvements, building and improvements, tenant improvements, furniture, fixtures, and equipment, and identified intangible assets and liabilities, consisting of the value of acquired above-market and below-market leases, in-place leases and ground leases, if any, based in each case on their respective fair values.

Loan premiums, in the case of above-market rate loans, or loan discounts, in the case of below-market rate loans, are recorded based on the fair value of any loans assumed in connection with acquiring the real estate.

13 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 months ended March 31, 2024 and 2023 (Note 3).

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

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

2 unchanged sentences

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

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

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

15 unchanged sentences

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

As of 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.

As of June 30, 2024 and December 31, 2023, lease incentives of $ 3.9 million and $ 3.9 million, respectively, are presented net of accumulated amortization of $ 3.5 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

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,

June 30, 2024 (Unaudited) – (Continued)

For the three and six months ended June 30, 2024 and 2023, the Company recognized rental income as follows (in thousands):

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

2024 2023 2024 2023

Rental and other property income

2 unchanged sentences

Variable lease payments (2)

2,911 2,854 5,336 5,266

Rental and other property income $ 19,249 $ 18,052 $ 38,022 $ 32,938

2 unchanged sentences

(2) Variable lease payments include expense reimbursements billed to tenants and percentage rent, net of bad debt expense from the Company’s operating leases plus cash payments from tenants deemed not probable of collection.

Collectability of Lease-Related Receivables

The Company continually reviews whether collection of lease-related receivables, including any straight-line rent, and current and future operating expense reimbursements from tenants is probable.

Collectability of Future Lease Payments

The Company continually reviews whether collection of future lease payments, including any straight-line rent, and current and future operating expense reimbursements from tenants is probable.

The determination of whether collectability is probable takes into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located.

Upon the determination that the collectability of a receivable is not probable, the Company will record a reduction to rental and other property income and a decrease in the outstanding receivable.

Upon the determination that the collectability of future lease payments is not probable, the Company will record a reduction to rental and other property income and a decrease in the outstanding receivable.

Revenue from leases where collection is deemed to be not probable is recorded on a cash basis until collectability becomes probable.

Management’s estimate of the collectability of lease-related receivables is based on the best information available at the time of estimate.

Management’s estimate of the collectability of future lease payments is based on the best information available at the time of estimate.

The Company does not use a general reserve approach.

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.

As of June 30, 2024 and December 31, 2023, the Company had identified certain tenants where collection was no longer considered probable and decreased outstanding receivables by $ 504,000 and $ 868,000 , respectively, across all operating leases.

Revenue from lending activities

15 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

June 30, 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 March 31,

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

2024 2023 2024 2023

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 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.

No such amounts were recognized for tenant recoveries outside of the lease agreements for each of the three and six months ended June 30, 2024 and 2023.

As of June 30, 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 $ 8.4 million as of March 31, 2024 and December 31, 2023, respectively.

Unamortized retained loan discounts were $ 8.0 million and $ 8.4 million as of June 30, 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.

10 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

June 30, 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.

2 unchanged sentences

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.

As of June 30, 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.

23 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

June 30, 2024 (Unaudited) – (Continued)

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

1 unchanged sentence

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

With respect to shares of Series A1 Preferred Stock issued in June 2024 and thereafter, in the event a holder of Series A1 Preferred Stock requests redemption of such shares and such redemption takes place prior to the first anniversary of the date of original issuance, the Company is required to pay such redemption in cash.

As a result, beginning in June 2024 and thereafter, deferred offering costs allocated to each issuance are recorded as reductions to temporary equity and will subsequently be reclassified to permanent equity on the first anniversary of each issuance.

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

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

The deferred offering costs allocated to the Series A Preferred Stock and Series A Preferred Warrants were reductions to temporary equity and permanent equity, respectively, with the deferred offering costs allocated to Series A Preferred Stock being reclassified from temporary equity to permanent equity on the first anniversary of each issuance.

