What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-11-08 compared with 2024-08-08 · 391 added, 298 removed, 1031 unchanged (40% of the section changed)

3 unchanged sentences

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

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Investments in real estate, net $ 702,845 $ 704,762

17 unchanged sentences

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

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;

25,226,343 and 27,904,974 shares authorized as of September 30, 2024 and December 31, 2023, respectively;

913,630 shares issued and outstanding as of September 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;

31,519,738 and 34,611,501 shares authorized as of September 30, 2024 and December 31, 2023, respectively;

8,820,338 and 4,340,076 shares issued and outstanding, respectively, as of September 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

1 unchanged sentence

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

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;

25,226,343 and 27,904,974 shares authorized as of September 30, 2024 and December 31, 2023, respectively;

11,327,248 and 8,553,591 shares issued and outstanding, respectively, as of September 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 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;

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

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

83,447,280 shares issued and outstanding as of September 30, 2024 and 22,786,741 shares issued and outstanding as of December 31, 2023

Additional paid-in capital 984,978 852,476

8 unchanged sentences

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

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

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

2024 2023 2024 2023

12 unchanged sentences

Total Expenses 37,938 45,400 111,371 133,562

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

(Loss) income from unconsolidated entities ( 1,239 ) 1,189 ( 442 ) 1,053

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

18 unchanged sentences

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

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Common Stock Preferred Stock

6 unchanged sentences

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

— — — — 55 — 55 — 55

Common dividends ($ 0.085 per share)

1 unchanged sentence

Issuance of Series A1 Preferred Stock — — 853,879 21,246 ( 2,180 ) — 19,066 — 19,066

Redemption of Series A1 Preferred Stock — — ( 24,046 ) ( 595 ) 52 ( 24 ) ( 567 ) — ( 567 )

Redemption of Series A1 Preferred Stock paid in cash

— — ( 24,046 ) ( 595 ) 52 ( 24 ) ( 567 ) — ( 567 )

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

2 unchanged sentences

— — — — — ( 17 ) ( 17 ) — ( 17 )

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

Redemption of Series A Preferred Stock paid in cash

— — ( 389,506 ) ( 9,698 ) 831 ( 776 ) ( 9,643 ) — ( 9,643 )

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

6 unchanged sentences

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

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

Redemption of Series A1 Preferred Stock paid in cash

— — ( 32,002 ) ( 791 ) 69 ( 16 ) ( 738 ) — ( 738 )

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

3 unchanged sentences

— — — — — ( 17 ) ( 17 ) — ( 17 )

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

Redemption of Series A Preferred Stock paid in cash

— — ( 287,474 ) ( 7,162 ) 621 ( 558 ) ( 7,099 ) — ( 7,099 )

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

2 unchanged sentences

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

Stock based compensation expense 107,840 — — — 55 — 55 — 55

Stock dividend ($ 0.04 per share)

— 3 — — 3,336 ( 3,339 ) — — —

Redemption of Series A1 Preferred Stock paid in cash

— — ( 31,967 ) ( 791 ) 70 ( 17 ) ( 738 ) — ( 738 )

Redemption of Series A1 Preferred Stock paid in Common Stock

32,998,865 33 ( 2,590,616 ) ( 64,127 ) 70,147 ( 8,440 ) ( 2,387 ) — ( 2,387 )

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

— — — — — ( 5,710 ) ( 5,710 ) — ( 5,710 )

Redemption of Series D Preferred Stock — — — — — — — — —

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

— — — — — ( 17 ) ( 17 ) — ( 17 )

Reclassification of Series A Preferred stock to permanent equity — — — — — — — — —

Redeemable preferred stock accretion — — — — — ( 327 ) ( 327 ) — ( 327 )

Redemption of Series A Preferred Stock paid in cash

— — ( 247,627 ) ( 6,214 ) 530 ( 459 ) ( 6,143 ) — ( 6,143 )

Redemption of Series A Preferred Stock paid in Common Stock

27,553,834 28 ( 2,167,156 ) ( 53,927 ) 58,861 ( 7,180 ) ( 2,218 ) — ( 2,218 )

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

— — — — — ( 2,239 ) ( 2,239 ) — ( 2,239 )

Net loss — — — — — ( 10,384 ) ( 10,384 ) ( 192 ) ( 10,576 )

Balances, September 30, 2024 83,447,280 $ 87 12,942,114 $ 321,770 $ 984,978 $ ( 985,874 ) $ 320,961 $ 1,900 $ 322,861

Nine Months Ended September 30, 2023

Common Stock Preferred Stock

7 unchanged sentences

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

— — — — — — — 5,002 5,002

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

— — — — 55 — 55 — 55

Common dividends ($ 0.085 per share)

1 unchanged sentence

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

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

Redemption of Series A1 Preferred Stock paid in cash

— — ( 12,870 ) ( 319 ) 28 ( 11 ) ( 302 ) — ( 302 )

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

3 unchanged sentences

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

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

Redemption of Series A Preferred Stock paid in cash

— — ( 189,753 ) ( 4,723 ) 403 ( 362 ) ( 4,682 ) — ( 4,682 )

