What changed in this filing

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Item 9A. Controls and Procedures

2025-09-29 compared with 2024-09-27 · 1150 added, 1128 removed, 1139 unchanged (67% of the section changed)

1 unchanged sentence

Evaluation of disclosure controls and procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules

13a-15(e) or 15d-15(e) of the 1934 Act) as of the end of the period covered by this report as required by paragraph (b) of Rule 13a-15 or 15d-15 of the 1934 Act.

Based upon such evaluation, our Chief Executive Officer and Chief Financial Officer

concluded that our disclosure controls and procedures were effective as of such date and provided reasonable assurance that information required to be disclosed by us in the reports we file or submit under the 1934 Act is recorded, processed,

summarized and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate,

to allow timely decisions regarding required disclosure.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as

defined in Rules 13a-15(e) or 15d-15(e) of the Exchange Act) as of the end of the period covered by this report as required by paragraph (b) of Rule 13a-15 or 15d-15 of the Exchange Act.

Based upon such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of such date and provided reasonable assurance

that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the

SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

There have been no changes in our internal control over financial reporting (identified in connection with the evaluation required by paragraph (d) of Rules 13a-15 or 15d-15 of

the Exchange Act) during the fiscal year ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting.

As defined in Exchange Act Rules 13a-15(f) and 15d-15(f), internal control over

financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s Board of Directors, management

and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with GAAP.

As defined in Exchange Act Rules 13a-15(f) and 15d-15(f), internal control

over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s Board of Directors,

management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with GAAP.

Our internal control over financial reporting includes those policies and procedures that:

Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and the dispositions of our assets;

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of the consolidated financial statements in accordance with GAAP, and that our receipts and expenditures are

being made only in accordance with authorizations of our management and Board of Directors;

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of the consolidated financial statements in accordance with GAAP, and that our receipts and expenditures

are being made only in accordance with authorizations of our management and Board of Directors;

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the consolidated financial

Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation and presentation and

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.

Our management’s assessment of the effectiveness of our internal control system as of June 30, 2024, was based on the framework for effective internal control over financial reporting described in

Internal Control- Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Based on management’s assessment, as of June 30, 2024, our system of internal control over financial reporting

was effective at the reasonable assurance level.

Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation and

presentation and 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.

Our management’s assessment of the effectiveness of our internal control system as of June 30, 2025, was based on the framework for effective internal control over financial reporting

described in Internal Control- Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on management’s assessment, as of June 30, 2025, our system of internal control over financial

reporting was effective at the reasonable assurance level.

This annual report does not include an attestation report of our independent registered public accounting firm regarding control over financial reporting.

Management’s report was not subject to

attestation by our independent registered public accounting firm pursuant to Section 989G of the Dodd-Frank Wall Street and Consumer Protection Act, which exempts non-accelerated filers from the auditor attestation requirement of section 404 (b)

of the Sarbanes-Oxley Act.

Management’s report was not subject

to attestation by our independent registered public accounting firm pursuant to Section 989G of the Dodd-Frank Wall Street and Consumer Protection Act, which exempts non-accelerated filers from the auditor attestation requirement of section

404 (b) of the Sarbanes-Oxley Act.

Changes in Internal Control over Financial Reporting

5 unchanged sentences

DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

Board of Directors and Executive Officers

Our business and affairs are managed under the direction of our Board of Directors.

Accordingly, our Board provides broad supervision over our affairs, including supervision of the duties performed

by the Advisers and MacKenzie.

Certain employees of MacKenzie are responsible for our day-to-day operations.

The names, ages and addresses of our Directors and specified executive officers, together with their principal occupations and other

affiliations during the past five years, are set forth below.

Each Director and officer holds office for a one-year term to which he or she is elected and until his successor is duly elected and qualifies, or until he resigns or is removed in the

manner provided by law.

While the Company’s securities currently are not listed for trading on any registered national securities exchange, our Board consists of a majority of “Independent Directors” as defined under the New York Stock Exchange

independence standards.

The address for all officers and Directors is 89 Davis Road, Suite 100, Orinda CA 94563.

None of our Directors or officers serves as a director for any other company which (i) has a class of securities registered under

section 12 of the 1934 Act, (ii) is subject to section 15(d) of the 1934 Act, or (iii) is registered as an investment company under the 1940 Act, and we only have one investment portfolio.

There are no understandings or arrangements between us

and any officer or director pursuant to which they attained their position, there are no family relationships between any officers or directors other than as set forth below.

Board of Directors

Principal Occupation(s) During Past 5 Years

Charles “Chip” Patterson†, 53

Chairman of the Board

Chip Patterson, an MRC Executive Officer (as discussed further below) since May of 2012, is managing director, general counsel, and senior vice president of the Advisers and the

Manager, and a director of their general partner, and a beneficial owner of all three companies, all since 2005.

Patterson graduated magna cum laude from the University of Michigan Law School with a J.

degree and with high

distinction and Phi Beta Kappa from the University of California at Berkeley with a B.

degree in Political Science.

Prior to joining the Manager in July 2003, he was a securities and corporate finance attorney with the national law

firm of Davis Wright Tremaine LLP.

Prior to law school, Chip Patterson taught physics, chemistry, and math at the high school level for three years.

He also has prior experience in sales, retail, and banking, and is a licensed California

Real Estate Broker.

Tim Dozois, 62

Dozois was Vice President, Secretary and Corporate Counsel for Pendrell Corporation, a NASDAQ listed company specializing in intellectual property solutions, from June of 2010 until

He is now sole owner of Conseiller LLC.

From January 1996 until March of 2010, Mr.

Dozois was an equity partner of Davis Wright Tremaine LLP, a Seattle-based national law firm, where he specialized in private securities work

and structured financings, with an emphasis on the acquisition, financing and management of real property assets.

He has over 30 years of experience supporting leading corporations in securities law compliance, mergers, acquisitions, and

real estate acquisition, financing, and management.

Dozois received his B.

in Financial Management from Oregon State University and his J.

from the University of Oregon School of Law, where he was Order of the Coif.

Tom Frame, 82

Frame was a co-founder of TransCentury Property Management and solely founded Paradigm Investment Corporation.

TransCentury began in May of 1973 and has syndicated and managed over

10,000 residential units.

During the last 35 years, Mr.

Frame has been a principal in the acquisition, financing, restoration, and sale of over $500,000,000 in residential and commercial real estate.

Paradigm was founded in June 1986 to

sponsor and manage private, closed end “mutual funds”.

The last of the funds successfully liquidated in December of 2000.

Frame received a BA degree from the University of Kansas in Mathematics in June 1964, a Juris Doctor degree from

the San Francisco Law School in June 1975, and an MBA with honors from Pepperdine University in April 1986.

Frame is currently managing his own investments which include residential units, commercial property, and a portfolio of

†As a principal of both MacKenzie and the Advisers, Mr.

Patterson is not an Independent Director.

Executive Officers

Our current officers are listed in the chart below.

The address for all officers is 89 Davis Road, Suite 100, Orinda, CA 94563.

Principal Occupation(s) During Past 5 Years

Robert Dixon, 53

Chief Executive Officer and President

Dixon has been the senior vice president and chief investment officer of MacKenzie and the Advisers since 2005, and a director of their general partner, and a beneficial owner

of all three companies since 2005.

Robert Dixon served as an officer and director of Sutter Holding Company, Inc.

from March 2002 until 2005.

Dixon has been president of Sutter Capital Management since its founding.

Dixon received

his Master of Business Administration degree from Cornell University in 1998 and has held the Chartered Financial Analyst designation since 1996.

Dixon received his bachelor’s degree in economics from the University of California at

Los Angeles in 1992.

Angche Sherpa, 43

Chief Financial Officer

Sherpa was appointed Chief Financial Officer of the Company in July 2021 after the retirement of his predecessor Mr.

Paul Koslosky.

He has been employed by MacKenzie since 2012.

Prior to being appointed Chief Financial Officer, he was Director of Accounting and Financial Reporting of MacKenzie.

Sherpa graduated from San Francisco State University in 2006 with a Bachelor of Science degree in Business

Administration (Accounting) with honors.

He obtained his CPA license from the California Board of Accountancy in January 2011.

Prior to joining MacKenzie, he worked as staff auditor from 2007 through 2008 and senior auditor from 2009

through 2012 at a national public accounting firm, Moss Adams LLP.

During his career at Moss Adams, he led various audit teams involved in auditing financial services companies including private equity, asset management and real estate

investment companies.

Glen Fuller, 51

Chief Operating Officer

Fuller has been senior vice president and secretary of MacKenzie and the Advisers since 2000, and a director of their general partner, and a beneficial owner of all three companies

Prior to becoming senior vice president of MacKenzie, he was with MacKenzie for two years as a portfolio manager and research analyst.

Prior to joining MacKenzie, Mr.

Fuller spent two years running the over-the-counter trading

desk for North Coast Securities Corp.

(previously Morgan Fuller Capital Group) with responsibility for both the proprietary and retail trading desks.

Fuller was also the registered options principal and registered municipal bond

principal for North Coast Securities Corp., a registered broker-dealer.

Fuller previously held his NASD Series 7, general securities registration.

Fuller has a Bachelor of Arts in Management.

Charles “Chip” Patterson,

General Counsel and Secretary

Patterson is a managing director and general counsel of the Advisers and our Manager, where he has been employed since 2003.

He is a director of their general partner and a

beneficial owner of all three companies.

Chip Patterson graduated magna cum laude from the University of Michigan Law School with a J.

degree and with high distinction and Phi Beta Kappa from the University of California at Berkeley

degree in Political Science.

Prior to joining the Manager in July 2003, he was a securities and corporate finance attorney with the national law firm of Davis Wright Tremaine LLP.

Prior to law school, Chip Patterson taught

physics, chemistry, and math at the high school level for three years.

He also has prior experience in sales, retail, and banking, and is a licensed California Real Estate Broker.

Chief Compliance Officer

Bluth has been the Chief Compliance Officer for MacKenzie and the Advisers since 2009.

She owns a beneficial interest in each MacKenzie and the Advisers.

Bluth oversees

compliance for all the funds advised by the Advisers, and she oversees our compliance with our Code of Ethics, Bylaws, Charter, and applicable rules and regulations.

Bluth began her career with MacKenzie Patterson Fuller, Inc.

July of 1996 in the Investor Services Department.

Bluth’s career with MacKenzie, she graduated from St.

Mary’s College of California in June 2001, with a Bachelor of Arts degree in Business Management.

Christine Simpson,

Chief Portfolio Manager

Simpson has been employed by MacKenzie and its affiliates since 1990, and has been the Advisers’ Senior Vice President of Research and Trading since 2005.

responsible for handling the day-to-day operations of The Advisers’ research department.

Simpson’s career with MacKenzie, she graduated:

with a Bachelor of Arts degree in Business Management from St.

Mary’s College of

California in October 2004 (with honors), with a Master of Science degree in Financial Analysis and Investment Management in September 2006, and a Master’s in Business Administration in June 2008.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires the Company’s directors, executive officers and persons who own more than ten percent of a registered class of the Company’s equity securities to file with

the SEC initial reports of ownership and reports of changes in beneficial ownership of Common Stock and other equity securities of the Company.

Officers, directors and greater than ten percent shareholders are required by SEC regulation to

furnish the Company with copies of all Section 16(a) reports they file.

Based solely upon the Company’s review of copies of such reports furnished to it through the date hereof, or written representations that no other reports were required to be

filed, the Company believes that during its fiscal year ended June 30, 2024 all officers, directors and ten percent shareholders complied with the filing requirements applicable to them.

The information called for by this item, other than the information set forth below, is set forth under the headings “Information About the Directors,” “Meetings of the Board of Directors

& Committees,” “Corporate Governance,” “Information About Our Executive Officers,” and “Delinquent Section 16(a) Reports” in our definitive proxy statement on Schedule 14A in connection with our 2025 Annual Meeting of Stockholders, to

be filed within 120 days after June 30, 2025 (the “Annual Meeting Proxy Statement”).

Code of Ethics

We have adopted a Code of Ethics which applies to, among others, our senior officers, including our Chief Executive Officer and Chief Financial Officer, as well as all of our officers, directors and

We have adopted a Code of Ethics which applies to, among others, our senior officers, including our Chief Executive Officer and Chief Financial Officer, as well as all of our officers,

directors and employees.

Our Code of Ethics requires that all employees and directors avoid any conflict, or the appearance of a conflict, between an individual’s personal interests and our interests.

Pursuant to our Code of Ethics, each employee and director

must disclose any conflicts of interest, or actions or relationships that might give rise to a conflict, to our Chief Compliance Officer.

Our Audit Committee is charged with approving any waivers under our Code of Ethics.

A copy of the Code, as

amended from time to time, has been posted to the “Corporate Documents” section of our web site at http://www.mackenziecapital.com/sec-filings.

Audit Committee

The Board of Directors has established an Audit Committee in accordance with 1934 Act §3(a)(58)(A).

The Audit Committee operates under a Charter approved by our Board of Directors, which contains

the responsibilities of the Audit Committee.

A copy of the Audit Committee Charter, as amended from time to time, has been posted to the “Corporate Documents” section of our web site at http://www.mackenziecapital.com/sec-filings.

Committee’s responsibilities include establishing guidelines and making recommendations to our Board of Directors regarding the valuation of our loans and investments, selecting our independent registered public accounting firm, reviewing with

such independent registered public accounting firm the planning, scope and results of their audit of our consolidated financial statements, pre‑approving the fees for services performed, reviewing with the independent registered public accounting

firm the adequacy of internal control systems, reviewing our annual consolidated financial statements and periodic filings and receiving our audit reports and consolidated financial statements.

The Audit Committee is currently composed of Messrs.

Dozois and Frame, both of whom are Independent Directors as described under Item 13 below.

Dozois serves as chairman of the Audit Committee.

We have determined that Mr.

Dozois is a “audit committee financial expert” as defined by SEC rules.

Nominating and Corporate Governance Committee

The nominating and corporate governance committee operates under a Charter approved by our Board of Directors.

A copy of the Nominating and Corporate Governance Committee Charter, as amended from

time to time, has been posted to the “Corporate Documents” section of our web site at http://www.mackenziecapital.com/sec-filings.The members of the nominating and corporate governance committee are Messrs.

Dozois and Frame, both of whom are

Independent Directors.

Frame serves as chairman of the nominating and corporate governance committee.

The nominating and corporate governance committee is responsible for selecting, researching and nominating directors for election by our

stockholders, selecting nominees to fill vacancies on the Board of Directors or a committee thereof, developing and recommending to the Board of Directors a set of corporate governance principles and overseeing the evaluation of the Board of

Directors and our management.

The nominating and corporate governance committee currently does not consider nominees recommended by our stockholders.

The nominating and corporate governance committee seeks candidates who possess the background, skills and expertise to make a significant contribution to the Board of Directors, our operations, and

our stockholders.

In considering possible candidates for election as a director, the nominating committee takes into account, in addition to such other factors as it deems relevant, the desirability of selecting directors who:

are of high character and integrity;

are accomplished in their respective fields, with superior credentials and recognition;

have relevant expertise and experience upon which to be able to offer advice and guidance to management;

have sufficient time available to devote to our affairs;

are able to work with the other members of the Board of Directors and contribute to our success;

can represent the long‑term interests of our stockholders as a whole;

are selected such that the Board of Directors represents a range of backgrounds and experience.

The nominating and corporate governance committee has not adopted a formal policy with regard to the consideration of diversity in identifying director nominees.

In determining whether to recommend

a director nominee, the nominating and corporate governance committee considers and discusses diversity, among other factors, with a view toward the needs of the Board of Directors as a whole.

The nominating and corporate governance committee

generally conceptualizes diversity expansively to include, without limitation, concepts such as race, gender, national origin, differences of viewpoint, professional experience, education, skill and other qualities that contribute to the Board of

Directors, when identifying and recommending director nominees.

The nominating and corporate governance committee believes that the inclusion of diversity as one of many factors considered in selecting director nominees is consistent with the

nominating and corporate governance committee’s goal of creating a Board of Directors that best serves our needs and the interests of our stockholders.

Compensation Committee

We do not have a compensation committee because our executive officers do not receive any direct compensation from us.

Pursuant to our Code of Ethics, each

employee and director must disclose any conflicts of interest, or actions or relationships that might give rise to a conflict, to our Chief Compliance Officer.

Our Audit Committee is charged with approving any waivers under our Code of

A copy of the Code, as amended from time to time, has been posted to the “Corporate Documents” section of our web site at http://www.mackenziecapital.com/sec-filings.

Insider Trading Policy

We have adopted a policy regarding insider trading (the “Insider Trading

Policy”) that governs the purchase, sale, and other dispositions of the our securities by all officers of the Company and its subsidiaries, all members of the Board and all employees of the Company and its subsidiaries, that is designed to

promote awareness and compliance with insider trading laws, rules, and regulations, and applicable Nasdaq listing standards.

Our Insider Trading Policy is filed as Exhibit 19 to this Annual Report on Form 10-K for the year ended June 30,

EXECUTIVE COMPENSATION

We do not have a compensation committee because our executive officers do not receive any direct compensation from us.

Compensation of Directors

Our Independent Directors received an annual retainer of $28,000 for fiscal years up to June 30, 2021;

the annual retainer was increased to $48,000 per year beginning July 1, 2021, because the

directors approved of our discontinuing directors’ liability insurance due to the exorbitant cost.

However, in 2024, given that the Company began trading on the OTCQX and intended to list on a national exchange, the Board of Directors approved

obtaining a directors’ and officers’ liability insurance policy.

They also determined that the annual retainer should remain at $48,000 per year given the higher profile the Company will have when listed.

They also receive $1,000 plus

reimbursement of reasonable out-of-pocket expenses incurred in connection with attending each board meeting in person and $500 for each telephonic meeting, and also receive $500 plus reimbursement of reasonable out-of-pocket expenses incurred in

connection with attending each committee meeting.

In addition, the chairman of the Audit Committee receives an annual fee of $1,000 and each chairman of any other committee receives an annual fee of $1,000 for their additional services, if any,

in these capacities.

No compensation is expected to be paid to directors who are non-independent directors.

The following table details the compensation accrued to Directors fees during Fiscal 2024.

We maintain no pension, equity participation, or retirement plans for our Directors.

Name & Position

Fees Earned or Paid in Cash (1)

All Other Compensation

Chip Patterson (Chairman of the Board of Directors)

Tim Dozois (Independent Director)

Tom Frame (Independent Director)

Consists only of directors’ fees and does not include reimbursed expenses.

Compensation of Executive Officers

None of our officers receives direct compensation from us.

We have not compensated our executive officers in any of the last two fiscal years.

We do not provide any bonus, stock options, stock

appreciation rights, non-equity incentive plans, non-qualified deferred compensation or pension benefits to our executive officers.

Further, we have no agreements with any officer pertaining to change in control payments.

All of our officers and

staff are employed by MacKenzie or the Advisers, which pay all of their cash compensation.

Compensation Committee Interlocks and Insider Participation

We do not have a separate compensation committee utilized to determine the appropriate compensation payable to our executive officers and Directors.

The Audit Committee, however, is responsible for,

among other things, annually reviewing and approving the compensation policies for our Directors.

The information called for by this item, other than the information set forth below, is set forth under the heading “Compensation Discussion & Analysis” and under the subheadings

“Compensation of Directors,” “Compensation of Executive Officers,” and “Compensation Committee Interlocks and Insider Participation” in our Annual Meeting Proxy Statement.

Executive Compensation Clawback Policy

The Board of Directors has adopted a clawback policy (the “Clawback Policy”), effective October 2, 2023, which, if we ever pay incentive-based compensation (which we currently do not), would

require recoupment of erroneously awarded executive compensation from current and former executive officers in the event we are required to prepare an accounting restatement due to our material noncompliance with any financial reporting

requirement under the securities laws.