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

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

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

March 31, 2024 December 31, 2023

As of June 30, 2024 and December 31, 2023, deferred rent receivable and charges consist of the following (in thousands):

June 30, 2024 December 31, 2023

Deferred rent receivable $ 14,755 $ 14,757

5 unchanged sentences

Redeemable Preferred Stock —Beginning on the date of original issuance of any given shares of Series A1 Preferred Stock, par value $ 0.001 per share (“Series A1 Preferred Stock”), with an initial stated value of $ 25.00 per share, subject to adjustment (the “Series A1 Preferred Stock Stated Value”), Series A Preferred Stock, par value $ 0.001 per share (“Series A Preferred Stock”) with an initial stated value of $ 25.00 per share, subject to adjustment (the “Series A Preferred Stock Stated Value”), or Series D Preferred Stock, par value $ 0.001 per share (“Series D Preferred Stock”), with an initial stated value of $ 25.00 per share, subject to adjustment (the “Series D Preferred Stock Stated Value”), the holder of such shares has the right to require the Company to redeem such shares, subject to certain limitations as discussed in Note 11.

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

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

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

The Company records the activity related to the Series A1 Preferred Stock (for issuances prior to June 2024), Series A Preferred Stock, Series A Preferred Warrants and Series D Preferred Stock in permanent equity.

As a result, beginning in June 2024 and thereafter, the Company records issuances of Series A1 Preferred Stock in temporary equity.

With respect to shares of Series A1 Preferred Stock issued in June 2024 and thereafter, on the first anniversary of the date of original issuance of a particular share of Series A1 Preferred Stock the Company reclassifies such share of Series A1 Preferred Stock from temporary equity to permanent equity as the feature giving rise to temporary equity classification, the requirement to satisfy redemption requests in cash, lapses on the first anniversary date.

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.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

Restricted cash also includes cash required to be segregated in connection with certain of the Company’s loans receivable and with its SBA 7(a) loan-backed notes.

5 unchanged sentences

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

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

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 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.

9 unchanged sentences

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Land $ 175,682 $ 175,715

7 unchanged sentences

Net investments in real estate $ 699,329 $ 704,762

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.

For the three months ended June 30, 2024 and 2023, the Company recorded depreciation expense of $ 5.8 million and $ 5.9 million, respectively.

For the six months ended June 30, 2024 and 2023, the Company recorded depreciation expense of $ 11.7 million and $ 10.7 million, respectively.

2024 Transactions —There were no acquisitions or dispositions during the six months ended June 30, 2024.

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

The purchases were accounted for as asset acquisitions.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

Asset Date of Interest Purchase

11 unchanged sentences

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 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.

1 unchanged sentence

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.

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

Asset Date of Interest Sales Gain on

4 unchanged sentences

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

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 June 30, 2024.

Additionally, as of June 30, 2024, the Company has a receivable of $ 396,000 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.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

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 three months ended March 31, 2024 and 2023.

Three Months Ended March 31,

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

There were no acquisitions during the six months ended June 30, 2024.

Six Months Ended

June 30, 2023

(in thousands)

7 unchanged sentences

Net assets acquired $ 283,051

(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.

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

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

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

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

June 30, 2024 (Unaudited) – (Continued)

INVESTMENT IN UNCONSOLIDATED ENTITIES

2 unchanged sentences

Carrying Value

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

Joint Venture Asset Type Location Acquisition Date Ownership Interest June 30, 2024 December 31, 2023

1910 Sunset Boulevard (1)

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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.

As of June 30, 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.

5 unchanged sentences

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.

As of June 30, 2024, the 1910 Sunset JV had incurred total costs of $ 3.9 million in connection with the 1915 Park Project.

The Company recorded income of $ 300,000 and a loss of $ 1,000 related to its investment in the 1910 Sunset JV during the three and six months ended June 30, 2024, respectively, and a loss of $ 220,000 and $ 281,000 during the three and six months ended June 30, 2023, respectively.

The Company’s investment in the 1910 Sunset JV was $ 12.0 million and its ownership percentage remained unchanged as of June 30, 2024.

