Creative Media & Community Trust Corp 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures As of December 31, 2024, we carried out an evaluation, under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, regarding the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) at the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded, as of that time, that our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in the reports that we file or submit to the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms and include controls and procedures designed to ensure the information required to be disclosed by us in such reports is accumulated and communicated to management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. 71 Table of Contents Management’s Report on Internal Control Over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. We reviewed the results of management’s assessment with the Audit Committee of the Board of Directors. Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2024. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework (2013) . Based on their assessment, management determined that as of December 31, 2024, our internal control over financial reporting was effective based on those criteria. The effectiveness of our internal control over financial reporting as of December 31, 2024 has been audited by Deloitte & Touche, LLP, an independent registered public accounting firm as stated in their report which appears herein. 72 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of Creative Media & Community Trust Corporation Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of Creative Media & Community Trust Corporation (the “Company”) as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2024, of the Company and our report dated March 7, 2025, expressed an unqualified opinion on those financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Deloitte & Touche LLP Tempe, Arizona March 7, 2025 73 Table of Contents Limitations on the Effectiveness of Controls Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls or our internal controls will prevent all errors and fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with associated policies or procedures. Because of the inherent limitations in a cost effective control system, misstatements due to error or fraud may occur and not be detected. Changes in Internal Control Over Financial Reporting There have been no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information We have adopted an Insider Trading Policy governing the trading of our securities by the Company’s officers, directors, employees and certain employees of CIM Group, as well as the Company itself, that we believe is reasonably designed to promote compliance with insider trading laws, rules and regulations and the Nasdaq listing standards. A copy of our Insider Trading Policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K. None of our officers or directors had any contract, instruction, or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement,” as defined in Item 408 of Regulation S-K, in effect at any time during the three months ended December 31, 2024. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. 74 Table of Contents PART III Item 10. Directors, Executive Officers and Corporate Governance Information required by this Item regarding our directors and executive officers, and corporate governance, including information with respect to beneficial ownership reporting compliance, will appear in an amendment to this Annual Report on Form 10-K or the Company’s Proxy Statement, which will be filed or delivered to our stockholders in connection with our 2025 Annual Meeting of Stockholders not later than 120 days after the end of the fiscal year covered by this Annual Report. Such information is incorporated herein by reference. Information relating to the registrant’s Code of Business Conduct and Ethics that applies to its employees, including its senior financial officers, is included in Part I of this Annual Report on Form 10-K under “Item 1––Business—Available Information.” Item 11. Executive Compensation The information required by this Item will appear in an amendment to this Annual Report on Form 10-K or the Company’s Proxy Statement, which will be filed or delivered to our stockholders in connection with our 2025 Annual Meeting of Stockholders not later than 120 days after the end of the fiscal year covered by this Annual Report. Such information is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by this Item regarding security ownership of certain beneficial owners and management will appear in an amendment to this Annual Report on Form 10-K or the Company’s Proxy Statement, which will be filed or delivered to our stockholders in connection with our 2025 Annual Meeting of Stockholders not later than 120 days after the end of the fiscal year covered by this Annual Report. Such information is incorporated herein by reference. Information relating to securities authorized for issuance under our equity compensation plans is included in Part II of this Annual Report on Form 10-K under “Item 5—Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.” Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by this Item will appear in an amendment to this Annual Report on Form 10-K or the Company’s Proxy Statement, which will be filed or delivered to our stockholders in connection with our 2025 Annual Meeting of Stockholders not later than 120 days after the end of the fiscal year covered by this Annual Report. Such information is incorporated herein by reference. Item 14. Principal Accountant Fees and Services The information required by this Item will appear in an amendment to this Annual Report on Form 10-K or the Company’s Proxy Statement, which will be filed or delivered to our stockholders in connection with our 2025 Annual Meeting of Stockholders not later than 120 days after the end of the fiscal year covered by this Annual Report. Such information is incorporated herein by reference. 75 Table of Contents PART IV Item 15. Exhibits and Financial Statement Schedules (a) 1. Financial Statements The list of the financial statements filed as part of this Annual Report on Form 10-K is set forth on page F-1 herein. 2. Financial Statement Schedules The list of the financial statement schedules filed as part of this Annual Report on Form 10-K is set forth on page F-1 herein. Note: Other schedules are omitted because of the absence of conditions under which they are required or because the required information is given in the financial statements or notes thereto. 3. Exhibits The following documents are included or incorporated by reference in this Annual Report on Form 10-K: Exhibit No. Document 3.1 Articles of Amendment and Restatement (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on May 2, 2014). 3.1(a) Articles of Amendment (Name Change) (incorporated by reference to Exhibit 3.4 to the Registrant's Current Report on Form 8-K filed with the SEC on May 2, 2014). 3.1(b) Articles of Amendment (Reverse Stock Split) (incorporated by reference to Exhibit 3.5 to the Registrant's Current Report on Form 8-K filed with the SEC on May 2, 2014). 3.1(c) Articles of Amendment (Par Value Decrease) (incorporated by reference to Exhibit 3.6 to the Registrant's Current Report on Form 8-K filed with the SEC on May 2, 2014). 3.1(d) Articles of Amendment (Reverse Stock Split) (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on September 6, 2019). 3.1(e) Articles of Amendment (Par Value Decrease) (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on September 6, 2019). 3.1(f) Articles of Amendment (Name Change) (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on March 10, 2022). 3.2 Articles Supplementary, designating the Series A Preferred Stock (incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed with the SEC on October 27, 2016). 3.3 Amendment No. 1 to the Articles Supplementary, designating the Series A Preferred Stock (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on January 31, 2020). 3.4 Articles Supplementary, designating the Series D Preferred Stock (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on January 31, 2020). 3.5 Articles Supplementary, designating the Series L Preferred Stock (incorporated by reference to Exhibit 4.1 to the Registrant's Pre-Effective Amendment No. 4 to the Form S-11 Registration Statement (333-218019) filed with the SEC on November 15, 2017). 3.6 Articles Supplementary, designating the Series A1 Preferred Stock (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on June 16, 2022). 3.7 Bylaws of Creative Media & Community Trust Corporation (incorporated by reference to Exhibit 3.6 to the Registrant’s Annual Report on Form 10-K filed with the SEC on March 16, 2022). *4.1 Description of Securities of Creative Media & Community Trust Corporation 4.2 Purchase Agreement among PMC Commercial Trust, PMC Preferred Capital Trust-A and Taberna Preferred Funding I, Ltd. dated March 15, 2005 (incorporated by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q filed with the SEC on May 10, 2005). 4.3 Junior Subordinated Indenture between PMC Commercial Trust and JPMorgan Chase Bank, National Association as Trustee dated March 15, 2005 (incorporated by reference to Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q filed with the SEC on May 10, 2005). 4.4 Amended and Restated Trust Agreement among PMC Commercial Trust, JPMorgan Chase Bank, National Association, Chase Bank USA, National Association and The Administrative Trustees Named Herein dated March 15, 2005 (incorporated by reference to Exhibit 10.3 to the Registrant's Quarterly Report on Form 10‑Q filed with the SEC on May 10, 2005). 76 Table of Contents 4.5 Floating Rate Junior Subordinated Note due 2035 (incorporated by reference to Exhibit 10.5 to the Registrant's Quarterly Report on Form 10-Q filed with the SEC on May 10, 2005). 4.6 Warrant Agreement, dated June 28, 2016, between CIM Commercial Trust Corporation and American Stock Transfer & Trust Company, LLC (incorporated by reference to Exhibit 4.2 to the Registrant's Registration Statement on Form S-11/A filed with the SEC on June 29, 2016). 4.7 First Amendment to Warrant Agreement, dated November 6, 2019, between CIM Commercial Trust Corporation and American Stock Transfer & Trust Company, LLC (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on November 8, 2019). 4.8 Form of Warrant Certificate (incorporated by reference to Exhibit 4.4 to the Registrant’s Registration Statement on Form S-11 filed with the SEC on June 29, 2016). +10.1 2015 Equity Incentive Plan (incorporated by reference to Exhibit A to the Registrant's Definitive Proxy Statement related to its 2015 annual meeting of stockholders, as filed with the SEC on April 17, 2015). +10.2 Amended and Restated Executive Employment Contract with Barry N. Berlin dated August 30, 2013 (incorporated by reference to Exhibit 10.2 to the Registrant's Current Report on Form 8-K filed with the SEC on August 30, 2013). 10.3 Master Services Agreement dated March 11, 2014 by and among PMC Commercial Trust, certain of its subsidiaries, and CIM Service Provider, LLC (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the SEC on March 11, 2014). 10.4 Service Agreement, dated as of August 7, 2014, by and among CIM Commercial Trust Corporation and CIM Service Provider, LLC, under the Master Services Agreement dated March 11, 2014, by and among PMC Commercial Trust, certain of its subsidiaries, and CIM Service Provider, LLC (incorporated by reference to Exhibit 10.8 to the Registrant's Quarterly Report on Form 10-Q filed with the SEC on August 11, 2014). 10.5 Form of Indemnification Agreement for directors and officers of CIM Commercial Trust Corporation (incorporated by reference to Exhibit 10.9 to the Registrant's Quarterly Report on Form 10-Q filed with the SEC on August 11, 2014). 10.6 Staffing and Reimbursement Agreement, dated as of January 1, 2015, by and among CIM SBA Staffing, LLC, PMC Commercial Lending, LLC and CIM Commercial Trust Corporation (incorporated by reference to Exhibit 10.15 to the Registrant's Annual Report on Form 10-K filed with the SEC on March 16, 2015). 10.7 Investment Management Agreement, dated as of December 10, 2015, between CIM Urban Partners, L.P. and CIM Investment Advisors, LLC (incorporated by reference to Exhibit 10.16 to the Registrant's Annual Report on Form 10-K filed with the SEC on March 15, 2016). 10.8 Assignment Agreement, dated as of January 1, 2019, by and among CIM Capital, LLC (formerly known as CIM Investment Advisors, LLC), CIM Capital Controlled Company Management, LLC, CIM Capital RE Debt Management, LLC, CIM Capital Real Property Management, LLC and CIM Capital Securities Management, LLC (incorporated by reference to Exhibit 10.12 to the Registrant's Annual Report on Form 10-K filed with the SEC on March 18, 2019). 10.9 Third Amended and Restated Dealer Manager Agreement, dated as of June 16, 2022, by and among Creative Media & Community Trust Corporation, CIM Service Provider, LLC and CCO Capital, LLC (incorporated by reference to Exhibit 1.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on June 16, 2022). 10.10 Third Amended and Restated Dealer Manager Guaranty, dated as of June 16, 2022, by and among Creative Media & Community Trust Corporation, CIM Service Provider, LLC and CCO Capital, LLC (incorporated by reference to Exhibit 1.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on June 16, 2022). 10.11 Credit Agreement, dated as of December 16, 2022, by and among certain subsidiary borrowers of Creative Media & Community Trust Corporation, JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders party thereto (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 20, 2022). 10.12 Credit Guaranty, dated as of December 16, 2022, by and among certain subsidiary borrowers of Creative Media & Community Trust Corporation, JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders party thereto (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on December 16, 2022). 10.13 Modification Agreement, dated as of September 2, 2020, among certain subsidiary borrowers of CIM Commercial Trust Corporation, each Lender party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8‑K filed with the SEC on September 3, 2020). 10.14 Lease Agreement, dated as of June 29, 2009, by and among CIM/Oakland 1 Kaiser Plaza, LP and Kaiser Foundation Health Plan, Inc, as amended by the First Amendment to Lease, dated as of June 15, 2012, as further amended by the Second Amendment to Lease, dated as of December 16, 2013, as further amended by the Third Amendment to Lease, dated as of July 8, 2015, and as further amended by the Fourth Amendment to Lease, dated as of November 18, 2015 (incorporated by reference to Exhibit 10.16 to the Registrant’s Annual Report on Form 10-K filed with the SEC on March 16, 2020). 77 Table of Contents 10.15 Equity Distribution Agreement, dated as of March 16, 2020, by and among CIM Commercial Trust Corporation, CIM Capital, LLC, CIM Service Provider, LLC and Ladenburg Thalmann & Co. Inc. (incorporated by reference to Exhibit 1.1 to the Registrant’s Current Report on Form 8‑K filed with the SEC on March 16, 2020). 10.16 Amendment No. 2, dated as of September 22, 2021, to Second Amended and Restated Dealer Manager Agreement, dated as of January 28, 2020, by and among CIM Commercial Trust Corporation, CIM Service Provider, LLC and CCO Capital, LLC (incorporated by reference to Exhibit 1.1 to the Registrant's Current Report on 8-K filed with the SEC on September 24, 2021) 10.17 Fee Waiver, dated January 5, 2022, by and among CIM Commercial Trust Corporation, CIM Service Provider, LLC, CIM Capital, LLC, CIM Capital Securities Management, LLC, CIM Capital Controlled Company Management, LLC, CIM Capital RE Debt Management, LLC, CIM Capital Real Property Management, LLC, CIM Urban Partners, L.P., PMC Funding Corp. and PMC Properties, Inc. (incorporated by reference to Exhibit 10.17 to the Registrant’s Current Report on Form 10‑K filed with the SEC on March 16, 2022) 10.18 Equity Interest Purchase and Sale Agreement, dated as of January 31, 2023, by and between Jack London Square Development (Oakland) Holdings, LLC and Channel House (Oakland) Owner, LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8‑K filed with the SEC on February 3, 2023) 10.19 Equity Interest Purchase and Sale Agreement, dated as of January 31, 2023, by and between 466 Water Street (Oakland) Holdings, LLC, and Parcel D 466 Water Street (Oakland) Owner, LLC (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8‑K filed with the SEC on February 3, 2023) 10.20 Equity Interest Purchase and Sale Agreement, dated as of January 31, 2023, by and between JLS F-3 (Oakland) Holdings, LLC, and Parcel F-3 (Oakland) Owner, LLC (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8‑K filed with the SEC on February 3, 2023) 10.21 Equity Interest Purchase and Sale Agreement, dated as of January 31, 2023, by and between 1100 Clay Venture Holdings, LLC and CMCT 1100 Clay (Oakland) Owner, LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8‑K filed with the SEC on March 29, 2023) 10.22 Amended and Restated Limited Liability Company Operating Agreement of 4750 Co-Investor, LLC (incorporated by reference to Exhibit 10.23 to the Registrant's Form 10-K filed with the SEC on March 31, 2023) 10.23 Amended and Restated Agreement of Limited Partnership of CIM Urban Partners, L.P. (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on November 8, 2024). 10.24 Exchange Agreement, dated as of March 28, 2024, by and among Creative Media & Community Trust Corporation, CMCT NAV REIT and CIM Urban Partners, L.P. (incorporated by reference to Exhibit 10.24 to the Registrant’s Form 10-K filed with the SEC on March 29, 2024). 10.25 Amendment to 2015 Equity Compensation Plan (incorporated by reference to Appendix A to the Registrant's Definitive Proxy Statement related to its 2023 annual meeting of stockholders, as filed with the SEC on June 21, 2023) 10.26 Modification Agreement, dated as of May 14, 2024, by and among certain wholly owned subsidiaries of Creative Media & Community Trust Corporation, each Lender party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on May 15, 2024). 10.27 Fifth Amended and Restated Dealer Manager Agreement, dated as of June 20, 2024, by and among Creative Media & Community Trust Corporation, CIM Service Provider, LLC and CCO Capital, LLC (incorporated by reference to Exhibit 1.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on June 24, 2024). 10.28 Modification Agreement, dated as of August 7, 2024, by and among certain wholly owned subsidiaries of Creative Media & Community Trust Corporation, each Lender party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q filed with the SEC on August 8, 2024). 10.29 Third Modification Agreement, dated as of October 24, 2024, by and among certain wholly owned subsidiaries of Creative Media & Community Trust Corporation, each Lender party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on October 29, 2024). 10.30 Loan Agreement, dated as of December 6, 2024, by and among certain subsidiary borrowers of Creative Media & Community Trust Corporation and Deutsche Bank AG, New York Branch (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K as filed with the SEC on December 10, 2024). 10.31 Guaranty of Non-Recourse Exceptions, dated as of December 6, 2024, by Creative Media & Community Trust Corporation for the benefit of Deutsche Bank AG, New York Branch (incorporated by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 8-K as filed with the SEC on December 10, 2024). 10.32 Environmental Indemnity Agreement, dated as of December 6, 2024, by and among certain subsidiary borrowers of Creative Media & Community Trust Corporation and Creative Media & Community Trust Corporation for the benefit of Deutsche Bank AG, New York Branch (incorporated by reference to Exhibit 10.3 of the Registrant’s 10.33 Completion Guaranty, dated as of December 6, 2024, by Creative Media & Community Trust Corporation for the benefit of Deutsche Bank AG, New York Branch (incorporated by reference to Exhibit 10.4 of the Registrant’s Current Report on Form 8-K as filed with the SEC on December 10, 2024). 78 Table of Contents 10.34 Guaranty of Payment, dated as of December 6, 2024, by Creative Media & Community Trust Corporation for the benefit of Deutsche Bank AG, New York Branch (incorporated by reference to Exhibit 10.5 of the Registrant’s Current Report on Form 8-K as filed with the SEC on December 10, 2024). 10.35 Loan Agreement, dated as of December 27, 2024, by and among certain subsidiary borrowers of Creative Media & Community Trust Corporation and Wells Fargo Bank, National Association, Bank of America, N.A. and JPMorgan Chase Bank, National Association (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K as filed with the SEC on January 2, 2025). 10.36 Guaranty of Recourse Obligations, dated as of December 27, 2024, by and between Creative Media & Community Trust Corporation and CIM Group Investments, LLC for the benefit of Wells Fargo Bank, National Association, Bank of America, N.A. and JPMorgan Chase Bank, National Association (incorporated by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 8-K as filed with the SEC on January 2, 2025). 10.37 Environmental Indemnity Agreement, dated as of December 27, 2024, by certain subsidiary borrowers of Creative Media & Community Trust Corporation and Creative Media & Community Trust Corporation for the benefit of Wells Fargo Bank, National Association, Bank of America, N.A. and JPMorgan Chase Bank, National Association (incorporated by reference to Exhibit 10.3 of the Registrant’s Current Report on Form 8-K as filed with the SEC on January 2, 2025). 10.38 Fourth Modification Agreement, dated as of January 31, 2024, by and among certain wholly owned subsidiaries of Creative Media & Community Trust Corporation, each Lender party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on February 12, 2025). *19.1 Insider Trading Policy, dated December 17, 2024. *21.1 Subsidiaries of the Registrant. *23.1 Consent of Deloitte & Touche, LLP. *24.1 Powers of Attorney (included on signature page). *31.1 Section 302 Officer Certification-Chief Executive Officer. *31.2 Section 302 Officer Certification-Chief Financial Officer. *32.1 Section 906 Officer Certification-Chief Executive Officer. *32.2 Section 906 Officer Certification-Chief Financial Officer. 