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

6 unchanged sentences

Issuance of Series A1 Preferred Stock

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

— — 1,195,589 29,582 ( 2,597 ) — 26,985 — 26,985

Redemption of Series A1 Preferred Stock paid in cash

— — ( 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 )

Redemption of Series D Preferred Stock paid in cash

— — ( 410 ) ( 10 ) — — ( 10 ) — ( 10 )

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

1 unchanged sentence

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 )

Redemption of Series A Preferred Stock paid in cash

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

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

2 unchanged sentences

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

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

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

Common dividends ($ 0.085 per share)

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

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

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

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

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

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

— — — — — ( 17 ) ( 17 ) — ( 17 )

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

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

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

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

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

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

2 unchanged sentences

(In thousands) (Unaudited)

Six Months Ended

Nine Months Ended

September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

8 unchanged sentences

Write-offs (recoveries) of uncollectible receivables 782 160

Write-off of other deferred costs 491 —

Loss (gain) on interest rate caps 425 349

1 unchanged sentence

Stock-based compensation 165 128

Income (loss) from unconsolidated entities ( 797 ) 136

Loss (income) from unconsolidated entities 442 ( 1,053 )

Loans funded, held for sale to secondary market ( 13,017 ) ( 13,468 )

31 unchanged sentences

Distributions to noncontrolling interests ( 43 ) ( 38 )

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

Net cash (used in) provided by financing activities ( 9,429 ) 51,836

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

1 unchanged sentence

(In thousands) (Unaudited)

Six Months Ended

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

Nine Months Ended

September 30,

NET DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH ( 8,253 ) ( 14,269 )

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH:

19 unchanged sentences

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

2 unchanged sentences

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

Write-off of preferred stock deferred offering costs $ 5,123 $ —

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

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited)

September 30, 2024 (Unaudited)

ORGANIZATION AND OPERATIONS

10 unchanged sentences

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

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

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

In addition, as of September 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.

5 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

September 30, 2024 (Unaudited) – (Continued)

Buildings and improvements 15 - 40 years

17 unchanged sentences

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

The Company did no t recognize any impairment of long-lived assets during the three and six months ended June 30, 2024 and 2023 (Note 3).

The Company did no t recognize any impairment of long-lived assets during the three and nine months ended September 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.

10 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

September 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 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.

As of September 30, 2024 and December 31, 2023, lease incentives of $ 3.9 million and $ 3.9 million, respectively, are presented net of accumulated amortization of $ 3.6 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

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,

September 30, 2024 (Unaudited) – (Continued)

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

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

2024 2023 2024 2023

15 unchanged sentences

The Company does not use a general reserve approach.

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.

As of September 30, 2024 and December 31, 2023, the Company had identified certain tenants where collection was no longer considered probable and decreased outstanding receivables by $ 536,000 and $ 868,000 , respectively, across all operating leases.

Revenue from lending activities

15 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

September 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 June 30, Six Months Ended June 30,

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

2024 2023 2024 2023

10 unchanged sentences

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

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

As of June 30, 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 nine months ended September 30, 2024 and 2023.

As of September 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 $ 8.0 million and $ 8.4 million as of June 30, 2024 and December 31, 2023, respectively.

Unamortized retained loan discounts were $ 7.9 million and $ 8.4 million as of September 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.

6 unchanged sentences

however, subsequent changes to CECL are recognized through net income on the Company’s consolidated statements of operations.

While ASU 2016-13 does not require any particular method for determining CECL, it does specify the allowance should be based on relevant information about past events, including historical loss experience, current portfolio and market conditions, and reasonable and supportable forecasts for the duration of each respective loan.

In addition, other than a

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

September 30, 2024 (Unaudited) – (Continued)

market conditions, and reasonable and supportable forecasts for the duration of each respective loan.

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

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

1 unchanged sentence

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

As of June 30, 2024 and December 31, 2023, the Company had a total CECL of $ 1.6 million and $ 1.7 million, respectively.

As of September 30, 2024 and December 31, 2023, the Company had a total CECL of $ 1.9 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.

20 unchanged sentences

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

Deferred offering costs represent direct costs incurred in connection with the Company’s offerings of Series A1 Preferred Stock (as defined below), Series A Preferred Stock (as defined below), and, after January 2020, Series A Preferred Stock (as defined below) and Series D Preferred Stock (as defined below), excluding

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

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

September 30, 2024 (Unaudited) – (Continued)

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

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

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

Deferred offering costs were 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 were expected to be issued in the related offering.

With respect to shares of Series A1 Preferred Stock issued from June 2024 through September 2024, 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, from June 2024 through September 2024, deferred offering costs allocated to each issuance were 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 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.

The Company discontinued its issuance of Series A Preferred Stock and Series D Preferred stock in June 2022.

In September 2024, the Company, at its option, redeemed 2,589,606 and 2,167,156 shares of its Series A1 Preferred Stock and Series A Preferred Stock, respectively, in shares of Common Stock and suspended its offering of Series A1 Preferred Stock.