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

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

June 30, 2024 (Unaudited) – (Continued)

(“4750 Wilshire”) for a gross sales price of $ 34.4 million (excluding transaction costs).

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 4750 Wilshire Project is expected to be completed by the third 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.

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.

As of June 30, 2024, total costs of $ 23.6 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 $ 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.

The Company recorded a loss of $ 207,000 and income of $ 194,000 related to its investment in the 4750 Wilshire JV during the three and six months ended June 30, 2024, respectively, and a loss of $ 490,000 and $ 493,000 during the three and six months ended June 30, 2023, respectively, in the consolidated statements of operations.

The Company’s investment in the 4750 Wilshire JV was $ 9.4 million and its ownership percentage remained unchanged at 20 % as of June 30, 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”).

2 unchanged sentences

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.

The Company recorded a loss of $ 81,000 and $ 524,000 related to its investment in the 1902 Park JV during the three and six months ended June 30, 2024, respectively, and a loss of $ 194,000 and income of $ 638,000 during the three and six months ended June 30, 2023, respectively, in the consolidated statements of operations.

The Company’s investment in the 1902 Park JV was $ 6.7 million as of June 30, 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”).

1 unchanged sentence

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.

The Company recorded income of $ 1.1 million and $ 1.1 million related to its investment in the 1015 N Mansfield JV during the three and six months ended June 30, 2024, respectively, in the consolidated statements of operations.

The Company’s investment in the 1015 N Mansfield JV was $ 6.4 million as of June 30, 2024.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

June 30, 2024 (Unaudited) – (Continued)

LOANS RECEIVABLE

Loans receivable consist of the following (in thousands):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

SBA 7(a) loans receivable, subject to credit risk $ 12,665 $ 10,393

14 unchanged sentences

Current Expected Credit Losses

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.

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 June 30, 2024 pursuant to ASU 2016-13 as implemented effective January 1, 2023.

Refer to Note 2 for further discussion of CECL.

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

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

The following table presents the activity in the Company’s CECL for the six months ended June 30, 2024 and June 30, 2023 (dollar amounts in thousands):

Loans Receivable

2 unchanged sentences

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

Net adjustment to reserve for expected credit losses

Current expected credit losses as of June 30, 2024 $ 1,607

Allowance for credit losses as of December 31, 2022

2 unchanged sentences

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

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)

During the three and six months ended June 30, 2024, the Company recorded a decrease of $ 37,000 and $ 73,000 , respectively, in its CECL related to its loans receivable, which was recorded in general and administrative expenses in the consolidated statement of operations.

During the three and six months ended June 30, 2023, the Company recorded a decrease of $ 142,000 and $ 91,000 , respectively, in its CECL related to its loan 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 .

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.

2 unchanged sentences

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.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

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):

The following table presents the net book value of the Company’s loans receivable portfolio as of June 30, 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

As of June 30, 2024

Number of Loans 2024 2023 2022 2021 2020 Prior Total

15 unchanged sentences

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.

As of June 30, 2024 and December 31, 2023, 99.4 % and 100.0 %, respectively, of the Company’s loans subject to credit risk were concentrated in the hospitality industry.

As of June 30, 2024 and December 31, 2023, 98.5 % 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 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.

As of June 30, 2024 and December 31, 2023, $ 2.7 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)

June 30, 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 March 31, 2024 and December 31, 2023 is as follows (in thousands):

March 31, 2024 December 31, 2023

A schedule of the Company’s intangible assets and liabilities and related accumulated amortization and accretion as of June 30, 2024 and December 31, 2023 is as follows (in thousands):

June 30, 2024 December 31, 2023

Intangible assets:

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

During the three 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,

During the three and six months ended June 30, 2024 and 2023, the Company recognized amortization related to its intangible assets and liabilities as follows (in thousands):

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

2024 2023 2024 2023

Acquired above-market lease amortization $ 1 $ 34 $ 3 $ 58

1 unchanged sentence

Acquired below-market lease amortization $ — $ 141 $ — $ 150

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

A schedule of future amortization and accretion of acquired intangible assets and liabilities as of June 30, 2024, is as follows (in thousands):