Our Clawback Policy is attached as Exhibit 97.1 to this Annual Report on Form 10-K.

As of June 30, 2025, there have been no restatements that would require recovery of erroneously awarded compensation

under the Clawback Policy.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

As of September 27, 2024, to our knowledge, there were no persons that beneficially owned more than five percent of our voting securities.

The following table shows the amount of our common and preferred stocks beneficially owned and based on a total of 13,435,656.80 shares of our common stock, 765,429.60 shares of Series A preferred

stock and 63,909.52 shares of Series B preferred stock outstanding on September 27, 2024, as of that date, by (1) each of our directors and nominees for director, (2) our executive officers and (3) all directors and executive officers as a group.

To our knowledge, no other person owns more than 5% of our common stock.

The number of shares beneficially owned by each entity, person, director or executive officer is determined under the rules of the SEC and the information is not necessarily

indicative of beneficial ownership for any other purpose.

Under such rules, beneficial ownership includes any shares as to which the individual has the sole or shared voting power or investment power and also any shares that the individual has

the right to acquire within 60 days of September 27, 2024, through the exercise of any instrument.

Unless otherwise indicated, each person has the sole investment and voting power, or shares such powers with his spouse, with respect to the shares

set forth in the table.

Unless known otherwise by us, the beneficial ownership information is based on each beneficial owner’s most recent Form 3, Form 4, Form 5, Schedule 13D or Schedule 13G, as applicable.

With respect to the Executive Officers

listed below, they are limited partners of MPF Successors, LP, as well as officers of its general partner, which owns 55,692.00 shares in us.

In addition, Mr.

Sherpa directly owns 1,601.00 shares of common stock and Mr.

Dixon directly owns

4,417.05 shares of Series A preferred stock.

Patterson, the mother of Glen Fuller is the sole beneficial owners of 11,118.00 shares of common stock owned in a personal holdings limited partnership, and the executive officers below are also

in control of its general partner.

Thus, they are all deemed to have voting and dispositive control over such shares and the number of shares owned below is the number of shares owned by MPF Successors, LP and the personal holding partnership.

The address of each beneficial owner is 89 Davis Road, Orinda, CA 94563.

Name and address of Beneficial Owner

Nature of Beneficial Ownership

Number of Common Shares

Beneficially Owned

Percent of Class

Number of Series

Percent of Class

Number of Series

Percent of Class

Independent Directors:

Directly held

Interested Director:

Charles “Chip” Patterson

Indirectly held

Executive Officers

Directly and Indirectly held

Indirectly held

Chip Patterson

Indirectly held

Angche Sherpa

Directors and Officers as a group (6 persons)

Indirectly held

Represents less than 1% of the number of shares outstanding.

The information called for by this item is set forth under the heading “Security Ownership of Certain Beneficial Owners & Management” in our Annual Meeting Proxy Statement.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

We are managed by MacKenzie, which is owned by three sub-partnerships that are owned in varying percentages by MacKenzie and the Advisers employees and the extended family of Messrs.

Chip Patterson,

Glen Fuller and Robert Dixon.

The general partner of MacKenzie is MCM-GP, Inc., a California corporation owned by the same individuals.

The majority of the beneficial interests of MacKenzie are owned by Berniece A.

Patterson, Robert Dixon, Glen

Fuller, and Chip Patterson, in addition to other family members.

All of the ownership interests are owned by either executive officers of the Company or related persons, and thus all of the amounts paid by the Company to MacKenzie benefit such

related persons.

Certain non-family employees of MacKenzie own non-controlling interests in MacKenzie that represent in the aggregate less than 10% of the equity in MacKenzie.

MacKenzie manages all of our affairs except for providing investment

We are advised by the Investment Adviser, whose investment team members have an average of nearly 20 years of experience investing in real estate-related securities.

The Investment Adviser is

registered with the SEC and is owned by the same beneficial owners and in the same proportions as MacKenzie.

The Investment Adviser is led by its investment team:

Fuller, who serves as Chief Operating Officer and Managing Director of the

General Partner of MacKenzie and the Investment Adviser;

Chip Patterson, who serves as Managing Director and General Counsel, and Director of the General Partner of MacKenzie and the Investment Adviser;

Dixon, who serves as Chief

Investment Officer and Managing Director of the General Partner of MacKenzie and the Investment Adviser;

and Christine E.

Simpson, who serves as Chief Portfolio Manager and Senior Vice President of Research for the General Partner of MacKenzie

and the Investment Adviser.

We also are advised by the Real Estate Adviser, about 93% of which is owned by the executive officers and related persons of the Company and the remainder of which is owned by certain employees of

the Real Estate Adviser or their affiliates.

Thus, 93% of the ownership interests are owned by either executive officers of the Company or related persons, and thus 93% of the amounts paid by the Company to MacKenzie benefit such related persons.

We have entered into three affiliated contracts – the Advisory Management Agreement, under which the Real Estate Adviser serves as our real estate investment adviser, the Amended and Restated

Investment Advisory Agreement, under which the Investment Adviser serves as our securities portfolio adviser and the Administration Agreement, under which MacKenzie furnishes us with certain non-investment management services and administrative

services necessary to conduct our day-to-day operations.

Each of these agreements is terminable by either party upon proper notice.

In Fiscal 2024 and 2023, Management fees accrued to the Real Estate Adviser under the Advisory Management

Agreement were $3,224,834 and $3,004,725, respectively.

Administration fees accrued and payable under the Administration Agreement for Fiscal 2024 and 2023, were $756,733 and $726,000, respectively.

Administration Agreement fees occur on an

ongoing basis as expenses are incurred on our behalf by MacKenzie.

However, if MacKenzie withdraws as our administrator, it is liable for any expenses we incur as a result of such withdrawal.

Since November 1, 2018, MacKenzie also provided

transfer agent services, and we reimbursed MacKenzie for the out-of-pocket cost incurred by them.

Effective March 5, 2024, we hired a third-party transfer agent to provide these services.

Transfer agent service costs reimbursed during Fiscal 2024

and 2023, were $66,267 and $92,000, respectively.

For additional information concerning the terms of these agreements and related fees paid, see Note 8 – Related Party Transactions in the consolidated financial statements included in this report.

Related Party Transaction Approval

In order to ensure that we did not engage in any transactions with any persons affiliated with us that are not in the best interests of our shareholders, we implemented certain written policies and

procedures whereby our executive officers screen each of our transactions for any possible affiliations between the issuer in which we invest, us, companies controlled by us and our executive officers and directors.

We do not enter into any

agreements unless and until we are satisfied that doing so does not violate our Charter and is in the best interest of shareholders;

further, when related party transactions are planned, we seek board review from our independent directors.

Board of Directors reviews these on an annual basis.

In addition, our Board of Directors approves all our advisory and administrative agreements.

We have also adopted a Code of Ethics which applies to, among others, our senior officers, including our Chief Executive Officer and Chief Financial Officer, as well as all of our officers,

directors and employees.

Our Code of Ethics requires that all employees and directors avoid any conflict, or the appearance of a conflict, between an individual’s personal interests and our interests.

Pursuant to our Code of Ethics, each employee

and director must disclose any conflicts of interest, or actions or relationships that might give rise to a conflict, to our Chief Compliance Officer.

Our Audit Committee is charged with approving any waivers under our Code of Ethics.

Director Independence

We have determined that both Messrs.

Dozois and Frame are Independent Directors.

In addition, although our shares are not listed for trading on any national securities exchange, a majority of our

directors, and all of the members of the Audit Committee and the Conflicts Committee, are “independent” as defined by the New York Stock Exchange.

The New York Stock Exchange standards provide that to qualify as an independent director, in

addition to satisfying certain bright-line criteria, our Board of Directors must affirmatively determine that a director has no material relationship with us (either directly or as a partner, stockholder or officer of an organization that has a

relationship with us).

Our Board of Directors has affirmatively determined that Messrs.

Dozois and Frame each satisfies the New York Stock Exchange independence standards.

The information called for by this item is set forth under the headings “Certain Relationships & Related Transactions” and “Corporate Governance—Annual Director Independence Evaluation” in

our Annual Meeting Proxy Statement.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table presents fees incurred for professional services rendered by Moss Adams LLP, our independent registered public accounting firm, with Public Company Accounting Oversight Board ID

Number 659, for Fiscal 2024 and Fiscal 2023:

Audit-Related Fees

All Other Fees

Audit Fees were for professional services rendered for the audit of our consolidated financial statements and review of the interim consolidated financial

statements included in quarterly reports and services that are normally provided by Moss Adams in connection with statutory and regulatory filings or engagements and include quarterly reviews and security counts.

Audit-Related Fees were for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated

financial statements and are not reported under “Audit Fees”.

These services include accounting consultations in connection with acquisitions, consultations concerning financial accounting and reporting standards.

Tax Fees were for professional services for federal, state and international tax compliance, tax advice and tax planning and include preparation of federal

and state income tax returns, and other tax research, consultation, correspondence and advice.

All Other Fees are for services other than the services reported above.

These fees were incurred for their review of our registration statements and

Regulation A offering statement.

The Audit Committee has concluded the provision of the non-audit services listed above is compatible with maintaining the independence of Moss Adams LLP.

Moss Adams LLP did not bill the Advisers or

MacKenzie, for any non-audit services in Fiscal 2024 and 2023.

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm

The Audit Committee pre-approves all audit and permissible non-audit services provided by the independent registered public accounting firm.

These services may include audit services, audit-related

services, tax services and other services.

Pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget.

The independent

auditors and management are required to periodically report to the Audit Committee regarding the extent of services provided by the independent auditors in accordance with this pre-approval, and the fees for the services performed to date.

Audit Committee may also pre-approve particular services on a case-by-case basis.

The information called for by this item is set forth under the heading “Information about the Audit Committee & the Principal Accountant” in our Annual Meeting Proxy Statement.

EXHIBITS AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULES

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Description of Document

Contribution Agreement by and between MacKenzie Realty Operating Partnership, LP and the Addison Group, dated June 8, 2020 (incorporated by reference to the Registrant’s Form 8-K (File

Contribution Agreement by and between MacKenzie Realty Operating Partnership, LP and the Addison Group, dated June 8, 2020 (incorporated by reference to the Registrant’s Form 8-K

814-00961), filed on June 9, 2020)

Membership Interest Purchase Agreement with The Wiseman Company, LLC, dated April 12, 2022 (incorporated by reference to the Registrant’s Form 8-K (File No.

000-55006), filed on April

000-55006), filed on

April 18, 2022)

Articles of Amendment and Restatement (incorporated by reference to Registrant’s Post-Effective Amendment No.

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024-11503), filed on November 13, 2023)

Articles of Amendment and Restatement of MacKenzie Realty Capital, Inc., effective as of January 10, 2025 (incorporated by reference to the Company’s Form

8-K/A, filed on January 10, 2025)

Second Amended & Restated Bylaws (incorporated by reference to Registrant’s Form 8-K (File No.

000-55006), filed on January 12, 2021)

Third Amended and Restated Bylaws of MacKenzie Realty Capital, Inc., effective as of January 8, 2025 (incorporated by reference to the Company’s Form 8-K/A,

filed on January 10, 2025)

Third Amended and Restated Bylaws of MacKenzie Realty Capital, Inc., effective as of January 8, 2025 (marked to show changes against the prior version) (incorporated

by reference to the Company’s Form 8-K/A, filed on January 10, 2025)

First Amendment of Charter Dated August 1, 2025 (incorporated by reference to Registrant’s Form 8-K (File No.

000-55006), filed on August 1, 2025)

Second Amendment of Charter Dated August 1, 2025 (incorporated by reference to Registrant’s Form 8-K (File No.

000-55006), filed on August 1, 2025)

Description of Securities (incorporated by reference to Registrant’s Form 10-K ( File No.

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000-55006), filed on June 3, 2022)

Equity Distribution Agreement dated January 15, 2025 by and between MacKenzie Realty Capital, Inc.

and Maxim Group LLC (incorporated by reference to the Company’s

Form 8-K, filed on January 15, 2025)

Securities Purchase Agreement, dated November 18, 2024, between the company and purchaser ( incorporated by reference to the Company’s Form 8-K, filed on March 3,

Forbearance, Settlement, and Release Agreement dated March 25, 2025, related to Main Street West Property Indebtedness (incorporated by reference to the Company’s

Form 8-K, filed on March 31, 2025)

Note Purchase Agreement dated June 11, 2025 by and between the Company and Streeterville Capital, LLC (incorporated by reference to the Company’s Form 8-K, filed

on June 11, 2025)

Secured Promissory Note #1 dated June 11, 2025 issued by the Company in favor of Streeterville Capital, LLC (incorporated by reference to the Company’s Form 8-K,

filed on June 11, 2025)

Security Agreement dated June 11, 2025 by MRC QRS, Inc.

in favor of Streeterville Capital, LLC (incorporated by reference to the Company’s Form 8-K, filed on June

Guaranty dated June 11, 2025 by MRC QRS, Inc.

for the benefit of Streeterville Capital, LLC (incorporated by reference to the Company’s Form 8-K, filed on June 11,

Stock Pledge Agreement dated June 11, 2025 by and between the Company and Streeterville Capital, LLC (incorporated by reference to the Company’s Form 8-K, filed on

June 11, 2025)

Letter dated June 9, 2025 from Moss Adams to the Securities and Exchange Commission confirming the disclosures contained in Item 4.01 of the report on Form 8-K (incorporated

by reference to the Company’s Form 8-K, filed on June 10, 2025)

Insider Trading Policy of MacKenzie Realty Capital, Inc.

List of Subsidiaries of the Registrant

Consent of Independent Registered Public Accounting Firm

Section 302 Certification of Robert Dixon (President and Chief Executive Officer)

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Section 1350 Certification of Angche Sherpa (Treasurer and Chief Financial Officer)

MacKenzie Realty Capital, Inc.

Executive Compensation Clawback Policy, effective as of October 2, 2023.

Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)

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* Filed Herewith

All other exhibits for which provision is made in the applicable regulations of the Securities and Exchange Commission are not required under the related instruction or are inapplicable and

therefore have been omitted.

All other exhibits for which provision is made in the applicable regulations of the Securities and Exchange Commission are not required under the related instruction or are inapplicable and therefore have

been omitted.

FORM 10-K SUMMARY

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2025 and 2024

Consolidated Statements of Changes in Equity for the years

ended June 30, 2024 and 2023

Consolidated Statements of Changes in Equity for the years ended

June 30, 2025 and 2024

Consolidated Statements of Cash Flows for the years ended June 30,

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We have audited the accompanying consolidated balance sheets of Mackenzie Realty Capital, Inc.

(the Company), as of June 30, 2024 and 2023, the

related consolidated statements of operations, changes in equity, and cash flows for the years then ended, and the related notes and financial statement schedule (collectively referred to as the “consolidated financial statements”).

opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of June 30, 2024

and 2023, and the consolidated results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

(the Company), as of June 30, 2025 and

2024, the related consolidated statements of operations, changes in equity, and cash flows for the years then ended, and the related notes and financial statement schedule III - Real Estate Properties and Accumulated Depreciation (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of June 30, 2025 and 2024, and the

consolidated results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the

Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (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.

Our responsibility is to express an opinion

on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public

Company Accounting Oversight Board (United States) (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 consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control

over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose

of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Those standards require that we plan and perform the audit to

obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its

internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over

financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures to respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts

and disclosures in the consolidated 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 consolidated

financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Such procedures included examining, on a test

basis, evidence regarding the amounts and disclosures in the consolidated 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 consolidated financial statements.

We believe that our audits provide a reasonable basis for

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the consolidated financial statements that

was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective,

or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated 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.

Purchase Price Allocation for Acquisitions

As described in Notes 2 and 3 to the consolidated financial statements, the Company acquired certain real estate properties during the year

ended June 30, 2024, that were accounted for as asset acquisitions.

For each asset acquisition, the Company assesses the acquisition-date relative fair values of all tangible assets, identifiable intangible assets, and assumed

liabilities using methods similar to those used by independent appraisers (e.g., discounted cash flow analysis) which utilize appropriate discount and/or capitalization rates and other available market information to allocate the

purchase price to land, buildings and identified intangible assets and liabilities.

Estimates of the fair values of the tangible assets, identifiable intangibles and assumed liabilities require the Company to make significant

assumptions to estimate market lease rates, carrying costs during lease-up periods, discount rates, capitalization rates, and market absorption periods.

The principal consideration for our determination that the fair value measurements used in the purchase price allocation of real estate

acquisitions is a critical audit matter are (i) the significant judgment by management to determine the fair value measurements of tangible, intangible assets and liabilities to allocate the purchase price;

(ii) significant auditor

judgment, subjectivity and effort in evaluating audit evidence related to the significant assumptions used in the fair value measurement;

and (iii) use of professionals with specialized skill and knowledge to assist in performing the

procedures and evaluating the audit evidence obtained.

The primary procedures we performed to address this critical audit matter included:

With the assistance of our valuation specialists, we evaluated the reasonableness of certain significant fair value inputs used in the purchase price allocations related to

acquired real estate properties such as market lease rates, carrying costs during lease-up periods, capitalization rates, discount rates, and market absorption periods.

The evaluation included comparison of Company assumptions

to independently developed ranges using market data from industry transaction databases and published industry reports.

We evaluated the mathematical accuracy of the valuation models and performed procedures over the completeness and accuracy of the data provided by management.

Fair Value Measurements of Investments

As disclosed in Notes 2 and 4 to the consolidated financial statements, investments held by the Company have been classified as Level III

investments as pricing inputs for these are unobservable and there is little, if any, market activity for such investments.

Establishing fair values of investments is inherently subjective and is often dependent upon significant

estimates and modeling assumptions that are unobservable and generally requires the Company to establish the use of internal assumptions about future cash flows, including the cash flows of underlying real property, and appropriate

risk-adjusted discount rates.

Fair values inputs for investments classified as Level III are estimated by management using valuation methodologies that consider a range of factors, including but not limited to the price at which the

investment was acquired, the nature of the investment, and local market conditions.

Management uses a valuation model which includes critical inputs such as cap rates, discount rates and consideration of the market where the property is

The inputs into the determination of fair value require significant judgment by management.

The principal consideration in our determination that the Level III fair value inputs used in the valuation of investments is a critical

audit matter are (i) the significant judgment by management to determine the fair value measurements;

(ii) significant auditor judgment, subjectivity and effort in evaluating audit evidence related to the significant assumptions used in

the fair value measurement;

The critical audit matters communicated below are matters arising from the current-period audit of the consolidated financial

statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially

challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated 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.

Purchase Price Allocation for an Acquisition

As described in Notes 2 and 3 to the consolidated financial statements, the Company acquired a real estate property

during the year ended June 30, 2025, which was accounted for as an asset acquisition.

The Company records the acquisition-date fair values of all tangible assets, identifiable intangible assets, and assumed liabilities using methods

similar to those used by independent appraisers (e.g., discounted cash flow analysis) which utilize appropriate discount and/or capitalization rates and other available market information to allocate the purchase price at their

relative fair values.

Estimates of the fair values of the tangible assets, identifiable intangibles, and assumed liabilities require the Company to make significant assumptions to estimate market lease rates, carrying costs during

lease-up periods, discount rates, capitalization rates, and market absorption periods.

We identified the fair value measurements used in the purchase price allocation of the Company’s real estate

acquisition is a critical audit matter are as follows (i) the significant judgment by management to determine the fair value measurements of tangible assets (land and buildings), used in the purchase price allocation;

significant auditor judgment, subjectivity and effort in evaluating audit evidence related to the significant assumptions used in the fair value measurement;

and (iii) use of professionals with specialized skill and knowledge to

assist in performing the procedures and evaluating the audit evidence obtained.