97.1 Creative Media & Community Trust Corporation Clawback Policy dated October 31, 2023 (incorporated by reference to Exhibit 97.1 to the Registrant's Form 10-K filed with the SEC on March 29, 2024). * Filed herewith. + Management contract or compensatory plan (b) Exhibits The exhibits listed in Item 15(a) are incorporated by reference or attached hereto. (c) Excluded Financial Statements None. Item 16. Form 10-K Summary None. 79 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Creative Media & Community Trust Corporation Dated: March 7, 2025 By: /s/ DAVID THOMPSON David Thompson Chief Executive Officer Dated: March 7, 2025 By: /s/ BARRY N. BERLIN Barry N. Berlin Chief Financial Officer POWERS OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints David Thompson and Barry N. Berlin and each of them severally, his true and lawful attorney-in-fact with power of substitution and resubstitution to sign in his name, place and stead, in any and all capacities, to do any and all things and execute any and all instruments that such attorney may deem necessary or advisable under the Securities Exchange Act of 1934 and any rules, regulations and requirements of the U.S. Securities and Exchange Commission in connection with this Annual Report on Form 10-K and any and all amendments hereto, as fully for all intents and purposes as he might or could do in person, and hereby ratifies and confirms all said attorneys-in-fact and agents, each acting alone, and his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ David Thompson Chief Executive Officer (Principal Executive March 7, 2025 David Thompson Officer) /s/ Barry N. Berlin Chief Financial Officer (Principal Financial March 7, 2025 Barry N. Berlin Officer and Principal Accounting Officer) /s/ Douglas Bech Director March 7, 2025 Douglas Bech /s/ John Hope Bryant Director March 7, 2025 John Hope Bryant /s/ Marcie L. Edwards Director March 7, 2025 Marcie L. Edwards /s/ Shaul Kuba Director March 7, 2025 Shaul Kuba /s/ Richard Ressler Director March 7, 2025 Richard Ressler /s/ Avraham Shemesh Director March 7, 2025 Avraham Shemesh /s/ Elaine Wong Director March 7, 2025 Elaine Wong 80 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS TABLE OF CONTENTS Financial Statements Page Number Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34 ) F- 2 Consolidated Balance Sheets as of December 31, 2024 and 2023 F- 4 Consolidated Statements of Operations for the Years Ended December 31, 2024 and 2023 F- 5 Consolidated Statements of Equity for the Years Ended December 31, 2024 and 2023 F- 6 Consolidated Statements of Cash Flows for the Years Ended December 31, 2024 and 2023 F- 8 Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 F- 9 Schedule III—Real Estate and Accumulated Depreciation F- 49 Schedule IV—Mortgage Loans on Real Estate F- 51 F-1 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of Creative Media & Community Trust Corporation Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Creative Media & Community Trust Corporation (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations, equity, and cash flows, for each of the two years in the period ended December 31, 2024, and the related notes and the schedules listed in the Index at Item 8 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 7, 2025 expressed an unqualified opinion on the Company’s internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Investments in Real Estate – Evaluation of Impairment and Undiscounted Cash Flows – Refer to Note 2 to the consolidated financial statements Critical Audit Matter Description The Company’s evaluation of investments in real estate for impairment involves an initial assessment of each real estate asset to determine whether events or changes in circumstances exist that may indicate that the carrying amounts of each investment in real estate is no longer recoverable. When events or changes in circumstances exist, the Company evaluates its investments in real estate for impairment by comparing undiscounted future cash flows expected to be generated over the life of each asset to the respective carrying amount. If the carrying amount of an asset exceeds the undiscounted future cash flows, an analysis is performed to determine the fair value of the asset. For those investments in real estate where indications of impairment have been identified, the Company makes significant estimates and assumptions to determine whether the undiscounted future cash flows expected to be generated over the life of the asset exceed the carrying amount of the investment in real estate. Management concluded that the carrying value of the assets F-2 Table of Contents were recoverable and therefore it was not required to perform an analysis of the fair value of the assets. Estimates and assumptions used for the undiscounted future cash flows of the properties include rental rates, lease-up period, growth rates, estimated holding periods, capital expenditures and terminal capitalization rates. We identified the process for evaluating real estate impairment and certain assumptions used for the undiscounted future cash flows of the properties as a critical audit matter because of (1) the significant assumptions management makes when determining whether events or changes in circumstances have occurred indicating that the carrying amounts of investments in real estate assets may not be recoverable and (2) for those investments in real estate where indications of impairment have been identified, the significant estimates and assumptions management makes to evaluate whether the undiscounted future cash flows expected to be generated over the life of the asset exceed the carrying amount of the property, including those related to rental rates, lease-up period, growth rates, estimated holding period, capital expenditures and terminal capitalization rates. This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate (1) whether management appropriately identified impairment indicators and (2) the reasonableness of management’s assumptions related to rental rates, lease-up period, growth rates, estimated holding period, capital expenditures and terminal capitalization rates for the undiscounted future cash flows analysis. How the Critical Audit Matter Was Addressed in the Audit • We tested the effectiveness of controls over (1) management’s identification of possible circumstances that may indicate that the carrying amounts of investments in real estate are no longer recoverable and (2) the undiscounted cash flows, including review of significant inputs. • We evaluated the accuracy, relevance, and completeness of changes in circumstances that could indicate the carrying amounts of real estate assets may not be recoverable. • We performed corroborating inquiries with management, including property accounting, leasing and portfolio oversight to determine whether factors were identified in the current period that may be an impairment indicator, and corroborated these inquiries through review of third-party market reports and inspection of meeting minutes of the Board of Directors. In addition, we evaluated whether factors were identified in the current period that may result in a change to assumptions used in the undiscounted cash flow models. • We selected certain office and multifamily properties to evaluate whether the assumptions used in the Company’s undiscounted model relating to rental rates, lease-up period, growth rates, estimated holding period, capital expenditures and terminal capitalization rates were consistent with evidence obtained in other areas of the audit, including actual historical results and external market information. • With the assistance of our fair value specialists, we evaluated the inputs included in the undiscounted cash flow analysis for our selected office and multifamily properties, including estimated rental rates, lease-up periods, growth rates, holding period, capital expenditures and terminal capitalization rates by (1) evaluating the source of information and assumptions used by management (2) comparing the inputs included in the undiscounted cash flow analysis to market data and (3) testing the mathematical accuracy of the undiscounted cash flow analysis. /s/ Deloitte & Touche LLP Tempe, Arizona March 7, 2025 We have served as the Company’s auditor since 2020. F-3 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Consolidated Balance Sheets (In thousands, except share and per share amounts) December 31, 2024 2023 ASSETS Investments in real estate, net $ 709,194 $ 704,762 Investments in unconsolidated entities 33,677 33,505 Cash and cash equivalents 20,262 19,290 Restricted cash 32,606 24,938 Loans receivable, net (Note 5) 56,210 57,005 Accounts receivable, net 4,345 5,347 Deferred rent receivable and charges, net 19,896 28,222 Other intangible assets, net 3,568 3,948 Other assets 9,797 14,183 TOTAL ASSETS $ 889,555 $ 891,200 LIABILITIES, REDEEMABLE PREFERRED STOCK, AND EQUITY LIABILITIES: Debt, net $ 505,732 $ 471,561 Accounts payable and accrued expenses 32,204 26,426 Due to related parties 14,068 3,463 Other liabilities 10,488 12,981 Total liabilities 562,492 514,431 COMMITMENTS AND CONTINGENCIES (Note 15) REDEEMABLE PREFERRED STOCK: Series A1 cumulative redeemable preferred stock, $ 0.001 par value; 25,045,401 and 27,904,974 shares authorized as of December 31, 2024 and December 31, 2023, respectively; 913,630 and 913,590 shares issued and outstanding as of December 31, 2024, respectively and no shares issued and outstanding as of December 31, 2023; liquidation preference of $ 25.00 per share, subject to adjustment 20,799 — EQUITY: Series A cumulative redeemable preferred stock, $ 0.001 par value; 31,305,025 and 34,611,501 shares authorized as of December 31, 2024 and December 31, 2023, respectively; 8,820,338 and 4,125,363 shares issued and outstanding, respectively, as of December 31, 2024 and 8,820,338 and 7,431,839 shares issued and outstanding, respectively, as of December 31, 2023; liquidation preference of $ 25.00 per share, subject to adjustment 103,326 185,704 Series A1 cumulative redeemable preferred stock, $ 0.001 par value; 25,045,401 and 27,904,974 shares authorized as of December 31, 2024 and December 31, 2023, respectively; 11,327,248 and 8,372,689 shares issued and outstanding, respectively, as of December 31, 2024 and 10,473,369 and 10,378,343 shares issued and outstanding, respectively, as of December 31, 2023; liquidation preference of $ 25.00 per share, subject to adjustment 207,387 256,935 Series D cumulative redeemable preferred stock, $ 0.001 par value; 26,991,590 and 26,991,590 shares authorized as of December 31, 2024 and December 31, 2023, respectively; 56,857 and 48,447 shares issued and outstanding, respectively, as of December 31, 2024 and 56,857 and 48,447 shares issued and outstanding, respectively, as of December 31, 2023; liquidation preference of $ 25.00 per share, subject to adjustment 1,190 1,190 Common stock, $ 0.001 par value; 900,000,000 shares authorized; 11,654,506 shares issued and outstanding as of December 31, 2024 and 2,278,674 shares issued and outstanding as of December 31, 2023 119 23 Additional paid-in capital 994,973 852,476 Distributions in excess of earnings ( 1,002,479 ) ( 921,925 ) Total stockholders’ equity 304,516 374,403 Noncontrolling interests 1,748 2,366 Total equity 306,264 376,769 TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK, AND EQUITY $ 889,555 $ 891,200 The accompanying notes are an integral part of these consolidated financial statements. F-4 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Consolidated Statements of Operations (In thousands, except per share amounts) Year Ended December 31, 2024 2023 REVENUES: Rental and other property income $ 72,266 $ 66,002 Hotel income 37,679 39,063 Interest and other income 14,567 14,193 Total Revenues 124,512 119,258 EXPENSES: Rental and other property operating 67,962 62,493 Asset management and other fees to related parties 1,797 2,627 Expense reimbursements to related parties—corporate 2,281 2,342 Expense reimbursements to related parties—lending segment 2,571 2,579 Interest 36,872 35,098 General and administrative 7,004 8,119 Transaction-related costs 1,382 4,421 Depreciation and amortization 27,373 52,484 Loss on early extinguishment of debt (Note 7) 1,416 — Total Expenses 148,658 170,163 Loss from unconsolidated entities ( 806 ) ( 427 ) Gain on sale of real estate (Note 3) — 1,104 LOSS BEFORE PROVISION FOR INCOME TAXES ( 24,952 ) ( 50,228 ) Provision for income taxes 798 1,228 NET LOSS ( 25,750 ) ( 51,456 ) Net loss attributable to noncontrolling interests 575 2,971 NET LOSS ATTRIBUTABLE TO THE COMPANY ( 25,175 ) ( 48,485 ) Redeemable preferred stock dividends declared or accumulated (Note 11) ( 29,686 ) ( 25,731 ) Redeemable preferred stock deemed dividends (Note 11) ( 755 ) — Redeemable preferred stock redemptions (Note 11) ( 17,727 ) ( 1,511 ) NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ ( 73,343 ) $ ( 75,727 ) NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS PER SHARE: Basic $ ( 17.21 ) $ ( 31.02 ) Diluted $ ( 17.21 ) $ ( 31.02 ) WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING: Basic 4,261 2,441 Diluted 4,261 2,441 The accompanying notes are an integral part of these consolidated financial statements. F-5 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Consolidated Statements of Equity (In thousands, except share and per share amounts) Years Ended December 31, 2024 and 2023 Common Stock Preferred Stock Additional Distributions Total Non- Par Par Paid - in in Excess Stockholders’ controlling Total Shares Value Shares Value Capital of Earnings Equity Interests Equity Balances, December 31, 2022 2,273,785 $ 23 13,570,353 $ 337,762 $ 861,721 $ ( 837,846 ) $ 361,660 $ 373 $ 362,033 Cumulative-effect adjustment upon adoption of ASU 2016-13 (Note 2) — — — — — ( 619 ) ( 619 ) — ( 619 ) Contributions to noncontrolling interests — — — — — — — 5,002 5,002 Distributions to noncontrolling interests — — — — — — — ( 38 ) ( 38 ) Stock-based compensation expense 4,888 — — — 183 — 183 — 183 Common dividends ($ 3.400 per share) — — — — — ( 7,740 ) ( 7,740 ) — ( 7,740 ) Issuance of A1 Preferred Stock — — 4,507,292 111,520 ( 9,791 ) — 101,729 — 101,729 Redemptions of Series A1 Preferred Stock — — ( 85,096 ) ( 2,099 ) 173 ( 99 ) ( 2,025 ) — ( 2,025 ) Dividends to holders of A1 Preferred Stock ($ 1.801 per share) — — — — — ( 14,825 ) ( 14,825 ) — ( 14,825 ) Redemptions of Series D Preferred Stock — — ( 410 ) ( 10 ) — — ( 10 ) — ( 10 ) Dividends to holders of Series D Preferred Stock ($ 1.413 per share) — — — — — ( 69 ) ( 69 ) — ( 69 ) Reclassification of Series A Preferred stock to permanent equity — — 690,171 17,161 ( 1,545 ) — 15,616 — 15,616 Redemption of Series A Preferred Stock — — ( 823,681 ) ( 20,505 ) 1,735 ( 1,412 ) ( 20,182 ) — ( 20,182 ) Dividends to holders of Series A Preferred Stock ($ 1.375 per share) — — — — — ( 10,830 ) ( 10,830 ) — ( 10,830 ) Net loss — — — — — ( 48,485 ) ( 48,485 ) ( 2,971 ) ( 51,456 ) Balances, Balances, December 31, 2023 2,278,673 $ 23 17,858,629 $ 443,829 $ 852,476 $ ( 921,925 ) $ 374,403 $ 2,366 $ 376,769 (Continued) F-6 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Consolidated Statements of Equity (Continued) (In thousands, except share and per share amounts) Years Ended December 31, 2024 and 2023 Common Stock Preferred Stock Shares Par Value Shares Par Value Additional Paid-in Capital Distributions in Excess of Earnings Total Stockholders’ Equity Non-controlling Interests Total Equity Balances, December 31, 2023 2,278,673 $ 23 17,858,629 $ 443,829 $ 852,476 $ ( 921,925 ) $ 374,403 $ 2,366 $ 376,769 Distributions to noncontrolling interests — — — — — — — ( 43 ) ( 43 ) Stock-based compensation expense 10,784 — — — 220 — 220 — 220 Common dividends ($ 1.70 per share) — — — — — ( 3,874 ) ( 3,874 ) — ( 3,874 ) Common dividends - stock dividend 168,464 3 — — 3,336 ( 3,339 ) — — Issuance of A1 Preferred Stock — — 853,879 21,246 ( 2,180 ) — 19,066 — 19,066 Redemption of Series A1 Preferred Stock paid in cash — — ( 88,015 ) ( 2,177 ) 191 ( 57 ) ( 2,043 ) — ( 2,043 ) Redemption of Series A1 Preferred Stock paid in Common Stock 4,817,486 48 ( 2,771,518 ) ( 68,617 ) 74,793 ( 8,372 ) ( 2,148 ) — ( 2,148 ) Dividends to holders of A1 Preferred Stock ($ 1.958 per share) — — — — — ( 21,059 ) ( 21,059 ) — ( 21,059 ) Dividends to holders of Series D Preferred Stock ($ 1.413 per share) — — — — — ( 68 ) ( 68 ) — ( 68 ) Redeemable preferred stock accretion — — — — — ( 755 ) ( 755 ) — ( 755 ) Redemption of Series A Preferred Stock paid in cash — — ( 941,687 ) ( 23,501 ) 2,015 ( 1,793 ) ( 23,279 ) — ( 23,279 ) Redemption of Series A Preferred Stock paid in Common Stock 4,379,099 45 ( 2,364,789 ) ( 58,877 ) 64,122 ( 7,503 ) ( 2,213 ) — ( 2,213 ) Dividends to holders of Series A Preferred Stock ($ 1.375 per share) — — — — — ( 8,559 ) ( 8,559 ) — ( 8,559 ) Net loss — — — — — ( 25,175 ) ( 25,175 ) ( 575 ) ( 25,750 ) Balances, December 31, 2024 11,654,506 $ 119 12,546,499 $ 311,903 $ 994,973 $ ( 1,002,479 ) $ 304,516 $ 1,748 $ 306,264 The accompanying notes are an integral part of these consolidated financial statements. F-7 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Consolidated Statements of Cash Flows (In thousands) Year Ended December 31, 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ ( 25,750 ) $ ( 51,456 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization, net 27,732 52,669 Gain on interest rate caps ( 463 ) ( 539 ) Gain on sale of real estate — ( 1,104 ) Loss on early extinguishment of debt 1,416 — Amortization of deferred debt origination costs 2,134 2,286 Amortization of premiums and discounts on debt 24 ( 59 ) Unrealized premium adjustment 1,019 1,215 Amortization of deferred costs and accretion of fees on loans receivable, net ( 249 ) ( 404 ) Write-offs of uncollectible receivables 1,263 299 Write-offs of other deferred costs 491 — Deferred income taxes ( 36 ) 42 Stock-based compensation 220 183 Loss from unconsolidated entities 806 427 Return on investment from unconsolidated entities — 1,328 Loans funded, held for sale to secondary market ( 30,191 ) ( 33,654 ) Proceeds from sale of guaranteed loans 28,760 33,672 Principal collected on loans subject to secured borrowings 1,646 2,972 Commitment fees remitted and other operating activity ( 806 ) ( 742 ) Changes in operating assets and liabilities: Accounts receivable 91 ( 1,991 ) Other assets 4,670 2,062 Accounts payable and accrued expenses ( 2,023 ) 10,407 Deferred leasing costs ( 1,840 ) ( 1,049 ) Other liabilities ( 2,493 ) ( 4,875 ) Due to related parties 10,605 308 Net cash provided by operating activities 17,026 11,997 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ( 23,262 ) ( 13,326 ) Acquisition of real estate — ( 96,731 ) Proceeds from sale of real estate, net 1,096 33,304 Investment in unconsolidated entity ( 2,263 ) ( 14,279 ) Return of investment from unconsolidated entity 1,285 — Loans funded ( 10,064 ) ( 11,534 ) Principal collected on loans 10,838 13,871 Other investing activity 82 — Net cash used in investing activities ( 22,288 ) ( 88,695 ) CASH FLOWS FROM FINANCING ACTIVITIES: Payment of revolving credit facilities, mortgages payable, term notes and principal on SBA 7(a) loan-backed notes ( 171,767 ) ( 278,347 ) Proceeds from revolving credit facilities, term notes and mortgages 209,746 334,882 Proceeds from SBA 7(a) loan-backed notes — 54,141 Payment of principal on secured borrowings ( 1,646 ) ( 2,972 ) Payment of deferred preferred stock offering costs ( 1,586 ) ( 859 ) Payment of deferred costs ( 4,489 ) ( 3,211 ) Payment of common dividends ( 5,811 ) ( 7,732 ) Net proceeds from issuance of Preferred Stock 40,445 103,228 Payment of preferred stock dividends ( 25,574 ) ( 29,500 ) (Continued) CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Consolidated Statements of Cash Flows (Continued) (In thousands) Year Ended December 31, 2024 2023 Redemption of Preferred Stock ( 25,373 ) ( 106,146 ) Noncontrolling interests’ distributions ( 43 ) ( 38 ) Net cash provided by financing activities 13,902 63,446 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH 8,640 ( 13,252 ) CASH AND CASH EQUIVALENTS AND RESTRICTED CASH: Beginning of period 44,228 57,480 End of period $ 52,868 $ 44,228 RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH TO THE CONSOLIDATED BALANCE SHEETS: Cash and cash equivalents $ 20,262 $ 19,290 Restricted cash 32,606 24,938 Total cash and cash equivalents and restricted cash $ 52,868 $ 44,228 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for interest $ 34,874 $ 31,079 Federal income taxes paid $ 845 $ 1,560 SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES: Accrued capital expenditures, tenant improvements and real estate developments $ 7,569 $ 1,502 Proceeds from the sale of real estate committed but not yet received $ — $ 1,096 Other amounts due from Unconsolidated Joint Venture partners included in other assets $ 396 $ 1,445 Non-cash contributions to Unconsolidated Joint Venture $ — $ 8,600 Accrued deferred debt origination costs $ 425 $ — Accrued preferred stock offering costs $ — $ 125 Accrual of dividends payable to preferred stockholders $ 5,976 $ 2,508 Accrual of dividends payable to common stockholders $ — $ 1,937 Preferred stock offering costs offset against redeemable preferred stock $ 1,420 $ 1,655 Reclassification of Series A Preferred Stock from temporary equity to permanent equity $ — $ 15,616 Mortgage notes assumed in connection with our acquisition of real estate $ — $ 181,318 Write-off of preferred stock deferred offering costs $ 4,966 $ — Redeemable preferred stock deemed dividends $ 755 $ — Accrued Redeemable Preferred Stock fees $ 186 $ 282 Acquisition of noncontrolling interests $ — $ 5,002 The accompanying notes are an integral part of these consolidated financial statements. F-8 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 1. ORGANIZATION AND OPERATIONS Creative Media & Community Trust Corporation (the “Company”) is a Maryland corporation and real estate investment trust (“REIT”). The Company primarily acquires, develops, owns and operates both premier multifamily properties situated in vibrant communities throughout the United States and Class A and creative office real assets in markets with similar business and employment characteristics to its multifamily investments. The Company also owns one hotel in northern California and a lending platform that originates loans under the Small Business Administration (“SBA”) 7(a) loan program. The Company seeks to apply the expertise of CIM Group Management, LLC (“CIM Group”) and its affiliates to the acquisition, development and operation of premier multifamily properties and creative office assets that cater to rapidly growing industries such as technology, media and entertainment in vibrant and emerging communities throughout the United States. The Company’s common stock, $ 0.001 par value per share (“Common Stock”), is currently traded on the Nasdaq Global Market (“Nasdaq”) under the ticker symbol “CMCT”, and on the Tel Aviv Stock Exchange (the “TASE”) under the ticker symbol “CMCT.” On January 6, 2025, the Company effected a 1-for-10 reverse stock split (the “Reverse Stock Split”) on its Common Stock. Unless otherwise specified, all Common Stock and per share of Common Stock amounts set forth in this Annual Report on Form 10-K have been adjusted to give retroactive effect to the Reverse Stock Split. Any references to building square footage or number of multifamily units set forth in this Annual Report on Form 10-K are unaudited. 