Years Ending December 31, Acquired

Leases Acquired

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

2024 (Six months ended December 31, 2024) $ 3 $ 186

Thereafter — 72

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

June 30, 2024 (Unaudited) – (Continued)

The following table summarizes the debt balances as of June 30, 2024 and December 31, 2023, and the debt activity for the six months ended June 30, 2024 (in thousands):

During the Six Months Ended June 30, 2024

Balances as of December 31, 2023 Debt Issuances & Assumptions Repayments Accretion & (Amortization) Balances as of June 30, 2024

Mortgages Payable:

17 unchanged sentences

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.

As of June 30, 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, 2025, respectively.

In regards to the mortgage payable maturing on June 7, 2025, the Company has a one-year extension option at its discretion.

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.

As of June 30, 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.

5 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

June 30, 2024 (Unaudited) – (Continued)

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 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.

As of June 30, 2024, the Company’s secured borrowings-government guaranteed loans included $ 890,000 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 June 30, 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 6.87 % at June 30, 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 March 31, 2024, the variable interest rate was 7.93 %.

As of June 30, 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 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.

As of June 30, 2024 and December 31, 2023, $ 0 and $ 53.0 million, respectively, was available for future borrowings.

As of each of March 31, 2024 and June 30, 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.

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

On August 7, 2024, lenders under the 2022 credit facility and the Company entered into an agreement (the “Second Modification Agreement”) pursuant to which the lenders waived such event of default with respect to the test period ending June 30, 2024.

Pursuant to the Second 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;

The Company believes that it could rely on other sources for its liquidity needs, including, among other things, (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;

2 unchanged sentences

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.

Among other restrictions, the Second 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 Second Modification Agreement did not waive compliance with the financial covenant for the test period ending September 30, 2024 or any future period.

Simultaneously with the execution of the Second Modification Agreement, the Company made a $ 4.0 million repayment under the 2022 credit facility.

While the Company has been in discussions with the administrative agent of the 2022 credit facility to come to a satisfactory solution to the Company’s non-compliance with a financial covenant, there can be no assurance that such resolution will be achieved.

If the Company is unsuccessful in coming to a resolution with the administrative agent of the 2022 credit facility, and is not able to re-establish compliance with the financial covenant for the test period ending September 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.

1 unchanged sentence

The junior subordinated notes may be redeemed at par at the Company’s option.

SBA 7(a) Loan-Backed Notes —On March 9, 2023, the Company completed a securitization of the unguaranteed portion of certain of its SBA 7(a) loans receivable with the issuance of $ 54.1 million of unguaranteed SBA 7(a) loan-backed notes (with net proceeds of approximately $ 43.3 million, after payment of fees and expenses in connection with the securitization and the funding of a reserve account and an escrow account).

The SBA 7(a) loan-backed notes are collateralized by the right to receive payments and other recoveries attributable to the unguaranteed portions of certain of our SBA 7(a) loans receivable.

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

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

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 %.

June 30, 2024 (Unaudited) – (Continued)

notes (with net proceeds of approximately $ 43.3 million, after payment of fees and expenses in connection with the securitization and the funding of a reserve account and an escrow account).

The SBA 7(a) loan-backed notes are collateralized by the right to receive payments and other recoveries attributable to the unguaranteed portions of certain of our SBA 7(a) loans receivable.

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

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

As of June 30, 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.

The restricted cash on the Company’s consolidated balance sheets included funds related to the Company’s SBA 7(a) loan-backed notes was $ 3.7 million as of June 30, 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)

As of June 30, 2024 and December 31, 2023, accrued interest and unused commitment fees payable of $ 1.9 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 June 30, 2024 are as follows (in thousands):

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

2022 Credit Facility Other (1) (2)

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

2024 (Six months ending December 31, 2024) $ — $ 77 $ — $ 5,611 $ 5,688

2025 153,600 164 173,230 9,947 336,941

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______________________

(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.