Following the suspension of its Series A1 Preferred Stock’s offering, the Company no longer deemed it probable that future proceeds would be raised from the sale of these securities and, as a result, the Company recognized $ 5.1 million of redeemable preferred stock redemptions in its consolidated statement of operations for the three months ended September 30, 2024 related to amounts that had been recorded as deferred offering costs.

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

June 30, 2024 December 31, 2023

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

September 30, 2024 December 31, 2023

Deferred rent receivable $ 13,849 $ 14,757

6 unchanged sentences

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)

September 30, 2024 (Unaudited) – (Continued)

redemption in cash.

As a result, beginning from June 2024 through September 2024, the Company recorded issuances of Series A1 Preferred Stock in temporary equity.

With respect to shares of Series A1 Preferred Stock issued from June 2024 through September 2024, 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 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.

14 unchanged sentences

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

The Company does not expect the adoption of ASU 2023-07 to have a material impact on its consolidated financial statements and disclosures.

The Company is currently evaluating whether the the adoption of ASU 2023-07 will have a material impact on its consolidated financial statements and disclosures.

INVESTMENTS IN REAL ESTATE

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

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Land $ 175,682 $ 175,715

7 unchanged sentences

Net investments in real estate $ 702,845 $ 704,762

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)

September 30, 2024 (Unaudited) – (Continued)

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

For the nine months ended September 30, 2024 and 2023, the Company recorded depreciation expense of $ 17.5 million and $ 16.6 million, respectively.

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

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

The purchases were accounted for as asset acquisitions.

Asset Date of Interest Purchase

Property Type Acquisition Units Acquired Price

Property Type Acquisition Units Acquired (1)

(in thousands)

7 unchanged sentences

March 28, 2023 288 98.1 % $ 145,500

(1) As of September 30, 2024 the Company’s ownership interests in Channel House, F3 Land Site, and 466 Water Street Land Site had changed to 93.9 %, 93.2 %, and 90.9 %, respectively, as result of additional contributions made to the entities by the Company subsequent to the applicable initial acquisition.

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

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

The F3 Land Site is c urrently being utilized as a surface parking lot and being evaluated for future development options including hotel development but there are no formal plans in place to begin development as of June 30, 2024.

(3) Transaction costs that were capitalized as a component of the assets acquired and liabilities assumed in connection with the acquisition of this property totaled $ 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.

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

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

Asset Date of Interest Sales Gain on

4 unchanged sentences

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

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 September 30, 2024.

Additionally, as of September 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.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

September 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 six months ended June 30, 2023.

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

Six Months Ended

June 30, 2023

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

There were no acquisitions during the nine months ended September 30, 2024.

Nine Months Ended

September 30, 2023

(in thousands)

7 unchanged sentences

Net assets acquired $ 283,051

(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.

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

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

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

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

September 30, 2024 (Unaudited) – (Continued)

INVESTMENT IN UNCONSOLIDATED ENTITIES

2 unchanged sentences

Carrying Value

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

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

1910 Sunset Boulevard (1)

2 unchanged sentences

4750 Wilshire Boulevard (2)

Office / Multifamily (Development)

Office / Multifamily

Los Angeles, CA February 17, 2023 20.0 % 9,342 9,119

7 unchanged sentences

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

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

The 1910 Sunset JV (defined below).

The 1910 Sunset JV has begun the 1915 Park Project (defined below) to build 36 multifamily units on the 1915 Park Avenue land parcel adjacent to the office building.

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

The remainder of the building is being converted into for-lease multifamily units.

The remainder of the building was substantially converted into 68 for-lease multifamily units in September, 2024.

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

1 unchanged sentence

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

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.

As of September 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.

1 unchanged sentence

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

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

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

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

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

The 1915 Park Project is expected to be completed by the third quarter of 2025 and to cost approximately $ 14.7 million (excluding the land acquisition cost), the Company’s share of which will be $ 6.5 million.

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

As of 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

As of September 30, 2024, the 1910 Sunset JV had incurred total costs of $ 4.8 million in connection with the 1915 Park Project.

The Company recorded a loss of $ 763,000 and $ 764,000 related to its investment in the 1910 Sunset JV during the three and nine months ended September 30, 2024, respectively, and a loss of $ 402,000 and $ 683,000 during the three and nine months ended September 30, 2023, respectively.

The Company’s investment in the 1910 Sunset JV was $ 12.2 million and its ownership percentage remained unchanged as of September 30, 2024.

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

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 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”).

September 30, 2024 (Unaudited) – (Continued)

(the “4750 Wilshire JV”).

The goal of the 4750 Wilshire JV was to convert 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 was substantially completed in September 2024 the 4750 Wilshire JV has commenced leasing of the multifamily units.

The total cost of the conversion is estimated to be approximately $ 31.0 million (the Company’s share of which is $ 6.2 million), which is being 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 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.

As of September 30, 2024, total costs of $ 27.9 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 ongoing 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 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.