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation —The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). Principles of Consolidation —The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. In determining whether the Company has controlling interests in an entity and the requirement to consolidate the accounts in that entity, the Company analyzes its investments in real estate in accordance with standards set forth in GAAP to determine whether they are variable interest entities (“VIEs”), and if so, whether the Company is the primary beneficiary. The Company’s judgment with respect to its level of influence or control over an entity and whether the Company is the primary beneficiary of a VIE involves consideration of various factors, including the form of the Company’s ownership interest, the Company’s voting interest, the size of the Company’s investment (including loans), and the Company’s ability to participate in major policy-making decisions. The Company’s ability to correctly assess its influence or control over an entity affects the presentation of these investments in real estate on the Company’s consolidated financial statements. As of December 31, 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 December 31, 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. Therefore, the Unconsolidated Joint Ventures do not qualify for consolidation. The Company accounts for its investments in Unconsolidated Joint Ventures as equity method investments. Investments in Real Estate —Investments in real estate are stated at depreciated cost. Depreciation and amortization are recorded on a straight-line basis over the estimated useful lives as follows: Buildings and improvements 15 - 40 years Furniture, fixtures, and equipment 3 - 5 years Tenant improvements Lesser of useful life or lease term F-9 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (Continued) Capitalized Project Costs The Company capitalizes project costs, including pre-construction costs, interest expense, property taxes, insurance, and other costs directly related and essential to the development, redevelopment, or construction of a project, while activities are ongoing to prepare an asset for its intended use. Costs incurred after a project is substantially complete and ready for its intended use are expensed as incurred. Improvements and replacements are capitalized when they extend the useful life, increase capacity, or improve the efficiency of the asset. Ordinary repairs and maintenance are expensed as incurred. Recoverability of Investments in Real Estate —The Company periodically monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate assets may not be recoverable. Investments in real estate are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If, and when, such events or changes in circumstances are present, the recoverability of assets to be held and used requires significant judgment and estimates and is measured by a comparison of the carrying amount to the future undiscounted cash flows expected to be generated by the assets and their eventual disposition. If the undiscounted cash flows are less than the carrying amount of the assets, an impairment is recognized to the extent the carrying amount of the assets exceeds the estimated fair value of the assets. The process for evaluating real estate impairment requires management to make significant assumptions related to certain inputs, including rental rates, lease-up period, occupancy, estimated holding periods, capital expenditures, growth rates, market discount rates and terminal capitalization rates. These inputs require a subjective evaluation based on the specific property and market. Changes in the assumptions could have a significant impact on whether an impairment is recognized and, if so, the estimated fair value which impacts the amount of impairment charge, if any. Any asset held for sale is reported at the lower of the asset’s carrying amount or fair value, less costs to sell. 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 years ended December 31, 2024 and 2023 (Note 3). Investments in Unconsolidated Entities —The Company accounts for its investments in the unconsolidated joint ventures (the “Unconsolidated Joint Ventures”) under the equity method, as the Company has the ability to exercise significant influence over the investments. The Unconsolidated Joint Ventures record their assets and liabilities at fair value. As such, the Company records its share of the Unconsolidated Joint Ventures’ unrealized gains or losses as well as its share of the revenues and expenses on a quarterly basis as an adjustment to the carrying value of the investment on the Company’s consolidated balance sheet and such share is recognized within the Company’s income from unconsolidated entities on the consolidated statements of operations. Cash and Cash Equivalents —Cash and cash equivalents include short-term liquid investments with initial maturities of three months or less. 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. 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. In addition, for one of the Company’s mortgage loans, rent from the Company’s tenants at the applicable property is deposited directly into a lender reserve account, from which the monthly debt service payments are disbursed to the lender and the excess funds are then disbursed to the Company. Loans Receivable —The Company’s loans receivable are carried at their unamortized principal balance less unamortized acquisition discounts and premiums, retained loan discounts and reserves for expected credit losses. Acquisition discounts or premiums, origination fees and retained loan discounts are amortized as a component of interest and other income using the effective interest method over the expected life of the respective loans. All loans were originated pursuant to programs sponsored by the Small Business Administration (the “SBA”) under the SBA 7(a) Small Business Loan Program (the “SBA 7(a) Program”). Pursuant to the SBA 7(a) Program, the Company sells the portion of the loan that is guaranteed by the SBA. 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 $ 7.9 million and $ 8.4 million as of December 31, 2024 and 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. Generally, loans are charged-off when management F-10 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (Continued) determines that the Company will be unable to collect any remaining amounts due under the loan agreement, either through liquidation of collateral or other means. Interest income, included in interest and other income, on a Non-Accrual Loan is recognized on the cost recovery basis. Current Expected Credit Losses — On January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments-Credit Losses , and subsequent amendments (“ASU 2016-13”). The current expected credit losses (“CECL”) required under ASU 2016-13 reflects the Company’s current estimate of potential credit losses related to the Company’s loans receivable included in the consolidated balance sheets. The initial expected credit losses recorded on January 1, 2023 is reflected as a direct charge to distributions in excess of earnings on the Company’s consolidated statements of equity; however, subsequent changes to CECL are recognized through net income on the Company’s consolidated statements of operations. While ASU 2016-13 does not require any particular method for determining CECL, it does specify the allowance should be based on relevant information about past events, including historical loss experience, current portfolio and market conditions, and reasonable and supportable forecasts for the duration of each respective loan. In addition, other than a few narrow exceptions, ASU 2016-13 requires that all financial instruments subject to the credit loss model have some amount of loss reserve to reflect the GAAP principal underlying the credit loss model that all loans, debt securities, and similar assets have some inherent risk of loss, regardless of credit quality, subordinate capital, or other mitigating factors. The Company adopted ASU 2016-13 using the modified retrospective method for all financial assets measured at amortized cost. The Company recorded a cumulative-effective adjustment to the opening distributions in excess of earnings in its consolidated statement of equity as of January 1, 2023 of $ 619,000 . This represents a total CECL reserve transition adjustment of approximately $ 783,000 , net of a $ 164,000 deferred tax asset. As of December 31, 2024 and December 31, 2023, the Company had a total CECL of $ 2.0 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. 1. This method requires the Company to reference historical loan loss data across a comparable dataset and apply such loss rate to each loan investment over its expected remaining term, taking into consideration expected economic conditions over the relevant timeframe. The Company considers loans that are both (i) expected to be substantially repaid through the operation or sale of the underlying collateral and (ii) for which the borrower is experiencing financial difficulty, to be “collateral-dependent” loans. For loans that the Company determines that foreclosure of the collateral is probable, the Company measures the expected losses based on the difference between the fair value of the collateral less costs to sell and the amortized cost basis of the loan as of the measurement date. For collateral-dependent loans with respect to which the Company determines foreclosure is not probable, the Company applies a practical expedient to estimate expected losses using the difference between the collateral’s fair value (less costs to sell the asset if repayment is expected through the sale of the collateral) and the amortized cost basis of the loan. The Company may use other acceptable alternative approaches in the future depending on, among other factors, the type of loan, underlying collateral and availability of relevant historical market loan loss data. Quarterly, the Company evaluates the risk of all loans receivable and assigns a risk rating based on a variety of factors, which are grouped as follows: (i) loan and credit structure, including the as-is loan-to-value (“LTV”) ratio and structural features; (ii) quality and stability of real estate value and operating cash flow, including debt yield, dynamics of the geography, local market, physical condition and stability of cash flow; and (iii) quality, experience and financial condition of the borrower. Based on a 5-point scale, the Company’s loans receivable are rated “1” through “5,” from least risk to greatest risk, respectively, which ratings are defined as follows: 1- Acceptable — These are assets of high quality; 2- Other Assets Especially Mentioned (“OAEM”) — These are assets that are generally profitable but exhibit potential weakness or weaknesses, including, but not limited to, no significant pay history as detailed below for loans originated generally within the last year. Such weaknesses could result in deterioration if not corrected ; 3- Substandard — These assets generally have a well-defined weakness or weaknesses which could hinder collection efforts; 4- Doubtful — These assets have weakness or weaknesses similar to substandard loans; however, the weakness or weaknesses are so extreme that significant loss potential exists in all cases; and F-11 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (Continued) 5- Loss — Assets assigned this classification have no value and thus have been or are in the process of being charged off. The Company generally assigns a risk rating of “2” to all newly originated loans (generally within one year of origination) due to lack of management experience and/or lack of adequate historical debt coverage at the origination date. These loans likely will be classified to acceptable within two years of origination. Deferred Rent Receivable and Charges —Deferred rent receivable and charges consist of deferred rent, deferred leasing costs, deferred offering costs (Note 11), deferred financing costs and other deferred costs. Deferred leasing costs, which represent lease commissions and other direct costs associated with the acquisition of tenants, are capitalized and amortized on a straight-line basis over the terms of the related leases. Deferred offering costs 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 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 2,150,076 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 year ended December 31, 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. F-12 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (Continued) As of December 31, 2024 and 2023, deferred rent receivable and charges, net consist of the following: December 31, 2024 December 31, 2023 (in thousands) Deferred rent receivable $ 12,931 $ 14,757 Deferred leasing costs, net of accumulated amortization of $ 11,870 and $ 10,483 , respectively 6,351 6,613 Deferred offering costs — 4,925 Deferred financing costs, net of accumulated amortization of $ 2,654 and $ 764 , respectively 614 1,436 Other deferred costs — 491 Deferred rent receivable and charges, net $ 19,896 $ 28,222 Noncontrolling Interests —Noncontrolling interests represent the interests in various properties owned by third parties. Redeemable Preferred Stock —Beginning on the date of original issuance of any given shares of Series A1 Preferred Stock, par value $ 0.001 per share (“Series A1 Preferred Stock”), with an initial stated value of $ 25.00 per share, subject to adjustment (the “Series A1 Preferred Stock Stated Value”), Series A Preferred Stock, par value $ 0.001 per share (“Series A Preferred Stock”) with an initial stated value of $ 25.00 per share, subject to adjustment (the “Series A Preferred Stock Stated Value”), or Series D Preferred Stock, par value $ 0.001 per share (“Series D Preferred Stock”), with an initial stated value of $ 25.00 per share, subject to adjustment (the “Series D Preferred Stock Stated Value”), the holder of such shares has the right to require the Company to redeem such shares, subject to certain limitations as discussed in Note 11. The Company records the activity related to the Series A1 Preferred Stock (for issuances prior to June 2024), Series A Preferred Stock, Series A Preferred Warrants and Series D Preferred Stock in permanent equity. 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, 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. Purchase Accounting for Acquisition of Investments in Real Estate —The Company applies the acquisition method to all acquired real estate assets. The purchase consideration of the real estate, which includes the transaction costs incurred in connection with such acquisitions, is recorded at fair value to the acquired tangible assets, consisting primarily of land, land improvements, building and improvements, tenant improvements, and furniture, fixtures, and equipment, and identified intangible assets and liabilities, consisting of the value of acquired above-market and below-market leases, in-place leases and ground leases, if any, based in each case on their relative fair values. Loan premiums, in the case of above-market rate loans, or loan discounts, in the case of below-market rate loans, are recorded based on the fair value of any loans assumed in connection with acquiring the real estate. The fair value of the tangible assets of an acquired property is determined by valuing the property as if it were vacant, and the “as-if-vacant” value is then allocated to land (or acquired ground lease if the land is subject to a ground lease), land improvements, building and improvements, and tenant improvements based on management’s determination of the relative fair values of these assets. Management determines the as-if-vacant fair value of a property using methods similar to those used by independent appraisers. Factors considered by management in performing these analyses include an estimate of carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases. In estimating carrying costs, management includes real estate taxes, insurance and other operating expenses, and estimates of lost rental revenue during the expected lease-up periods based on current market demand. Management also estimates costs to execute similar leases, including leasing commissions, legal, and other related costs. In allocating the purchase consideration of the identified intangible assets and liabilities of an acquired property, above-market, below-market, and in-place lease values are recorded based on the present value (using an interest rate that F-13 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (Continued) reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases measured over a period equal to the remaining non-cancelable term of the lease, and for below-market leases, over a period equal to the initial term plus any below-market fixed-rate renewal periods. Acquired above-market and below-market leases are amortized and recorded to rental and other property income over the initial terms of the respective leases. The aggregate value of other acquired intangible assets, consisting of in-place leases and tenant relationships, is measured by the estimated cost of operations during a theoretical lease-up period to replace in-place leases, including lost revenues and any unreimbursed operating expenses, plus an estimate of deferred leasing commissions for in-place leases. The value of in-place leases is amortized to expense over the remaining non-cancelable periods of the respective leases. If a lease is terminated prior to its stated expiration, all unamortized amounts relating to that lease are written-off. 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. Based on this determination, the appropriate treatment in accordance with GAAP is applied to the contract, including its revenue recognition. Revenue from leasing activities The Company operates as a lessor of both office and multifamily real estate assets. When the Company enters into a contract or amends an existing contract, the Company evaluates if the contracts meet the definition of a lease using the following criteria: • One party (lessor) must hold an identified asset; • The counterparty (lessee) must have the right to obtain substantially all of the economic benefits from the use of the asset throughout the period of the contract; and • The counterparty (lessee) must have the right to direct the use of the identified asset throughout the period of the contract. The Company determined that the Company’s contracts with its tenants explicitly identify the premises and that any substitution rights to relocate tenants to other premises within the same building stated in the contract are not substantive. Additionally, so long as payments are made timely under such contracts, the Company’s tenants have the right to obtain substantially all the economic benefits from the use of the identified asset and can direct how and for what purpose the premises are used to conduct their operations. Therefore, the contracts with the Company’s tenants constitute leases. All leases are classified as operating leases and minimum rents are recognized on a straight-line basis over the terms of the leases when collectability is probable and the tenant has taken possession or controls the physical use of the leased asset. The excess of rents recognized over amounts contractually due pursuant to the underlying leases is recorded as deferred rent. If the lease provides for tenant improvements, the Company determines whether the tenant improvements, for accounting purposes, are owned by the tenant or the Company. When the Company is the owner of the tenant improvements, the tenant is not considered to have taken physical possession or have control of the physical use of the leased asset until the tenant improvements are substantially completed. When the tenant is considered the owner of the improvements, any tenant improvement allowance that is funded is treated as an incentive. 