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

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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):

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

The following table summarizes the terms of the Company’s interest rate cap agreement as of June 30, 2024 (dollar amounts in thousands):

Outstanding Notional Fair Value of Assets as of

Balance Sheet Amount as of Strike Effective Maturity March 31,

Location March 31, 2024 Rates (1)

Balance Sheet Amount as of Strike Effective Maturity June 30,

Location June 30, 2024 Rates (1)

Dates Dates 2024

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

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

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

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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.

During the three and six months ended June 30, 2024, the Company recorded an unrealized loss of $ 73,000 and $ 18,000 , respectively, which was included in interest expense on the accompanying consolidated statements of operations related to its interest rate cap.

During the three and six months ended June 30, 2023, the Company recorded an unrealized gain of $ 614,445 and $ 275,112 , respectively, which was included in interest expense on the accompanying consolidated statements of operations related to its interest rate caps.

STOCK-BASED COMPENSATION PLANS

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(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 $ 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.

The Company recorded compensation expense related to these restricted shares of Common Stock in the amount of $ 55,000 and $ 37,000 for the three months ended June 30, 2024 and 2023, respectively, and $ 110,000 and $ 92,000 for the six months ended June 30, 2024 and 2023.

As of June 30, 2024, there was $ 18,000 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 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.

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

No shares of Series D Preferred Stock, Series A Preferred Stock, or Series A1 Preferred Stock outstanding as of June 30, 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 and six months ended June 30, 2024 and 2023 because their impact was either anti-dilutive or such warrants were not exercisable during such periods (Note 12).

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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,

June 30, 2024 (Unaudited) – (Continued)

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

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

The following table reconciles the numerator and denominator used in computing the Company’s basic and diluted per-share amounts for net loss attributable to common stockholders for the three and six months ended June 30, 2024 and 2023 (in thousands, except per share amounts):

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

2024 2023 2024 2023

Net loss attributable to common stockholders $ ( 9,667 ) $ ( 23,815 ) $ ( 21,962 ) $ ( 36,530 )

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

The table below provides information regarding the issuances, reclassifications and redemptions of each class of the Company’s preferred stock in permanent equity during the three and six months ended June 30, 2024 and 2023 (dollar amounts in thousands):

Preferred Stock

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

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

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

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 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.

Redemption of Series A1 Preferred Stock ( 32,002 ) ( 791 ) — — — — ( 32,002 ) ( 791 )

Redemption of Series A Preferred Stock — — ( 287,474 ) ( 7,162 ) — — ( 287,474 ) ( 7,162 )

Balances, June 30, 2024 11,176,174 $ 276,795 6,754,859 $ 168,844 48,447 $ 1,190 17,979,480 $ 446,829

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

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.

June 30, 2024 (Unaudited) – (Continued)

Series A1 Preferred Stock —Since June 2022, the Company has been conducting 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.

Shares of Series A1 Preferred Stock issued from June 2022 through May 2024 were recorded in permanent equity at the time of their issuance.

With respect to Series A1 Preferred Stock, for shares issued in June 2024 and thereafter, in the event a holder of Series A1 Preferred Stock requests redemption of such shares and such redemption takes place prior to the first anniversary of the date of original issuance, the Company is required to pay such redemption in cash, As a result, net proceeds from the issuance of shares of Series A1 Preferred Stock in June 2024 and thereafter are initially recorded in temporary equity at an amount equal to the gross proceeds allocated to such shares of Series A1 Preferred Stock minus the costs specifically identifiable to the issuance of such shares and the non-issuance specific offering costs allocated to such shares.

With respect to shares of Series A1 Preferred Stock issued in June 2024 and thereafter, on the first anniversary of the issuance of a particular share of such Series A1 Preferred Stock, the Company will reclassify such shares of Series A1 Preferred Stock from temporary equity to permanent equity as the feature giving rise to temporary equity classification, the requirement to satisfy redemption requests in cash, lapses on the first anniversary date.

As of June 30, 2024, the Company had made no such reclassification from temporary equity to permanent equity.