Our audit procedures related to the purchase price allocation for an

acquisition, included the following, among others:

With the assistance of our valuation specialists, we evaluated the reasonableness of critical significant fair value

inputs used in the purchase price allocation related to an acquired real estate asset which were market lease rates, carrying costs during lease-up periods, capitalization rates, discount rates, and market absorption

The evaluation included comparison of Company assumptions to independently developed ranges using market data from industry transaction databases and published industry reports.

Tested the mathematical accuracy of the valuation model and performed procedures over the completeness and accuracy of

the data provided by management.

Impairment of Real Estate Asset

As described in Note 2 to the consolidated financial statements, the Company monitors events and changes in circumstances that could

indicate the carrying value of real estate may not be recoverable.

If indicators of impairment emerge, the Company assesses whether the carrying value of the asset through its undiscounted future cash flows and eventual

disposition, is recoverable.

An impairment loss to the extent that the carrying value exceeds the estimated fair value of the real estate assets is recorded.

The Company utilized inputs from a recent third-party appraisal and

potential new leases to estimate the fair value of the property to determine the impairment amount.

For the year ended June 30, 2025, the Company recorded $9,500,167 of impairment related to a real estate assets.

The principal consideration in our determination that the impairment of real estate is a critical audit matter are (i) the

significant judgment by management to determine the fair value measurement of the real estate asset;

(ii) significant auditor judgment, subjectivity and effort in evaluating audit evidence related to the significant assumptions

used in the fair value measurement of a real estate asset;

and (iii) use of professionals with specialized skill and knowledge to assist in performing the procedures and evaluating the audit evidence obtained.

The primary procedures we performed to address this critical audit matter included:

With the assistance of valuation specialists, we evaluated the reasonableness of the valuation methodology and significant assumptions used in management’s valuation models

such as future cash flows, including the cash flows of underlying real property, risk-adjusted discount rates, cap rates, nature of the investment and local market conditions.

The evaluation included comparison of the Company’s

assumptions to market data from industry transaction databases and published industry reports.

For investments sold during the year or subsequent to year end, we evaluated management’s ability to reasonably estimate fair value by comparing management’s historical

estimates to actual results from those sales.

We evaluated the mathematical accuracy of the valuation models and performed procedures over the completeness and accuracy of the data provided by management.

/s/ Moss Adams LLP

Our audit procedures related to the impairment of a real estate asset included the following, among others:

With the assistance of valuation specialists, we evaluated the reasonableness of the valuation methodology and significant assumptions used in

management’s valuation models such as future cash flows, associated with the underlying real property, generally over the relevant hold period, risk-adjusted discount rates, cap rates, and consideration of the market

where the property is located.

The evaluation included comparison of the Company’s assumptions to market data from industry transaction databases and published industry reports.

Tested the mathematical accuracy of the valuation model and performed procedures over the completeness and accuracy of the data provided by

/s/ Baker Tilly US, LLP

Campbell, California

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Investments, at fair value

Unconsolidated investment (non-security), at fair value

Equity method investments, at fair value

Investments income, rents and other receivables

Investment acquisition advance

Prepaid expenses and other assets

Mortgage notes payable, net

Notes payable

Line of credit and notes payable, net

Deferred rent and other liabilities

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Accounts payable and accrued liabilities

Stock redemption payable

Below-market lease liabilities, net

Due to related entities

Contingent liability

Capital pending acceptance

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Common stock, $ 0.0001 par value, 80,000,000 shares authorized;

13,302,572.99

and 1,330,257.30 shares issued and outstanding as of June 30, 2025 and June 30, 2024, respectively.

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shares issued and outstanding as of June 30, 2025 and June 30, 2024, respectively.

Series B Preferred stock, 49,564.56 shares issued and outstanding as of June 30, 2024.

Capital in excess of par value

Series B Preferred stock, 116,112.32

and 49,564.56 shares issued and outstanding as of June 30, 2025 and June 30, 2024, respectively.

Additional paid-in capital *

Accumulated deficit

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Total liabilities and equity

*After giving effect to the 1-for-10 Reverse Stock Split that was effective August 4, 2025.

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

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Year Ended June 30,

Rental and reimbursements

Rental, reimbursements and other property income

Depreciation and amortization

Property operating and maintenance

Interest expense

Property operating and maintenance

Asset management fees to related party (Note 8)

General and administrative

Administrative cost reimbursements to related party (Note 8)

Professional fees

Administrative cost reimbursements to related party (Note 8)

Directors’ fees

Transfer agent cost reimbursements to related party (Note 8)

Impairment loss on assets held for sale

Impairment loss

Total operating expenses

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Dividend and distribution income from equity securities at fair value

Net unrealized loss on equity securities at fair value

Net income from equity method investments at fair value

Net realized gain (loss) from investments

Net loss on disposal of real estate

Gain on extinguishment of debt

Net unrealized gain (loss) on equity securities at fair value

Net income (loss) from equity method investments at fair value

Net realized income (loss) from investments

Net income attributable to non-controlling interests

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Net loss attributable to common stockholders

Net loss per share attributable to common stockholders

Weighted average common shares outstanding

Basic and diluted net loss per share attributable to common stockholders *

Basic and diluted weighted average common shares outstanding *

*After giving effect to the 1-for-10 Reverse Stock Split that was effective August 4, 2025.

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

MacKenzie Realty Capital, Inc.

Consolidated Statements of

Statements of

Changes in Equity

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Series B Preferred Stock

Additional Paid-

in Capital **

Stockholders’

Non-controlling

Additional Paid-

Year Ended June 30, 2025

Balance, June 30, 2024

13,243,279.96

Contributions by non-controlling interest holders

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Operating Partnership Class A conversion to

Issuance of common stock through reinvestment

Preferred Series A conversion to common stock

Issuance of common stock

Issuance of pre-funded warrants

Series A common stock warrants

Series B common stock warrants

Stock-based compensation

Issuance of Series A preferred stock through

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Operating Partnership Series A Preferred Units issued

Operating Partnership Series B Preferred Units issued

Issuance Operating Partnership Series A Preferred Units

Issuance of Operating Partnership Series A Preferred Units

through reinvestment of dividends

Increase liquidation preference of Operating Partnership

Increase in liquidation preference of Operating Partnership

Series B Preferred Units

3 unchanged sentences

Balance, June 30, 2025

13,302,572.99

Series A Preferred Stock

Series B Preferred Stock

Additional Paid-

in Capital **

Stockholders’

Non-controlling

Additional Paid-

Year Ended June 30, 2024

Balance, June 30, 2023

13,253,571.98

Contributions by non-controlling interest holders

Distributions to non-controlling interest holders

Operating Partnership Series A Preferred Units issued

Dividends to common stockholders

Dividends to Series A preferred stockholders

Series B preferred stockholders

Net income (loss)

Operating Partnership Class A conversion to

Issuance of Series A preferred stock

Issuance of common stock through reinvestment

Issuance of common stock through reinvestment of dividends

Issuance of Series A preferred stock through

reinvestment of dividends

Issuance Operating Partnership Series A Preferred Units

through reinvestment of dividends

Issuance of Series B preferred stock through reinvestment of dividends

Issuance of Series A preferred stock

Issuance of Series B preferred stock

Increase in liquidation preference - Series B preferred stock

Operating Partnership Series A Preferred Units issued

Operating Partnership Series B Preferred Units issued

Issuance of Operating Partnership Series A Preferred Units through reinvestment of dividends

Increase in liquidation preference of Operating Partnership Series B Preferred Units

Payment of selling commissions and fees

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Balance, June 30, 2024

13,243,279.96

* Amount is less than $1.

**After giving effect to the 1-for-10 Reverse Stock Split that was effective August 4, 2025.

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

MacKenzie Realty Capital, Inc.

Consolidated Statements of

Statements of

Year Ended June 30,

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Adjustments to reconcile net loss to net cash from operating activities:

Net unrealized loss on equity securities at fair value

Net income from equity method investments at fair value

Net unrealized (gain) loss on equity securities at fair value

Net (income) loss from equity method investments at fair value

Net realized (gain) loss on investments

Net loss on disposal of real estate

Impairment loss on assets held for sale

Gain on extinguishment of debt

Impairment loss

Straight-line rent

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Accretion of above (below) market lease, net

Stock-based compensation

Changes in assets and liabilities:

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Proceeds from sale of investments

Investment acquisition advance

Net proceeds from sale of real estate

Investments in real estate assets

4 unchanged sentences

Cash flows from financing activities:

Proceeds from mortgage notes payable

Borrowing under mortgage notes payable

Payments on mortgage notes payable

Borrowing under line of credit

Proceeds from notes payable

Payments on notes payable

Payment of loan extension fee

Payment of financing fees

Acquisition cost of below market debt

Dividend to common stockholders

Dividend to Series A preferred stockholders

Dividend to Series B preferred stockholders

Dividends to common stockholders

Dividends to Series A preferred stockholders

Dividends to Series B preferred stockholders

Proceeds from issuance of Series A preferred stock

Proceeds from issuance of Series B preferred stock

Proceeds from issuance of common stock

Proceeds from issuance of pre-funded warrants

Proceeds from issuance of Series A common stock warrants

Proceeds from issuance of Series B common stock warrants

Payment on finance lease liabilities

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Distributions to non-controlling interests holders

Redemption of common stock, net of stock redemption payable

Redemption of Series A preferred stock, net of stock redemption payable

Redemptions of common stock

Redemptions of Series A preferred stock

Capital pending acceptance

Net cash from financing activities

Net increase (decrease) in cash, cash equivalents and restricted cash

Net decrease in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of the year

4 unchanged sentences

Supplemental disclosure of non-cash financing activities and other cash flow information:

Issuance of common stock through reinvestment of dividends

Issuance of Series A preferred stock through reinvestment of dividends

4 unchanged sentences

Increase in liquidation preference of Operating Partnership Preferred Units - Series B

Issuance of the Operating Partnership Preferred Units for the purchase of Green Valley Medical Center, LP (Note 1)

Fair value of assets acquired from consolidation of Green Valley Medical Center, LP

Fair value of liabilities assumed from consolidation of Green Valley Medical Center, LP

Stock-based compensation

Operating Partnership Class A conversion to common stock

Capitalized construction in progress outstanding as accounts payable and accrued expenses

Conversion of notes receivable to preferred equity of Martin Plaza Associates, LP

Issuance of common stock through reinvestment of dividends

Issuance of the Operating Partnership Preferred units for the purchase of GV Executive Center, LLC (Note 1)

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Fair value of liabilities assumed from consolidation of One Harbor Center, LP

Issuance of the Operating Partnership Preferred Units for the purchase of First & Main, LP (Note 1)

Issuance of the Operating Partnership Preferred Units for the purchase of Main Street West, LP (Note 1)

Fair value of assets acquired from consolidation of First & Main, LP

Fair value of liabilities assumed from consolidation of First & Main, LP

Fair value of assets acquired from consolidation of 1300 Main, LP

Fair value of liabilities assumed from consolidation of 1300 Main, LP

Fair value of assets acquired from consolidation of Main Street West, LP

Fair value of liabilities assumed from consolidation of Main Street West, LP

Fair value of assets acquired from consolidation of Woodland Corporate Center Two, LP

Fair value of liabilities assumed from consolidation of Woodland Corporate Center Two, LP

Reduction in contingent consideration estimate

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

MacKenzie Realty Capital, Inc.

Notes to Consolidated Financial Statements

Notes to Consolidated

Financial Statements

June 30, 2025

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We commenced our operations on February 28, 2013, and our fiscal year-end is June 30.

We filed our initial registration statement in June 2012 with the Securities and Exchange Commission (“SEC”) to register the initial public offering

of 5,000,000 shares of our common stock.

The initial public offering commenced in January 2014 and concluded in October 2016.

second registration statement with the SEC to register a subsequent public offering of 15,000,000 shares of our common stock.

offering commenced in December 2016 and concluded on October 28, 2019.

We filed a third registration statement with the SEC to register a public offering of 15,000,000

shares of our common stock that was declared effective by the SEC on October 31, 2019.

The third offering commenced shortly thereafter and expired on October 31, 2020.

On April 29, 2024, our common stock became eligible for trading on the OTCQX Best Market under the ticker symbol of MKZR.

We are registered under Section 12(b) of the Securities Exchange Act of 1934 (the “Exchange Act”), and we will continue to file periodic reports on Form 10-K, Form

10-Q, and Form 8-K, as well as file proxy statements and other reports required under the Exchange Act.

We filed our initial registration statement with the Securities and Exchange Commission (“SEC”) in 2012 and have since completed multiple public offerings of our

common stock.

On April 29, 2024, our common stock became eligible for trading on the OTCQX Best Market under the ticker symbol “MKZR”.

Subsequently, on November 6, 2024, The Nasdaq Stock Market (“Nasdaq”) approved the listing of our common stock,

and trading commenced on the Nasdaq Capital Market on November 11, 2024.

We are externally managed by MacKenzie Capital Management, LP (“MacKenzie”) under a

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liability companies.

Our wholly owned subsidiary, MRC TRS, Inc., (“TRS”) was incorporated under the

Our wholly owned subsidiary, MRC TRS, Inc.

(“TRS”), was incorporated under the

general corporation laws of the State of California on February 22, 2016, and operated as a taxable REIT subsidiary.

MacKenzie NY Real Estate 2 Corp., (“MacKenzie NY 2”), a wholly owned subsidiary of TRS, was formed for the purpose of making

MacKenzie NY Real Estate 2 Corp.

(“MacKenzie NY 2”), a wholly owned subsidiary of TRS, was formed for the purpose of making

certain limited investments in New York companies.

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(through its termination date) and MacKenzie NY 2 have been consolidated with the Parent Company.

Effective tax year 2023, MacKenzie NY 2 have elected to be treated as a taxable REIT subsidiary.

Effective tax year 2023, MacKenzie NY 2 has elected to be treated as a taxable REIT subsidiary.

On May 20, 2020, we formed an operating partnership, MacKenzie

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As of June 30, 2025, we own all limited partnership units of the Operating Partnership except for 81,909.89 Class A Limited Partnership units, 1,063,504.34 Series A preferred units and 43,212.86 Series B preferred units .

which would be entitled to receive, at liquidation of the Operating Partnership, 82,232.08 common shares of the Company

(stated value of $ 10.25 per share), $ 23,464,095

(based on the stated value of $ 25 per share for the Series A preferred units ) in liquidation preference, and $ 1,080,322 (based on the stated value of $ 25 per share for the Series B preferred units) in liquidation preference, respectively.

Upon a limited partner’s request for redemption or upon liquidation of the Operating Partnership, the 81,909.89 Class A Limited Partnership units are convertible into the Company’s shares of common stock on a 1:

1 conversion ratio or, at the Company’s election, for cash based upon the 10-day average trading price of the Company’s common stock on a

As a result of the Company’s 1-for- 10 common stock reverse stock split (the “Reverse Stock Split”) on August 4, 2025, discussed below, the Class A Limited Partnership units are convertible into the Company’s common stock on a 10 :1 basis subsequent to the Reverse Stock Split.

Upon a request of a holder of Series A or Series B preferred units, the Company may elect to

repurchase such units with the Company’s common stock based upon the volume weighted average price per share of common stock for the twenty ( 20 )

trading days prior to the repurchase date, or at the Company’s election or upon liquidation, the 1,063,504.34 Series A preferred units are entitled to a

liquidation preference of $ 26,587,609 (based on the stated value of $ 25 per share for the Series A preferred units) and the 43,212.86 Series B

preferred units are entitled to a liquidation preference of $ 1,080,322 (based on the stated value of $ 25 per share for the Series B preferred units).

The Parent Company has contributed $ 98,692,635 in capital to the Operating Partnership since inception;

thus the Class A, Series A and Series B Preferred Units represent approximately

24.47 % of all capital contribution s.

thus, the Class A, Series A and Series B preferred units represent approximately 22.41 % of all capital contributions.

In March 2021, we, together with our joint venture partners, formed two operating companies:

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We own 98.45 % and 98.75 % of equity units of Madison and PVT, respectively.

The joint venture partners own the remaining 1.55 % and 1.25 % equity units of Madison and PVT, respectively, and

also hold a carried interest in both companies.

The joint venture partners own the remaining 1.55 % and 1.25 % of equity units of Madison and PVT, respectively,

and also hold a carried interest in both companies.

We are the controlling majority owner of both companies;

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We filed a post-effective amendment to the Offering Circular on October 14, 2022, and increased the offering to sell up to $ 75 million of shares of our Series A preferred stock.

The post-effective amendment to this Offering Circular was declared effective on November 13, 2022.

We filed a second post-effective amendment to the Offering Circular on November 1, 2023, which amended the offering to sell an aggregate of up to $ 75

million of shares of either our Series A preferred stock or our Series B preferred stock.

This post-effective amendment to the Offering Circular was qualified by the SEC on November 14, 2023.

We filed a second post-effective amendment to the Offering Circular on November 1, 2023, which amended the offering to sell

an aggregate of up to $ 75 million of shares of either our Series A preferred stock or our Series B preferred stock.

This post-effective

amendment to the Offering Circular terminated on November 1, 2024.

We filed a new offering circular (the “Second Offering Circular”) in December 2024 to sell an aggregate of up to approximately $ 71.30 million of shares of either our Series A preferred stock or our Series B preferred stock at an offering price of $ 25 per share.

The Second Offering Circular was qualified by the SEC on January 29, 2025.

In June 2025, we filed a post-effective amendment to the Second Offering Circular to permit the sale of

up to $ 72.90 million of Series A, Series B, and Series C preferred stock, at an offering price of $ 22.50 per Series A share and $ 25.00 per

Series B or Series C share.

In November 2024, we filed a new shelf registration statement on Form S-3 (the “Form S-3 Registration Statement”) to sell our common and preferred stock, warrants,

rights and units up to an aggregate of $ 75 million.

The Form S-3 Registration Statement was declared effective by the SEC on January 15,

Also on January 15, 2025, we entered into an Equity Distribution Agreement (the “ATM Sales Agreement”) with Maxim Group LLC (the “Sales Agent” or “Maxim”) pursuant to which we may issue and sell shares of our common stock, covered by the

prospectus supplement filed with the SEC on January 15, 2025 and accompanying base prospectus dated January 15, 2025 (together, the “ATM Prospectus”) from time to time through or to the Sales Agent, acting as our agent or principal (subject to

compliance with Regulation M).

Sales of shares of our common stock under the ATM Prospectus may be made in negotiated transactions (including block transactions) or transactions that are deemed to be an “at the market offering” as defined in Rule

415(a)(4) under the Securities Act of 1933, as amended (the “Securities Act”), including sales made directly on Nasdaq or sales made to or through a market maker other than on an exchange, subject to maintaining compliance with General Instruction

I.B.6 of Form S-3 which requires that in no event will we sell securities in a public primary offering with a value exceeding more than one-third of our public float in any 12-month period so long as our public float remains below $75 million.

Under the terms of the ATM Sales Agreement, we also may sell shares, our common stock, to the Sales Agent, as principal for its own account (subject to compliance with Regulation M), at a price to be agreed upon at the time of sale.

shares to the Sales Agent, as principal (subject to compliance with Regulation M), we will enter into a separate agreement with the Sales Agent and we will describe the agreement in a separate prospectus supplement or pricing supplement.

On February 28, 2025, we entered into a securities purchase agreement with a single institutional investor.

Under the agreement, the Company offered and sold in a

registered direct offering (the “Registered Offering”), 153,403.40 shares of the Company’s common stock, $ 0.0001 par value per share, and pre-funded warrants to purchase up to 129,226.50 shares of common stock;

and, in a concurrent private placement and together with the Registered Offering, warrants to purchase up to an aggregate of 423,944.85 shares of common stock.