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 December 31, 2024 and 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 as of December 31, 2024 and 2023, 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. Tenant reimbursements are recognized and presented on a gross basis when the Company is primarily responsible for fulfilling the promise to provide the specified good or service and control that specified good or service before it is transferred to the tenant. The Company has elected not to separate lease and non-lease components as the pattern of revenue recognition does not differ for the two components, and the non-lease component is not the primary component in the Company’s leases. In addition to minimum rents, certain leases, including the Company’s parking leases with third-party operators, provide for additional rents based upon varying percentages of tenants’ sales in excess of annual minimums. Percentage rent is recognized once lessees’ specified sales targets have been met. F-14 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (Continued) For the years ended December 31, 2024 and 2023, the Company recognized rental income as follows: Year Ended December 31, 2024 2023 (in thousands) Rental and other property income Fixed lease payments (1) $ 62,322 $ 55,520 Variable lease payments (2) 9,944 10,482 Rental and other property income $ 72,266 $ 66,002 (1) Fixed lease payments include contractual rents under lease agreements with tenants recognized on a straight-line basis over the lease term, including amortization of acquired above-market leases, below-market leases and lease incentives. (2) Variable lease payments include expense reimbursements billed to tenants and percentage rent, net of bad debt expense from the Company’s operating leases plus cash payments from tenants deemed not probable of collections. Collectability of Future Lease Payments The Company periodically reviews whether collection of future lease payments, including any straight-line rent, and current and future operating expense reimbursements from tenants is probable. The determination of whether collectability is probable takes into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. Upon the determination that the collectability of future lease payments is not probable, the Company will record a reduction to rental and other property income and a decrease in the outstanding receivable. Revenue from leases where collection is deemed to be not probable is recorded on a cash basis until collectability becomes probable. Management’s estimate of the collectability of future lease payments is based on the best information available at the time of estimate. The Company does not use a general reserve approach. As of December 31, 2024 and 2023, the Company had identified certain tenants where collection was no longer considered probable and decreased outstanding receivables by $ 640,000 and $ 868,000 , respectively, across all operating leases. Revenue from lending activities Interest income included in interest and other income is comprised of interest earned on loans and the Company’s short-term investments and the accretion of loan discounts. Interest income on loans is accrued as earned with the accrual of interest suspended when the related loan becomes a Non-Accrual Loan (as defined below). Revenue from hotel activities The Company recognizes revenue from hotel activities separate from its leasing activities. At contract inception, the Company assesses the goods and services promised in its contracts with customers and identifies a performance obligation for each promise to transfer to the customer a good or service (or bundle of goods or services) that is distinct. To identify the performance obligations, the Company considers all of the goods or services promised in the contract regardless of whether they are explicitly stated or implied by customary business practices. Various performance obligations of hotel revenues can be categorized as follows: • cancellable and noncancelable room revenues from reservations and • ancillary services including facility usage and food or beverage. Cancellable reservations represent a single performance obligation of providing lodging services at the hotel. The Company satisfies its performance obligation and recognizes revenues associated with these reservations over time as services are rendered to the customer. The Company satisfies its performance obligation and recognizes revenues associated with noncancelable reservations at the earlier of (i) the date on which the customer cancels the reservation or (ii) over time as services are rendered to the customer. Ancillary services include facilities usage and providing food and beverage. The Company satisfies its performance obligation and recognizes revenues associated with these services at a point in time when the good or service is delivered to the customer. F-15 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (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. The Company presents hotel revenues net of sales, occupancy, and other taxes. Below is a reconciliation of the hotel revenue from contracts with customers to the total hotel segment revenue disclosed in Note 18: Year Ended December 31, 2024 2023 (in thousands) Hotel properties Hotel income $ 37,679 $ 39,063 Rental and other property income 1,344 1,676 Interest and other income 384 357 Hotel revenues $ 39,407 $ 41,096 Tenant recoveries outside of the lease agreements Tenant recoveries outside of the lease agreements are related to construction projects in which the Company’s tenants have agreed to fully reimburse the Company for all costs related to construction. These services include architectural, permit expediter and construction services. At inception of the contract with the customer, the contractual price is equivalent to the transaction price as there are no elements of variable consideration to estimate. While these individual services are distinct, in the context of the arrangement with the customer, all of these services are bundled together and represent a single package of construction services requested by the customer. 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 the years ended December 31, 2024 and 2023. As of December 31, 2024, there were no remaining performance obligations associated with tenant recoveries outside of the lease agreements. Premiums and Discounts on Debt — Premiums and discounts on debt are amortized or accreted to interest expense using the effective interest method or on a straight-line basis over the respective term of the debt, which approximates the effective interest method. Stock-Based Compensation Plans —The Company has issued and continues to issue restricted shares under stock-based compensation plans described more fully in Note 9. The Company uses fair value recognition provisions to account for all awards granted, modified or settled. Earnings per Share (“EPS”) —Basic EPS is computed by dividing net income attributable to common stockholders by the weighted-average number of shares of Common Stock outstanding for the period. Net income attributable to common stockholders includes a deduction for dividends due to preferred stockholders. Diluted EPS is computed by dividing net income attributable to common stockholders by the weighted average number of shares of Common Stock outstanding adjusted for the dilutive effect, if any, of securities such as stock-based compensation awards, warrants, including the Series A Preferred Warrants and preferred stock, including the Series A1 Preferred Stock, Series A Preferred Stock, Series D Preferred Stock and Series L Preferred Stock, whose redemption is payable in shares of Common Stock or cash, at the discretion of the Company. The dilutive effect of stock-based compensation awards and warrants, including the Series A Preferred Warrants, is reflected in the weighted average diluted shares calculation by application of the treasury stock method. The dilutive effect of preferred stock, including the Series A1 Preferred Stock, Series A Preferred Stock, Series D Preferred Stock and Series L Preferred Stock, whose redemption is payable in shares of Common Stock or cash, at the discretion of the Company, is reflected in the weighted average diluted shares calculation by application of the if-converted method. Distributions —Distributions on the Company’s Series A1 Preferred Stock, Series A Preferred Stock, Series D Preferred Stock, Series L Preferred Stock and Common Stock are recorded when they are authorized by its Board of Directors and declared by the Company. F-16 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (Continued) Assets Held for Sale and Discontinued Operations —In the ordinary course of business, the Company may periodically enter into agreements to dispose of its assets. Some of these agreements are non-binding because either they do not obligate either party to pursue any transactions until the execution of a definitive agreement or they provide the potential buyer with the ability to terminate without penalty or forfeiture of any material deposit, subject to certain specified contingencies, such as completion of due diligence at the discretion of such buyer. The Company does not classify assets that are subject to such non-binding agreements as held for sale. The Company classifies assets as held for sale, if material, when they meet the necessary criteria, which include: a) management commits to and actively embarks upon a plan to sell the assets, b) the assets to be sold are available for immediate sale in their present condition, c) the sale is expected to be completed within one year under terms usual and customary for such sales and d) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. The Company generally believes that it meets these criteria when the plan for sale has been approved by its management, having the authority to approve the sale, there are no known significant contingencies related to the sale and management believes it is probable that the sale will be completed within one year. Assets held for sale are recorded at the lower of cost or estimated fair value less cost to sell. In addition, if the Company were to determine that the asset disposal associated with assets held for sale or disposed of represents a strategic shift, the revenues, expenses and net gain (loss) on dispositions would be recorded in discontinued operations for all periods presented through the date of the applicable disposition. Derivative Financial Instruments —As part of risk management and operational strategies, from time to time, we may enter into derivative contracts with various counterparties. All derivatives are recognized on the balance sheet at their estimated fair value. On the date that we enter into a derivative contract, we designate the derivative as a fair value hedge, a cash flow hedge, a foreign currency fair value hedge, a hedge of a net investment in a foreign operation, or a trading or non-hedging instrument. Accounting for changes in the fair value of a derivative instrument depends on the intended use and designation of the derivative instrument. The Company has interest rate caps that are used to manage exposure to interest rate movements but do not meet the requirements to be designated as hedging instruments. The change in fair value of the derivative instruments that are not designated as hedges is recorded directly to earnings as interest expense on the accompanying consolidated statements of operations. See Note 8 for further disclosures about the Company’s derivative financial instruments and hedging activities. Income Taxes —The Company has elected to be taxed as a REIT under the provisions of the Code. To the extent the Company qualifies for taxation as a REIT, it generally will not be subject to a federal corporate income tax on its taxable income that is distributed to its stockholders. The Company may, however, be subject to certain federal excise taxes and state and local taxes on its income and property. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income taxes at regular corporate rates and will not be able to qualify as a REIT for four subsequent taxable years. In order to remain qualified as a REIT under the Code, the Company must satisfy various requirements in each taxable year, including, among others, limitations on share ownership, asset diversification, sources of income, and the distribution of at least 90% of its taxable income within the specified time in accordance with the Code. The Company has wholly owned taxable REIT subsidiaries (“TRS’s”) which are subject to federal income taxes. The income generated from the taxable REIT subsidiaries is taxed at normal corporate rates. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the carrying amounts of existing assets and liabilities and their respective tax bases. The Company has established a policy on classification of penalties and interest related to audits of its federal and state income tax returns. If incurred, the Company’s policy for recording interest and penalties associated with audits will be to record such items as a component of general and administrative expense. Penalties, if incurred, will be recorded in general and administrative expense and interest paid or received will be recorded in interest expense or interest income, respectively, in the Company’s consolidated statements of operations. ASC 740, Income Taxes , provides guidance for how uncertain tax positions should be recognized, measured, presented, and disclosed in the financial statements. ASC 740 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Company’s tax returns to determine whether the tax positions are “more likely than not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be F-17 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (Continued) recorded as a tax benefit or expense in the current period. The Company has reviewed all open tax years and concluded that the application of ASC 740 resulted in no material effect to its consolidated financial position or results of operations. Use of Estimates —The preparation of consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. The Company bases such estimates on historical experience, information available at the time, and assumptions the Company believes to be reasonable under the circumstances at such time. Actual results could differ from those estimates. Concentration of Credit Risk —Financial instruments that subject us to credit risk consist primarily of cash and cash equivalents and interest rate swap agreements. The Company has its cash and cash equivalents on deposit with what it believes to be high-quality financial institutions. Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $250,000. Management routinely assesses the financial strength of its tenants and, as a consequence, believes that its accounts receivable credit risk exposure is limited. The majority of the Company’s revenues are earned from properties located in California. The Company is subject to risks incidental to the ownership and operation of commercial real estate. These include, among others, the risks normally associated with changes in the general economic climate in the communities in which the Company operates, trends in the real estate industry, changes in tax laws, interest rate levels, availability of financing, and the potential liability under environmental and other laws. Segment Information —Segment information is prepared on the same basis that the Company’s management reviews information for operational decision-making purposes. The Company’s reportable segments for the years ended December 31, 2024 and 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 products for the Company’s office segment primarily include rental of office space and other tenant services, including tenant reimbursements, parking, and storage space rental. The products for the Company’s multifamily segment primarily include revenues generated from residential and other lease income. The products for the Company’s hotel segment include revenues generated from the operations of hotel properties and rental income generated from a garage located directly across the street from the hotel. The income from the Company’s lending segment includes premium income recognized from the sale of the government guaranteed portion of loans receivable, income from the yield on its loans receivable and other related fee income earned on its loans receivable. Recently Issued Accounting Pronouncements— In August 2023, the FASB issued ASU No. 2023-05, Business Combinations-Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement (“ASU 2023-05”). ASU 2023-05 applies to the formation of a joint venture and requires a joint venture to initially measure all contributions received upon its formation at fair value. The guidance is intended to reduce diversity in practice and provide users of joint venture financial statements with more decision-useful information. The amendments are effective prospectively for all joint venture formations with a formation date on or after January 1, 2025. The Company does not believe the adoption of ASU 2023-05 will have a material impact on its consolidated financial statements and disclosures . In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 enhances the disclosures required for reportable segments on an annual and interim basis. ASU 2023-07 is effective on a retrospective basis for annual periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, and early adoption is permitted. The adoption of ASU No. 2023-07 has not impacted the Company’s financial statements but has resulted in incremental disclosures, which are included within Note 18 — Segment Reporting. In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”). ASU 2024-03 requires that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. ASU 2024-03 is effective on either a prospective basis, with the option for retrospective application, for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027, and early adoption is permitted. The Company is currently evaluating whether the adoption of ASU 2024-03 will have a material impact on its consolidated financial statements and disclosures. F-18 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (Continued) 3. INVESTMENTS IN REAL ESTATE Investments in real estate consist of the following: December 31, 2024 2023 (in thousands) Land $ 175,682 $ 175,715 Land improvements 5,863 5,862 Buildings and improvements 636,525 633,299 Furniture, fixtures, and equipment 12,844 11,627 Tenant improvements 26,942 26,460 Work in progress 36,929 15,915 Investments in real estate 894,785 868,878 Accumulated depreciation ( 185,591 ) ( 164,116 ) Net investments in real estate $ 709,194 $ 704,762 For the years ended December 31, 2024 and 2023, the Company recorded depreciation expense of $ 24.9 million and $ 22.4 million, respectively. 2024 Transactions —There were no acquisitions or dispositions during the year ended December 31, 2024. 2023 Transactions — During the year ended December 31, 2023, the Company acquired an interest in the following properties from subsidiaries indirectly wholly owned by a fund that is managed by affiliates of CIM Group. The acquisitions were accounted for as asset acquisitions. Asset Date of Interest Purchase Property Type Acquisition Units Acquired (1) Price (in thousands) Channel House Multifamily (2) January 31, 2023 333 89.4 % $ 134,615 F3 Land Site Multifamily (2) January 31, 2023 N/A 89.4 % $ 250 466 Water Street Land Site Multifamily (2) January 31, 2023 N/A 89.4 % $ 2,500 1150 Clay Multifamily (3) March 28, 2023 288 98.1 % $ 145,500 (1) As of December 31, 2024, the Company’s ownership interests in C hannel House, F3 Land Site, and 466 Water Street Land Site had changed to 94.0 %, 93.4 %, and 91.0 %, 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 were no formal plans in place to begin development as of December 31, 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. The building also includes approximately 3,968 square feet of retail space . Please refer to “Investments in Unconsolidated Entities” (Note 4) for information on the Company’s real estate acquisitions through its investments in Unconsolidated Joint Ventures. F-19 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (Continued) The Company sold an interest in the following property during the year ended December 31, 2023. Asset Date of Interest Sales Gain on Property Type Sale Sold Price Sale (in thousands) 4750 Wilshire Boulevard (1) Multifamily / Office February 17, 2023 80.0 % $ 34,400 $ 1,104 (1) The Company sold 80 % of its interest in 4750 Wilshire Boulevard (excluding a vacant land parcel which was not included in the sale) to co-investors with whom 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 $ 17.6 million, all of which has been collected as of December 31, 2024. Additionally, as of December 31, 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. The results of operations of the properties the Company acquired have been included in the consolidated statements of operations from the date of acquisition. The following table summarizes the purchase price allocation of the aforementioned acquisitions during the years ended December 31, 2023. Year Ended December 31, 2023 (in thousands) Land $ 36,613 Land improvements 4,523 Buildings and improvements 206,717 Furniture, fixtures, and equipment 8,140 Acquired in-place leases (1) 27,210 Acquired above-market leases (2) 71 Acquired below-market leases (3) ( 223 ) Net assets acquired $ 283,051 (1) The amortization period for the in-place leases acquired during the year ended December 31, 2023 was approximately 6 months at the date of acquisition. (2) The amortization period for the above-market leases acquired during the year ended December 31, 2023 was approximately 7 months at the date of acquisition. (3) The amortization period for the below-market leases acquired during the year ended December 31, 2023 was approximately 5 months at the date of acquisition. F-20 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (Continued) 4. INVESTMENT IN UNCONSOLIDATED ENTITIES The following table details the Company’s equity method investments in the Unconsolidated Joint Venture. See Note 2 - Basis of Presentation and Summary of Significant Accounting Policies (dollars in thousands): Ownership Interest Carrying Value Joint Venture Asset Type Location Date of Acquisition December 31, 2024 December 31, 2024 December 31, 2023 1910 Sunset Boulevard (1) Office / Multifamily (Development) Los Angeles, CA February 11, 2022 44.2 % $ 12,898 $ 12,040 4750 Wilshire Boulevard (2) Multifamily / Office Los Angeles, CA February 17, 2023 20.0 % 8,622 9,119 1902 Park Avenue (3) Multifamily Los Angeles, CA February 28, 2023 25.5 % 5,730 7,082 1015 N Mansfield Avenue (4) Office (Development) Los Angeles, CA October 10, 2023 28.8 % 6,427 5,264 Total investments in unconsolidated entities $ 33,677 $ 33,505 ______________________ (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). 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 was substantially converted into 68 for-lease multifamily units in September 2024. (3) 1902 Park Avenue is a 75 -unit four-story multifamily building. (4) 1015 N Mansfield Avenue is an office building with a 44,141 square foot site area and a parking garage. The site is being evaluated for different development options, including creative office or other commercial space. As of December 31, 2024, this property was in pre-development phase and the Company has not finalized the formal development plan for the property. 1910 Sunset Boulevard — In February 2022, the Company invested in an Unconsolidated Joint Venture (the “1910 Sunset JV”) with a CIM-managed separate account (the “1910 Sunset JV Partner”) to purchase an office property located at 1910 Sunset Boulevard in Los Angeles, California along with an adjacent vacant land parcel located at 1915 Park Avenue, for a gross purchase price of approximately $ 51.0 million, of which the Company initially contributed approximately $ 22.4 million and the 1910 Sunset JV Partner initially contributed the remaining balance. In September 2022, the 1910 Sunset JV obtained financing through a mortgage loan of $ 23.9 million secured by the office property (the “1910 Sunset Mortgage Loan”). The Company provided a limited guarantee to the lender under the 1910 Sunset Mortgage Loan. The 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. 