As of June 30, 2024, the Company had issued in registered public offerings 11,492,002 shares of the Series A1 Preferred Stock and received gross proceeds of $ 284.6 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, $ 21.0 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 $ 11.6 million related to the Company’s offering of Series A Preferred Stock, Series A Preferred Warrants, Series A1 Preferred Stock and Series D Preferred Stock.

As of June 30, 2024, the Company had reclassified and allocated $ 4.5 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 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.

If the net proceeds from the issuance of shares of Series A1 Preferred Stock are less than the redemption value of such shares at the time they were issued, or if the redemption value of such shares subsequently becomes greater than the carrying value of such shares, an adjustment is recorded to increase the carrying amount of such shares to their redemption value as of the balance sheet date.

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

The Company recorded redeemable preferred stock deemed dividends related to such adjustments of $ 428,000 during the three and six months ended June 30, 2024 and recorded no deemed dividends during the three and six months ended June 30, 2023.

As of June 30, 2024, there were 11,540,928 shares of Series A1 Preferred Stock outstanding and 151,074 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 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.

As of June 30, 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 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.

As of June 30, 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,

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

respectively, as a reduction to the gross proceeds received.

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

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

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

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

During the 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 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.

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 as the feature giving rise to temporary equity classification, the requirement to satisfy redemption requests in cash, lapses on the first anniversary date.

As of June 30, 2024, the Company had reclassified an aggregate of $ 199.6 million in net proceeds from temporary equity to permanent equity.

As of June 30, 2024, there were 6,754,859 shares of Series A Preferred Stock outstanding and 2,065,479 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 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.

As of June 30, 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 $ 10.9 million related

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

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.

As of June 30, 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 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.

As of June 30, 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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Holders of Series A Preferred Stock are entitled to receive, if, as and when authorized by the Company’s Board of Directors, and declared by the Company out of legally available funds, cumulative cash dividends on each share of Series A Preferred Stock at an annual rate of 5.50 % of the Series A Preferred Stock Stated Value (i.e., the equivalent of $ 0.34375 per share per quarter) (the “Series A Dividend”).

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

Holders of Series D Preferred Stock are entitled to receive, if, as and

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

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 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.

During the six months ended June 30, 2024, the Company paid $ 10.6 million, $ 4.9 million, and $ 34,000 of cash dividends on the Series A1 Preferred Stock, Series A Preferred Stock, and Series D Preferred Stock, respectively.

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

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.

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

The Company has the right to redeem the Series A1 Preferred Stock after the date that is twenty-four months following the 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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With respect to redemptions of the Series A1 Preferred Stock, Series A Preferred Stock or Series D Preferred Stock, at the Company’s discretion, the redemption price will be paid in cash and/or in Common Stock based on the volume weighted average price of the Company’s Common Stock for the 20 trading days prior to the redemption;

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

provided that the redemption price of any shares of Series A1 Preferred Stock issued in June 2024 and thereafter that are redeemed prior to the first anniversary of the date of original issuance of such shares must be paid in cash.

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 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:

Consequently, the dividend rate on a quarterly basis

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

does not necessarily correlate directly to any individual factor.

Cash dividends per share of Common Stock paid in respect of the six months ended June 30, 2024 and 2023 consist of the following:

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

June 25, 2024 July 22, 2024 Regular Quarterly $ 0.085

March 27, 2024 April 8, 2024 Regular Quarterly $ 0.085

June 27, 2023 July 24, 2023 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 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)

As of June 30, 2024, the Company had 988,794 Series A Preferred Warrants outstanding to purchase 250,777 shares of Common Stock in connection with the Company’s offering of Series A Preferred Units and allocated net proceeds of $ 370,000 , after specifically identifiable offering costs and allocated general offering costs, to the Series A Preferred Warrants in permanent equity.

Share Repurchase Program

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

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

As of March 31, 2024, the Company had repurchased 662,462 shares of Common Stock for $ 4.7 million.

There were no repurchases during the three and six months ended June 30, 2024.

As of June 30, 2024, the Company had repurchased 662,462 shares of Common Stock for $ 4.7 million.