The Company recorded a loss of $ 71,000 and income of $ 123,000 related to its investment in the 4750 Wilshire JV during the three and nine months ended September 30, 2024, respectively, and income of $ 2.0 million and $ 1.5 million during the three and nine months ended September 30, 2023, respectively, in the consolidated statements of operations.

The Company’s investment in the 4750 Wilshire JV was $ 9.3 million and its ownership percentage remained unchanged at 20 % as of September 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 $ 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.

The Company recorded a loss of $ 405,000 and $ 929,000 related to its investment in the 1902 Park JV during the three and nine months ended September 30, 2024, respectively, and a loss of $ 422,000 and income of $ 216,000 during the three and nine months ended September 30, 2023, respectively, in the consolidated statements of operations.

The Company’s investment in the 1902 Park JV was $ 6.3 million as of September 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”).

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

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

The Company recorded income of $ 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.

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

The Company recorded income of $ 0 and $ 1.1 million related to its investment in the 1015 N Mansfield JV during the three and nine months ended September 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 September 30, 2024.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

September 30, 2024 (Unaudited) – (Continued)

LOANS RECEIVABLE

Loans receivable consist of the following (in thousands):

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

SBA 7(a) loans receivable, subject to credit risk $ 13,660 $ 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 June 30, 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 September 30, 2024 pursuant to ASU 2016-13 as implemented effective January 1, 2023.

Refer to Note 2 for further discussion of CECL.

1 unchanged sentence

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):

September 30, 2024 (Unaudited) – (Continued)

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

Loans Receivable

4 unchanged sentences

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

Net adjustment to reserve for expected credit losses

Current expected credit losses as of September 30, 2024 $ 1,866

Allowance for credit losses as of December 31, 2022

5 unchanged sentences

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

Reserve for expected credit losses ( 9 )

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

The 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 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 .

During the three and nine months ended September 30, 2024, the Company recorded an increase of $ 259,000 and $ 186,000 , 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 nine months ended September 30, 2023, the Company recorded a decrease of $ 9,000 and $ 100,000 , 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.

4 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

September 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 June 30, 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 September 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 June 30, 2024

As of September 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 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.

As of September 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 September 30, 2024 and December 31, 2023, 94.9 % 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 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.

As of September 30, 2024 and December 31, 2023, $ 4.0 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

June 30, 2024 (Unaudited) – (Continued)

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

June 30, 2024 December 31, 2023

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

September 30, 2024 December 31, 2023

Intangible assets:

5 unchanged sentences

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

During the three and six months ended June 30, 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,

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

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

2024 2023 2024 2023

2 unchanged sentences

Acquired below-market lease amortization $ — $ 93 $ — $ 243

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

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

Years Ending December 31, Acquired

Leases Acquired

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

2024 (Three months ended December 31, 2024) $ 2 $ 92

Thereafter — 72

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

September 30, 2024 (Unaudited) – (Continued)

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

During the Nine Months Ended September 30, 2024

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

Mortgages Payable:

16 unchanged sentences

Total Debt, Net $ 471,561 $ 19,627 $ ( 13,888 ) $ 1,039 $ 478,339

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 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.

Fixed Rate Mortgages 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 September 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 and initial maturity dates of 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 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 Company has been in discussion with the largest tenant at One Kaiser Plaza in Oakland, California, a property that is secured by a fixed rate mortgage with a balance of $ 97.1 million as of September 30, 2024, about renewing a portion of its existing lease.

This extension would require a sizable capital investment by the Company for tenant improvements, leasing commissions and certain building improvements and may not meet the Company’s return hurdles and falls outside of the Company’s strategy of reducing its footprint in traditional office investments.

The Company is exploring whether the lender holding the fixed-rate mortgage on the property will agree to loan concessions relating to such upfront capital costs.

If we are not able to receive such concessions, we may elect to cease interest payments on the mortgage, such failure would constitute an event of default under the mortgage and would allow the lender to, among other remedies, declare principal and interest on the mortgage loan to be immediately due and payable.

Variable Rate Mortgage 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 September 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, with an initial maturity date of July 7, 2025 and an extension option subject to certain conditions being met.

The loan is non-recourse.

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

There can be no assurance that such restructuring will occur.

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

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

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

September 30, 2024 (Unaudited) – (Continued)

The Company has been in discussions with the lender under its variable rate mortgage for Channel House, a multifamily property in Oakland, California, to restructure the terms of the mortgage, as rent payments from the property will likely be insufficient to meet debt service payments under the mortgage.

There can be no assurance that such restructuring will occur.

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

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 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.

As of September 30, 2024, the Company’s secured borrowings-government guaranteed loans included $ 355,000 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 9.21 % at September 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 September 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 included a $ 56.2 million term loan (the “2022 Credit Facility Term Loan”) as well as a revolver that originally allowed the Company to borrow up to $ 150.0 million (the “2022 Credit Facility Revolver”), both of which are collectively subject to a borrowing base calculation.