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 has a balance of $ 658,000 as of December 31, 2024 and total borrowing availability of $ 9.4 million, subject to additional equity contribution requirements). As of December 31, 2024, the 1910 Sunset JV had incurred total costs of $ 7.6 million in connection with the 1915 Park Project. The Company recorded a loss of $ 825,000 related to its investment in the 1910 Sunset JV during the year ended December 31, 2024 and loss of $ 2.4 million during the year ended December 31, 2023. The Company’s investment in the 1910 Sunset JV was $ 12.9 million and its ownership percentage remained unchanged as of December 31, 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 (“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 goal of the 4750 Wilshire JV was to convert two of the three floors of 4750 Wilshire from office- F-21 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (Continued) 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 4750 Wilshire Project which was 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 had a balance of $ 36.9 million as of December 31, 2024 (with total borrowing availability 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 December 31, 2024, total costs of $ 28.9 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 $ 597,000 related to its investment in the 4750 Wilshire JV during the year ended December 31, 2024 and income of $ 1.8 million during the year ended December 31, 2023 in the consolidated statements of operations. The Company’s investment in the 4750 Wilshire JV was $ 8.6 million as of December 31, 2024. 1902 Park Avenue — In February 2023, the Company and a CIM-managed interval fund (the “1902 Park JV Partner”) purchased a multifamily property in the Echo Park neighborhood of Los Angeles, California for a gross purchase price of $ 19.1 million (excluding transaction costs) (the “1902 Park JV”), with the Company owning a 50 % interest. In connection with the closing of this transaction in February 2023, the 1902 Park JV obtained financing through a mortgage loan of $ 9.6 million secured by the multifamily property (the “1902 Park Mortgage Loan”). In October 2024, the 1902 Park JV 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 $ 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 25.5 %. In addition, the Company and the 1902 Park JV Partner will be receiving an ongoing fee from such third party co-investor in connection with its co-investment in 1902 Park JV. The Company recorded a loss of $ 548,000 related to its investment in the 1902 Park JV during the year ended December 31, 2024 and income of $ 156,000 during the year ended December 31, 2023 in the consolidated statements of operations. The Company’s investment in the 1902 Park JV was $ 5.7 million as of December 31, 2024. 1015 N Mansfield Avenue — In October, 2023, the Company and a co-investor affiliated with CIM Group (the “1015 N Mansfield JV Partner”) acquired from an unrelated third party a 100 % fee-simple interest in a plot of land located in the Sycamore media district of Los Angeles, California for a gross purchase price of $ 18.0 million (excluding transaction costs) (the “1015 N Mansfield JV”). The property has a site area of approximately 44,141 square feet and contains a parking garage that has been leased to a third-party tenant. The site is being evaluated for different creative office or other commercial space development options and was in pre-development phase as the Company has not finalized the formal development plan for the property. The Company owns 28.8 % of the 1015 N Mansfield JV. The Company recorded income of $ 1.2 million related to its investment in the 1015 N Mansfield JV during the year ended December 31, 2024 and income of $ 13,000 during the year ended December 31, 2023 in the consolidated statements of operations. The Company’s investment in the 1015 N Mansfield JV was $ 6.4 million as of December 31, 2024. F-22 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (Continued) 5. LOANS RECEIVABLE Loans receivable consist of the following: December 31, 2024 2023 (in thousands) SBA 7(a) loans receivable, subject to credit risk $ 19,306 $ 10,393 SBA 7(a) loans receivable, subject to loan-backed notes 34,930 43,983 SBA 7(a) loans receivable, subject to secured borrowings 1,383 3,105 SBA 7(a) loans receivable, held for sale 1,494 74 Loans receivable 57,113 57,555 Deferred capitalized costs, net 1,129 1,130 Current expected credit losses ( 2,032 ) ( 1,680 ) Loans receivable, net $ 56,210 $ 57,005 SBA 7(a) Loans Receivable, Subject to Credit Risk —Represents the unguaranteed portions of loans originated under the SBA 7(a) Program which were retained by the Company. SBA 7(a) Loans Receivable, Subject to Loan-Backed Notes —Represents the unguaranteed portions of loans originated under the SBA 7(a) Program which were transferred to a trust and are held as collateral in connection with a securitization transaction. The proceeds received from the transfer were reflected as loan-backed notes payable (Note 7). These loans were subject to credit risk. SBA 7(a) Loans Receivable, Subject to Secured Borrowings —Represents the government guaranteed portions of loans originated under the SBA 7(a) Program which were sold with the proceeds received from the sale reflected as secured borrowings—government guaranteed loans. There was no credit risk associated with these loans since the SBA has guaranteed payment of the principal. SBA 7(a) Loans Receivable, Held for Sale — Represents the government guaranteed portion of loans held for sale at the end of the period or that had been sold but in respect of which proceeds had not been received as of the end of the period. Current Expected Credit Losses 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 December 31, 2024 pursuant to ASU 2016-13 as implemented effective January 1, 2023. Refer to Note 2 for further discussion of CECL. F-23 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (Continued) The following table presents the activity in the Company’s CECL for the year ended December 31, 2024 (dollar amounts in thousands): Loans Receivable Allowance for credit losses as of December 31, 2022 $ 1,106 Transition adjustment on January 1, 2023 783 Net adjustment to reserve for expected credit losses ( 124 ) Write-offs ( 85 ) Current expected credit losses as of December 31, 2023 1,680 Net adjustment to reserve for expected credit losses 352 Current expected credit losses as of December 31, 2024 $ 2,032 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 year ended December 31, 2024, the Company recorded an increase of $ 352,000 in its CECL related to its loans receivable, which was recorded in general and administrative expenses in the consolidated statement of operations, bringing the total CECL to $ 2.0 million as of December 31, 2024. During the year ended December 31, 2023, the Company recorded a decrease of $ 124,000 in its CECL related to its loans receivable, which was recorded in general and administrative expenses in the consolidated statement of operations, and recorded a decrease due to write-offs of $ 85,000 . Risk Ratings As further described in Note 2 - Basis of Presentation and Summary of Significant Accounting Policies, the Company evaluates its loans receivable portfolio on a quarterly basis. Each quarter, the Company assesses the risk factors of each loan, and assigns a risk rating based on several factors. Factors considered in the assessment include, but are not limited to, loan and credit structure, current LTV ratio, debt yield, collateral performance, and the quality and condition of the sponsor, borrower, and guarantor(s). Loans are rated “1” (less risk) through “5” (greater risk), which ratings are defined in Note 2 - Basis of Presentation and Summary of Significant Accounting Policies. F-24 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (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 December 31, 2024 by year of origination, loan type, and risk rating (dollar amounts in thousands): Amortized Cost of Loans Receivable by Year of Origination As of December 31, 2024 Number of Loans 2024 2023 2022 2021 2020 Prior Total Loans by internal risk rating: 1 111 $ 9,690 $ 5,401 $ 4,458 $ 6,143 $ 839 $ 9,310 $ 35,841 2 49 328 4,065 3,987 2,806 1,846 5,509 $ 18,541 3 1 — — — 439 — — $ 439 4 1 — 909 — — — — $ 909 5 — — — — — — — $ — Total 162 $ 10,018 $ 10,375 $ 8,445 $ 9,388 $ 2,685 $ 14,819 $ 55,730 Plus: SBA 7(a) loans receivable, subject to secured borrowings (1) 1,383 Plus: Deferred capitalized costs, net 1,129 Less: Current expected credit losses ( 2,032 ) Total loans receivable, net $ 56,210 Weighted average risk rating 1.3 ____________________ (1) The Company does not assign a risk rating to its SBA 7(a) loans receivable that are subject to secured borrowings or the government guaranteed portion of loans held for sale. The Company has determined there is no credit risk associated with these loans since the SBA has guaranteed payment of the principal. Other As of December 31, 2024 and 2023, the Company’s loans subject to credit risk were 99.5 % and 100.0 %, respectively, concentrated in the hospitality industry. As of December 31, 2024 and 2023, 92.3 % 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 December 31, 2024 and 2023, $ 4.8 million and $ 1.3 million, respectively, of loans subject to credit risk were classified in substandard categories. F-25 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (Continued) 6. OTHER INTANGIBLE ASSETS AND LIABILITIES A schedule of the Company’s intangible assets and liabilities and related accumulated amortization and accretion as of December 31, 2024 and 2023, is as follows: As of December 31, 2024 2023 (in thousands) Intangible assets: Acquired in-place leases, net of accumulated amortization of $ 5,195 and $ 4,821 , respectively, both with an average useful life of 6 years, respectively $ 610 $ 984 Acquired above-market leases, net of accumulated amortization of $ 36 and $ 30 , respectively, both with an average useful life of 7 years 1 7 Trade name and license 2,957 2,957 Total intangible assets, net $ 3,568 $ 3,948 Amortization of the acquired above-market leases is recorded as a reduction to rental and other property income, and amortization of the acquired in-place leases is included in depreciation and amortization in the accompanying consolidated statements of operations. Amortization of the acquired below-market leases is recorded as an increase to rental and other property income in the accompanying consolidated statements of operations. During the years ended December 31, 2024 and 2023, the Company recognized amortization related to its intangible assets and liabilities as follows: Year Ended December 31, 2024 2023 (in thousands) Acquired above-market lease amortization $ 6 $ 80 Acquired in-place lease amortization $ 374 $ 27,714 Acquired below-market lease amortization $ — $ 243 A schedule of future amortization and accretion of acquired intangible assets and liabilities as of December 31, 2024, is as follows: Assets Acquired Acquired Above-Market In-Place Years Ending December 31, Leases Leases (in thousands) 2025 $ 1 $ 170 2026 — 123 2027 — 123 2028 — 122 2029 — 72 Thereafter — — $ 1 $ 610 F-26 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (Continued) 7. DEBT The following table summarizes the debt balances as of December 31, 2024 and 2023, and the debt activity for the year ended December 31, 2024 (in thousands): During the Year Ended December 31, 2024 Balances as of December 31, 2023 Debt Issuances & Assumptions Repayments (1) Accretion & (Amortization) Balances as of December 31, 2024 Mortgages Payable: Fixed rate mortgages payable $ 163,700 $ 105,400 $ — $ — $ 269,100 Variable rate mortgages payable 87,000 84,346 — — 171,346 250,700 189,746 — — 440,446 Deferred debt issuance costs — Mortgages Payable ( 954 ) ( 3,828 ) — 787 ( 3,995 ) Total Mortgages Payable 249,746 185,918 — 787 436,451 Secured Borrowings – Government Guaranteed Loans: Outstanding Balance 3,007 — ( 1,646 ) — 1,361 Unamortized premiums 100 — — ( 78 ) 22 Total Secured Borrowings—Government Guaranteed Loans 3,107 — ( 1,646 ) ( 78 ) 1,383 Other Debt: 2022 credit facility revolver 97,000 20,000 ( 115,633 ) — 1,367 2022 credit facility term loan 56,230 — ( 42,597 ) — 13,633 Junior subordinated notes 27,070 — — — 27,070 SBA 7(a) loan-backed notes 41,394 — ( 13,537 ) — 27,857 Deferred debt issuance costs — other ( 1,588 ) ( 19 ) 275 599 ( 733 ) Discount on junior subordinated notes ( 1,398 ) — — 102 ( 1,296 ) Total Other Debt 218,708 19,981 ( 171,492 ) 701 67,898 Total Debt, Net $ 471,561 $ 205,899 $ ( 173,138 ) $ 1,410 $ 505,732 (1) The write-off of $ 275,000 of deferred debt issuance costs associated with the 2022 Credit Facility Term Loan resulting from the early extinguishment of debt during incurred during the year ended December 31, 2024 is reflected here within Deferred debt issuance costs — other. See further discussion under 2022 Credit Facility. Fixed Rate Mortgages Payable —The Company’s fixed rate mortgages payable are non-recourse and are secured by, among other things, first priority deeds of trust, security agreements or other similar security instruments on the fee simple interests in properties underlying such mortgages and assignments of rents receivable. As of December 31, 2024, the Company’s fixed rate mortgages payable had fixed interest rates of 4.14 %, 6.25 % and 7.41 % per annum, with payments of interest only and initial maturity dates of July 1, 2026, June 7, 2025 and January 11, 2030, respectively. In regards to the mortgage payable maturing on June 7, 2025, the Company has a one-year extension option exercisable at its discretion. Variable Rate Mortgages Payable —The Company’s variable rate mortgages payable are non-recourse and are secured by, among other things, first priority deeds of trust, security agreements or other similar security instruments on the Company’s fee simple and leasehold interests in its hotel asset and adjacent parking garage and by a deed of trust on and assignment of rents receivable from a multifamily property. As of December 31, 2024, the Company’s variable rate mortgages payable had a variable interest rate of SOFR plus 3.36 % and SOFR plus 4.35 %, with monthly payments of interest only, with an initial maturity date of July 7, 2025 and January 1, 2027. With regards to the mortgage payable maturing on July 7, 2025 (the “Channel House Mortgage”), the Company has an extension option subject to certain conditions. F-27 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (Continued) The Company has been in discussions with the lender under the Channel House Mortgage, which is non-recourse and has no cross-collateral provisions and is secured by Channel House (a multifamily property in Oakland, California), to restructure the terms of the mortgage, as the Company does not expect the property will meet certain conditions that are required in order for the Company to exercise the option to extend the Channel House Mortgage beyond July 7, 2025. There can be no assurance that such restructuring will occur. If the Company and the lender under the Channel House Mortgage cannot agree on a modification of the mortgage and the Company fails to exercise its extension option, 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 December 31, 2024, the Company’s secured borrowings-government guaranteed loans included $ 0.4 million of loans sold for a premium and excess spread, with a variable rate, reset quarterly, based on prime rate with weighted average coupon rate of 8.71 % at December 31, 2024, and $ 1.0 million of loans sold for an excess spread, with a variable rate, reset quarterly, based on prime rate with weighted average coupon rate of 6.35 % at December 31, 2024. 2022 Credit Facility —In December 2022, the Company refinanced its 2018 credit facility and replaced it with a new 2022 credit facility (the “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. At the time the 2022 Credit Facility was entered into, it was collateralized by six of the Company’s office properties, as well as the Company’s hotel property and adjacent parking garage (the “Hotel Properties”). The 2022 Credit Facility bears interest at (A) the base rate plus 1.50 % or (B) SOFR plus 2.60 %. As of December 31, 2024, the variable interest rate was 7.29 %. The 2022 Credit Facility Revolver is also subject to an unused commitment fee of 0.15 % or 0.25 % depending on the amount of aggregate unused commitments. The 2022 Credit Facility is guaranteed by the Company and the Company is subject to certain financial maintenance covenants. The 2022 Credit Facility originally had a maturity date in December 2025 and provided for two one-year extension options. In December 2024, using proceeds from the closing of a variable rate mortgage on the Hotel Properties and a fixed rate mortgage on three of the Company’s office properties (collectively, “the Refinancings”), the Company repaid $ 111.7 million on the 2022 Credit Facility Revolver and $ 42.6 million on the 2022 Credit Facility Term Loan. Following the completion of the Refinancings, the 2022 Credit Facility was secured by three of the Company’s office properties. The 2022 Credit Facility is not cross-collateralized by any other of the Company’s assets. In connection with the Refinancings, the Company recorded a loss on early extinguishment of debt of $ 1.4 million related to the write-off of deferred debt origination costs of $ 1.1 million associated with the 2022 Credit Facility Revolver and $ 275,000 associated with the 2022 Credit Facility Term Loan. As of December 31, 2024 and 2023, $ 0 and $ 53.0 million, respectively, was available for future borrowings. At the end of the first three quarters of 2024, the Company was not in compliance with a financial covenant under the 2022 Credit Facility. Further, as of December 31, 2024, the Company was not in compliance with two covenants under the 2022 Credit Facility. Such non-compliance events during 2024 constituted events of default under the 2022 Credit Facility. 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 prohibited 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. Simultaneously with the execution of the Second Modification Agreement, the Company made a $ 4.0 million repayment under 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 which the aggregate commitments under the 2022 Credit Facility were reduced from $ 206.2 million to $ 169.3 million, and pursuant to which the lenders under the 2022 Credit facility agreed to release the Hotel Properties in order to facilitate the refinancing of such properties. On December 24, 2024, in connection with the Refinancings, the lenders under the 2022 Credit Facility and the Company entered into an agreement (the “Fourth Modification Agreement”) pursuant to which the lenders agreed to release assets relating to three of the Company’s office buildings located in Los Angeles, California, in order to facilitate a refinancing of such properties, subject to a minimum prepayment of the 2022 Credit Facility in connection with such refinancing. In addition, the Fourth Modification Agreement changed the maturity date of the facility to January 31, 2025, F-28 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (Continued) subject to a 2-month extension option. Such extension option was executed on January 31, 2025, pursuant to an additional modification agreement to the 2022 Credit Facility (the “Fifth Modification Agreement”), as described under “Subsequent Events.” The event of default under the 2022 Credit Facility as of December 31, 2024 allows 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. Management plans to address such default by further modifying the 2022 Credit Facility and/or refinancing an additional office property in Austin, Texas (the “Austin Refinancing”). As the Company has reduced the outstanding borrowings under the 2022 Credit Facility from $ 169.3 million to $ 15.0 million during December 2024 in connection with the Refinancings, Management expects the proceeds from the Austin Refinancing will be more than sufficient to repay all amounts outstanding under the 2022 Credit Facility, with the remaining proceeds to be used for general corporate purposes. Management believes its plan to repay amounts outstanding under the 2022 Credit Facility is probable based on the favorable loan-to-value ratio (“LTV”) of the property associated with the Austin Refinancing. Junior Subordinated Notes —The Company has junior subordinated notes with a variable interest rate which resets quarterly based on the three-month SOFR plus 3.51 %, with quarterly interest only payments. The junior subordinated balance is due at maturity on March 30, 2035. The junior subordinated notes may be redeemed at par at the Company’s option. SBA 7(a) Loan-Backed Notes —On March 9, 2023, the Company completed a securitization of the unguaranteed portion of certain of its SBA 7(a) loans receivable with the issuance of $ 54.1 million of unguaranteed SBA 7(a) loan-backed notes (with net proceeds of approximately $ 43.3 million, after payment of fees and expenses in connection with the securitization and the funding of a reserve account and an escrow account). The SBA 7(a) loan-backed notes are collateralized by the right to receive payments and other recoveries attributable to the unguaranteed portions of certain of the Company’s SBA 7(a) loans receivable. The SBA 7(a) loan-backed notes mature on March 20, 2048, with monthly payments due as payments on the collateralized loans are received. The SBA 7(a) loan-backed notes bear interest at a per annum rate equal to the lesser of (i) the 30-day average compounded SOFR plus 2.90 % and (ii) the prime rate minus 0.35 %. As of December 31, 2024, the variable interest rate was 7.40 %. 