The purchase price for each share and the exercise price for each warrant was $ 17.10 per share, and the purchase price for each pre-funded warrant was $ 17.099 per share.

The common stock warrants consist of Series A common stock warrants and Series B common stock warrants.

The Series A common stock warrants to purchase up to 141,314.95 shares of common stock became exercisable six months after the closing date of the offering and expire 18 months from the date of issuance.

The Series B common stock warrants to purchase up to 282,629.90 shares of common stock became exercisable six months after the date of issuance and expire five years from the date of issuance.

The Company and the single institutional investor have no other material relationships.

All share and warrant amounts described have been adjusted to

give effect to the Reverse Stock Split that became effective on August 4, 2025.

On October 4, 2021, through the Operating Partnership, we acquired a 90 % economic interest in Hollywood Hillview Owner, LLC (“Hollywood Hillview”), a Delaware limited liability company, to acquire and operate a

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The remaining 10 % economic interest in Hollywood

Hillview is owned by an unaffiliated third party, True USA, LLC.

Hollywood Hillview owns 100 % of the membership interests in PT Hillview

GP, LLC (the “PT Hillview”).

Hillview is owned by an unaffiliated third party, True USA, LLC (“True USA”).

Hollywood Hillview owns 100 % of the membership interests

in PT Hillview GP, LLC (the “PT Hillview”).

We are the controlling majority owner of Hollywood Hillview;

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(“Merger Sub”) entered into a reverse triangular merger agreement with FSP Satellite Place Corp.

(“FSP Satellite”), pursuant to which the Merger Sub would be merged with and into FSP Satellite with FSP Satellite as the surviving

entity, but renamed MacKenzie Satellite Place, Inc.

(“MacKenzie Satellite”).

On June 1, 2022, the merger closed, and MacKenzie Satellite became our wholly owned subsidiary, which owns the Satellite Place Office Building, a six-story Class “A”

(“FSP Satellite”), pursuant to which the Merger Sub merged with and into FSP Satellite with FSP Satellite as the surviving entity, but

renamed MacKenzie Satellite Place Corp.

(“MacKenzie Satellite”), effective June 1, 2022, at which time MacKenzie Satellite became our wholly owned subsidiary.

MacKenzie Satellite owns the Satellite Place Office Building, a six-story Class “A”

suburban office building containing approximately 134,785 rentable square feet of space located on approximately 10 acres of land in Duluth, GA.

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shareholders of FSP Satellite holders elected to be paid in cash with the exception of two shareholders who elected to receive common

and preferred stocks in the amount of $ 27,503 and $ 13,752 , respectively.

and preferred stock in the amount of $ 27,503 and $ 13,752 , respectively.

Subsequent to the completion of the merger, we have consolidated the financial statements of MacKenzie Satellite effective June 30, 2022.

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We completed the acquisition of all of the limited partnership interests in five

of the eight partnerships prior to the expiration of the two-year window.

We may acquire the remaining limited partnership interests via separate agreements in the future, but there is no agreement or obligation to do so.

We acquired all the

limited partnership interests in, and therefore all the equity in, the following partnership on the following dates:

First & Main, LP (“First and Main”) in July 2022, 1300 Main, LP (“1300 Main”) in October 2022, Woodland Corporate Center Two,

LP (“Woodland Corporate Center Two”) in January 2023, Main Street West, LP (“Main Street West”) in February 2023, and One Harbor Center, LP (“One Harbor Center”) in May 2024.

Some of these acquisitions were paid in all cash, and some were

purchased through issuance of 339,078.39 and 43,212.86 of the Operating Partnership’s Series A and Series B preferred units, respectively.

We consolidated the financial statements of these five limited partnerships after we completed the acquisition of the limited partnership interests in each of these Wiseman Partnerships.

On February 6, 2023, we formed a new entity, MRC Aurora, LLC (the “MRC Aurora”) for the purpose of owning,

developing, renovating, leasing, managing, renting, and potentially selling certain real property and building and improvements located at 5000 Wiseman Way, Fairfield, California (the “Aurora Project”).

The Parent Company is the manager and the

Operating Partnership is the sole common member of MRC Aurora.

The Operating Partnership contributed the entitled land located at 5000 Wiseman Way, Fairfield, California to MRC Aurora in exchange for the common membership interest in MRC Aurora.

MRC Aurora commenced selling its preferred units in February 2024 with the goal of raising $ 10 million in preferred capital and closed

on a construction loan of $ 17.15 million on February 21, 2024 to fund the development of the Aurora Project.

Since the Operating Partnership has the 100 % voting rights and we, as the manager, have the managing and operating rights of MRC Aurora, we have consolidated the financial statements of MRC Aurora.

On September 1, 2023, we formed 220 Campus Lane, LLC (“220 Campus Lane”) to

acquire, lease and operate a vacant office building located at 220 Campus Lane, Fairfield, CA (“220 Campus Lane Office Building”) and Campus Lane Residential, LLC (“Campus Lane Residential”) to acquire and develop a parcel of vacant land adjacent

to 220 Campus Lane Office Building into a multi-family residential community.

of the eight partnerships prior to the expiration of the two-year window, and one shortly thereafter via a separate agreement.

acquire the remaining limited partnership interests via separate agreements in the future, but there is no agreement or obligation to do so.

We acquired all the limited partnership interests in, and therefore all the equity in, the following

partnerships on the following dates:

First & Main, LP (“First & Main”) in July 2022, 1300 Main, LP (“1300 Main”) in October 2022, Woodland Corporate Center Two, LP (“Woodland Corporate Center Two”) in January 2023, Main Street West, LP

(“Main Street West”) in February 2023, One Harbor Center, LP in May 2024 and Green Valley Medical Center, LP in August 2024.

Some of these acquisitions were paid in all cash, and some were purchased through issuance of 459,620.35 and 43,212.86 of the

Operating Partnership’s Series A and Series B preferred units, respectively.

We consolidated the financial statements of these six

limited partnerships after we completed the acquisition of the limited partnership interests in each of these Wiseman Partnerships.

On February 6, 2023, we formed a new entity, MRC Aurora, LLC (“MRC Aurora”) for the purpose of owning, developing, and renovating certain real

property and building and improvements located at 5000 Wiseman Way, Fairfield, California (the “Aurora Land”), and thereafter leasing, managing, renting, and potentially selling the completed project (the “Aurora at Green Valley”).

Company is the manager and the Operating Partnership is the sole common member of MRC Aurora.

The Operating Partnership contributed the Aurora Land to MRC Aurora in exchange for the common membership interest in MRC Aurora.

Construction of the Aurora at Green Valley, which consists of three

residential buildings and a clubhouse, began in September 2024.

The clubhouse opened in June 2025 for pre-leasing activities and

the first residential building was completed in July 2025, with leasing commencing in August 2025.

The remaining two buildings were completed in September 2025, with leasing expected to commence shortly thereafter.

The construction of Aurora at Green Valley was

financed through $ 10 million of preferred capital ($ 7.23 million from outside investors and $ 2.77 million from the Operating

Partnership) and a $ 17.15 million construction loan from Valley Strong Credit Union.

The Operating Partnership holds 100 % of the voting rights, and we, as the manager, have the managing and operating rights of MRC Aurora.

Therefore, we consolidate the financial

statements of MRC Aurora.

As of June 30, 2025, the Operating Partnership has contributed $ 4.60 million (including the value of the

Aurora Land) in exchange for common units and $ 2.77 million in exchange for preferred units in MRC Aurora and we have raised $ 7.23 million in exchange for preferred units from outside investors.

On September 1, 2023, we formed 220 Campus Lane, LLC (“220 Campus Lane”)

to acquire, lease and operate a vacant office building located at 220 Campus Lane, Fairfield, CA (“220 Campus Lane Office Building”) and Campus Lane Residential, LLC (“Campus Lane Residential”) to acquire and develop a parcel of vacant

land adjacent to 220 Campus Lane Office Building into a multi-family residential community.

220 Campus Lane acquired the 220 Campus Lane Office Building, and Campus Lane Residential acquired the vacant land in September 2023.

The entitlement process for the

vacant land is currently underway, but our goal of commencing construction in late 2025 will be dependent upon the City’s response to our development application that was submitted in April 2024 and securing the necessary financial resources.

own 100 % of both of these companies;

therefore, we consolidated the financial statements of these companies after the acquisitions

were completed on September 8, 2023.

entitlement process for the vacant land is currently underway.

Our goal is to commence construction in spring 2026;

however, this is subject to the city’s approval of our development application submitted in April 2024 and to securing

the necessary financial resources.

The Campus Lane Residential development project is now known as Blue Ridge at Suisun Valley (“Blue Ridge”).

We own 100 % of 220 Campus Lane and Campus Lane Residential;

therefore, we consolidated the financial statements of these companies after the acquisitions were completed on September 8,

On January 1, 2024, the Operating Partnership acquired 100 % membership interest in GV Executive Center, LLC (“GVEC”), which owns an office building located in Fairfield, California known as “Green Valley

Executive Center” from an affiliate of our Advisers, for a total purchase price of $ 8,703,127 , which was paid through issuance of 386,805.64 Series A Preferred Units of the Operating Partnership.

The acquisition price was determined based on the price paid for the building by the

affiliate in August 2022 adjusted for the company’s other current assets and liabilities as of the acquisition date.

Executive Center” from Patterson Real Estate Services LP (“PRES”), an affiliate of our Advisers, for a net purchase price of $ 8,703,127 ,

which was paid through issuance of 386,805.64 Series A preferred units of the Operating Partnership.

The net acquisition price was

determined based on the price paid for the building by the affiliate in August 2022 adjusted for the company’s other current assets and liabilities as of the acquisition date.

The acquisition of GVEC was approved by our Independent Directors.

On August 26, 2024, the Company entered into a letter agreement with Maxim Group

LLC (“Maxim”) to provide general financial advisory and investment banking services to the Company in connection with, among other things, strategic planning, potential uplisting to a U.S.

exchange (NASDAQ, New York Stock Exchange), and potential

rights offering, equity issuance or other mechanisms to enhance corporate and shareholder value.

In connection with the agreement, the Company has issued in a private placement an aggregate amount of 133,000 shares of common stock to Maxim’s affiliate, approximately 1 %

of the Company’s outstanding stock.

The common stock does not have any conversion rights.

On August 26, 2024, the Company entered into a letter agreement with Maxim to provide general financial advisory and investment banking services

to the Company in connection with, among other things, strategic planning, potential uplisting to a U.S.

exchange (Nasdaq, New York Stock Exchange), and potential rights offering, equity issuance or other mechanisms to enhance corporate and

shareholder value.

In connection with the agreement, the Company issued to Maxim’s affiliate in a private placement 13,300 shares

of common stock, representing approximately 1 % of the Company’s outstanding stock.

The common stock does not have any conversion

On January 30, 2025, the Company entered into a letter agreement with Outside The Box Capital Inc.

(“OTB Capital”) to provide marketing and

distribution services to communicate information about the Company.

In connection with the agreement, the Company issued 8,583.70 shares

of common stock to OTB Capital in a private placement.

The common stock issued to OTB Capital does not have any conversion rights.

On May 8, 2025, we formed a new wholly owned subsidiary, Innovate Napa, LLC (“Innovate Napa”), to enter into a master lease of a portion of the Main

Street West Office Building in connection with the refinancing of the Main Street West loan.

Our wholly owned subsidiary, MRC QRS, Inc.

(“MRC QRS”), a qualified REIT subsidiary incorporated in Delaware on May 22, 2025, was formed to acquire and

hold non-traded REIT shares.

On August 4, 2025, the Company

effected a 1-for- 10 Reverse Stock Split of its common stock, increasing the par value from $ 0.0001 per share to $ 0.001 per share.

However, on the same

date, the Company amended its charter to decrease the par value back to $ 0.0001 .

The Reverse Stock Split did not change the number of

authorized shares of common stock.

Prior to the Reverse Stock Split, the Company had 16,760,978 shares of common stock outstanding.

Immediately following the Reverse Stock Split (and after giving effect to the payment of cash in lieu of fractional shares), the Company had 1,675,776

shares of common stock outstanding.

No fractional shares were issued as a result of the Reverse Stock Split.

Stockholders entitled to receive a fractional share instead received a cash payment equal to the fraction of a share multiplied by the

closing price of the Company’s common stock on The Nasdaq Capital Market on August 1, 2025, as adjusted for the Reverse Stock Split, without interest .

All common share and per-share information in the accompanying consolidated financial

statements and notes have been retroactively adjusted to reflect the Reverse Stock Split .

As of June 30, 2025, we have raised approximately $ 125.44

million from our three common stock public offerings, $ 18.51 million from our Series A preferred stock offering and $ 1.26 million from our Series B preferred

stock offering pursuant to the Offering Circular.

As of June 30, 2024, we have issued common and Series A and Series B preferred shares with gross proceeds of $ 15.56 million and $ 0.25 million, respectively, under our DRIP.

Of the total shares issued by us

as of June 30, 2024, approximately $ 14.28 million and $ 0.11 million, respectively, worth of common and Series A preferred stock shares have been repurchased under our share repurchase program.

million from our common stock public offerings (including $ 4.80 million from our Registered Offering and the concurrent private

placement, and $ 1.50 million from the ATM offering), $ 18.74 million from our Series A preferred stock offering and $ 3.11 million from

our Series B preferred stock offering pursuant to the Second Offering Circular.

As of June 30, 2025, we have issued shares of common stock, Series A preferred stock and Series B preferred stock with gross proceeds of $ 15.56 million, $ 0.44 million and $ 0.01 million, respectively, under our dividend reinvestment plans (each a “DRIP” and together the “DRIPs”).

Of the total shares issued by us as of June

30, 2025, approximately $ 14.28 million and $ 0.11

million, respectively, worth of shares of common stock and Series A preferred stock have been repurchased under our share repurchase program.

As of June 30, 2025, we have 1,578,192.98 shares of common stock, 766,176.57 shares of Series A preferred

stock and 116,112.32 shares of Series B preferred stock outstanding.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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available to settle the obligations of the Parent Company or the Operating Partnership, and the obligations of the subsidiaries does not constitute obligations of the Parent Company or the Operating Partnership.

Certain prior period information has been reclassified to conform to the current year end presentation.

The reclassification has no effect on

our consolidated balance sheet or the consolidated statement of operations as previously reported.

Use of Estimates

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liabilities, revenues, expenses and unrealized gains (losses) on investments during the reporting period.

Material estimates that are susceptible to change, and actual results could differ from those estimates.

Material estimates are susceptible to change, and actual results could differ from those estimates.

Variable Interest Entities

We evaluate the need to consolidate our investments in securities in accordance with ASC 810.

In determining whether we have a controlling interest in a variable

interest entity and whether to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the partners, as well as

whether the entity is a variable interest entity for which we are the primary beneficiary.

We evaluate the need to consolidate our investments in securities in accordance with Accounting Standards Codification (“ASC”) 810.

In determining whether we have a

controlling interest in a variable interest entity and whether to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights

of the partners, as well as whether the entity is a variable interest entity for which we are the primary beneficiary.

Refer to Note 7 for additional information .

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These balances are insured by the Federal Deposit Insurance Corporation up to certain

At times, the cash balances held in financial institutions by us may exceed these insured limits.

Often, the cash balances held in financial institutions by us may exceed these insured limits.

Restricted cash is subject to legal or contractual restrictions as to withdrawal or use, including restrictions that require the funds to be used

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income receivable represents dividends, distributions, and sales proceeds recognized in accordance with our revenue recognition policy but not yet received as of the date of the consolidated financial statements.

The amounts are generally fully

collectible as they are recognized based on completed transactions.

We monitor and adjust our receivables, and those deemed to be uncollectible are written-off only after all reasonable collection efforts are exhausted.

We have determined that

all investments income receivable balances outstanding as of June 30, 2024 and 2023, are collectible and do not require recording any uncollectible allowance .

We monitor and adjust our

receivables, and those deemed to be uncollectible are written-off only after all reasonable collection efforts are exhausted.

We believe, based on the credit worthiness of the obligors, that all investment income receivable balances outstanding

as of June 30, 2025 and 2024, are collectible and do not require recording any uncollectible allowance .

Rental, Reimbursement and Other Property Income

We generate rental revenue by leasing office space and apartment units to a building’s tenants.

These tenant leases fall under the scope of ASC Topic 842 and are classified as

operating leases.

Revenues from such leases are recognized on a straight-line basis over the terms of the lease agreements.

During the year ended June 30, 2025, we recorded lease termination income of $ 3,000,000 due to an early lease termination by one of the tenants of our Satellite Place Office Building as a part of rental, reimbursement and other property income in

the consolidated statements of operations.

Rents and Other Receivables

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and current credit status of tenants in developing these estimates.

As of June 30, 2024 and June 30, 2023, we recognized an allowance for doubtful accounts of $ 213,797 and $ 150,786 , respectively.

As of June 30, 2025 and 2024, we recognized an allowance for doubtful accounts of $ 259,590 and $ 213,797 , respectively.

Capital Pending Acceptance

We conduct closings for new issuance of our stocks twice per month and admit new stockholders effective beginning the first of each month.

Subscriptions are effective

only upon our acceptance.

Any gross proceeds received from subscriptions which are not accepted as of the period-end are classified as capital pending acceptance in the consolidated balance sheets .

As of June 30, 2024 and June 30, 2023 , capital pending acceptance was $ 297,000

and $ 538,600 , respectively.

We conduct closings for new issuance of our Series A, Series B and Series C preferred stock and MRC Aurora preferred units twice per month and admit new stockholders

effective beginning the first of each month.

Subscriptions are effective only upon our acceptance.

Any gross proceeds received from subscriptions which are not accepted as of the period-end are classified as capital pending acceptance in the

consolidated balance sheets.

We close our common stock ATM sales on a daily basis.

As of June 30, 2025, capital pending acceptance related to our preferred stock was $ 13,411 and as of June 30, 2024, capital pending acceptance related to MRC Aurora preferred units was $ 297,000 .

Organization and Offering Costs

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registration statements and pre and post-effective amendments.

offering costs incurred by us on the Offering Circular to sell the Series A and Series B preferred stock have been classified as a reduction of equity.

Offering costs incurred in connection with our offering circulars to sell the Series A, Series B and Series C preferred stock are classified as a reduction of equity .

Income Taxes and Deferred Tax Liability

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not incur any tax expense or excise tax on its income from operations during the quarterly periods within the tax year 2024.

In addition, for the tax year 2024, we intend to pay the requisite amounts of dividends during the year and meet other

REIT requirements such that the Parent Company will not owe any income taxes.

In addition, for the tax year 2025, the Parent Company intends to pay the requisite amounts of dividends during the year

and meet other REIT requirements such that the Parent Company will not owe any income taxes.

Therefore, the Parent Company did not record any income tax provisions during any fiscal periods within the tax year 2025.

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The Operating Partnership is a limited partnership.

Hollywood Hillview, MacKenzie Shoreline, Madison, PVT, 220 Campus Lane, Campus Lane Residential and GVEC are limited liability companies.

First & Main, 1300 Main, Woodland Corporate Center Two, Main Street West, and One Harbor Center are

limited partnerships.

Accordingly, all income tax liabilities of these entities flow through to their partners, which ultimately is the Company.

Hollywood Hillview, MacKenzie Shoreline, Madison, PVT, 220 Campus Lane, Campus Lane Residential, GVEC and Innovate Napa are limited liability companies.

First & Main, 1300 Main, Woodland Corporate Center Two, Main Street West, One Harbor

Center, LP and Green Valley Medical Center, LP are limited partnerships.

Accordingly, all income tax liabilities of these entities flow through to their partners, which, subject to the minority exceptions described in this document, ultimately

is the Company.

Therefore, no income tax provisions are recorded for these entities.