FAIR VALUE OF FINANCIAL INSTRUMENTS

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In such cases, for disclosure purposes, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

Management’s estimation of the fair value of the Company’s financial instruments is based on a Level 3 valuation in the fair value hierarchy established for disclosure of how a company values its financial instruments.

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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

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

primarily on the anticipated proceeds to be received upon sale.

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Discount Rate Prepayment Rate Discount Rate Prepayment Rate

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

Other Financial Instruments —The carrying amounts of the Company’s cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and accrued expenses approximate their fair values due to their short-term maturities at March 31, 2024 and December 31, 2023.

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):

March 31, 2024 December 31, 2023

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

June 30, 2024 December 31, 2023

Amount Estimated

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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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

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

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

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

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

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

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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

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

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

12 unchanged sentences

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

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

On May 11, 2020, the Master Services Agreement

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

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

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

11 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

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

10 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 March 31,

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

Three Months Ended June 30, Six Months Ended June 30, 2024

2024 2023 2024 2023

Asset Management Fees:

2 unchanged sentences

Property management fees (1)

$ 577 $ 551 $ 1,160 $ 1,028

Onsite management and other cost reimbursements (2)

1 unchanged sentence

Leasing commissions (3)

$ 183 $ 37 $ 238 $ 76

Construction management fees (4)

$ 138 $ 52 $ 190 $ 170

Development management reimbursements (5)

$ 591 $ 653 $ 1,013 $ 653

Administrative Fees and Expenses:

2 unchanged sentences

Expense reimbursements to related parties - lending segment (6)

$ 673 $ 910 $ 1,236 $ 1,518

Offering-Related Fees:

Upfront dealer manager and trailing dealer manager fees (7)

$ 110 $ 370 $ 377 $ 690

Non-issuance specific offering costs (8)

$ 213 $ 162 $ 423 $ 306

(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

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.

______________________

(1) Does not include the Company’s share of the property management fees from the Unconsolidated Joint Ventures of $ 25,000 and $ 50,000 for the three and six months ended June 30, 2024, respectively, and $ 20,000 and $ 37,000 for the three and six months ended June 30, 2023, respectively.

(2) Does not include the Company’s share of the onsite management and other cost reimbursements from the Unconsolidated Joint Ventures of $ 131,000 and $ 238,000 for the three and six months ended June 30, 2024, respectively, and $ 112,000 and $ 141,000 for the three and six months ended June 30, 2023, respectively.

(3) Does not include the Company’s share of the leasing commissions from the Unconsolidated Joint Ventures of $ 6,000 and $ 10,000 for the three and six months ended June 30, 2024, respectively, and $ 2,000 and $ 14,000 for the three and six months ended June 30, 2023, respectively.

(4) Does not include the Company’s share of the construction management fees from the Unconsolidated Joint Ventures of $ 35,000 and $ 122,000 for the three and six months ended June 30, 2024, respectively, and $ 55,000 and $ 59,000 for the three and six months ended June 30, 2023, respectively.

(5) Does not include the Company’s share of the development management reimbursements from the Unconsolidated Joint Ventures of $ 205,000 and $ 384,000 for the three and six months ended June 30, 2024, respectively, and $ 187,000 for the three and six months ended June 30, 2023.

(6) Expense reimbursements to related parties - lending segment do not include personnel costs capitalized to deferred loan origination costs of $ 30,000 and $ 60,000 for the three and six months ended June 30, 2024, respectively, and $ 30,000 and $ 61,000 for the three and six months ended June 30, 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.

(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.

(8) As of June 30, 2024 and June 30, 2023, $ 3.0 million 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 March 31, 2024 and December 31, 2023, due to related parties consisted of the following (in thousands):

March 31, 2024 December 31, 2023

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

As of June 30, 2024 and December 31, 2023, due to related parties consisted of the following (in thousands):

June 30, 2024 December 31, 2023

Asset management fees $ 819 $ 555

4 unchanged sentences

Non-issuance specific offering costs 157 61

Other amounts due (from) to the CIM Management Entities and certain of its affiliates 241 290

Other amounts due to the CIM Management Entities and certain of its affiliates 246 290

Total due to related parties $ 5,903 $ 3,463

10 unchanged sentences

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) .