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 $ 2.4 million as of December 31, 2024. Other —Deferred debt issuance costs, which represent legal and third-party fees incurred in connection with the Company’s borrowing activities, are capitalized and amortized to interest expense on a straight-line or effective interest method over the life of the related loan. Deferred debt issuance costs are presented net of accumulated amortization and are a reduction to total debt. As of December 31, 2024 and 2023, accrued interest and unused commitment fees payable of $ 1.1 million and $ 1.8 million, respectively, are included in accounts payable and accrued expenses. Future principal payments on the Company’s debt (face value) as of December 31, 2024 are as follows: Years Ending December 31, Mortgages Payable (1) Secured Borrowings Principal (2) 2022 Credit Facility Other (2) (3) Total (in thousands) 2025 $ 154,000 $ 91 $ 15,000 $ 8,449 $ 177,540 2026 97,100 97 — 8,504 105,701 2027 84,346 104 — 7,235 91,685 2028 — 111 — 3,669 3,780 2029 — 119 — — 119 Thereafter 105,000 839 — 27,070 132,909 $ 440,446 $ 1,361 $ 15,000 $ 54,927 $ 511,734 F-29 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (Continued) (1) In respect to the $ 154.0 million of mortgages payable maturing in 2025, each such mortgage payable has a one-year extension option. The extension option for the fixed rate mortgage is at the Company’s discretion and the Company intends to execute such option. In regards to the Channel House Mortgage, see the discussion under Variable Rate Mortgages Payable. (2) Principal payments on secured borrowings and SBA 7(a) loan-backed notes, which are included in Other, are generally dependent upon cash flows received from the underlying loans. The Company’s estimate of their repayment is based on scheduled payments on the underlying loans. The Company’s estimate will differ from actual amounts to the extent the Company experiences prepayments and/or loan liquidations or charge-offs. (3) Represents the junior subordinated notes and SBA 7(a) loan-backed notes. 8. DERIVATIVES 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. The following table summarizes the terms of the Company’s interest rate cap agreement as of December 31, 2024 (dollar amounts in thousands): Outstanding Notional Fair Value of Assets as of Balance Sheet Amount as of Strike Effective Maturity December 31, Location December 31, 2024 Rates (1) Date Date 2024 Interest Rate Caps Other assets $ 171,346 4.5 % to 5.75 % 5/3/2023 - 12/6/2024 7/7/2025 - 1/1/2027 $ 107 ____________________________________ (1) The index used for the Company’s interest rate cap agreement is 1-Month Term SOFR. Additional disclosures related to the fair value of the Company’s derivative instrument are included in Note 13. The notional amount under the derivative instrument is an indication of the extent of the Company’s involvement in such instrument but does not represent exposure to credit, interest rate or market risks. Accounting for changes in the fair value of a derivative instrument depends on the intended use and designation of the derivative instrument. The Company has an interest rate cap that is used to manage exposure to interest rate movements but does not meet the requirements to be designated as a hedging instrument. The change in fair value of the derivative instrument that is not designated as a hedge is recorded directly to earnings as interest expense on the accompanying consolidated statements of operations. During the year ended December 31, 2024 and 2023, the Company recorded an unrealized loss of $ 463,000 and $ 539,000 , respectively, which was included in interest expense on the accompanying consolidated statements of operations related to its interest rate caps. F-30 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (Continued) 9. STOCK-BASED COMPENSATION PLANS On April 3, 2015, the Company’s board of directors (the “Board of Directors”) unanimously approved the Company’s Equity Incentive Plan (the “Equity Incentive Plan”), which was approved by the Company’s stockholders. On June 27, 2023, the Equity Incentive Plan was amended by the Board of Directors, and subsequently approved by the Company’s stockholders, to authorize additional shares of Common Stock for issuance as compensation . The Company has granted awards of restricted shares of Common Stock to each of the independent members of the Board of Directors under the Equity Incentive Plan as follows: Weighted Number Average Grant of Date Fair Value Shares (1) Per Share Balance, December 31, 2022 3,098 $ 71.00 Granted 4,888 $ 45.00 Vested ( 3,098 ) $ 71.00 Balance, December 31, 2023 4,888 $ 45.00 Granted 10,784 $ 20.40 Vested ( 4,888 ) $ 45.00 Balance, December 31, 2024 10,784 $ 20.40 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 Stoc k in the amount of $ 220,000 and $ 183,000 for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, there was $ 128,000 of total unrecognized compensation expense related to restricted shares of Common Stock which will be recognized ratably over the remaining vesting period. 10. EARNINGS PER SHARE (“EPS”) The computation of basic EPS is 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 December 31, 2024 were included in the computation of diluted EPS because they had no dilutive effect. Outstanding Series A Preferred Warrants were not included in the computation of diluted EPS for the years ended December 31, 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. F-31 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (Continued) The following table reconciles the numerator and denominator used in computing the Company’s basic and diluted per-share amounts for net loss attributable to common stockholders for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 (in thousands, except per share amounts) Numerator: Net loss attributable to common stockholders $ ( 73,343 ) $ ( 75,727 ) Redeemable preferred stock dividends declared on dilutive shares — — Diluted net loss attributable to common stockholders $ ( 73,343 ) $ ( 75,727 ) Denominator: Basic weighted average shares of Common Stock outstanding 4,261 2,441 Effect of dilutive securities—contingently issuable shares — — Diluted weighted average shares and common stock equivalents outstanding 4,261 2,441 Net loss attributable to common stockholders per share: Basic $ ( 17.21 ) $ ( 31.02 ) Diluted $ ( 17.21 ) $ ( 31.02 ) 11. 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 years ended December 31, 2024 and 2023 (dollar amounts in thousands): Preferred Stock Series A1 Series A Series D Total Shares Amount Shares Amount Shares Amount Shares Amount Balances, December 31, 2022 5,956,147 $ 147,514 7,565,349 $ 189,048 48,857 $ 1,200 13,570,353 $ 337,762 Issuances of A1 Preferred Stock 4,507,292 111,520 — $ — — — 4,507,292 111,520 Redemption of Series A1 Preferred Stock ( 85,096 ) ( 2,099 ) — — — — ( 85,096 ) ( 2,099 ) Redemption of Series D Preferred Stock — — — — ( 410 ) ( 10 ) ( 410 ) ( 10 ) Reclassification of Series A Preferred stock to Permanent Equity — — 690,171 17,161 — — 690,171 17,161 Redemption of Series A Preferred Stock — — ( 823,681 ) ( 20,505 ) — — ( 823,681 ) ( 20,505 ) Balances, December 31, 2023 10,378,343 $ 256,935 7,431,839 $ 185,704 48,447 $ 1,190 17,858,629 $ 443,829 Issuances of A1 Preferred Stock 853,879 $ 21,246 — $ — — $ — 853,879 $ 21,246 Redemption of Series A1 Preferred Stock paid in cash ( 88,015 ) ( 2,177 ) — — — — ( 88,015 ) ( 2,177 ) Redemption of Series A1 Preferred Stock paid in Common Stock ( 2,771,518 ) ( 68,617 ) — — — — ( 2,771,518 ) ( 68,617 ) Redemption of Series A Preferred Stock paid in cash — — ( 941,687 ) ( 23,501 ) — — ( 941,687 ) ( 23,501 ) Redemption of Series A Preferred Stock paid in Common Stock — — ( 2,364,789 ) ( 58,877 ) — — ( 2,364,789 ) ( 58,877 ) Balances, December 31, 2024 8,372,689 $ 207,387 4,125,363 $ 103,326 48,447 $ 1,190 12,546,499 $ 311,903 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 F-32 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (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 of the original issuance. As of December 31, 2024, the Company had made no such reclassification from temporary equity to permanent equity. As of December 31, 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 the CIM Service Provider, LLC (the “Administrator”), for which no cash proceeds were received. In connection with the issuance of shares of Series A1 Preferred Stock, $ 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 $ 11.9 million related to the Company’s offering of Series A Preferred Stock, Series A Preferred Warrants, Series A1 Preferred Stock and Series D Preferred Stock. As of December 31, 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. If the net proceeds from the issuance of shares of Series A1 Preferred Stock are less than the redemption value of such shares at the time they were issued, or if the redemption value of such shares subsequently becomes greater than the carrying value of such shares, an adjustment is recorded to increase the carrying amount of such shares to their redemption value as of the balance sheet date. Such adjustment is considered a deemed dividend for purposes of calculating basic and diluted EPS. The Company recorded redeemable preferred stock deemed dividends related to such adjustments of $ 755,000 during the year ended December 31, 2024 and no deemed dividends during the year ended December 31, 2023. As of December 31, 2024, there were 9,286,279 shares of Series A1 Preferred Stock outstanding and 2,954,599 shares of Series A1 Preferred Stock had been redeemed. Of the 2,954,599 shares of Series A1 Preferred Stock that have been redeemed, the redemption of 183,081 shares of Series A1 Preferred Stock were paid in cash (all of which were redeemed at the option of the holders). During the year ended December 31, 2024, 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, for the year ended December 31, 2024, 181,912 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 4,817,486 shares of Common Stock. Series A Preferred Stock —The Company conducted a continuous public offering of Series A Preferred Stock, with each issued share of Series A Preferred Stock initially accompanied by one warrant (“Series A Preferred Warrant”) to purchase 0.25 of a share of Common Stock, subject to adjustment, from October 2016 through January 2020. Proceeds and expenses from the sale were allocated to the Series A Preferred Stock and Series A Preferred Warrants using their relative fair values on the date of issuance. From February 2020 through June 2022, the Company conducted a continuous public offering with respect to shares of the Company’s Series A Preferred Stock, which, since February 2020, was no longer being issued as a unit with an accompanying Series A Preferred Warrant. In June 2022, the Company concluded the offering of Series A Preferred Stock. As of December 31, 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 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 $ 11.9 million related to the Company’s offering of Series A Preferred Stock, F-33 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (Continued) Series A Preferred Warrants, Series A1 Preferred Stock and Series D Preferred Stock. As of December 31, 2024, the Company had reclassified and allocated $ 1.9 million and $ 5,000 from deferred charges to Series A Preferred Stock and Series A Preferred Warrants, respectively, as a reduction to the gross proceeds received. Such reclassification was based on the cumulative number of securities issued relative to the maximum number of securities expected to be issued under the offering. 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 December 31, 2024, the Company had reclassified an aggregate of $ 199.6 million in net proceeds from temporary equity to permanent equity. As of December 31, 2024, there were 4,125,363 shares of Series A Preferred Stock outstanding and 4,694,975 shares of Series A Preferred Stock had been redeemed. Of the 4,694,975 shares of Series A Preferred Stock that have been redeemed, the redemption of 2,330,186 shares of Series A Preferred Stock were paid in cash, 2,313,106 of which were redeemed at the option of the holders and 17,080 of which were redeemed at the option of the Company. During the year ended December 31, 2024, the Company, at its option, redeemed 2,150,076 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 and, in addition, for the year ended December 31, 2024, 214,713 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 A In-Kind Redemptions”). The Series A In-Kind Redemptions resulted in the aggregate issuance of 4,379,099 shares of Common Stock. Series D Preferred Stock —From February 2020 through June 2022, the Company conducted a continuous public offering with respect to shares of its Series D Preferred Stock, par value $ 0.001 per share, subject to adjustment. The selling price of the Series D Preferred Stock was $ 25.00 per share for all sales that occurred from the beginning of the offering to and including June 28, 2020 and $ 24.50 per share thereafter. Shares of Series D Preferred Stock were recorded in permanent equity at the time of their issuance. In June 2022, the Company concluded the offering of its Series D Preferred Stock. As of December 31, 2024, the Company had issued in registered public offerings 56,857 shares of Series D Preferred Stock and received gross proceeds of $ 1.4 million. In connection with such issuance, $ 35,000 of costs specifically identifiable to the offering of Series D Preferred Stock were allocated to the Series D Preferred Stock. Such costs include commissions, dealer manager fees and other offering fees and expenses but do not include non-issuance-specific costs of $ 11.9 million related to the Company’s offering of Series A Preferred Stock, Series A Preferred Warrants, Series A1 Preferred Stock and Series D Preferred Stock. As of December 31, 2024, the Company had reclassified and allocated $ 13,000 from deferred charges to Series D Preferred Stock as a reduction to the gross proceeds received. Such reclassification was based on the cumulative number of securities issued relative to the maximum number of securities expected to be issued under the offering. As of December 31, 2024, there were 48,447 shares of Series D Preferred Stock outstanding and 8,410 shares of Series D Preferred Stock had been redeemed (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. The Company received gross proceeds of $ 229.3 million from the sale of the Series L Preferred Stock, which was reduced by issuance-specific offering costs. On September 15, 2022, the Company repurchased 2,435,284 shares of its Series L Preferred Stock in a privately negotiated transaction (the “Series L Repurchase”). The shares were repurchased at a purchase price of $ 27.40 per share (a 3.4 % discount to the stated value of $ 28.37 per share) plus $ 1.12 per share of accrued and unpaid dividends (or $ 2.7 million accrued and unpaid dividends in the aggregate). The total cost to complete the Series L Repurchase, including transactions costs of $ 700,000 (or $ 0.29 per share), was $ 70.1 million. In December 2022, the Company announced the redemption of all outstanding shares of its Series L Preferred Stock. In January 2023, the Company completed such previously-announced redemption of all outstanding shares of its Series L Preferred Stock in cash at its stated value of $ 28.37 per share (plus accrued and unpaid dividend of $ 1.56 per share, or $ 4.6 million in the aggregate). The total cost to complete the Series L Redemption, including transaction costs of $ 93,000 (or $ 0.03 per share), was $ 83.8 million. F-34 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (Continued) 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 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. During the year ended December 31, 2024, the Company paid $ 17.8 million, $ 7.8 million and $ 57,000 of cash dividends on the Series A1 Preferred Stock, Series A Preferred Stock and Series D Preferred Stock, respectively. Additionally, during the year ended December 31, 2024, the Company paid dividends of $ 389,000 and $ 258,000 on the Series A1 Preferred Stock and Series A Preferred Stock, respectively, in shares of Common Stock due to these dividends being accrued and unpaid at the time that such applicable shares of Preferred Stock were redeemed in shares of Common Stock. During the year ended December 31, 2023, the Company paid $ 13.9 million, $ 10.9 million, $ 69,000 and $ 4.6 million of cash dividends on the Series A1 Preferred Stock, Series A Preferred Stock, Series D Preferred Stock and Series L Preferred Stock, respectively. Redemptions —The Company’s Series A1 Preferred Stock, Series A Preferred Stock and Series D Preferred Stock are redeemable at the option of the holder or the Company. The redemption schedule of the Series A1 Preferred Stock, Series A Preferred Stock and Series D Preferred Stock allows redemptions at the option of the holder of Series A1 Preferred Stock, Series A Preferred Stock or Series D Preferred Stock from the date of original issuance of any such shares at the Series A1 Preferred Stock Stated Value, Series A Preferred Stock Stated Value or Series D Preferred Stock Stated Value, respectively, less a redemption fee applicable prior to the fifth anniversary of the issuance of such shares, plus accrued and unpaid dividends. The Company has the right to redeem the Series A1 Preferred Stock after the date that is twenty-four months following the original issuance of such shares of Series A1 Preferred Stock at the Series A1 Preferred Stock Stated Value, plus accrued and unpaid dividends. The Company has the right to redeem the Series A Preferred Stock or Series D Preferred Stock after the fifth anniversary of the date of original issuance of such shares at the Series A Preferred Stock Stated Value or Series D Preferred Stock Stated Value, respectively, plus accrued and unpaid dividends. With respect to redemptions of the Series A1 Preferred Stock, Series A Preferred Stock or Series D Preferred Stock, at the Company’s discretion, the redemption price will be paid in cash and/or in Common Stock based on the volume weighted average price of the Company’s Common Stock for the 20 trading days prior to the redemption; 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 2025, when legally permitted. 12. STOCKHOLDERS’ EQUITY Dividends Holders of the Company’s Common Stock are entitled to receive dividends, if, as and when authorized by the Board of Directors and declared by the Company out of legally available funds. In determining the Company’s dividend policy, the Board of Directors considers many factors including the amount of cash resources available for dividend distributions, capital spending plans, cash flow, the Company’s financial position, applicable requirements of the MGCL, any applicable contractual restrictions, and future growth in NAV and cash flow per share prospects. Consequently, the dividend rate on a quarterly basis F-35 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (Continued) does not necessarily correlate directly to any individual factor. Cash dividends per share of Common Stock paid in respect of the years ended December 31, 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 Regular Quarterly (a.) June 25, 2024 July 22, 2024 Regular Quarterly $ 0.850 March 27, 2024 April 22, 2024 Regular Quarterly $ 0.850 December 20, 2023 January 16, 2024 Regular Quarterly $ 0.850 September 27, 2023 October 23, 2023 Regular Quarterly $ 0.850 June 27, 2023 July 24, 2023 Regular Quarterly $ 0.850 March 20, 2023 April 11, 2023 Regular Quarterly $ 0.850 _____________________ a. The Company’s Board of Directors declared a stock dividend of $ 0.40 (or 0.2020 shares of Common Stock, as determined on a reverse split-adjusted basis) per share of Common Stock, payable in shares of Common Stock, using a price of $ 19.850 per share, resulting in the issuance of 168,463 shares of Common Stock. The stock dividend was retrospectively applied to the periods reflected in the consolidated statements of operations included in this Annual Report on Form 10-K. Series A Preferred Warrants Prior to February 2020, the Series A Preferred Stock was sold as a unit that included one share of Series A Preferred Stock and one Series A Preferred Warrant that could be exercised to purchase 0.25 of a share of Common Stock. The Series A Preferred Warrants are exercisable beginning on the first anniversary of the date of their original issuance until and including the fifth anniversary of the date of such issuance. At the time of issuance, the exercise price of each Series A Preferred Warrant was at a 15.0 % premium to the per share estimated NAV of the Company’s Common Stock then most recently published and designated as the applicable NAV. However, in accordance with the terms of the Series A Preferred Warrants, the exercise price of each Series A Preferred Warrant issued prior to the Reverse Stock Split was automatically adjusted to reflect the effect of the Reverse Stock Split and, in the discretion of the Company’s Board of Directors, the exercise price and the number of shares issuable upon exercise of each Series A Preferred Warrant issued prior to the Special Dividend was adjusted to reflect the effect of the Special Dividend. Proceeds and expenses from the sale of the Series A Preferred Stock and Series A Preferred Warrants were allocated to the Series A Preferred Stock and Series A Preferred Warrants using their relative fair values on the date of issuance. As of December 31, 2024, the Company had 118,911 Series A Preferred Warrants outstanding to purchase 29,728 shares of Common Stock in connection with the Company’s offering of Series A Preferred Units and allocated net proceeds of $ 28,000 after specifically identifiable offering costs and allocated general offering costs, to the Series A Preferred Warrants in permanent equity. Share Repurchase Program In May 2022, the Company’s Board of Directors approved a repurchase program of up to $ 10.0 million of the Company’s Common Stock (the “SRP”). Under the SRP, the Company, in its discretion, may purchase shares of its Common Stock from time to time in the open market or in privately negotiated transactions. The amount and timing of purchases of shares will depend on a number of factors, including, without limitation, the price and availability of shares, trading volume, general market conditions and compliance with applicable securities law. The SRP has no termination date and may be suspended or discontinued at any time. There were no repurchases during the year ended December 31, 2024. As of December 31, 2024, the Company had repurchased 66,246 shares of Common Stock for $ 4.7 million. 13. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company determines the estimated fair value of financial assets and liabilities utilizing a hierarchy of valuation techniques based on whether the inputs to a fair value measurement are considered to be observable or unobservable in a marketplace. The hierarchy for inputs used in measuring fair value is as follows: F-36 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (Continued) Level 1 Inputs —Quoted prices in active markets for identical assets or liabilities Level 2 Inputs —Observable inputs other than quoted prices in active markets for identical assets and liabilities Level 3 Inputs —Unobservable inputs In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. 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. 