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As of June 30, 2025 and 2024, there were no uncertain tax positions.

Management’s determinations regarding ASC 740 are subject to review and adjustment at a later date based upon factors including, but not limited to, an on-going

analysis of tax laws, regulations and interpretations thereof.

Management’s determinations regarding ASC 740 are subject to review and adjustment at a later date based upon factors including, but not limited to, an on-going analysis of tax

laws, regulations and interpretations thereof.

Subsequent Events

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These estimates may be subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision.

believe that the carrying amounts of our financial instruments, consisting of cash, restricted cash, investments income, rent and other receivables, prepaid expenses and other assets, mortgage notes payable, accounts payable and accrued

liabilities, below-market lease liabilities, net, deferred rent and other liabilities and due to related entities, approximate the fair values of such items based on their nature, terms, and interest rates .

payable, net, accounts payable and accrued liabilities, below-market lease liabilities, net, deferred rent and other liabilities and due to related entities, approximate the fair values of such items based on their nature, terms, and interest

Revenue Recognition

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investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

Management’s assessment of the significance of a particular input to the fair value measurement, in its

entirety, requires judgment and considers factors specific to the investment.

Management’s assessment of the significance of a particular input to the fair value measurement, in its entirety, requires judgment and

considers factors specific to the investment.

Valuation of Investments

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We may value securities that do not trade on a national exchange by using published secondary market trading information.

When doing so, we first confirm that GAAP

recognizes the trading price as the fair value of the security.

When doing so, we first confirm that GAAP recognizes the trading price

as the fair value of the security.

Securities for which reliable market data are not readily available or for which the pricing source does not provide a valuation or methodology or

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consolidated statements of operations during the period such changes occur.

The below list of investments would have been accounted for under the equity method if the fair value method had not been elected and have been included in investments in the

consolidated balance sheets as of June 30, 2024 and 2023:

The below investments would have been accounted for under the equity method if the fair value method had not been elected as of June 30, 2025 and 2024:

Fair Value as of

June 30, 2025

5210 Fountaingate, LP

Limited Partnership

Lakemont Partners, LLC

Limited Liability Company

Green Valley Medical Center, LP

Limited Partnership

Martin Plaza Associates, LP

Limited Partnership

GP and LP Interest

Westside Professional Center I, LP

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Limited Partnership

Capitol Hill Partners, LLC

Limited Liability Company

Citrus Park Hotel Holdings, LLC

Limited Liability Company

Lakemont Partners, LLC

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Limited Partnership

One Harbor Center, LP

Limited Partnership

Westside Professional Center I, LP

Limited Partnership

* The general partner has a 1 % partnership interest but is also entitled to profit sharing distributions ranging from 25 % to 50 % after certain thresholds are met.

Unconsolidated Investments (Non-security) at Fair Value

These are equity method investments that do

not meet the consolidation requirements under ASC 810.

Under the 1940 Act, these investments are considered “voting securities” as opposed to “investment securities”.

Therefore, we listed these equity method investments separately from the

rest of the equity method investments at fair value in the consolidated balance sheets.

As of June 30, 2024, our investments in Green Valley Medical Center, LP, Martin Plaza Associates, LP and Westside Professional Center I, LP are considered

to be voting securities under the 1940 Act.

As of June 30, 2023, our investments in Green Valley Medical Center, LP, Martin Plaza Associates, LP, One Harbor Center, LP and Westside Professional Center I, LP are considered to be voting

securities under the 1940 Act.

Therefore, these investments were shown as unconsolidated investments (non-security), at fair value in the consolidated balance sheets.

For GAAP purposes, these investments have been recorded under the equity

method investments, for which we have elected the fair value option as discussed above.

* The general partner has a 1 %

partnership interest but is also entitled to profit sharing distributions ranging from 25 % to 50 % after certain thresholds are met.

Lease Accounting Topic 842

In February 2016, the FASB issued ASU No.

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2016-02 Leases (Topic 842) (“ASU 2016-02”).

Under ASU 2016-02, an entity is required to recognize

right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing.

ASU 2016-02 offers specific accounting guidance for a lessee, a lessor, and parties to sale and leaseback transactions.

Lessees and lessors

are required to disclose qualitative and quantitative information about leasing arrangements to facilitate assessment the amount, timing, and uncertainty of cash flows arising from leases.

Under ASU 2016-02, an entity is required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing.

offers specific accounting guidance for a lessee, a lessor, and parties to sale and leaseback transactions.

Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to facilitate assessment

the amount, timing, and uncertainty of cash flows arising from leases.

In July 2018, the FASB issued ASU No.

2018-11, “Leases

2018-11, Leases (Topic 842):

Targeted Improvements (“ASU 2018-11”).

ASU 2018-11 provides lessors with a practical expedient to not separate lease and non-lease components if both (i) the timing and pattern of revenue recognition for the non-lease component

and the related lease component are the same and (ii) the combined single lease component would be classified as an operating lease.

We adopted the practical expedient as of July 1, 2019, to account for lease and non-lease components as a

single component in lease contracts where we or one of our subsidiaries is the lessor.

ASU 2018-11 provides lessors with a practical expedient to not separate lease and non-lease components if both (i) the timing and pattern of

revenue recognition for the non-lease component and the related lease component are the same and (ii) the combined single lease component would be classified as an operating lease.

We adopted the practical expedient as of July 1, 2019, to

account for lease and non-lease components as a single component in lease contracts where we or one of our subsidiaries is the lessor.

current portfolio consists of commercial office properties and residential apartment buildings whereby we generate rental revenue by leasing office space and apartment units to the building’s tenants.

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Depreciation and amortization expense are computed on the straight-line method over the asset’s estimated useful life .

We consider the period of future benefit of an asset to determine its appropriate useful life and anticipates the estimated useful

lives of assets by class to be generally as follows:

We consider the period of future benefit of an asset to determine its appropriate useful life and anticipates the estimated

useful lives of assets by class to be generally as follows:

16 – 45 years

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Assets and Liabilities Held for Sale

We classify long-lived assets or disposal groups to be sold as held for sale in the period in

which all of the following criteria are met:

We classify long-lived assets to be sold as held for sale in the period in which all of the

following criteria are met:

Management, having the authority to approve the action, commits to a plan to sell the asset (disposal group);

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depreciation or amortization of these assets should be recognized as a cumulative “catch up” adjustment, as if the additional amount of consideration that is no longer contingent had been accrued from the outset of the arrangement.

Five of our properties, 1300 Main, Main Street West, Woodland Corporate Center, Green Valley Executive Center and One Harbor Center, had solar equipment leases in

place at the time of our acquisition.

Six of our properties, 1300 Main, Main Street West, Woodland Corporate Center, Green Valley Executive Center, One Harbor Center and Green Valley Medical Center had

solar equipment leases in place at the time of our acquisition.

Therefore, these existing solar leases were reassessed at the acquisition date and were recorded as finance leases in accordance with ASC 842.

We record leases on the consolidated balance sheets in the form

of a lease liability for the present value of future minimum payments under the lease terms and a right-of-use asset equal to the lease liability adjusted for items such as deferred or prepaid rent, lease incentives, and any impairment of the

right-of-use asset.

We record leases on the consolidated

balance sheets in the form of a lease liability for the present value of future minimum payments under the lease terms and a right-of-use asset equal to the lease liability adjusted for items such as deferred or prepaid rent, lease incentives,

and any impairment of the right-of-use asset.

The discount rate used in determining the lease liability is based upon incremental borrowing rates that we could obtain for similar loans as of the date of commencement or renewal.

We do not record leases on the consolidated

balance sheets that are classified as short term (less than one year).

At lease inception, we determine the lease term by considering the minimum lease term and all optional renewal periods that we are reasonably certain to renew.

lease term is also used to calculate straight-line rent expense.

The depreciable life of leasehold improvements is limited by the estimated lease term, including renewals if they are reasonably certain to be renewed.

Our leases do not contain

residual value guarantees or material variable lease payments that will impact our ability to pay dividends or cause us to incur additional expenses.

We do not record

leases on the consolidated balance sheets that are classified as short term (less than one year).

At lease inception, we determine the lease term by considering the minimum lease term and all optional renewal periods that are reasonably certain to be exercised.

The lease term is also used to calculate straight-line rent expense.

The depreciable life of leasehold improvements is limited by the estimated lease term, including renewals if they are reasonably certain to be exercised.

Our leases do not

contain residual value guarantees or material variable lease payments that will impact our ability to pay dividends or cause us to incur additional expenses.

The amortization of the right-of-use asset arising from finance leases is expensed through depreciation and amortization expense and the interest on the related

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intangible assets, we will record an impairment loss to the extent that the carrying value exceeds the estimated fair value of the real estate and related intangible assets .

impairment charges on assets held for use were recorded for the years ended June 30, 2024 and 2023.

However, during the year ended June 30, 2023, we recorded an impairment loss of $ 8,121,090 on our held for sale asset (Addison Corporate Center building), which was sold in June 2023.

Gain on Dispositions of Real Estate Investments

on sales of rental real estate are not considered sales to customers and will generally be recognized pursuant to the provisions of ASC 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610-20”), which

applies to sales or transfers to noncustomers of nonfinancial assets or in substance nonfinancial assets that do not meet the definition of a business.

Generally, our sales of real estate would be considered a sale of a nonfinancial asset as

defined by ASC 610-20.

ASC 610-20 refers to the revenue recognition principles under ASU No.

2014-09, Revenue from Contracts with

Customers (Topic 606).

Under ASC 610-20, if we determine we do not have a controlling financial

interest in the entity that holds the asset and the arrangement meets the criteria to be accounted for as a contract, we will dispose of the asset and recognize a gain or loss on the sale of the real estate when control of the underlying asset

transfers to the buyer.

Reportable Segments

ASC 280, Segment Reporting , establishes standards for reporting financial and descriptive information

about an enterprise’s reportable segments.

We have one reportable segment, income-producing real estate properties, which consists of

activities related to investing in real estate.

The real estate properties are geographically diversified throughout the United States, and we evaluate operating performance on an overall portfolio level.

During the year ended June 30, 2025, we recorded an impairment loss of $ 9,500,167 , with respect to our Main Street West Office Building due to an early lease termination by the anchor tenant and maturity default of the

debt secured by the property.

We utilized the inputs from a recent third-party appraisal and potential new leases to estimate the fair value of the property to determine the impairment amount.

We consider these inputs as Level 3 measurements

within the fair value hierarchy.

Stock-based Compensation

ASC 718, Stock-based Compensation , requires generally that all equity awards granted to employees and consultants be accounted for at fair value.

This fair value is

measured at grant date for stock settled awards, and at subsequent exercise or settlement for cash-settled awards.

Under this method, we recorded the 13,300

shares of common stock issued to Maxim discussed in Note 1 at fair value as compensation for services rendered to the Company.

The fair value is computed based on the trading price of the common stock on the OTCQX capital market at the grant

date of August 26, 2024.

Additionally, we recorded the 8,583.70 shares of common stock issued to OTB Capital discussed in Note 1 at

fair value in consideration for their marketing and distribution services.

The fair value is computed based on the public trading price of the common stock at the grant date of February 3, 2025.

Recent Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting – Improvements to Reportable Segments Disclosures (“ASU 2023-07”), to enhance reportable segment disclosure requirements, primarily

through increased disclosures about significant segment expenses.

This ASU requires that a public entity disclose, on an annual and interim basis, significant segment expenses that are regularly provided to an entity’s CODM, a description of

other segment items by reportable segment, and any additional measures of a segment’s profit or loss used by the CODM when deciding how to allocate resources.

The amendment is effective for fiscal years beginning after December 15, 2023, and

interim periods within fiscal years beginning after December 15, 2024, and should be applied retrospectively to all periods presented.

The Company adopted ASU 2023-07 effective June 30, 2025, for the annual period beginning July 1, 2024.

the adoption has no impact on our consolidated financial statements, it has resulted in incremental disclosures within the footnotes to our consolidated financial statements.

Refer to Note 16 for the inclusion of the new required disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes – Improvements to Income Tax , to enhance the transparency and decision usefulness of income tax disclosures, primarily related to rate

reconciliation and income taxes paid information.

The amendment is effective for annual periods beginning after December 15, 2024, and should be applied on a prospective basis, with the option to apply retrospectively.

Early adoption is

permitted for annual financial statements that have not yet been issued or made available for issuance.

We are currently evaluating the impact of adopting these amendments on our consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses .

The ASU’s purpose is to improve the disclosures about a public business entity’s expenses and address requests

from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales,

SG&A, and research and development).

This ASU is effective for the Company’s annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted.

currently evaluating the impact of this ASU on our consolidated financial statements.

NOTE 3 – INVESTMENTS IN REAL ESTATE

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Commodore Apartments

Pon de Leo Apartments

The Park View Apartments

Hollywood Apartments

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Ownership Interest:

Property Name:

Green Valley Medical Center

Property Owner:

Green Valley Medical Center, LP

Fairfield, CA

Number of Tenants:

Ownership Interest:

The following table presents

the purchase price allocation of real estate assets acquired during the year ended June 30, 2024 based on asset

the purchase price allocation of real estate asset acquired during the year ended June 30, 2025 based on asset

acquisition accounting .

Property Name:

220 Campus Lane Office Building

Acquisition Date:

September 8, 2023

Purchase Price Allocation

Debt mark-to-market

Total assets acquired

Property Name:

Campus Lane Residential Land

Acquisition Date:

September 8, 2023

Purchase Price Allocation

Debt mark-to-market

Total assets acquired

Property Name:

Green Valley Executive Center

Green Valley Medical Center

Acquisition Date:

January 1, 2024

August 1, 2024

Purchase Price Allocation

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Legal & Marketing Lease Up

Debt mark-to-market

Solar Finance Lease

Total assets acquired

Total capital assets acquired

Net leasehold liability

Total assets acquired, net

Property Name:

One Harbor Center

Acquisition Date:

Purchase Price Allocation

Site Improvements

Tenant Improvements

Lease In Place

Leasing Commissions

Legal & Marketing Lease Up Costs

Debt mark-to-market

Solar Finance Lease

Total assets acquired

Net leasehold asset

Total assets acquired

The total depreciation expense of our operating properties for the years ended June 30, 2024 and June 30, 2023 was $ 5,109,524 and $ 3,735,160 , respectively .

Total capital assets acquired, net

The total depreciation expense of our operating properties for the years ended June 30, 2025 and 2024 was $ 7,902,429 and $ 5,109,524 , respectively .

Operating Leases:

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Accumulated amortization

Accumulated impairment loss

Weighted average amortization period (years)

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fair value as of June 30, 2025 and 2024.

On the consolidated balance sheets, these investments are reflected in two separate lines:

(i) investments at fair value, which are classified as equity securities under ASC Topic 321, and (ii) equity

method investments with fair value option election.

June 30, 2024

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method investment with fair value option election)

Our above total investments at fair value are disclosed in two separate lines as investments and

unconsolidated investments (non-securities) in the consolidated balance sheets as of June 30, 2024 and 2023.

During the year ended June 30, 2024, we realized a total net loss of $ 3,016,772 from five investment liquidations and disposals (Citrus Park Hotel Holdings, LLC, Highland REIT, Inc., SmartStop Self Storage REIT,

Inc., Strategic Realty Trust, Inc., and Summit Healthcare REIT, Inc.) and two investment write-offs (BP3 Affiliate, LLC and Capitol Hill Partners, LLC).

During the year ended June 30, 2023, we realized a total gain of $ 656,984 from twelve investment liquidations and disposals (American Healthcare REIT, Inc., Coastal Realty Business Trust, REEP, Inc-A, Healthcare

Trust, Inc., HGR Liquidating Trust, Secured Income, LP, SmartStop Self Storage REIT, Inc., Summit Healthcare REIT, Inc., WP Carey, Inc., 3100 Airport Way South LP, Dimensions28 LLP, Highlands REIT Inc.

and KBS Real Estate Investment Trust II,

During the year ended June 30, 2025, we realized a total net gain of $ 132,434 from four investment liquidations and disposals

(Blackstone Real Estate Income Trust, Inc., Highlands REIT, Inc., National Healthcare Properties, Inc., and 5210 Fountaingate, LP).

During the year ended June 30, 2024,

we realized a total net loss of $ 3,016,772 from five investment liquidations and disposals (Citrus Park Hotel Holdings, LLC,

Highland REIT, Inc., SmartStop Self Storage REIT, Inc., Strategic Realty Trust, Inc., and Summit Healthcare REIT, Inc.) and two investment write-offs (BP3 Affiliates, LLC and Capitol Hill Partners, LLC).

The following table presents fair value measurements of our investments as of June 30, 2025 and 2024, according to the fair value hierarchy:

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Proceeds from sales, net

Return of capital distributions

Net realized loss

Net realized gain

Net unrealized gain

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For the year ended June 30, 2025, net change in unrealized losses included in earnings relating to Level III investments still held at June 30, 2025 were $ 2,680,923 .

The following is a reconciliation of the beginning and ending balances for

investments measured at fair value on a recurring basis using significant unobservable inputs (Level III of the fair value hierarchy) for the year ended June 30, 2023:

The following is a reconciliation of the beginning and ending balances for investments measured at fair value on a recurring basis using

significant unobservable inputs (Level III of the fair value hierarchy) for the year ended June 30, 2024:

Balance at July 1, 2023

Purchases of investments

Transfers to Level I

Transfer to Investments in Real Estate

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Return of capital distributions

Written off contingent consideration

Net realized gains

Net unrealized loss

Net realized loss

Net unrealized gain

Ending balance at June 30, 2024

The transfer of $ 30,753 from

Level III to Level I category during the year ended June 30, 2023 resulted from one of our investments converting from a non-traded REIT to publicly traded REIT.

Transfers are assumed to have occurred at the beginning of the year.

For the year ended June 30, 2024, net change in unrealized losses included in earnings relating to Level III investments still held at June 30, 2024 were $ 1,215,172 .

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Market Activity

Secondary market industry publication

Acquisition cost

Security sales

Secondary market industry publication

Estimated Liquidation Value

Sponsor provided value

Direct Capitalization Method

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Discount rate

Estimated Liquidation Value

Sponsor provided value

Market Activity

Acquisition cost

The following table shows quantitative information

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Secondary market industry publication

Acquisition cost

Direct Capitalization Method

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Discount rate

0.0 % - 9.0 %

Estimated Liquidation Value

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Summarized Financial Statements for Equity Method Investments (Fair Value Option)

Our investments in securities are generally in small and mid-sized companies in

a variety of industries.

In accordance with the Rule 8-03(b)(3) of Regulation S-X applicable for smaller reporting companies, we must determine which of our equity method investments measured at fair value under the Fair Value Option are

considered “significant”, if any.

Regulation S-X mandates the use of three different tests to determine if any of our investments are considered significant investments:

Our investments in securities are generally in small and mid-sized companies in a variety of industries.

In accordance with the Rule 8-03(b)(3) of Regulation S-X

applicable for smaller reporting companies, we must determine which of our equity method investments measured at fair value under the Fair Value Option are considered “significant”, if any.

Regulation S-X mandates the use of three different

tests to determine if any of our investments are considered significant investments:

the investment test, the asset test, and the income test.

requires summarized financial statements for any significant equity method investments in an annual and interim report if any of the three tests exceed 20% .

In addition to the SEC rules, ASC 323-10-50-3(c) requires summarized financial statements of our equity method investments, including those reported under the fair value option, if they are material individually or in

None of our equity method investments accounted under the fair value option were determined to be individually significant under any of the

tests and are not material in aggregate as of June 30 , 2024.

The rule requires summarized financial statements for any significant equity method investments in an

annual and interim report if any of the three tests exceed 20%.

In addition to the SEC rules, ASC 323-10-50-3(c) requires summarized financial statements of our equity method investments, including those

reported under the fair value option, if they are material individually or in aggregate.