The 2022 Credit Facility is secured by certain properties in the Company’s real estate portfolio:

1 unchanged sentence

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

As of June 30, 2024, the variable interest rate was 7.93 %.

As of September 30, 2024, the variable interest rate was 7.53 %.

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

1 unchanged sentence

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

As of June 30, 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.

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

As of each of March 31, 2024, June 30, 2024 and September 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 “First Modification Agreement”) pursuant to which the lenders waived such event of default with respect to the test period ending March 31, 2024.

Among other restrictions, the First 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.

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, 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;

(iv) the sale of existing assets;

(v) partnering with co-investors;

and or (vi) cash flows from operations.

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.

On October 24, 2024, lenders under the 2022 Credit Facility and the Company entered into an agreement (the “Third Modification Agreement”) pursuant to which the lenders waived such event of default with respect to the test period ending September 30, 2024.

Pursuant to the Third 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.

Under the Third Modification Agreement, the aggregate commitments under the 2022 Credit Facility were reduced from $ 206.2 million to $ 169.3 million.

Pursuant to the Third Modification Agreement, the Company and the lenders agreed that, starting April 1, 2025, excess cash flow generated by the borrowers under the 2022 Credit Facility will be deposited into a collateral account controlled by the administrative agent.

The borrowers’ ability to withdraw funds from the collateral account will be limited to specified uses and subject to certain requirements.

In addition, the lenders agreed (i) to modify the borrowing base formula to remove certain limitations on the inclusion of office, retail, flex office/industrial and standalone parking assets and (ii) subject to certain conditions, to release assets relating to the Sacramento Sheraton to facilitate a refinancing of such property.

The Third Modification Agreement did not waive compliance with the financial covenant for the test period ending December 31, 2024 or any future period.

If the Company breaches any financial covenant under the 2022 Credit Facility in the future and is unable to obtain a further waiver from the lenders thereunder with respect to such breach, an event of default would occur under the 2022 Credit

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 (Unaudited) – (Continued)

Facility, which would allow lenders under the 2022 Credit Facility to, among other remedies, declare the unpaid principal amount of all outstanding loans, and all interest accrued and unpaid thereon, to be immediately due and payable.

The occurrence of any future event of default would raise substantial doubt about the Company’s ability to continue as a going concern.

Management plans to address any possible future event of default under the 2022 Credit Facility by entering into new financing arrangements to repay amounts outstanding under the 2022 Credit Facility.

The Company is in the process of obtaining refinancing for the Company’s hotel in Sacramento, California (the “Sheraton Refinancing”).

If completed, the Company intends to use the proceeds of the Sheraton Refinancing to repay part of the amount outstanding under the 2022 Credit Facility and to pay for the Hotel Renovation described above.

In addition, the Company is in the process of obtaining refinancing (the “Los Angeles Refinancing”) for three of its properties in Los Angeles, California.

If completed, the proceeds of the Los Angeles Refinancing, along with a portion of the proceeds from the Sheraton Refinancing, are anticipated to be in an amount sufficient to repay all amounts outstanding under the 2022 Credit Facility, with the rest to be used for general corporate purposes.

The Company expects that each of the Sheraton Refinancing and the Los Angeles Refinancing will close by the end of the first quarter of 2025.

Management of the Company believes that its plans to repay amounts outstanding under the 2022 Credit Facility are probable based on the following:

(1) the Company has executed term sheets with the respective lenders under the Sheraton Refinancing and the Los Angles Refinancing;

(2) the Company expects that both the Los Angeles Refinancing and the Sheraton Refinancing will close by the end of the first quarter of 2025;

(3) the favorable loan-to-value ratios (“LTVs”) of the properties that are the subject of the Sheraton Refinancing and the Los Angeles Refinancing and (4) the Company’s plans and efforts to date to obtain additional financing to be secured by two properties that it owns (in addition to the Sheraton Refinancing and the Los Angeles Refinancing), and the favorable LTVs of these two properties.

Management’s plans are intended to mitigate the relevant condition that would raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the interim financial information contained in this Quarterly Report on Form 10-Q is issued.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue its operations as a going concern and do not include any adjustments that might result from the outcome of events described in this paragraph.

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.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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).

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.

1 unchanged sentence

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 %.

As of September 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 $ 3.7 million as of June 30, 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 $ 3.6 million as of September 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 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):

As of September 30, 2024 and December 31, 2023, accrued interest and unused commitment fees payable of $ 1.8 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 September 30, 2024 are as follows (in thousands):

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 (Unaudited) – (Continued)

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

2022 Credit Facility Other (1) (2)

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

2024 (Three months ending December 31, 2024) $ — $ 479 $ — $ 3,316 $ 3,795

2025 153,600 89 169,263 9,947 332,899

11 unchanged sentences

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

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

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

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):

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

Outstanding Notional Fair Value of Assets as of

Balance Sheet Amount as of Strike Effective Maturity June 30,

Location June 30, 2024 Rates (1)

Balance Sheet Amount as of Strike Effective Maturity September 30,

Location September 30, 2024 Rates (1)

Dates Dates 2024

7 unchanged sentences

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 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.