During the six months ended June 30, 2023 , the Company acquired an interest in four assets from entities indirectly wholly-owned by a fund that is managed by affiliates of CIM Group 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

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.

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 .

For the three and six months ended June 30, 2024 the Company’s share of the income from the tenant earned by the 4750 Wilshire JV was $ 84,000 and $ 164,000 , respectively, and for the three and six months ended June 30, 2023, the Company’s share of the income from the tenant earned by the 4750 Wilshire JV was $ 53,000 and $ 90,000 , respectively.

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 $ 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.

The Company’s outstanding commitments to fund loans were $ 19.6 million as of June 30, 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.

1 unchanged sentence

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 $ 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.

The Company had a total of $ 6.3 million in future obligations under leases to fund tenant improvements and other

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

future construction obligations as of June 30, 2024.

As of June 30, 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.

4 unchanged sentences

A subsidiary of the Company is a defendant in a lawsuit in connection with injuries sustained by a third-party contractor at a property previously owned by such subsidiary.

While it is possible that a loss may be incurred, the Company is unable to estimate a range of potential losses due to the complexity and current status of the lawsuit.

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.

Such subsidiary has reached an agreement in principle to settle the lawsuit with the plaintiff pursuant to which such subsidiary’s share of the settlement payment will be approximately $ 700,000 .

The Company anticipates that such payment will be made directly from the Company’s insurance carrier, which will be responsible for the entire payment.

Accordingly, the Company does not expect this lawsuit to have any 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 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.

As of June 30, 2024, the Company serviced an aggregate of $ 225.6 million of the guaranteed portion of SBA 7(a) loans.

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

5 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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):

June 30, 2024 (Unaudited) – (Continued)

Future minimum rental revenue under long-term operating leases as of June 30, 2024, excluding tenant reimbursements of certain costs, are as follows (excludes unconsolidated properties, in thousands):

Years Ending December 31, Total

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

2024 (Six months ending December 31, 2024) $ 29,008

Thereafter 52,404

SEGMENT DISCLOSURE

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.

The Company’s reportable segments during the three and six months ended June 30, 2024 and June 30, 2023 consist of three types of commercial real estate properties, namely, office, hotel and multifamily, as well as a segment for the Company’s lending business.

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

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,

June 30, 2024 (Unaudited) – (Continued)

The net operating income (loss) of the Company’s segments for the three and six months ended June 30, 2024 and 2023 is as follows (in thousands):

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

2024 2023 2024 2023

Revenues $ 14,101 $ 13,975 $ 28,712 $ 27,462

28 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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,

June 30, 2024 (Unaudited) – (Continued)

A reconciliation of segment net operating income to net income attributable to the Company for the three and six months ended June 30, 2024 and 2023 is as follows (in thousands):

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

2024 2023 2024 2023

Total segment net operating income $ 16,223 $ 11,998 $ 29,856 $ 24,976

12 unchanged sentences

Net loss attributable to the Company $ ( 796 ) $ ( 17,359 ) $ ( 4,526 ) $ ( 24,310 )

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

The condensed assets for each of the segments as of June 30, 2024 and December 31, 2023 are as follows (in thousands):

June 30, 2024 December 31, 2023

Condensed assets:

5 unchanged sentences

Total assets $ 891,228 $ 891,200

Three Months Ended March 31,

Capital expenditures (1) and loan originations:

Office $ 8,582 $ 2,156

Hotel 2,360 1,629

Multifamily 2,598 5,327

Total capital expenditures 13,540 9,112

Loan originations 7,733 10,781

Total capital expenditures and loan originations $ 21,273 $ 19,893

______________________

(1) Represents additions and improvements to real estate investments, excluding acquisitions.

Includes the activity for dispositions through their respective disposition dates.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024 (Unaudited) – (Continued)

SUBSEQUENT EVENTS

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

The Company evaluated events subsequent to June 30, 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.

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