None of our equity method investments accounted under the fair value option were determined to be individually significant under any of the tests

as of June 30, 2025.

Furthermore, our equity method investments accounted under the fair value option in aggregate were not material as of June 30, 2025.

Unconsolidated Significant Subsidiaries

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an annual report if any of the three tests exceeds 10%.

As of June 30, 2024 and 2023, none of our investments in securities was considered an unconsolidated significant subsidiary under the SEC

rules described above.

As of June 30, 2025 and 2024, none of our investments in securities were considered unconsolidated significant subsidiaries under the SEC rules

described above.

NOTE 5 – REAL ESTATE ACQUISITIONS AND HELD FOR SALE

A s discussed in Note 1, in September 2023, 220 Campus Lane and Campus Lane Residential acquired the vacant 220 Campus Lane Office Building and the adjacent vacant parcel of

land for a total purchase price of $ 4,473,756 , of which $ 3,300,000 was funded through seller-financed non-recourse loans.

In addition , as discussed in Note 1, on January 1, 2024, the Operating Partnership acquired 100 % membership interest in GVEC, which owns Green Valley Executive Center from an affiliate of our Advisers, for a total purchase price of $ 8,703,127 , which was paid through issuance of 386,805.64

Series A Preferred Units of the Operating Partnership.

The acquisition of GVEC was approved by our independent Board of Directors.

Additionally , as discussed in Note 1, on May 1, 2024, the Operating Partnership completed the

acquisition of 100 % limited partnership interest in One Harbor Center for a total purchase price of $ 3,796,463 , of which $ 2,647,620 was

paid through the issuance of 74,459.11 Series A Preferred Units and 43,212.86 Series B Preferred Units of the Operating Partnership.

Contingent Consideration

As discussed in Note 1, p ursuant to the membership interest purchase agreement for the Wiseman

partnerships, the purchase price paid at closing for the general partnership interests was reduced by 20 % as of the closing date for

the property companies that had not received fully executed and in force leases, the annualized scheduled rents of which are equal to or greater than the target scheduled rent as stated in the membership interest purchase agreement.

This 20 % holdback will be paid upon a property company reaching the stabilization threshold, reduced by stabilization costs, as defined in the membership

interest purchase agreement.

Management believes that it is probable that the stabilization thresholds will be reached for each of the property companies that did not meet this threshold at the acquisition date.

Hence, the 20 % holdback in the amount of $ 2,715,000 was recorded as a contingent liability as of the acquisition date.

30, 2023, the contingent liability amounted to $ 1,503,000 , which was paid in full as of June 30 , 2024 .

Held for Sale

In August 2024 , the Company decided to list Hollywood Apartments for sale and met the criteria to be classified as held for sale.

Accordingly , the asset will be classified as an asset held for sale in our consolidated financial statements as of September 30,

A s discussed in Note 1, on August 1, 2024, the Operating Partnership completed the acquisition

of 100 % limited partnership interest in Green Valley Medical Center,LP for a total purchase price of $ 3,004,194 , of which $ 2,712,194 was

paid through the issuance of 120,541.96 Series A preferred units of the Operating Partnership.

Assets and Liabilities Held for Sale

In August 2024 , the Company decided to list Hollywood Apartments for sale and determined the property met the criteria to be classified as held for sale.

However, in February 2025, management decided to discontinue marketing the property for sale and opted to retain

ownership and continue operations.

As a result, it no longer qualifies as held for sale.

NOTE 6 – LEASES

Lessee Arrangements

As discussed in Note 2, we acquired five

As discussed in Note 2, we acquired six

partnerships which had solar equipment leases in place.

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Lease Expense

The components of total lease cost were as follows for the year ended June 30,

The components of total lease cost were as follows for the years ended June 30,

2025 and 2024:

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We reassess our evaluation of whether an entity is a VIE when certain reconsideration events occur.

We reassess our determination of whether it is the primary beneficiary of a VIE on an ongoing basis based on current facts and

We reassess our determination of whether we are the primary beneficiary of a VIE on an ongoing basis based on current facts and

circumstances.

Nonconsolidated VIEs

As of June 30, 2024 and 2023, two

and four of our unconsolidated VIEs, respectively, include interests in limited partnerships and limited liability companies.

have determined that the Company is not the primary beneficiary of these entities because the managing partner or member of each of these entities has the power to direct the activities that most significantly affect the VIE’s economic

Accordingly, these VIEs have not been consolidated with us, and they have been reported as investments at fair value in the June 30, 2024 and 2023, consolidated balance sheets.

As of June 30, 2025 and 2024, one

and two of our unconsolidated VIEs, respectively, include interests in limited partnerships and limited liability companies.

determined that the Company is not the primary beneficiary of these entities because the managing partner or member of each of these VIEs has the power to direct the activities that most significantly affect the VIE’s economic performance.

Accordingly, these VIEs have not been consolidated with us, and they have been reported as equity method investments at fair value in the June 30, 2025 and 2024, consolidated balance sheets.

The table below presents a summary of the nonconsolidated VIEs in which we hold variable interests:

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terms as we were paying the Investment Adviser prior to 2021, namely based upon a percentage of Invested Capital ( 3 % of the first $ 20 million, 2 % of the next $ 80 million, and 1.50 % over $ 100 million).

Invested Capital is equal to the amount calculated by multiplying the total number of outstanding shares, preferred shares, and the

partnership units (units in our operating partnership issued by us and held by persons other than us) issued by us by the price paid for each or the value ascribed to each in connection with their issuance.

The Advisory Management Agreement

also provides for a 2.5 % Acquisition Fee on new (non-security) purchases, subject to certain limitations designed to eliminate

incentives to “churn” our assets.

The new Advisory Management Agreement also provides for an incentive management fee that is equal to 15 %

of all distributions once shareholders have received cumulative distributions equal to 6 % from the effective date of the

Invested Capital is equal to the amount calculated by multiplying the total number of outstanding shares of common stock, shares of

preferred stock, and the partnership units (units in our operating partnership issued by us and held by persons other than us) issued by us by the price paid for each or the value ascribed to each in connection with their issuance.

Advisory Management Agreement also provides for a 2.50 % Acquisition Fee on new (non-security) purchases, subject to certain

limitations designed to eliminate incentives to “churn” our assets.

The new Advisory Management Agreement also provides for an incentive management fee that is equal to 15 % of all distributions once shareholders have received cumulative distributions equal to 6 % from the effective date of the Agreement.

The Investment Adviser will receive an annual fee equal to $ 100

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Property Management and Leasing Services:

On May 6, 2022,

the Real Estate Adviser’s newly formed wholly owned subsidiary, Wiseman Company Management, LLC (“WCM”), purchased the property management and leasing services rights from Wiseman.

Therefore, effective the acquisition date, WCM has been

providing property management and leasing services to the eight property limited partnerships in accordance with the

pre-existing agreements.

There have been no changes to any of the management services agreements terms with the property limited partnerships since the acquisition of the property management service rights.

year ended June 30, 2024, the ten limited partnerships paid total property management fees of $ 596,268 and leasing commissions of $ 489,571

In addition, during the year ended June 30, 2024, the eleven partnerships also paid $ 1,702,616 to WCM for direct operating costs and construction of tenant improvements.

year ended June 30, 2023, the eight limited partnerships paid total property management fees of $ 489,387 and leasing commissions of $ 591,596

In addition, during the year ended June 30, 2023, the eight partnerships also paid $ 1,963,432 to WCM for direct operating costs and construction of tenant improvements.

acquired the Wiseman Properties on May 6, 2022, our Real Estate Adviser’s newly formed wholly owned subsidiary − Wiseman Company Management,

LLC, which is now known as Wiseman Commercial, Inc.

(“Wiseman Commercial”) − purchased the property management and leasing services rights from Wiseman.

result, effective as of the acquisition date, Wiseman Commercial has been providing property management and leasing services to the Wiseman Partnerships under the pre-existing agreements.

Since the acquisition of these service rights, there

have been no changes to the terms of the management services agreements with these limited partnerships.

In addition, Wiseman Commercial also provides the property management and leasing services to 220 Campus Lane under a similar term as

the Wiseman Partnerships.

year ended June 30, 2025, these Wiseman Commercial managed limited partnerships paid total property management fees of $ 771,574

and total leasing commissions of $ 567,783 to Wiseman Commercial.

In addition, during the year ended June 30, 2025, eleven of the limited partnerships also paid $ 1,549,793

to Wiseman Commercial for direct operating costs and construction of tenant improvements.

year ended June 30, 2024, these Wiseman Commercial managed limited partnerships paid total property management fees of $ 596,268

and total leasing commissions of $ 489,571 to Wiseman Commercial.

In addition, during the year ended June 30, 2024, eleven of the limited partnerships also paid $ 1,702,616

to Wiseman Commercial for direct operating costs and construction of tenant improvements.

Organization and Offering Costs Reimbursement:

As detailed in the Offering Circular, offering costs incurred and paid by us in excess of $ 825,000

(excluding legal fees) in connection with the offering of preferred stock will be reimbursed by the Advisers except to the extent that 10 %

in broker fees are not incurred during the issuance of the preferred shares.

In such case, the broker fees savings are available to us for paying marketing expenses or other non-cash compensation and therefore the broker fees savings

increases the offering cost reimbursement threshold from the Advisers.

As of June 30, 2024, we incurred $ 1,385,342 (excluding

legal fees) of offering costs, of which $ 1,363,107 relates to offering cost paid by Mackenzie on behalf of us in connection with

the preferred stock offering.

As of June 30, 2023, we incurred $ 1,099,189 of offering costs, of which $ 1,000,667 relates to offering cost paid by Mackenzie on behalf of us in connection with the preferred stock offering.

The total offering cost

incurred as of June 30, 2024 were in excess of the total offering cost reimbursement threshold including the broker savings by $ 259,575 .

The total offering costs incurred as of June 30, 2023 were below the offering cost reimbursement threshold including the broker savings.

The cumulative offering costs in excess of the reimbursable threshold have been reimbursed by the

Adviser during the year ended June 30, 2024.

As detailed in the Offering Circular, which terminated on November 1, 2024, offering costs incurred and paid by us in excess of $ 825,000 (excluding legal fees) in connection with the preferred stock offering were reimbursable by the Advisers.

If broker fees of 10 % were not incurred during the issuance of preferred stock, the resulting savings could be applied to marketing expenses or other non-cash

compensation.

In such cases, the broker fee savings increased the reimbursement threshold from the Advisers.

As of the termination date, we had incurred total offering costs of $ 1,465,754 (excluding legal fees), of which $ 1,443,519 was paid by

MacKenzie on our behalf in connection with the preferred stock offering.

The total offering costs exceeded the reimbursement threshold, including the broker fee savings, by $ 328,970 .

This amount was fully reimbursed by the Advisers as of June 30, 2024.

Similarly, under our Second Offering Circular, which the SEC qualified on January 29, 2025, offering costs incurred and paid by us in excess of $ 825,000 (excluding legal fees) in connection with the preferred stock offering are reimbursable by the Advisers.

If broker fees of 10 % are not incurred during the issuance of the preferred shares, the resulting savings may be applied to marketing expenses or other non-cash compensation.

cases, the broker fee savings increase the reimbursement threshold from the Advisers.

As of June 30, 2025, we had incurred total offering costs of $ 61,023

(excluding legal fees), of which $ 44,023 was paid by MacKenzie on our behalf in connection with the preferred stock offering.

total offering costs incurred were below the reimbursable threshold as of that date.

Administration Agreement:

4 unchanged sentences

Officer, Director of Accounting and Financial Reporting, and any administrative support staff.

Since November 1, 2018, MacKenzie has provided transfer agent services, with the costs incurred by MacKenzie being reimbursed by us.

No fee (only cost

reimbursement) is paid to MacKenzie for this service.

Effective March 5, 2024, we hired Securities Transfer Corporation, a third-party transfer agent, to provide these services for our common and Series B preferred stock.

Since November 1, 2018, MacKenzie has provided transfer agent services, with the out-of-pocket costs incurred by MacKenzie being reimbursed by us.

cost reimbursement) is paid to MacKenzie for this service.

Effective March 5, 2024, to comply with Nasdaq listing requirements, we hired Securities Transfer Corporation, a third-party transfer agent, to provide these services for our common

and Series B preferred stock.

However, effective September 30, 2024, Computershare Limited, another third-party transfer agent, took over as transfer agent for our common

The administrative cost reimbursements for the years ended June 30, 2025 and 2024 were $ 669,855 and $ 756,733 , respectively.

The transfer agent

services cost reimbursement for the years ended June 30, 2024 and 2023 were $ 66,267 and $ 92,000 , respectively.

services cost reimbursements for the years ended June 30, 2025 and 2024 were $ 6,145 and $ 66,267 , respectively.

The table below outlines the related party expenses incurred for the years ended June 30, 2025 and 2024, and unpaid as of June 30, 2025 and 2024.

11 unchanged sentences

Due to related entities

Asset acquisition fees paid to the Real Estate Adviser were capitalized as a part of the real estate basis in accordance with our policy.

The acquisition fee paid during the

year ended June 30, 2024 was for the acquisition of 220 Campus Lane and Campus Lane Residential in September 2023, Green Valley Executive Center in January 2024 and One Harbor Center in May 2024.

Asset acquisition fees

paid to the Real Estate Adviser were capitalized as a part of the real estate basis in accordance with our policy.

The acquisition fee paid during the year ended June 30, 2025 was for the acquisition of Green Valley Medical

Center in August 2024.

The acquisition fee paid during the year ended June 30, 2024 was for the acquisition of 220 Campus Lane Office Building and Campus Lane

Land in September 2023, Green Valley Executive Center in January 2024 and One Harbor Center in May 2024.

Offering costs paid by MacKenzie - discussed in this Note under organization and offering costs reimbursements.

12 unchanged sentences

On February 26, 2021, Madison and PVT obtained mortgage loans from First

Republic Bank in the amounts of $ 6,737,500 and $ 8,387,500 , respectively, both at a fixed interest rate of 3.0 % per annum through April 1,

Effective May 1, 2026, interest rates will be the average of the twelve most recently published yields on U.S.

securities adjusted a constant maturity of one year as published by the Federal Reserve System in the Statistical Release H.15

plus 2.75 % per annum.

The loans were obtained to finance the acquisition of the Commodore Apartments and The Park View (f/k/a as

Pon De Leo Apartments), which are located in Oakland, California.

The loans mature on April 1, 2031 and are cross-collateralized

by both properties owned by Madison and PVT.

The loan requires interest only monthly payments through April 1, 2026 and beginning May 1, 2026, monthly payments of principal and interests are due based on 360 months of amortization period.

Republic Bank in the amounts of $ 6,737,500 and $ 8,387,500 , respectively, both at a fixed interest rate of 3 % per annum

through April 1, 2026.

Effective May 1, 2026, interest rates will be the average of the twelve most recently published yields on

Treasury securities adjusted a constant maturity of one year as published by the Federal Reserve System in the Statistical

Release H.15 plus 2.75 % per annum.

The loans were obtained to finance the acquisition of the Commodore Apartments and The Park

View Apartments, which are located in Oakland, California.

The loans mature on April 1, 2031 and are cross-collateralized by

both properties owned by Madison and PVT.

The loan requires interest-only monthly payments through April 1, 2026, and beginning May 1, 2026, monthly payments of principal and interest are due based on 360 months of amortization period.

The remaining unpaid principal balance is due at maturity date.

Accordingly, as of June 30, 2024 and 2023, the

outstanding loan balances for both years were $ 6,737,500 and $ 8,387,500 , on the Madison and PVT mortgage loans, respectively.

The mortgage notes payable balances are disclosed as a part of the mortgage notes payable in the

consolidated balance sheets.

Accordingly, as of both June 30, 2025 and 2024, the outstanding balances

of the loans were $ 6,737,500 for the Madison mortgage loan and $ 8,387,500 for the PVT mortgage loan.

The mortgage notes payable balances are disclosed as a part of the mortgage notes payable, net in the consolidated balance sheets.

The following table provides the projected principal

payments on Madison’s loan for the next five years:

Fiscal Year Ending June 30, :

The following table provides the projected principal

payments on PVT’s loan for the next five years:

Fiscal Year Ending June 30, :

PT Hillview Notes Payable

4 unchanged sentences

The loan was obtained to finance the acquisition of Hollywood Apartments.

The loan is secured by Hollywood Apartments and has an initial maturity date of October 6, 2023 , which can be extended for two

successive 12 -month terms (the “Maturity Date”).

On August 14, 2023, PT Hillview exercised the first extension option to extend the term of

the loan to October 6, 2024 .

The loan requires interest-only monthly payments

with the principal balance due at maturity date.

Interest is due based on a 360 -day amortization period.

The outstanding

balances as of June 30, 2024 and 2023 was $ 17,500,000 , which is disclosed as a part of the mortgage notes payable in the

consolidated balance sheets.

PT Hillview also entered into an interest rate cap agreement on October 4, 2021, as required by the lender.

interest rate cap agreement was revised on September 29, 2023.

We have not recorded the fair value and the changes in the fair value of the contract in our consolidated financial statements as the amounts were

insignificant to our consolidated financial statements.

Pursuant to Section 2.4.5 of the loan agreement, the lender determined

that a substitute benchmark rate transition event occurred.

Accordingly, the loan agreement was amended on March 15, 2023 to update the interest rate on the loan.

Pursuant to the amendment, effective April 6, 2023, the annual interest rate

shall be equal to the greater of (i) a floating rate of interest equal to 5.61148 % plus the secured overnight financing rate

(SOFR) published by Federal Reserve Bank of New York, and (ii) 5.75 %.

We (along with three other principals of True USA) guaranteed:

“Recourse Obligations” as defined in the loan agreement, which are triggered only if the borrower of the loan engages in “Bad Boy Acts” (such as fraud, intentional misrepresentation, willful misconduct, waste, conversion, intentional failure

to pay taxes or maintain insurance, filing for bankruptcy, ADA noncompliance, and environmental contamination, etc.), (2) a “Debt Service and Carry Guaranty” under the loan, which guarantees the payment of interest on the loan and other

“Basic Carrying Costs”, and (3) a “Guaranty of Completion” guaranteeing that the redevelopment work contracted to be performed will be completed as agreed.

As of June 30, 2024, we have not recorded any guaranty obligations since we have not

engaged in any bad boy acts, substantial cash reserves are maintained to cover the basic carrying costs and the redevelopment construction work was completed as agreed.

In August 2024, the underlying property has been listed for sale.

We are currently

in negotiation with the lender for a short-term extension to allow for the property to be marketed and sold.

The loan was secured by Hollywood Apartments and has an initial maturity date of October 6, 2023 , which could be extended for two

successive 12 -month terms.

On August 14, 2023, PT Hillview exercised the first extension option to extend the term of the loan to October 6, 2024 .

The loan required interest-only monthly payments with the principal balance due

at maturity date.

Interest was due based on a 360 -day amortization period.

Accordingly, the outstanding balance as of June 30,

2024 was $ 17,500,000 , which was disclosed as a part of the mortgage notes payable, net in the consolidated balance sheets.

Hillview also entered into an interest rate cap agreement on October 4, 2021, as required by the lender.

The interest rate cap

agreement was revised on September 29, 2023 and it matured on February 2, 2025.

We did not record the fair value and the changes in the fair value of the contract in our consolidated financial statements because the

amounts were insignificant to our consolidated financial statements.

On October 3,

2024, the loan agreement was amended to include extension options with principal paydowns.

PT Hillview exercised the extension options pursuant to the amended agreement and the maturity date was extended until April 6, 2025 with total principal paydown of $ 3,975,000 .

On March 28, 2025, PT Hillview entered into a loan agreement with Wells Fargo Bank, National

Association, in the amount of $ 11,660,000 at a fixed annual interest rate of 5.87 %.