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. In general, quoted market prices from active markets for the identical financial instrument (Level 1 inputs), if available, should be used to value a financial instrument. If quoted prices are not available for the identical financial instrument, then a determination should be made if Level 2 inputs are available. Level 2 inputs include quoted prices for similar financial instruments in active markets for identical or similar financial instruments in markets that are not active (i.e., markets in which there are few transactions for the financial instruments, the prices are not current, price quotations vary substantially, or in which little information is released publicly). There is limited reliable market information for the Company’s financial instruments and the Company utilizes other methodologies based on unobservable inputs for valuation purposes since there are no Level 1 or Level 2 inputs available. Accordingly, Level 3 inputs are used to measure fair value. In general, estimates of fair value may differ from the carrying amounts of the financial assets and liabilities primarily as a result of the effects of discounting future cash flows. Considerable judgment is required to interpret market data and develop estimates of fair value. Accordingly, the estimates presented are made at a point in time and may not be indicative of the amounts the Company could realize in a current market exchange. The following describes the methods the Company uses to estimate the fair value of the Company’s financial assets and liabilities. Debt —The carrying amounts of the Company’s secured borrowings - government guaranteed loans, SBA 7(a) loan-backed notes, 2022 Credit Facility and variable rate mortgage payable approximate their fair values, as the interest rates on these securities are variable and approximate current market interest rates. The Company determines the fair value of fixed rate mortgage notes payable and junior subordinated notes by discounting the expected cash flows based on estimated borrowing rates available to the Company as of the measurement date. Current and prior period liabilities’ carrying and fair values exclude net deferred financing costs. Loans Receivable —The Company determines the fair value of loans receivable by performing a present value analysis for the anticipated future cash flows using an appropriate market discount rate taking into consideration the credit risk and using an anticipated prepayment rate. The value of the government guaranteed portions of loans held for sale is based primarily on the anticipated proceeds to be received upon sale. The following summarizes the ranges of discount rates and prepayment rates used to arrive at the estimated fair values of the Company’s loans receivable: Year Ended December 31, 2024 2023 Discount Rate Prepayment Rate Discount Rate Prepayment Rate SBA 7(a) loans receivable, subject to credit risk 7.30 % - 10.75 % 4.07 % - 17.50 % 7.83 % - 11.00 % 4.88 % - 17.50 % SBA 7(a) loans receivable, subject to loan-backed notes 9.00 % - 10.75 % 4.81 % - 17.50 % 10.00 % - 11.00 % 4.88 % - 17.50 % SBA 7(a) loans receivable, subject to secured borrowings 10.25 % - 10.25 % 5.00 % - 17.50 % 10.00 % - 10.50 % 5.00 % - 17.50 % Derivative Instruments — The Company’s derivative instruments are comprised of two interest rate caps. All derivative instruments are carried at fair value and are valued using Level 2 inputs. The fair value of these instruments are determined using interest rate market pricing models. 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. F-37 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (Continued) Other Financial Instruments —The carrying amounts of the Company’s cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and accrued expenses approximate their fair values due to their short-term maturities at December 31, 2024 and 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: December 31, 2024 December 31, 2023 Carrying Estimated Carrying Estimated Amount Fair Value Amount Fair Value Level (in thousands) Assets: SBA 7(a) loans receivable, subject to loan-backed notes $ 34,452 $ 37,657 $ 43,263 $ 46,701 3 SBA 7(a) loans receivable, subject to credit risk $ 18,850 $ 18,994 $ 10,539 $ 10,482 3 SBA 7(a) loans receivable, subject to secured borrowings $ 1,383 $ 1,383 $ 3,105 $ 3,105 3 SBA 7(a) loans receivable, held for sale $ 1,525 $ 1,600 $ 98 $ 82 3 Liabilities: Fixed rate mortgages payable (1) $ 269,100 $ 233,364 $ 163,700 $ 158,529 3 Junior subordinated notes (1) $ 27,070 $ 25,415 $ 27,070 $ 24,667 3 (1) The carrying amounts for the mortgages payable and junior subordinated notes represents the principal outstanding amounts, excluding deferred debt issuance costs and discounts. 14. RELATED-PARTY TRANSACTIONS AND ARRANGEMENTS Asset Management and Other Fees to Related Parties Asset Management Fees; Administrative Fees and Expenses —CIM Urban Partners, L.P., a wholly owned subsidiary of the Company, and CIM Capital, LLC, an affiliate of CIM Group (“CIM Capital”), have an investment management agreement, pursuant to which CIM Urban engaged CIM Capital to provide certain services to CIM Urban (the “Investment Management Agreement”). CIM Capital has assigned its duties under the Investment Management Agreement to its four wholly owned subsidiaries: CIM Capital Securities Management, LLC, a securities manager, CIM Capital RE Debt Management, LLC, a debt manager, CIM Capital Controlled Company Management, LLC, a controlled company manager, and CIM Capital Real Property Management, LLC, a real property manager. The “Operator” refers to CIM Capital and its four wholly owned subsidiaries. The Company and its subsidiaries have a master services agreement (the “Master Services Agreement”) with CIM Service Provider, LLC (the “Administrator”), an affiliate of CIM Group, pursuant to which the Administrator provides, or arranges for other service providers to provide, management and administration services to the Company and its subsidiaries. On January 5, 2022, the Company and certain of its subsidiaries entered into a Fee Waiver (the “Fee Waiver”) with the Operator and the Administrator with respect to fees that are payable to them. The Fee Waiver is effective retroactively to January 1, 2022 (the “Effective Date”). Pursuant to the Fee Waiver, the Administrator agreed to voluntarily waive any fees in excess of those set forth in the Fee Waiver, to the extent it would otherwise have been entitled to such additional compensation under the Master Service Agreement, and the Operator agreed to voluntarily waive any fees in excess of those set forth in the Fee Waiver, to the extent it would otherwise have been entitled to such additional compensation under the Investment Management Agreement. Following the end of each quarter, the Administrator will deliver to the Company (i) a calculation of the cumulative fees earned by the Operator and the Administrator under the methodology prescribed by the Fee Waiver from the Effective Date through the end of such quarter and (ii) a calculation of the cumulative fees that would have been earned by the Operator and the Administrator during such period under the Master Services Agreement and the Investment Management Agreement without giving effect to the Fee Waiver. If, in respect of any quarter, the aggregate fees that are payable under the methodology prescribed by the Fee Waiver exceed the aggregate fees that would have been payable under the Master Services Agreement and the Investment Management Agreement, without giving effect to the Fee Waiver, such quarter will be deemed F-38 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (Continued) an “Excess Quarter”. For any quarter following an Excess Quarter, the Company (upon the direction of the independent members of the Board) may, at its option and upon written notice to Administrator, elect to calculate all fees due to the Administrator and the Operator in accordance with the Master Services Agreement and the Investment Management Agreement, without giving effect to the Fee Waiver, from and after such Excess Quarter. Any such election by the Company will be irrevocable, and all fees due to the Administrator and the Operator from and after such election will be calculated in accordance with the Master Services Agreement and the Investment Management Agreement, without giving effect to the Fee Waiver. The fees payable to the Operator and the Administrator are determined as follows under the Fee Waiver. 1. Base Fee: A base asset management fee (the “Base Fee”) is payable quarterly in arrears to the Operator in an amount equal to an annual rate of 1 % (or 0.25 % per quarter) of the average of the “Net Asset Value Attributable to Common Stockholders” as of the first and last day of the applicable quarter. Net Asset Value Attributable to Common stockholders is defined as (a) the sum of the Company’s (1) investments in real estate at fair value, (2) cash, (3) loans receivable at fair value and (4) the book value of the other assets of the Company, excluding deferred costs and net of other liabilities at book value, less (b) the Company’s (i) debt at face value, (ii) outstanding preferred stock at stated value, and (iii) non-controlling interests at book value; provided, that, non-controlling interests in any UPREIT operating partnership relating to the Company shall not be excluded. 2. Incentive Fee: An incentive fee (the “Revised Incentive Fee”) is payable quarterly in arrears to the Administrator with respect to the quarterly core funds from operations in excess of a quarterly threshold equal to 1.75 % (i.e., 7.00 % on an annualized basis) of the Company’s “Adjusted Common Equity” (as defined below) for such quarter (“Excess Core FFO”) as follows: (i) no Revised Incentive Fee in any quarter in which the Excess Core FFO is $ 0 ; (ii) 100 % of any Excess Core FFO up to an amount equal to the product of (x) the average of the Adjusted Common Equity as of the first and last day of the applicable quarter and (y) 0.4375 %; and (iii) 20 % of any Excess Core FFO thereafter. Revised Incentive Fees payable for any partial quarter will be appropriately prorated. “Adjusted Common Equity” means Common Equity plus Excluded Depreciation and Amortization. “Common Equity” means Total Stockholders’ Equity minus Excluded Equity. “Total Stockholders’ Equity” means the amount reflected as total stockholders’ equity in accordance with GAAP on the consolidated balance sheet of the Company and its subsidiaries as of the last day of a given quarter. “Excluded Equity” means the sum of all preferred securities of the Company and its subsidiaries classified as permanent equity in accordance with GAAP on the consolidated balance sheet of the Company and its subsidiaries as of the last day of a given quarter. “Excluded Depreciation and Amortization” means, for a given quarter, the amount of all accumulated depreciation and amortization of (i) the Company and its subsidiaries and (ii) to the extent allocable to the Company and its subsidiaries, the unconsolidated affiliates, in each case as of the last day of such quarter that corresponds to the periodic depreciation and amortization expense calculated in each case in accordance with GAAP that is a permitted add back to net income calculated in accordance with GAAP when calculating funds from operations. 3. Capital Gains Fee: A capital gains fee (the “Capital Gains Fee”) is payable quarterly in arrears to the Administrator in an amount equal to (i) 15 % of the cumulative aggregate realized capital gains minus the cumulative aggregate realized capital losses (in each case since the Effective Date), minus (ii) the aggregate capital gains fees paid since the Effective Date. Realized capital gains and realized capital losses are calculated by subtracting from the sales price of a property: (a) any costs incurred to sell such property, and (b) the current gross value of the property (meaning the property’s original acquisition price plus any subsequent, non-reimbursed capital improvements thereon paid for by the Company). F-39 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (Continued) Pursuant to the Investment Management Agreement, the asset management fee prior to January 1, 2022 fee was calculated (without giving effect to the Fee Waiver) as a percentage of the daily average adjusted fair value of CIM Urban’s assets as follows: Daily Average Adjusted Fair Value of CIM Urban’s Assets Quarterly Fee From Greater of To and Including Percentage (in thousands) $ — $ 500,000 0.2500 % $ 500,000 $ 1,000,000 0.2375 % $ 1,000,000 $ 1,500,000 0.2250 % $ 1,500,000 $ 4,000,000 0.2125 % $ 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 was amended to replace the Base Service Fee with an incentive fee pursuant to which the Administrator was entitled to receive, on a quarterly basis, 15.00 % of the Company’s quarterly core funds from operations in excess of a quarterly threshold equal to 1.75 % (i.e., 7.00 % on an annualized basis) of the Company’s average Adjusted Common Equity (defined above) for such quarter. The amendment was effective as of April 1, 2020 and was further modified by the Fee Waiver described above. No such incentive fee was paid by the Company. In addition, pursuant to the terms of the Master Services Agreement, the Administrator may receive compensation and/or reimbursement for performing certain services for the Company and its subsidiaries that are not covered by the Base Fee. During the years ended December 31, 2024 and 2023, such services performed by the Administrator and its affiliates included accounting, tax, reporting, internal audit, legal, compliance, risk management, IT, human resources, corporate communications, operational and ongoing support in connection with the Company’s offering of Preferred Stock. The Company will also reimburse the Administrator for the Company’s share of broken deal expenses that are incurred by the Administrator and its affiliates (i.e., fees and expenses relating to investments that were contemplated but the Company did not make and/or transactions that could have been executed by the Company but that the Company did not consummate, including fees and expenses associated with performing due diligence review and negotiating the terms of such investments or transactions). The Administrator’s compensation is based on the salaries and benefits of the employees of the Administrator and/or its affiliates who performed these services (allocated based on the percentage of time spent on the affairs of the Company and its subsidiaries). The expense for such services is included in expense reimbursements to related parties—corporate in the accompanying consolidated statements of operations. Property Management Fees and Reimbursements — CIM Management, Inc. and certain of its affiliates (collectively, the “CIM Management Entities”), all affiliates of CIM Group, provide property management, leasing, and development services to properties owned by the Company. Property management fees earned by the CIM Management entities and onsite management costs incurred are included in rental and other property operating expenses in the accompanying consolidated statements of operations, with the exception of certain onsite management costs which are capitalized in some cases. Leasing commissions earned are capitalized to deferred charges on the accompanying consolidated balance sheets. Construction management fees and development management reimbursements are capitalized to investments in real estate on the accompanying consolidated balance sheets. Lending Segment Expenses — The Company has a Staffing and Reimbursement Agreement with CIM SBA Staffing, LLC (“CIM SBA”), an affiliate of CIM Group, and the Company’s subsidiary, PMC Commercial Lending, LLC. The agreement provides that CIM SBA will provide personnel and resources to the Company and that the Company will reimburse CIM SBA for the costs and expenses of providing such personnel and resources. The expense for such services is included in expense reimbursements to related parties—lending segment in the accompanying consolidated statements of operations. F-40 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (Continued) Offering-Related Fees — CCO Capital, LLC (“CCO Capital”) became the exclusive dealer manager for the Company’s public offering of the Series A Preferred Stock and Series A Preferred Warrants effective as of May 31, 2019. CCO Capital is a registered broker dealer and is under common control with the Operator and the Administrator. The Company’s offering of the Series A Preferred Warrants ended at the end of January 2020. On January 28, 2020, the Company entered into the Second Amended and Restated Dealer Manager Agreement, pursuant to which CCO Capital acted as the exclusive dealer manager for the Company’s public offering of its Series A Preferred Stock and Series D Preferred Stock. The Second Amended and Restated Dealer Manager Agreement was subsequently amended by the Company and CCO Capital to address changes to, among other things, selling commissions and dealer manager fees. On November 22, 2022, the Company entered into the Fourth Amended and Restated Dealer Manager Agreement, pursuant to which CCO Capital has been acting as the exclusive dealer manager for the Company’s public offering of its Series A1 Preferred Stock. Thereunder, the Company agreed to compensate CCO Capital, as the dealer manager for the offering, as follows: (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: Year Ended December 31, 2024 2023 (in thousands) Asset Management Fees: Asset management fees $ 1,797 $ 2,627 Property Management Fees and Reimbursements: Property management fees (1) $ 2,295 $ 2,107 Onsite management and other cost reimbursement (2) $ 7,733 $ 5,794 Leasing commissions (3) $ 808 $ 101 Construction management fees (4) $ 1,061 $ 308 Development management reimbursements (5) $ 1,747 $ 1,321 Administrative Fees and Expenses: Expense reimbursements to related parties - corporate $ 2,281 $ 2,342 Lending Segment Expenses: Expense reimbursements to related parties - lending segment (6) $ 2,571 $ 2,579 Offering-Related Fees: Upfront dealer manager and trailing dealer manager fees (7) $ 546 $ 1,391 Non-issuance specific offering costs (8) $ 606 $ 623 (1) Does not include the company’s share of the property management fees from the Unconsolidated Joint Ventures of $ 95,000 and $ 78,000 for the years ended December 31, 2024 and 2023, respectively. (2) Does not include the Company’s share of the onsite management and other cost reimbursements from the Unconsolidated Joint Ventures of $ 511,000 and $ 336,000 for the years ended December 31, 2024 and 2023, respectively. (3) Does not include the Company’s share of the leasing commissions from the Unconsolidated Joint Ventures of $ 48,000 and $ 32,000 for the year ended December 31, 2024 and 2023, respectively. (4) Does not include the Company’s share of the construction management fees from the Unconsolidated Joint Ventures of $ 172,000 and $ 183,000 for the years ended December 31, 2024 and 2023, respectively. (5) Does not include the Company’s share of the development management reimbursements from the Unconsolidated Joint Ventures of $ 756,000 and $ 481,000 for the year ended December 31, 2024 and 2023, respectively. F-41 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (Continued) (6) Expense reimbursements to related parties - lending segment do not include personnel costs capitalized to deferred loan origination costs of $ 132,000 and $ 121,000 for the years ended December 31, 2024 and 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 December 31, 2024 and 2023, $ 0.0 million and $ 2.5 million, respectively, was included in deferred costs as reimbursable expenses incurred pursuant to the Master Services Agreement and the then applicable dealer manager agreement with CCO Capital. These non-issuance specific costs are allocated against the gross proceeds from the sale of the Series A1 Preferred Stock, Series A Preferred Stock and Series D Preferred Stock on a pro rata basis for each issuance as a percentage of the total offering. As of December 31, 2024 and 2023, due to related parties consisted of the following: December 31, 2024 2023 (in thousands) Asset management fees $ 1,403 $ 555 Property management fees and reimbursements 8,237 1,505 Expense reimbursements - corporate 1,676 613 Expense reimbursements - lending segment 1,994 156 Upfront dealer manager and trailing dealer manager fees 186 283 Non-issuance specific offering costs 289 61 Other amounts due to the CIM Management Entities and certain of its affiliates 283 290 Total due to related parties $ 14,068 $ 3,463 Investments with Affiliates of CIM Group In February 2022, the Company invested with the 1910 Sunset JV Partner, a CIM-managed separate account, in the 1910 Sunset JV which purchased an office property in Los Angeles, California for a gross purchase price of approximately $ 51.0 million , of which the Company initially contributed approximately $ 22.4 million and the 1910 Sunset JV Partner initially contributed the remaining balance . See Note 2 and Note 4 for more information. In February 2023, the Company and the 1902 Park JV Partner invested in the 1902 Park JV, which purchased a multifamily property in the Echo Park neighborhood of Los Angeles, California for a gross purchase price of $ 19.1 million, with the Company owning a 50 % interest. In October 2024, the 1902 Park JV 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 JV’s mortgage loan in full and the remaining contribution was used to make a distribution of $ 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 25.5 % . See Note 2 and Note 4 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). The property has a site area of approximately 44,141 square feet and contains a parking garage that has been leased to a third-party tenant. The Company owns 28.8 % of the 1015 N Mansfield JV. During the year ended December 31, 2023 , the Company acquired an interest in four assets from entities indirectly wholly owned by a fund that is managed by affiliates of CIM Group for $ 282.9 million (exclusive of transactions costs) . See Note 3 and Note 7 for more information. Other On May 15, 2019, an affiliate of CIM Group entered into an approximately 11-year lease for approximately 32,000 rentable square feet with respect to a property owned by the Company (4750 Wilshire). The lease was amended on August 7, 2019 to reduce the rentable square feet to approximately 30,000 rentable square feet. In February 2023, the Company sold an 80 % interest in 4750 Wilshire and now holds its retained 20 % interest in the property through the 4750 Wilshire JV. Prior to the F-42 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (Continued) 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 year ended December 31, 2023, the Company’s share of the income from the tenant earned by the 4750 Wilshire JV was $ 170,000 . For the year ended December 31, 2024, the Company’s share of the income from the tenant earned by the 4750 Wilshire JV was $ 342,000 . 