During the three and nine months ended September 30, 2024, the Company recorded an unrealized loss of $ 407,000 and $ 425,000 , respectively, which was included in interest expense on the accompanying consolidated statements of operations related to its interest rate cap.

During the three and nine months ended September 30, 2023, the Company recorded an unrealized loss of $ 624,024 and $ 348,912 , respectively, which was included in interest expense on the accompanying consolidated statements of operations related to its interest rate caps.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 (Unaudited) – (Continued)

STOCK-BASED COMPENSATION PLANS

3 unchanged sentences

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

June 2022 June 2023 7,746 30,984

August 2023 August 2024 12,222 48,888

August 2024 August 2025 26,960 107,840

______________________

(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 $ 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.

The Company recorded compensation expense related to these restricted shares of Common Stock in the amount of $ 55,000 and $ 36,000 for the three months ended September 30, 2024 and 2023, respectively, and $ 165,000 and $ 128,000 for the nine months ended September 30, 2024 and 2023.

As of September 30, 2024, there was $ 183,000 of total unrecognized compensation expense related to restricted shares of Common Stock which will be recognized ratably over the remaining vesting period.

EARNINGS PER SHARE ("EPS")

The 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 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

June 30, 2024 (Unaudited) – (Continued)

No shares of Series D Preferred Stock, Series A Preferred Stock, or Series A1 Preferred Stock outstanding as of September 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 nine months ended September 30, 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.

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,

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

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

2024 2023 2024 2023

8 unchanged sentences

Diluted $ ( 1.22 ) $ ( 0.94 ) $ ( 2.20 ) $ ( 2.44 )

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 (Unaudited) – (Continued)

REDEEMABLE PREFERRED STOCK

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

Preferred Stock

3 unchanged sentences

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

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

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

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

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

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

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 )

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

Redemption of Series D Preferred Stock paid in cash — — — — ( 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 )

Redemption of Series A Preferred Stock paid in cash — — ( 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

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

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

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

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

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

Issuance of Series A1 Preferred Stock 853,879 21,246 — — — — 853,879 21,246

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

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

Redemption of Series A1 Preferred Stock paid in cash

( 24,046 ) ( 595 ) — — — — ( 24,046 ) ( 595 )

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

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

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 )

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

Redemption of Series A Preferred Stock paid in cash — — ( 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

Redemption of Series A1 Preferred Stock paid in cash ( 31,967 ) $ ( 791 ) — $ — — $ — ( 31,967 ) $ ( 791 )

Redemption of Series A1 Preferred Stock paid in Common Stock ( 2,590,616 ) $ ( 64,127 ) — $ — — $ — ( 2,590,616 ) $ ( 64,127 )

Redemption of Series A Preferred Stock paid in cash — $ — ( 247,627 ) $ ( 6,214 ) — $ — ( 247,627 ) $ ( 6,214 )

Redemption of Series A Preferred Stock paid in Common Stock — $ — ( 2,167,156 ) $ ( 53,927 ) — $ — ( 2,167,156 ) $ ( 53,927 )

Balances, September 30, 2024 8,553,591 $ 211,877 4,340,076 $ 108,703 48,447 $ 1,190 12,942,114 $ 321,770

Series A1 Preferred Stock —From June 2022 through September 2024, 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.

As of September 2024, the Company has suspended its offering of Series A1 Preferred Stock.

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

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

September 30, 2024 (Unaudited) – (Continued)

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 from June 2024 and through September 2024 were 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 from June 2024 through September 2024, 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 September 30, 2024, the Company had made no such reclassification from temporary equity to permanent equity.

As of September 30, 2024, the Company had issued in registered public offerings 12,040,878 shares of the Series A1 Preferred Stock and received gross proceeds of $ 298.2 million, and additionally had issued 200,000 shares of Series A1 Preferred Stock as payment for services to 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, $ 22.0 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 $ 12.0 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.

As of September 30, 2024, the Company had reclassified and allocated $ 5.0 million from deferred charges to Series A1 Preferred Stock as a reduction to the gross proceeds received.

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

1 unchanged sentence

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.

The Company recorded redeemable preferred stock deemed dividends related to such adjustments of $ 327,000 and $ 755,000 during the three and nine months ended September 30, 2024, respectively, and recorded no deemed dividends during the three and nine months ended September 30, 2023.

As of September 30, 2024, there were 9,467,221 shares of Series A1 Preferred Stock outstanding and 2,773,657 shares of Series A1 Preferred Stock had been redeemed.

Of the 2,773,657 shares of Series A1 Preferred Stock that have been redeemed, the redemption of 183,041 shares of Series A1 Preferred Stock were paid in cash (all of which were redeemed at the option of the holders).

In September, the Company (at its option) redeemed 2,589,606 shares of Series A1 Preferred Stock, all of which were paid in shares of Common Stock, including all accrued and unpaid dividends as of each redemption date and, in addition, in September 1,010 shares redeemed at the option of the holders were paid in shares of Common stock, including all accrued and unpaid dividends as of the redemption date (collectively the “Series A1 In-Kind Redemptions”).