The loan was obtained to refinance the prior $ 17,500,000

loan with Ladder Capital Finance which matured on April 6, 2025 .

The new loan matures in April 2030 , is secured by Hollywood Apartments, and requires interest-only monthly payments with the principal balance due at maturity.

outstanding balance of the loan as of June 30, 2025 was $ 11,660,000 , which is disclosed as a part of the mortgage notes

payable, net in the consolidated balance sheets.

In connection with the refinancing, the Operating Partnership contributed $ 5,683,503 to PT Hillview to fund

the principal paydown, replenish reserves, and pay loan fees.

Of this amount, $ 568,350 ( 10 %) represented the share of the non-controlling interest holder, True USA.

Accordingly, as of June 30, 2025, this amount has been recorded

as a note receivable from True USA and is included in investments, income, rents, and other receivables in the consolidated balance sheet.

We (along with three other principals of True USA) guaranteed the “Recourse

Obligations” as defined in the loan agreement, which are triggered only if the borrower of the loan engages in “Bad Boy Acts” (such as fraud, intentional misrepresentation, willful misconduct, waste, conversion, intentional failure to pay

taxes or maintain insurance, filing for bankruptcy, ADA noncompliance, and environmental contamination, etc.).

As of June 30, 2025, we have not recorded any guaranty obligations.

MacKenzie Shoreline Mortgage Notes Payable

2 unchanged sentences

The annual interest rate under the agreement is 3.65 % for the first 60 months,

and a variable interest rate based on a 6-month CME Term Secured Overnight Financing Rate plus a margin of 3.00 percentage points, for months thereafter until maturity.

and a variable interest rate based on a 6-month CME Term SOFR plus a margin of 3.00 percentage points, for months thereafter until maturity.

The loan was obtained to finance the acquisition of Shoreline Apartments.

matures on June 1, 2032 and is secured by Shoreline Apartments.

The loan requires interest only monthly payments through June

30, 2027, and beginning July 1, 2027, monthly payments of principal and interests are due based on 360 months of amortization

Accordingly, the outstanding loan balance as of June 30, 2024 and 2023, was $ 17,650,000 , which is disclosed as a part

of the mortgage notes payable in the consolidated balance sheets.

The loan matures on June 1, 2032 , and is secured by Shoreline Apartments.

The loan requires interest-only monthly payments through June 30, 2027, and beginning July

1, 2027, monthly payments of principal and interests are due based on 360 months of amortization period.

Accordingly, the

outstanding loan balance as of June 30, 2025 and 2024, was $ 17,650,000 , which is disclosed as a part of the mortgage notes

payable, net in the consolidated balance sheets.

The following table provides the projected principal payments on the loan for the next five years:

Fiscal Year Ending June 30, :

First & Main Mortgage Notes Payable

On January 4, 2021, First & Main entered into a loan agreement

with Exchange Bank, in the amount of $ 12,000,000 at a fixed annual interest rate of 3.75 %.

The loan was obtained to finance the acquisition of First & Main Office Building.

The loan matures on February 1, 2026 and is secured by First & Main Office Building.

The loan requires monthly payments of principal and interest based on a 25-year amortization period with the remaining principal balance due at maturity.

The loan is guaranteed by Wiseman, but Wiseman was

subsequently indemnified by the Operating Partnership on July 1, 2022 as discussed in Note 5.

The outstanding balance of the loan as of June 30, 2024 and 2023, was $ 10,963,355 and $ 11,288,012 , respectively, which

is disclosed as a part of the mortgage notes payable in the consolidated balance sheets.

The following table provides the projected principal and interest

payments on the loan for the next two years:

As of the acquisition date, First & Main had a loan agreement with

Exchange Bank, in the amount of $ 12,000,000 at a fixed annual interest rate of 3.75 %, which the Company assumed.

The loan matures on February 1, 2026 ,

and is secured by First & Main Office Building.

The loan requires monthly payments of principal and interest based on a 25-year

amortization period with the remaining principal balance due at maturity.

The loan is guaranteed by Wiseman, but Wiseman was subsequently indemnified by the Operating Partnership on July 1, 2022.

The outstanding balance of the loan as

of June 30, 2025 and 2024, was $ 10,626,226 and $ 10,963,355 , respectively, which is disclosed as a part of the mortgage notes payable, net in the consolidated balance sheets.

The following table provides the projected principal payment on the loan

for the next year:

Fiscal Year Ending June 30, :

First & Main Other Note Payables:

In 2018, First & Main voted to issue $ 1,000,000 in interest-only junior promissory notes.

The notes were issued in 2018 and 2019 with an original maturity date of December 31, 2023 and included no

prepayment penalty for early retirement.

Of the total promissory notes, notes with a total principal balance of $ 350,000 were paid off as of December 31, 2023.

The maturity dates of the remaining promissory notes were extended to:

December 31, 2025 , with a principal balance of $ 100,000 ,

December 31, 2026 , with a principal balance of $ 100,000 , and December 31, 2028 , with a total principal balance

of $ 450,000 .

Interest on the notes is payable on the first day of each month at 7 % per annum.

The promissory notes are disclosed as a part of the notes payable in the consolidated balance sheets.

In March 2024, the partnership obtained a new loan with the principal amount of $ 200,000 in an interest-only junior promissory note.

As of the acquisition date, First & Main had $ 1,000,000 in interest-only junior promissory notes outstanding, which the Company assumed.

The notes were issued in 2018 and 2019 with an

original maturity date of December 31, 2023 and included no prepayment penalty for early retirement.

Of the total promissory notes,

notes with a total principal balance of $ 350,000 were paid off as of December 31, 2023.

The maturity dates of the

remaining promissory notes were extended to:

December 31, 2025 for notes with a principal balance of $ 100,000 , December 31, 2026 ,

for notes with a principal balance of $ 100,000 , and December 31, 2028 , for the remaining notes with a total principal balance of $ 450,000 .

Interest on the notes is payable on the first day of each month at 7 %

The promissory notes are disclosed as a part of line of credit and notes payable, net in the consolidated balance sheets.

In March 2024, the partnership obtained an additional loan with the principal amount of $ 200,000 in an interest-only junior promissory note.

The note was issued on March 8, 2024 with a maturity date of March 31, 2025 .

Interest on the note is payable on the first day of each month at 8.50 % per annum.

The $ 200,000 note was repaid in

full as of March 31, 2025 .

Small Business Administration (“SBA”) Loan

In June 2020, First & Main borrowed $ 151,000 from the SBA, under the Economic Injury Disaster Loan program.

As of the acquisition date, First & Main had an outstanding $ 151,000 loan from the SBA under the Economic Injury Disaster Loan program, which the Company assumed.

The loan will be paid back over 30 years at an annual interest rate of 3.75 %

starting in December 2022.

starting on December 20, 2022.

Monthly payments will be $ 731 .

The loan is disclosed as a part of the notes payable in the

consolidated balance sheets.

The loan is disclosed as a part of line of credit and notes

payable, net in the consolidated balance sheets.

Solar System Loan (First & Main)

In August 2020, First & Main borrowed $ 220,000 from The Wiseman Family Trust to fund the installation of the solar power system at First & Main Office Building.

The loan will

be paid back over a period of 10 years at an annual interest rate of 5 %.

As of the acquisition date, First & Main had an outstanding $ 220,000 loan from The Wiseman Family Trust, which the Company assumed.

The loan was used to finance the installation of a solar power system

at the First & Main Office Building.

The loan will be paid back over a period of 10 years at an annual interest rate of

Monthly payments of principal and interest will be $ 1,486 .

As of June 30, 2024 and 2023, the outstanding balance of the loan amounted to $ 163,362 and $ 182,393 , respectively, and is

disclosed as a part of the notes payable in the consolidated balance sheets.

As of June 30, 2025 and 2024, the outstanding balance of the loan amounted to $ 143,384 and $ 163,362 ,

respectively, and is disclosed as a part of line of credit and notes payable, net in the consolidated balance sheets.

1300 Main Mortgage Notes Payable

On April 12, 2019, 1300 Main entered into a loan agreement with Suncrest

Bank, in the amount of $ 9,160,000 at a fixed annual interest rate of 4.55 % for the first 60 payments.

Beginning May 25,

2024, the interest rate will be calculated on the unpaid principal balance at an interest rate based on the Prime Rate as published in the Western Edition Wall Street Journal, plus a margin of 1 %.

The loan was obtained to consolidate the construction loans obtained during the development and construction of the building.

The loan matures on April 25, 2029 , and is secured by 1300 Main Office Building.

The loan requires monthly payments of principal and interest of $ 51,610 for 60 consecutive

payments followed by 59 monthly payments of principal and interest of $ 60,674 with the remaining principal balance due at maturity.

The loan is guaranteed by Wiseman, but Wiseman was subsequently indemnified by the Operating Partnership

on July 1, 2022.

The outstanding balance of the loan as of June 30, 2024 and 2023, was $ 8,168,350 and $ 8,393,068 , respectively, which is disclosed as a part of the mortgage notes payable in the consolidated balance sheets.

Consistent with asset acquisition accounting, the debt assumed from the

acquisition of 1300 Main was measured at fair value.

The interest rate on the debt was below the current market rates, as a result, $ 338,000

of the acquisition cost was allocated to debt mark-to-market.

The debt mark-to-market value is amortized over the remaining loan term.

The debt mark-to-market value, net of accumulated amortization as of June 30, 2023, amounted to $ 177,895 , respectively, and was netted against the total debt balance in the consolidated balance sheets.

The debt mark-to-market value was fully amortized

as of June 30, 2024.

The following table provides the projected principal and interest

payments on the loan for the next five years:

On November 4, 2024, 1300 Main entered into a loan agreement with Valley

Strong Credit Union, in the amount of $ 8,000,000 at a fixed annual interest rate of 6.85 %.

The loan was obtained to refinance the prior $ 9,160,000

loan from Suncrest Bank, which was originally obtained by 1300 Main under its previous ownership.

The new loan matures on November 15, 2029 ,

and is secured by a real property and the assignment of all its rental revenue.

The loan requires monthly payments of principal and interest of $ 52,534

through maturity.

The remaining unpaid principal balance is due at maturity.

The note is guaranteed by the Parent Company.

The outstanding balance of the loan as of June 30, 2025 was $ 7,972,744 , which is disclosed as a part of the mortgage notes payable, net in the consolidated balance sheets .

The following table provides the projected principal payments on the

loan for the next five years:

Fiscal Year Ending June 30, :

1300 Main Other Notes Payable:

On January 13, 2021, 1300 Main borrowed $ 150,000 from the SBA, under the Economic Injury Disaster Loan program.

As of the acquisition date, 1300 Main had an outstanding $ 150,000 loan from the SBA under the Economic Injury Disaster Loan program, which the Company assumed.

The loan will be paid back over 30 years at an annual interest rate of 3.75 %

starting in July 2023.

starting on July 11, 2023.

Monthly payments will be $ 731 .

The outstanding balance of the loan as of June 30, 2024 and 2023 was $ 160,111 , which is

disclosed as a part of the mortgage notes payable in the consolidated balance sheets.

The outstanding balance of the loan as of June 30, 2025 and 2024 was $ 161,300 and $ 160,111 , respectively, which is disclosed as a part of the line of credit and notes payable, net in the consolidated balance

Woodland Corporate Center Two Mortgage Notes Payable

As of the acquisition date, Woodland Corporate Center Two had a loan

agreement with Western Alliance Bank, in the amount of $ 7,500,000 at a fixed annual interest rate of 4.15 %, which the Company assumed.

The loan matured on October 7, 2024 and was secured by Woodland Corporate Center.

The loan was guaranteed by Wiseman, but Wiseman was subsequently indemnified by the Operating Partnership on July 1,

The outstanding balance of the loan as of June 30, 2024 was $ 6,626,543 , which was disclosed as a part of the mortgage

notes payable, net in the consolidated balance sheets.

On October 4, 2024, Woodland Corporate Center Two entered into a loan

agreement with Western Alliance Bank, in the amount of $ 7,500,000 at a fixed annual interest rate of 4.15 %.

The loan was obtained to finance the acquisition of Woodland Corporate Center Office Building.

The loan matures on October 7, 2024 and

is secured by Woodland Corporate Center Office Building.

The loan requires monthly payments of principal and interest based on a 25-year

amortization period with the remaining principal balance due at maturity.

The loan is guaranteed by Wiseman, but Wiseman was subsequently indemnified by the Operating Partnership on July 1, 2022 as discussed in Note 5.

The outstanding

balance of the loan as of June 30, 2024 and 2023, was $ 6,626,543

and $ 6,827,930 , respectively,

which is disclosed as a part of the mortgage notes payable in the consolidated balance sheets .

The Company is currently working with a different lender to refinance the loan and has already received pre-approval for the new loan.

The following table provides the projected principal and interest

payments on the loan for the next year:

agreement with Summit Bank, in the amount of $ 6,000,000 at a fixed annual interest rate of 6.50 %.

The loan was obtained to refinance the prior $ 7,500,000 loan from Western Alliance Bank which matured on October 7, 2024.

The loan matures on October 5, 2027 , and is secured by the real property and the assignment of all its rental revenue.

The loan requires monthly payments of principal and interest of $ 40,873 through October 5, 2027.

The remaining unpaid principal balance is due at maturity.

The loan is guaranteed by the Parent Company.

The outstanding balance of the loan as of

June 30, 2025 was $ 5,932,794 , which is disclosed as a part of the mortgage notes payable, net in the consolidated balance

The following table provides the projected principal payments on the

loan for the next three years:

Fiscal Year Ending June 30, :

Main Street West Mortgage Notes Payable

22, 2019, Main Street West entered into a loan agreement with First Northern Bank of Dixon, in the amount of $ 16,600,000 at a

fixed annual interest rate of 4 %.

The loan was obtained to refinance the prior loan secured by the real property when it

The loan matures on November 1, 2024 and is secured by Main Street West Office Building.

The loan requires monthly payments of principal and interest based on a 25-year amortization period with the remaining principal balance due at maturity.

The loan is guaranteed by Wiseman, but Wiseman was subsequently indemnified by the Operating

Partnership on July 1, 2022 as discussed in Note 5.

The outstanding balance of the loan as of June 30, 2024 and 2023, was $ 14,893,842

and $ 15,337,106 , respectively, which is disclosed as a part of the mortgage notes payable in the consolidated balance sheets.

We are currently in negotiation with the lender to extend the

An appraisal has been ordered by the lender to determine the current value and a modified loan amount.

It is likely that a partial principal paydown is required.

Consistent with asset acquisition accounting, the debt assumed from the

acquisition of Main Street West was measured at fair value.

The interest rate on the debt was below the current market rates, as a result, $ 717,000

of the acquisition cost was allocated to debt mark-to-market.

The debt mark-to-market value is amortized over the remaining loan term.

The debt mark-to-market value, net of accumulated amortization as of June 30, 2024 and 2023, amounted

to $ 162,955 and $ 554,045 ,

respectively, and was netted against the total debt balance in the consolidated balance sheets.

The following table provides the projected principal and interest

payments on the loan for the next year:

Fiscal Year Ending June 30, :

acquisition date, Main Street West had a $ 16,600,000 loan with First Northern Bank of Dixon (the “Prior Lender”) at a fixed

annual interest rate of 4 %, which the Company assumed.

The loan was secured by the Main Street West Office Building and was

guaranteed by Wiseman, who was subsequently indemnified by the Operating Partnership on July 1, 2022.

matured on November 1, 2024 , and the Company was unable to reach agreement with the Prior Lender on extension terms.

result, the loan went into maturity default.

Although negotiations continued, the Prior Lender initiated foreclosure proceedings, and in February 2025 a court-appointed receiver assumed control of the property.

On March 25, 2025, the

Company entered into a Forbearance, Settlement, and Release Agreement (the “Forbearance Agreement”) and a related indemnity agreement with the Prior Lender.

of the Forbearance Agreement, the loan had an aggregate balance of $ 15,797,328 , consisting of $ 14,742,049 of principal, $ 867,812

of accrued interest (including COVID-19 deferred interest), and $ 187,467 of default-related costs incurred by the Prior

Under the terms of the Forbearance Agreement, the Company agreed to pay these default-related costs.

Pursuant to the Forbearance Agreement, the Company paid $ 5,000,000 toward the loan and regained control of the property from the receiver in April 2025.

This payment reduced the loan balance and resolved the foreclosure

action, allowing the Company to proceed with refinancing.

2025, the Company refinanced the loan it had with the Prior Lender for the indebtedness secured by the Main Street West Office Building that was in maturity default and subject to the Forbearance Agreement.

The loan from the Prior

Lender was paid off on June 6, 2025, with a new loan from EverTrust Bank.

loan has a principal amount of $ 9,500,000 , with an interest rate equal to the Wall Street Journal Prime Rate, currently at 7.50 % annually, with a 6.50 %

The loan requires monthly payments of principal and interest based on a 300 -month amortization schedule.

remaining unpaid principal balance is due at maturity.

The loan matures on May 30, 2028 , and is guaranteed by the Parent

also formed a wholly owned subsidiary, Innovate Napa, to enter into a master lease covering approximately 36.2 % ( 13,806 square feet) of the rentable square feet of the Main Street West Office Building.

The Operating Partnership will contribute $ 500,000 of capital in Innovate Napa in order for it to pay on the master lease.

Innovate Napa does not occupy the space;

arrangement was established in connection with the refinancing of the Main Street West loan to satisfy the lender’s occupancy requirements.

Lease payments from Innovate Napa to Main Street West are intercompany in nature and eliminated

in consolidation.

This related-party arrangement is temporary and is expected to remain in place until the space is leased to third-party tenants.

For the year ended June 30, 2025, rental revenue of $ 62,127 receivable from Innovate Napa was eliminated in the Parent Company’s books for consolidation purposes.

as of June 30, 2025 and 2024, the outstanding balances of the loans were $ 9,500,000 for the new loan and $ 14,893,842 for the old loan, respectively.

The mortgage notes payable balances are disclosed as part of the mortgage notes payable, net in

the consolidated balance sheets.

Total accrued interest on the loan as of June 30, 2025 and 2024, was $ 51,239 and $ 373,873 , respectively, the latter of which includes the COVID-19 deferred interest.

Main Street West Other Notes Payable:

On April 7, 2021,

Main Street West borrowed $ 150,000 from the SBA, under the Economic Injury Disaster Loan program.

The loan will be paid back

over 30 years at an annual interest rate of 3.75 % starting on September 4, 2022.

As of the acquisition date,

Main Street West had an outstanding $ 150,000 loan from the SBA under the Economic Injury Disaster Loan program, which the

Company assumed.

The loan will be paid back over 30 years at an annual interest rate of 3.75 % starting on September 4, 2023.

Monthly payments will be $ 731 .

The outstanding balance

of the loan as of June 30, 2024 and 2023 was $ 161,300 and $ 160,433 , respectively, which is disclosed as a part of the mortgage notes payable in the consolidated balance sheets .

The outstanding balance of the loan as of June 30, 2025 and 2024 was $ 161,300 ,

which is disclosed as a part of the line of credit and notes payable, net in the consolidated balance sheets .

220 Campus Lane Mortgage Notes Payable

6 unchanged sentences

at maturity date.

Accordingly, the outstanding balance of the loan as of June 30, 2024 was $ 2,145,000 , which is disclosed

as a part of the mortgage notes payable in the consolidated balance sheets.

We consolidated 220 Campus Lane with our consolidated financial statements during the quarter ended September 30, 2023.

Accordingly, the outstanding balance of the loan as of June 30, 2025 and 2024 was $ 2,145,000 , which

is disclosed as a part of the mortgage notes payable, net in the consolidated balance sheets.