15. 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 $ 9.5 million as of December 31, 2024, all of which are for prime-based loans to be originated by the Company’s subsidiary engaged in SBA 7(a) Small Business Loan Program lending, the government guaranteed portion of which is intended to be sold. Commitments generally have fixed expiration dates. Since some commitments are expected to expire without being drawn upon, total commitment amounts do not necessarily represent future cash requirements. 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 $ 11.3 million in future obligations under leases to fund tenant improvements and other future construction obligations as of December 31, 2024. As of December 31, 2024, $ 19.9 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 mortg age loan agreement entered into in June 2016. Employment Agreements —The Company has an employment agreement with one of its officers. Under certain circumstances, this employment agreement provides for (1) severance payment equal to the annual base salary paid to the officer and (2) death and disability payments in an amount equal to two times and one time, respectively, the annual base salary paid to the officer. Litigation —The Company is not currently involved in any material pending or threatened legal proceedings nor, to the Company’s knowledge, are any material legal proceedings currently threatened against the Company, other than routine litigation arising in the ordinary course of business. In the normal course of business, the Company is periodically party to certain legal actions and proceedings involving matters that are generally incidental to the Company’s business. While the outcome of these legal actions and proceedings cannot be predicted with certainty, in management’s opinion, the resolution of these legal proceedings and actions will not have a material adverse effect on the Company’s business, financial condition, results of operations, cash flow or the Company’s ability to satisfy its debt service obligations or to maintain its level of distributions on Common Stock or Preferred Stock. A subsidiary of the Company is a defendant in a lawsuit in connection with injuries sustained by a third-party contractor at a property previously owned by such subsidiary. Such subsidiary has reached an agreement in principle to settle the lawsuit with the plaintiff, pursuant to which such subsidiary’s share of the settlement payment is expected to be approximately $ 700,000 . The Company anticipates that such payment will be made directly from the Company’s insurance carrier, which will be responsible for the entire payment. Accordingly, the Company does not expect this lawsuit to have any adverse effect on the Company’s business, financial condition, results of operations, cash flow or the Company ability to satisfy its debt service obligations or to maintain the level of distributions on the Company’s Common Stock or Preferred Stock. SBA Related —If the SBA establishes that a loss on an SBA guaranteed loan is attributable to significant technical deficiencies in the manner in which the loan was originated, funded or serviced under the SBA 7(a) Small Business Loan Program, the SBA may seek recovery of the principal loss related to the deficiency from the Company. As of December 31, 2024, the Company serviced an aggregate of $ 222.8 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. Based on historical experience, the Company does not expect that this contingency is probable to be asserted. However, if asserted, it could have a material adverse effect on the Company’s business, financial condition, results of operations, cash flow or the Company’s ability to satisfy its debt service obligations or to maintain its level of distributions on Common Stock or Preferred Stock. Environmental Matters —In connection with the ownership and operation of real estate properties, the Company may be potentially liable for costs and damages related to environmental matters, including asbestos-containing materials. The Company has not been notified by any governmental authority of any noncompliance, liability, or other claim in connection with any of the properties, and the Company is not aware of any other environmental condition with respect to any of the F-43 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (Continued) properties that management believes will have a material adverse effect on the Company’s business, financial condition, results of operations, cash flow or the Company’s ability to satisfy its debt service obligations or to maintain its level of distributions on Common Stock or Preferred Stock. 16. LEASES Future minimum rental revenue under long-term operating leases as of December 31, 2024, excluding tenant reimbursements of certain costs, are as follows (excludes unconsolidated properties, in thousands): Years Ending December 31, Total 2025 $ 51,067 2026 35,899 2027 28,356 2028 15,397 2029 11,342 Thereafter 41,881 $ 183,942 17. INCOME TAXES The Company has elected to be taxed as a REIT under the Code. To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that the Company distributes at least 90% of its taxable income to its stockholders. As a REIT, the Company generally will not be subject to corporate level federal income tax on net income that is currently distributed to stockholders. The Company has wholly owned TRS’s which are subject to federal and state income taxes. The income generated from the TRS’s is taxed at normal corporate rates. The provision for income taxes results in effective tax rates that differ from federal and state statutory rates. A reconciliation of the provision for income tax attributable to the TRSs’ income from continuing operations computed at federal statutory rates to the income tax provision reported in the financial statements is as follows: Year Ended December 31, 2024 2023 (in thousands) Income from continuing operations before income taxes for TRSs $ 3,742 $ 4,711 Expected federal income tax provision $ 785 $ 989 State income taxes 1 44 Change in valuation allowance 151 ( 2,619 ) Other ( 139 ) 2,814 Income tax provision $ 798 $ 1,228 F-44 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (Continued) The components of the Company’s net deferred tax asset, which are included in other assets, are as follows: December 31, 2024 2023 (in thousands) Deferred tax assets: Net operating losses $ 196 $ 44 Secured borrowings—government guaranteed loans 5 21 Other 286 232 Total gross deferred tax assets 487 297 Valuation allowance ( 205 ) ( 52 ) 282 245 Deferred tax liabilities: Loans receivable — — — — Deferred tax asset, net $ 282 $ 245 The net operating loss carryforwards as of December 31, 2024 and 2023 were generated by TRSs and are available to offset future taxable income of these TRSs. The increase in the valuation allowance recorded in 2024 was $ 151,000 . The periods subject to examination for the Company’s federal and state income tax returns are 2021 through 2024. As of December 31, 2024 and 2023, no reserves for uncertain tax positions have been established and the Company does not anticipate any material changes in the amount of unrecognized tax benefits recorded to occur within the next 12 months. The Tax Cuts and Jobs Act of 2017, signed into law in late December 2017, made sweeping changes to provisions of the Code applicable to businesses. The CARES Act, signed into law in March 2020, made additional changes to provisions on the Code applicable to the businesses. The Inflation Reduction Act, signed into law in August 2022 also made changes to the Code applicable to businesses. Management has reviewed these statutory changes and determined that the impact to the Company’s consolidated financial statements is not material. 18. SEGMENT DISCLOSURE The Company’s reportable segments during the years ended December 31, 2024 and 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. The Company also has certain general and administrative level activities, including public company expenses, legal, accounting, and tax preparation that are not considered separate operating segments. The reportable segments are accounted for on the same basis of accounting as described in Note 2. For the Company’s real estate segments, the Company defines net operating income (loss) as rental and other property income and expense reimbursements less property related expenses, and excludes non-property income and expenses, interest expense, depreciation and amortization, corporate related general and administrative expenses, gain (loss) on sale of real estate, gain (loss) on early extinguishment of debt, impairment of real estate, transaction costs, and provision (benefit) for income taxes. For the Company’s lending segment, the Company defines net operating income as interest income net of interest expense and general overhead expenses. The Company’s chief operating decision maker (“CODM”) is the Company’s executive management team, comprised of the Chief Executive Officer, Chief Investment Officer, Chief Financial Officer, and the 1st Vice President for portfolio oversight of CIM. The CODM evaluates performance and allocates resources based on segment net operating income (loss). All expense categories on the statement of operations are significant and there are no other significant segment expenses that would require F-45 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (Continued) disclosure. The CODM uses net operating income (loss) to make key operating decisions, such as identifying attractive investment opportunities, evaluating underwriting standards, determining the appropriate level of leverage to enhance returns on equity and deciding on the sources of financing. The net operating income (loss) of the Company’s segments for the years ended December 31, 2024 and 2023 is as follows: Year Ended December 31, 2024 2023 (in thousands) Office (1): Revenues $ 54,283 $ 55,033 Property expenses: Operating 26,608 25,731 General and administrative 719 344 Total property expenses 27,327 26,075 Income (loss) from unconsolidated entities 462 ( 582 ) Segment net operating income—office 27,418 28,376 Hotel: Revenues 39,407 41,096 Property expenses: Operating 27,807 27,959 General and administrative 148 33 Total property expenses 27,955 27,992 Segment net operating income—hotel 11,452 13,104 Multifamily (1): Revenues 19,515 11,224 Property expenses: Operating 13,547 8,803 General and administrative 168 661 Total property expenses 13,715 9,464 (Loss) income from unconsolidated entities ( 1,268 ) 155 Segment net operating income—multifamily 4,532 1,915 Lending: Revenues 10,756 11,458 Lending expenses: Interest expense 3,283 3,692 Expense reimbursements to related parties—lending segment 2,571 2,579 General and administrative 1,702 1,628 Total lending expenses 7,556 7,899 Segment net operating income—lending 3,200 3,559 Total segment net operating income $ 46,602 $ 46,954 (1) Beginning in the quarter ended December 31, 2024, the Company reclassified its investment in the 4750 Wilshire JV to include income from the investment in the multifamily segment from its previous classification in the office segment. This change corresponded with the 4750 Wilshire JV’s substantial completion of the 4750 Wilshire Project. In the above table, the Company’s income earned from its investment in the 4750 Wilshire JV prior to October 1, 2024 is included within the F-46 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (Continued) office segment and its income earned from its investment in the 4750 Wilshire JV subsequent to October 1, 2024 is included within the multifamily segment. In addition, beginning in the quarter ended December 31, 2024, the Company reclassified its consolidated property located at 4750 Wilshire Boulevard (Backlot) in Los Angeles, California to include the property it in the multifamily segment, from its previous classification in the office segment. In the above table, activity related to 4750 Wilshire Boulevard (Backlot) occurring prior to October 1, 2024 is included within the office segment and such activity subsequent to October 1, 2024 is included within the multifamily segment. In the above table, activity related to both the 1910 Sunset JV and 1015 N Mansfield JV are included within the office segment, while activity related to the 1902 Park JV is included in the multifamily segment. A reconciliation of the Company’s segment net operating income to net income attributable to the Company for the years ended December 31, 2024 and 2023 is as follows: Year Ended December 31, 2024 2023 (in thousands) Total segment net operating income $ 46,602 $ 46,954 Interest and other income 551 447 Asset management and other fees to related parties ( 1,797 ) ( 2,627 ) Expense reimbursements to related parties—corporate ( 2,281 ) ( 2,342 ) Interest expense ( 33,589 ) ( 31,406 ) General and administrative ( 4,267 ) ( 5,453 ) Transaction costs ( 1,382 ) ( 4,421 ) Depreciation and amortization ( 27,373 ) ( 52,484 ) Loss on early extinguishment of debt ( 1,416 ) — Gain on sale of real estate — 1,104 (Loss) income before provision for income taxes ( 24,952 ) ( 50,228 ) Provision for income taxes ( 798 ) ( 1,228 ) Net (loss) income ( 25,750 ) ( 51,456 ) Net loss (income) attributable to noncontrolling interests 575 2,971 Net (loss) income attributable to the Company $ ( 25,175 ) $ ( 48,485 ) The condensed assets for each of the segments as of December 31, 2024 and 2023 are as follows: December 31, 2024 2023 (in thousands) Condensed assets: Office $ 421,438 $ 419,443 Hotel 108,963 95,998 Multifamily 279,308 278,492 Lending 71,192 76,374 Non-segment assets 8,654 20,893 Total assets $ 889,555 $ 891,200 (1) Beginning in the quarter ended December 31, 2024, the Company reclassified its consolidated property located at 4750 Wilshire Boulevard (Backlot) in Los Angeles, California to include the property it in the multifamily segment, from its previous classification in the office segment. In the above table, the assets related to 4750 Wilshire Boulevard (Backlot) as of December 31, 2024 and 2023 are included in with Multifamily and Office, respectively. F-47 Table of Contents CREATIVE MEDIA & COMMUNITY TRUST CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements as of December 31, 2024 and 2023 and for the Years Ended December 31, 2024 and 2023 (Continued) 19. SUBSEQUENT EVENTS On January 31, 2025, the Company entered into a modification agreement with JPMorgan Chase Bank, N.A., as administrative agent and lender (the “Fifth Modification Agreement”) pursuant to which the credit facility’s maturity date was extended from January 31, 2025 to March 31, 2025. As of the date of the Fifth Modification Agreement, the remaining aggregate principal balance outstanding under the 2022 Credit Facility was $ 15.0 million. On February 14, 2025, the Company and a lender entered into a $ 5.0 million first lien mortgage loan agreement secured by the Company’s property at 8944 Lindblade Street in Los Angeles, California. F-48 Schedule III—Real Estate and Accumulated Depreciation December 31, 2024 (in thousands) Initial Cost Net Improvements (Write-Offs) Since Acquisition Gross Amount at Which Carried (3) Property Name, City and State Encumbrances Land Building and Improvements Land Building and Improvements Total Acc. Deprec. Year Built / Renovated Year of Acquisition Office 3601 S Congress Avenue (1) Austin, TX $ — $ 9,569 $ 18,593 $ 15,583 $ 9,569 $ 34,176 $ 43,745 $ 11,551 1918 / 2001 & 2020 2007 1 Kaiser Plaza Oakland, CA 97,100 9,261 113,619 13,802 9,261 127,421 136,682 58,081 1970 / 2008 2008 2 Kaiser Plaza Parking Lot (1) Oakland, CA — 10,931 110 3,585 10,931 3,695 14,626 — N/A 2015 11600 Wilshire Boulevard (3) Los Angeles, CA — 3,477 18,522 2,641 3,477 21,163 24,640 8,409 1955 2010 11620 Wilshire Boulevard (3) Los Angeles, CA — 7,672 51,999 8,917 7,671 60,916 68,587 24,271 1976 2010 4750 Wilshire Boulevard Los Angeles, CA — 4,000 — 283 4,000 283 4,283 — 1984 / 2014 2014 Lindblade Media Center Los Angeles, CA — 6,341 11,568 775 6,341 12,343 18,684 3,620 1930 & 1957 / 2010 2014 1037 N Sycamore Los Angeles, CA — 1,839 1,094 136 1,839 1,230 3,069 119 2000 / 2021 2021 1130 Howard Street (1) San Francisco, CA — 8,290 10,480 ( 47 ) 8,290 10,433 18,723 1,995 1930 / 2016 & 2017 2017 9460 Wilshire Boulevard (3) Los Angeles, CA — 52,199 76,730 6,986 52,199 83,716 135,915 14,993 1959 / 2008 2018 1021 E 7th Street Austin, TX — 4,979 733 ( 189 ) 4,979 544 5,523 148 1972 / 2001 2020 3101 S Western Avenue Los Angeles, CA — 2,279 — 1,368 2,279 1,368 3,647 1 N/A 2022 3022 S Western Avenue Los Angeles, CA — 5,638 156 1,594 5,638 1,750 7,388 20 N/A 2022 1007 E 7th Street Austin, TX — 1,866 6 249 1,866 255 2,121 1 1920 2022 3109 S Western Avenue Los Angeles, CA — 712 2 207 712 209 921 — N/A 2022 Channel House Oakland, CA 87,000 17,214 103,553 175 17,208 103,728 120,936 6,141 2021 2023 1150 Clay Oakland, CA 67,000 16,643 115,828 270 16,623 116,098 132,721 6,870 2021 2023 F3 Land Site Oakland, CA — 251 — 41 250 41 291 — N/A 2023 466 Water Street Land Site Oakland, CA — 2,505 — 151 2,500 151 2,651 — N/A 2023 Hotel Sheraton Grand Hotel Sacramento, CA 84,346 3,498 107,447 20,854 3,498 128,301 131,799 45,380 2001 2008 Sheraton Grand Hotel Parking & Retail (4) Sacramento, CA — 6,551 10,996 286 6,551 11,282 17,833 3,991 2001 2008 $ 335,446 $ 175,715 $ 641,436 $ 77,667 $ 175,682 $ 719,103 $ 894,785 $ 185,591 F-49 (1) These properties collateralize the revolving credit facility, which had a $ 15.0 million outstanding balance as of December 31, 2024. (2) The aggregate gross cost of property included above for federal income tax purposes approximates $ 1.0 billion (unaudited) as of December 31, 2024. (3) Collectively, these properties collateralize a secured fixed rate mortgage, which had a $ 105.0 million outstanding balance as of December 31, 2024. (4) This property also collateralizes the Sheraton Grand Hotel’s variable rate mortgage, which has a $ 84.3 million outstanding balance as of December 31, 2024. Schedule III—Real Estate and Accumulated Depreciation (Continued) December 31, 2024 (in thousands) The following table reconciles the Company’s investments in real estate from January 1, 2023 to December 31, 2024: Year Ended December 31, 2024 2023 (in thousands) Investments in Real Estate Balance, beginning of period $ 868,878 $ 660,413 Additions: Improvements 29,329 10,969 Property acquisitions — 255,993 Deductions: Asset sales — ( 49,484 ) Retirements ( 3,422 ) ( 9,013 ) Balance, end of period $ 894,785 $ 868,878 The following table reconciles the accumulated depreciation from January 1, 2023 to December 31, 2024: Year Ended December 31, 2024 2023 (in thousands) Accumulated Depreciation Balance, beginning of period $ ( 164,116 ) $ ( 158,407 ) Additions: depreciation ( 24,897 ) ( 22,384 ) Deductions: Assets held for sale — — Asset sales — 7,662 Retirements 3,422 9,013 Balance, end of period $ ( 185,591 ) $ ( 164,116 ) F-50 Schedule IV—Mortgage Loans on Real Estate December 31, 2024 (dollars in thousands, except footnotes) Principal Amount of Loans Subject Geographic Number Final Carrying to Delinquent Dispersion of of Size of Loans Maturity Amount of Principal or Collateral Loans From To Interest Rate Date Range Mortgages “Interest” SBA 7(a) Loans - States 2% or greater (1) (2) : Ohio 20 $ 30 $ 800 9.00 % to 10.75 % 07/28/41 — 12/12/49 $ 9,294 $ — Texas 20 $ 20 $ 840 9.00 % to 10.75 % 07/13/34 — 03/29/49 7,406 — West Virginia 8 $ 50 $ 960 9.00 % to 10.75 % 05/07/46 — 11/06/49 3,491 — Michigan (3) 10 $ 20 $ 930 9.00 % to 10.25 % 03/27/38 — 12/18/48 3,300 — Florida 10 $ 90 $ 740 9.25 % to 10.75 % 06/29/32 — 06/27/49 3,010 — Pennsylvania 6 $ 290 $ 650 9.50 % to 10.75 % 03/05/40 — 10/26/49 2,894 — Indiana 5 $ 100 $ 920 9.50 % to 10.50 % 05/17/41 — 08/26/46 2,052 — Louisiana 5 $ 60 $ 1,010 9.00 % to 10.75 % 11/22/31 — 12/07/48 1,974 — Kentucky 6 $ 60 $ 430 9.75 % to 10.75 % 03/11/33 — 05/08/48 1,600 — New York 5 $ 110 $ 700 10.00 % to 10.75 % 02/11/47 — 02/28/50 1,579 — New Mexico 4 $ 80 $ 750 9.00 % to 10.75 % 11/17/34 — 04/19/48 1,315 — California 2 $ 450 $ 850 9.25 % to 9.50 % 09/27/48 — 11/22/49 1,299 — Illinois 7 $ 10 $ 280 9.75 % to 10.75 % 09/08/39 — 10/26/47 1,246 — Mississippi 3 $ 120 $ 620 9.75 % to 10.75 % 11/04/36 — 11/17/49 1,244 — North Carolina 4 $ 100 $ 720 9.75 % to 10.50 % 11/25/44 — 04/25/47 1,207 — Colorado 4 $ 260 $ 330 9.00 % to 10.25 % 02/17/41 — 10/19/49 1,168 — Washington 1 $ 1,120 $ 1,120 9.50 % to 9.50 % 10/12/48 — 10/12/48 1,125 — Other 42 $ 10 $ 550 8.75 % to 10.75 % 07/27/25 — 12/26/49 10,183 — Government guaranteed portions (4) 1,494 — SBA 7(a) loans, subject to secured borrowings (5) 1,361 — Current expected credit losses ( 2,032 ) — 162 $ 56,210 (6) $ — (1) Includes $ 1,369,000 of loans with subordinate lien positions. (2) Interest rates are variable at spreads over the prime rate unless otherwise noted. (3) Includes a loan with a retained face value of $ 116,000 and a fixed interest rate of 9.00 %. (4) Represents the government guaranteed portions of the Company’s SBA 7(a) loans detailed above retained by us. As there is no risk of loss to us related to these portions of the guaranteed loans, the geographic information is not presented as it is not meaningful. (5) Represents the guaranteed portion of SBA 7(a) loans which were sold with the proceeds received from the sale reflected as secured borrowings. For Federal income tax purposes, these proceeds are treated as sales and reduce the carrying value of loans receivable. (6) For Federal income tax purposes, the aggregate cost basis of the Company’s loans was approximately $ 55.8 million (unaudited). F-51 Schedule IV—Mortgage Loans on Real Estate (Continued) December 31, 2024 (in thousands) Year Ended December 31, 2024 2023 Balance, beginning of period $ 57,005 $ 62,547 Additions during period: New loans 40,255 45,188 Other - deferral of loan origination costs 806 742 Other - bad debt recovery ( 352 ) 125 Other - accretion of loan discounts, net of amortization of deferred origination costs 1,397 1,643 Deductions during period: Collections of principal ( 12,484 ) ( 16,843 ) Cost of mortgages sold, net ( 30,417 ) ( 35,614 ) Other - adoption of ASU 2016-13 (1) — ( 783 ) Other - bad debt expense — — Balance, end of period $ 56,210 $ 57,005 (1) Effective January 1, 2023, the Company adopted ASU 2016-13 and recorded a cumulative adjustment of $ 783,000 representing a non cash transaction. F-52