The Series A1 In-Kind Redemptions resulted in the aggregate issuance of 32,998,865 shares of Common Stock, all of which were issued in September 2024.

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.

2 unchanged sentences

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

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.

As of September 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.

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 $ 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.

September 30, 2024 (Unaudited) – (Continued)

Series A Preferred Warrants, Series A1 Preferred Stock and Series D Preferred Stock.

As of September 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, 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.

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.

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

As of September 30, 2024, there were 4,340,076 shares of Series A Preferred Stock outstanding and 4,480,262 shares of Series A Preferred Stock had been redeemed.

Of the 4,480,262 shares of Series A Preferred Stock that have been redeemed, the redemption of 2,313,106 shares of Series A Preferred Stock were paid in cash (all of which were redeemed at the option of the holders).

In September, the Company (at its option) redeemed 2,167,156 shares of Series A Preferred Stock, all of which were paid in shares of Common Stock, including all accrued and unpaid dividends as of each redemption date (the “Series A In-Kind Redemptions”).

The Series A In-Kind Redemptions resulted in the aggregate issuance of 27,553,834 shares of Common Stock, all of which were issued in September 2024.

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.

2 unchanged sentences

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

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.

As of September 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.

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.

As of September 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 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.

As of September 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 (all such redemptions were paid in cash and redeemed at the option of the holders).

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.

7 unchanged sentences

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

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

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

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

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”).

September 30, 2024 (Unaudited) – (Continued)

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

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

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

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

During the 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.

During the nine months ended September 30, 2024, the Company paid $ 16.2 million, $ 7.3 million, and $ 51,000 of cash dividends on the Series A1 Preferred Stock, Series A Preferred Stock, and Series D Preferred Stock, respectively.

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

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.

3 unchanged sentences

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 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.The Company currently plans to continue to satisfy some or all redemption requests submitted by holders of its shares of Preferred Stock in shares of Common Stock during the fourth quarter of 2024.

STOCKHOLDERS’ EQUITY

4 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

September 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:

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

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

September 16, 2024 October 8, 2024 Quarterly - Stock Dividend (1)

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

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

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

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

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

______________________

(1) The Company’s Board of Directors declared a stock dividend of $ 0.04 (or 0.0202 shares of Common Stock) per share of Common Stock, payable in shares of Common Stock, using a price of $ 1.985 per share, resulting in the issuance of 1,684,634 shares of Common Stock.

The stock dividend was retrospectively applied to the periods reflected in the consolidated statements of operations included in this Quarterly Report on Form 10-Q.

Series A Preferred Warrants

4 unchanged sentences

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

As of June 30, 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.

As of September 30, 2024, the Company had 498,420 Series A Preferred Warrants outstanding to purchase 124,605 shares of Common Stock in connection with the Company’s offering of Series A Preferred Units and allocated net proceeds of $ 118,000 , after specifically identifiable offering costs and allocated general offering costs, to the Series A Preferred Warrants in permanent equity.

Share Repurchase Program

3 unchanged sentences

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

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

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

There were no repurchases during the three and nine months ended September 30, 2024.

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

FAIR VALUE OF FINANCIAL INSTRUMENTS

1 unchanged sentence

The hierarchy for inputs used in measuring fair value is as follows:

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 (Unaudited) – (Continued)

Level 1 Inputs —Quoted prices in active markets for identical assets or liabilities

3 unchanged sentences

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.

14 unchanged sentences

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

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Discount Rate Prepayment Rate Discount Rate Prepayment Rate

15 unchanged sentences

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

Other Financial Instruments —The carrying amounts of the Company’s cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and accrued expenses approximate their fair values due to their short-term maturities at June 30, 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):

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

June 30, 2024 December 31, 2023

September 30, 2024 (Unaudited) – (Continued)

September 30, 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.

September 30, 2024 December 31, 2023

Amount Estimated

26 unchanged sentences

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

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

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

Any such election by the Company

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 (Unaudited) – (Continued)

September 30, 2024 (Unaudited) – (Continued)

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

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

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

26 unchanged sentences

$ 4,000,000 $ 20,000,000 0.1000 %

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

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

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.

September 30, 2024 (Unaudited) – (Continued)

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

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

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

21 unchanged sentences

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

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

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

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

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

September 30, 2024 (Unaudited) – (Continued)

Three Months Ended September 30, Nine Months Ended September 30, 2024

2024 2023 2024 2023

23 unchanged sentences

______________________

(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.

(1) Does not include the Company’s share of the property management fees from the Unconsolidated Joint Ventures of $ 24,000 and $ 74,000 for the three and nine months ended September 30, 2024, respectively, and $ 20,000 and $ 57,000 for the three and nine months ended September 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 $ 176,000 and $ 414,000 for the three and nine months ended September 30, 2024, respectively, and $ 114,000 and $ 255,000 for the three and nine months ended September 30, 2023, respectively.

(3) Does not include the Company’s share of the leasing commissions from the Unconsolidated Joint Ventures of $ 0 and $ 10,000 for the three and nine months ended September 30, 2024, respectively, and $ 18,000 and $ 32,000 for the three and nine months ended September 30, 2023, respectively.

(4) Does not include the Company’s share of the construction management fees from the Unconsolidated Joint Ventures of $ 6,000 and $ 128,000 for the three and nine months ended September 30, 2024, respectively, and $ 26,000 and $ 85,000 for the three and nine months ended September 30, 2023, respectively.

(5) Does not include the Company’s share of the development management reimbursements from the Unconsolidated Joint Ventures of $ 241,000 and $ 625,000 for the three and nine months ended September 30, 2024, respectively, and $ 135,000 and $ 322,000 for the three and nine months ended September 30, 2023, respectively.

(6) Expense reimbursements to related parties - lending segment do not include personnel costs capitalized to deferred loan origination costs of $ 24,000 and $ 84,000 for the three and nine months ended September 30, 2024, respectively, and $ 6,000 and $ 67,000 for the three and nine months ended September 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 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.

(8) As of September 30, 2024 and September 30, 2023, $ 3.2 million and $ 2.6 million, respectively, was included in deferred costs as reimbursable expenses incurred pursuant to the Master Services Agreement and the then applicable dealer manager agreement with CCO Capital.

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

1 unchanged sentence

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

September 30, 2024 (Unaudited) – (Continued)

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

September 30, 2024 December 31, 2023

Asset management fees $ 939 $ 555

13 unchanged sentences

The Company and the 1902 Park JV Partner both initially contributed $ 6.6 million to the 1902 Park JV.

See Note 2 and Note 4 for more information.

See Note 2, Note 4 and Note 18 for more information.

In October 2023, the Company and the 1015 N Mansfield JV Partner acquired from an unrelated third party a 100 % fee-simple interest in a plot of land located in the Sycamore media district of Los Angeles, California for a gross purchase price of $ 18.0 million (excluding transaction costs).

1 unchanged sentence

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

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) .

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

See Note 3 and Note 7 for more information.

3 unchanged sentences

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.

For the three and nine months ended September 30, 2024 the Company’s share of the income from the tenant earned by the 4750 Wilshire JV was $ 84,000 and $ 248,000 , respectively, and for the three and nine months ended September 30, 2023, the Company’s share of the income from the tenant earned by the 4750 Wilshire JV was $ 80,000 and $ 170,000 , respectively.

COMMITMENTS AND CONTINGENCIES

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

The Company’s outstanding commitments to fund loans were $ 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.

The Company’s outstanding commitments to fund loans were $ 18.5 million as of September 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.

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

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

The Company had a total of $ 6.3 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.

September 30, 2024 (Unaudited) – (Continued)

The Company had a total of $ 12.6 million in future obligations under leases to fund tenant improvements and other future construction obligations as of September 30, 2024.

As of September 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.

8 unchanged sentences

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

As of September 30, 2024, the Company serviced an aggregate of $ 221.9 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

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):

September 30, 2024 (Unaudited) – (Continued)

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

Years Ending December 31, Total

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

2024 (Three months ending December 31, 2024) $ 14,540

Thereafter 52,760

SEGMENT DISCLOSURE

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.

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

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

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,

September 30, 2024 (Unaudited) – (Continued)

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

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

2024 2023 2024 2023

4 unchanged sentences

Total property expenses 7,566 6,342 20,826 19,391

Income (loss) from unconsolidated entities 1,204 ( 710 ) 1,321 ( 774 )

(Loss) income from unconsolidated entities ( 834 ) 1,611 487 837

Segment net operating income—office 5,419 9,318 22,192 22,957

11 unchanged sentences

(Loss) income from unconsolidated entity ( 405 ) ( 422 ) ( 929 ) 216

Segment net operating income—multifamily 2,252 522 3,169 1,197

Segment net operating income (loss)—multifamily 508 ( 391 ) 3,677 806

Revenues 2,724 2,570 7,928 8,243

8 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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,

September 30, 2024 (Unaudited) – (Continued)

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

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

2024 2023 2024 2023

13 unchanged sentences

Net loss attributable to the Company $ ( 10,384 ) $ ( 15,773 ) $ ( 14,910 ) $ ( 40,083 )

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

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

September 30, 2024 December 31, 2023

Condensed assets:

6 unchanged sentences

SUBSEQUENT EVENTS

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.

At the end of October, 2024, the 1902 JV Partner admitted a new third party co-investor and used part of the net capital contribution of such third party co-investor to satisfy the 1902 Park Mortgage Loan in full.

The remaining contribution was used to make a distribution of approximately $ 1.0 million to each of the Company and the 1902 Park JV Partner.

Subsequent to this contribution, the Company’s ownership share of the 1902 Park JV was approximately 25.5% .

In addition, the Company and the 1902 Park JV Partner will be receiving an on-going fee from such third party co-investor in connection with its co-investment in 1902 Park JV.

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