Consistent with asset acquisition accounting, this debt was measured at fair value.

The interest rate on the debt was below the current market rates, as a result, $ 223,000 of the acquisition cost was allocated to debt mark-to-market as disclosed in Note 3.

The debt mark-to-market value is amortized over the remaining loan

The debt mark-to-market value, net of accumulated amortization as of June 30, 2024 amounted to $ 187,196 , and was

netted against the total debt balance in the consolidated balance sheets.

The interest rate on the debt was below the current market rates, as a result, $ 223,000 of the acquisition cost was allocated to debt mark-to-market.

The debt mark-to-market value is amortized over the remaining loan term.

mark-to-market value, net of accumulated amortization as of June 30, 2025 and 2024 amounted to $ 142,596 and $ 187,196 , respectively, and was netted against the total debt balance in the consolidated balance sheets.

Campus Lane Residential Mortgage Notes Payable

September 8, 2023, Campus Residential borrowed $ 1,155,000 from Northern California Laborers Pension Fund at a fixed

September 8, 2023, Campus Lane Residential borrowed $ 1,155,000 from Northern California Laborers Pension Fund at a fixed

annual interest rate of 5 %.

4 unchanged sentences

The remaining unpaid principal balance is due at maturity date.

outstanding balance of the loan as of June 30, 2024 was $ 1,155,000 , which is disclosed as a part of the mortgage notes

payable in the consolidated balance sheets.

Consistent with asset acquisition accounting, the debt acquired from the acquisition of Campus Lane Residential Land was measured at fair value.

The interest rate on the debt was below the current market rates, as a result, $ 120,000 of the acquisition cost was allocated to debt mark-to-market as disclosed in Note 3.

The debt mark-to-market value is amortized

over the remaining loan term.

The debt mark-to-market value, net of accumulated amortization as of June 30, 2024, amounted to $ 100,732 ,

and was netted against the total debt balance in the consolidated balance sheets.

Green Valley Executive Center Mortgage Notes Payable

On August 16, 2022, the

predecessor owner of GVEC entered into a $ 14,000,000 fixed-rate loan agreement with Columbia State Bank.

interest rate is 4.25 % until October 1, 2027, increasing to 5.46 % thereafter.

The loan matures on September 1, 2032

and is secured by the Green Valley Executive Center.

The loan requires monthly payments of principal and interest based on a 30 -year

amortization period with the remaining principal balance due at maturity.

The loan was assumed by GVEC on January 1, 2024 from the predecessor owner.

The outstanding balance of the loan as of June 30, 2024 was $ 13,599,329 , which is disclosed as a part of the mortgage notes payable in the consolidated balance sheets.

We consolidated GVEC with

our consolidated financial statements during the quarter ended March 31, 2024, accordingly, this mortgage note payable was not included in our consolidated balance sheet as of June 30, 2023.

outstanding balance of the loan as of June 30, 2025 and 2024 was $ 1,155,000 , which is disclosed as a part of the

mortgage notes payable, net in the consolidated balance sheets.

Consistent with asset acquisition accounting, the debt acquired from the acquisition of Campus Lane Land was measured at fair value.

The interest rate on the debt was below the current market rates, as a result, $ 120,000 of the acquisition cost was allocated to debt mark-to-market.

The debt mark-to-market value is amortized over the remaining loan

The debt mark-to-market value, net of accumulated amortization as of June 30, 2025 and 2024, amounted to $ 76,733

and $ 100,732 , respectively, and was netted against the total debt balance in the consolidated balance sheets.

GVEC Mortgage Notes Payable

As of the acquisition date,

GVEC had a $ 14,000,000 fixed-rate loan agreement with Columbia State Bank, which the Company assumed on January 1, 2024

from the predecessor owner.

The initial interest rate is 4.25 % until October 1, 2027, increasing to 5.46 % thereafter.

The loan matures on September 1, 2032 and is secured by the Green Valley Executive Center.

The loan requires monthly payments of principal and interest based on a 30 -year amortization period with the remaining principal balance due at maturity.

The outstanding balance of the loan as of June 30, 2025 and 2024 was $ 13,346,323 and $ 13,599,329 , respectively,

which is disclosed as a part of the mortgage notes payable, net in the consolidated balance sheets.

Consistent with asset

acquisition accounting, the debt assumed from the acquisition of Green Valley Executive Center was measured at fair value.

The interest rate on the debt was below the current market rates, as a result, $ 993,000 of the acquisition cost was allocated to debt mark-to-market as disclosed in Note 3.

The debt mark-to-market value is

amortized over the remaining loan term.

The debt mark-to-market value, net of accumulated amortization as of June 30, 2024, amounted to $ 943,350

and was netted against the total debt balance in the consolidated balance sheets.

The following table provides the projected principal and interest payments on the loan for the next five years:

The interest rate on the debt was below the current market rates, as a result, $ 993,000 of the acquisition cost was allocated to debt mark-to-market.

The debt mark-to-market value is amortized over the remaining

The debt mark-to-market value, net of accumulated amortization as of June 30, 2025 and 2024, amounted to $ 844,050

and $ 943,350 , respectively, and was netted against the total debt balance in the consolidated balance sheets.

The following table provides the projected principal payments on the loan for the next five years:

Fiscal Year Ending June 30, :

One Harbor Center

One Harbor Center, LP

Mortgage Notes Payable

On April 20, 2020, under the predecessor ownership, One Harbor Center, LP borrowed $ 8,378,825 from Travis Credit

Union at a fixed annual interest rate of 4.96 %.

The loan matures on June 1, 2028 , and is secured by a real property and the assignment of all its rental revenue.

The loan requires monthly payments of principal and interest of $ 46,092 through June 1, 2028.

The remaining unpaid principal balance is due at maturity date.

The outstanding balance of the loan as of

June 30, 2024 was $ 7,846,182 , which is disclosed as a part of the mortgage notes payable in the consolidated balance

We consolidated One Harbor Center with our consolidated financial statements during the quarter ended June 30, 2024, accordingly, this mortgage note payable was not included in our consolidated balance sheet as of June 30,

Consistent with asset

acquisition accounting, the debt assumed from the acquisition of One Harbor Center was measured at fair value.

The interest rate on the debt was below the current market rates, as a result, $ 334,000 of the acquisition cost was allocated to debt mark-to-market as disclosed in Note 3.

As of the acquisition date, One Harbor Center, LP had an $ 8,378,825 loan from Travis Credit Union, which the

Company assumed.

The loan bears interest at a fixed rate of 4.96 % per annum, matures on June 1, 2028 , and is secured by the property and the assignment of all rental revenue.

Monthly principal and interest payments of $ 46,092 are required through maturity, with the remaining unpaid principal balance due at the maturity date.

The outstanding balance of

the loan as of June 30, 2025 and 2024 was $ 7,704,950 and $ 7,846,182 , respectively, which is disclosed as a part of the mortgage notes payable, net in the consolidated balance sheets.

Consistent with asset acquisition accounting, the debt assumed from the acquisition of One Harbor Center was measured at fair value.

The interest rate on the debt was below the current market rates, as a result, $ 334,000 of the acquisition cost was allocated to debt mark-to-market.

The debt mark-to-market value is amortized over the remaining loan

The debt mark-to-market value, net of accumulated amortization as of June 30, 2024 amounted to $ 320,746 , and was

netted against the total debt balance in the consolidated balance sheets.

The following table provides the projected principal and

interest payments on the loan for the next four years:

The debt mark-to-market value, net of accumulated amortization as of June 30, 2025 and 2024 amounted to $ 241,222 and $ 320,746 , respectively, and was netted against the total debt balance in the consolidated balance sheets.

The following table provides the projected principal payments

on the loan for the next three years:

Fiscal Year Ending June 30, :

One Harbor Center Other

Notes Payable:

In August 2020, One Harbor Center borrowed $ 150,000 from the SBA, under the

Economic Injury Disaster Loan program.

The loan will be paid back over 27.5 years at an annual interest rate of 3.75 % starting on February 10, 2023.

The outstanding balance of the loan as of June 30, 2024 was $ 150,000 , which is disclosed as a part of the mortgage notes payable in the consolidated balance sheets.

One Harbor Center, LP

Other Notes Payable:

As of the acquisition date, One Harbor Center, LP had a $ 150,000 loan from

the SBA under the Economic Injury Disaster Loan program, which the Company assumed.

The loan will be paid back over 30 years

at an annual interest rate of 3.75 % starting on February 10, 2023.

The outstanding balance of the loan as of June

30, 2025 and 2024 was $ 150,000 , which is disclosed as a part of the line of credit and notes payable, net in the

consolidated balance sheets.

MRC Aurora Construction

As discussed in Note 1, in order to fund the development of the Aurora project (known as Aurora at Green Valley), we closed on a construction loan of $ 17.15 million with Valley Strong Credit Union, headquartered in Bakersfield, CA, on February 21, 2024.

Interest rate on the loan will be the current index

(Prime) plus a spread of 0.25 %.

As of June 30, 2024, we have not drawn any amount on the line.

Per the loan agreement,

MRC Aurora will first use its cash equity of $ 12.5 million, less any out-of-pocket costs already spent on the project,

for the construction before drawing on the line.

As discussed in Note 1, on February 21, 2024, the Company closed on a $ 17.15 million construction loan with

Valley Strong Credit Union, headquartered in Bakersfield, California, to fund the development of the Aurora at Green Valley.

The loan bears interest at a variable rate equal to the Prime Rate plus 0.25 % and matures on March 1, 2026 .

The Company has the option to extend the construction loan for an additional six-month period or to convert it to a conventional permanent loan.

The monthly accrued interest is added on the outstanding loan balance.

outstanding loan balance as of June 30, 2025 was $ 6,597,850 , which is disclosed as a part of the mortgage notes

payable, net in the consolidated balance sheets.

The following table provides the projected principal payment

on the loan for the next year:

Fiscal Year Ending June 30, :

MacKenzie Satellite

Mortgage Notes Payable

Subsequent to year ended June 30, 2024, on August 21, 2024, MacKenzie Satellite entered into a loan agreement with Summit Bank, in the amount of $ 6,000,000 at a fixed annual interest rate of 6.50 %.

The loan matures on August 21, 2027 , and is secured by a real property and the assignment of all its rental revenue.

On August 21, 2024, MacKenzie Satellite entered into a loan agreement with Summit Bank, in the amount of $ 6,000,000

at a fixed annual interest rate of 6.50 %.

The loan matures on August 21, 2027 , and is secured by MacKenzie Satellite’s real property and the assignment of all its rental revenue.

The Parent Company has guaranteed the loan.

requires monthly payments of principal and interest of $ 40,867 through August 21, 2027.

The remaining unpaid principal

balance is due at maturity date.

The outstanding balance of the loan as of June 30, 2025 was $ 5,909,606 , which is

disclosed as a part of the mortgage notes payable, net in the consolidated balance sheets.

following table provides the projected principal payments on the loan for the next three years:

Fiscal Year Ending June 30, :

Green Valley Medical Center, LP Mortgage Notes Payable

On July 15, 2024, Green Valley Medical Center, LP entered into a loan agreement with Valley Strong Credit Union, in the amount of $ 7,800,000 at a fixed annual interest rate of 7.12 %.

The loan matures on August 1, 2029 , and is secured by the real property and the assignment of all its rental

The Parent Company provided a guaranty of the note.

The loan requires monthly payments of principal and interest of $ 52,628

through August 21, 2027.

through December 1, 2028.

The remaining unpaid principal balance is due at maturity date.

This mortgage note payable was not included in our consolidated balance sheet as of June 30, 2024.

The following table provides the projected principal and interest payments on the loan for the next four years:

The outstanding balance of the loan as of June 30, 2025 was $ 7,747,998 , which is disclosed as a part of the mortgage notes payable, net in the consolidated balance sheets.

We consolidated Green Valley Medical Center,

LP with our consolidated financial statements during the year ended June 30, 2025;

accordingly, this mortgage note payable was not included in our consolidated balance sheet as of June 30, 2024.

The following table provides the projected principal payments on the loan for the next five years:

Fiscal Year Ending June 30, :

The below table

presents the total loan outstanding at the underlying companies as of June 30, 2024, and the fiscal years those loans mature:

Green Valley Medical Center, LP Other Notes Payable:

As of the acquisition date, Green Valley Medical Center, LP had a $ 150,000

loan from the SBA under the Economic Injury Disaster Loan program, which the Company assumed.

The loan bears interest at 3.75 %

per annum and is repayable over a 30-year term.

While the Company has been making interest payments, the Federal

Government has not yet commenced amortization of the principal.

The outstanding balance of the loan as of June 30, 2025 was $ 150,000 ,

which is disclosed as a part of the line of credit and notes payable, net in the consolidated balance sheets.

We consolidated Green Valley Medical Center, LP with our consolidated financial statements during the year ended June

accordingly, this note payable was not included in our consolidated balance sheet as of June 30, 2024.

Line of Credit Agreement

On January 22, 2025, we entered into a revolving line of credit agreement with PRES, an affiliate of the Adviser, of up to $ 10,000,000 .

Interest will accrue on any unpaid principal balance on the note at a fixed annual interest rate of 10 %.

In addition, an origination fee of 2 %

will be charged on each advance and the sum will be added to the principal balance.

The loan matures on June 1, 2026 .

The loan requires monthly interest payments beginning on March 1, 2025 , with the remaining principal balance due at maturity.

The outstanding loan balance as of June 30, 2025 was $ 9,588,000 , which includes $ 188,000

of loan origination fees, and is disclosed as a part of line of credit and notes payable, net in the consolidated balance sheets.

The loan origination fee is capitalized and amortized over the life of the loan.

The remaining

unamortized balance of $ 138,611 was netted against the total debt balance in the consolidated balance sheets.

For the year ended June 30, 2025, we incurred interest expense of $ 324,643

on the line of credit.

Of this amount, $ 284,693 remained outstanding as of June 30, 2025 and is disclosed as a part

of accounts payable and accrued liabilities in the consolidated balance sheet.

The following table provides the projected principal payment on the loan for the next year:

Fiscal Year Ending June 30, :

On September 24, 2025, the line of credit agreement with PRES was amended to extend the maturity date to December 31, 2027 .

Secured Promissory

Note Agreement

On June 11, 2025, the

Company entered into a note purchase agreement with Streetville Capital, LLC (the “Investor”) providing for the issuance of up to $ 3,270,000

in secured promissory notes to fund the REIT share purchases in MRC QRS.

On that date, the Investor funded $ 1,000,000

in cash, and the Company issued a secured promissory note in the principal amount of $ 1,115,000 , which included

an original issue discount of $ 90,000 and transaction expenses of $ 25,000 .

The note matures 18 months after

the funding date, or on December 11, 2026 .

For the first five

months following issuance, the Company is required to make monthly payments equal to accrued interest.

Beginning in the sixth month and continuing until maturity, the Company must make monthly payments of $ 93,000 plus accrued interest.

The notes are

guaranteed by MRC QRS through a security agreement entered into by MRC QRS in favor of the Investor.

MRC QRS granted the Investor a first-position security interest in the assets of MRC QRS.

The Company also

entered into a stock pledge agreement with the Investor, where the Company pledged to the Investor as collateral and security for the secured obligations, and granted the Investor a first-position security interest in the

common stock of MRC QRS.

The Investor shall have the right to exercise the rights and remedies set forth in the stock pledge agreement and in the transaction documents if an event of default has occurred.

The secured note is

subject to certain trigger events, which provide the Investor with the option to increase the outstanding balance by 5 %

to 15 % depending on the severity of the trigger event.

Failure of the Company to cure the trigger event may

result in an event of default, which would cause the outstanding balance to become immediately due and demandable.

The outstanding

balance of the loan as of June 30, 2025 was $ 1,115,000 , which is disclosed as a part of the line of credit and

notes payable, net in the consolidated balance sheets.

We consolidated MRC QRS with our consolidated financial statements during the year ended June 30, 2025;

accordingly, this note payable was not included in our

consolidated balance sheet as of June 30, 2024.

The following table provides the projected principal payments on the loan for the

next two years:

Fiscal Year Ending June 30, :

The table below presents the total loan outstanding at the underlying

companies as of June 30, 2025, and the fiscal years those loans mature:

Fiscal Year Ending June 30, :

Debt Guaranty

The Wiseman partnerships have mortgage loans with various banks and the loans are guaranteed by Wiseman and its owner, Doyle Wiseman and his trust.

The mortgage loans of 1300 Main, LP, One Harbor Center, LP, Martin Plaza

Associates, LP, and Main Street West, LP are also guaranteed by the partnerships’ general partner as the co-guarantor.

On July 1, 2022, subsequent to Operating Partnership’s acquisition of the management companies, Wiseman’s owner, Doyle Wiseman and the Operating Partnership entered into an indemnity agreement whereby the Operating

Partnership will indemnify Doyle Wiseman for any losses suffered by him through the default of a limited partnership on the mortgage secured by the property owned by the limited partnership.

Historically, none of the limited

partnerships has had any defaults on any mortgages and Doyle Wiseman has not had to satisfy any mortgage default through a guaranty.

Furthermore, each of the limited partnerships is adequately capitalized, has sufficient cash flow

from operations to service the mortgage notes and has not required Doyle Wiseman to provide any subordinated financial support to the limited partnerships.

Therefore, we have no t recorded any liability related to the guaranty on the mortgage loans as of June 30, 2024.

The mortgage loan of GVEC is guaranteed by Patterson Real Estate Services LP, an affiliate of the Adviser, and its owner, Berniece A.

The Wiseman partnerships had mortgage loans and solar leases with various banks, all of which were guaranteed by Wiseman and its owner, Doyle Wiseman and his trust, as of May 6, 2022, the date the Operating Partnership

acquired the management companies.

The mortgage loans of 1300 Main, LP, One Harbor Center, LP, Martin Plaza Associates, LP, and Main Street West, LP are also guaranteed by the partnerships’ general partner as the co-guarantor.

On July 1, 2022, subsequent to the Operating Partnership’s acquisition of the management companies, Doyle Wiseman, the owner of Wiseman, and the Operating Partnership entered into an indemnity agreement whereby the Operating

Partnership will indemnify Doyle Wiseman for any losses suffered by him through the default of a limited partnership on the mortgage secured by the property owned by the limited partnership, or default on any solar lease

Historically, except for the Main Street West default discussed below, none of the limited partnerships has had any defaults on any mortgages and Doyle Wiseman has not had to satisfy any mortgage default through a

Furthermore, except for Main Street West, each of the limited partnerships is adequately capitalized, has sufficient cash flow from operations to service the mortgage notes and has not required Doyle Wiseman to provide any

subordinated financial support to the limited partnerships.

Therefore, we have no t recorded any liability related to the

guaranty on the mortgage loans as of June 30, 2025.

As of June 30, 2025, refinancings have resulted in removal of Wiseman as guarantor at Westside Professional Center, Green Valley Medical Center, Woodland Corporate Center Two, 1300 Main and Main Street West.

Company now guarantees the mortgage note at each of these properties, with the exception of Westside Professional Center which is guaranteed by its sole limited partner.

As discussed in this note, as of November 1, 2024, Main Street West was in default under its note.

The bank initiated foreclosure proceedings in January 2025 and the court-appointed receiver took control of the property in

February 2025.

On March 25, 2025, the Company entered into a Forbearance Agreement and indemnity agreement with the Prior Lender.

Effective June 6, 2025, the Company refinanced the loan it had with the Prior Lender for the

indebtedness secured by the Company’s Main Street West Office Building that was in maturity default and subject to the Forbearance Agreement.

The loan from the Prior Lender was paid off on June 6, 2025, with a new loan from

EverTrust Bank.

As of June 30, 2025, the outstanding principal balance of the new loan was $ 9,500,000 and accrued

interest was $ 51,239 .

The new mortgage loan for Main Street West is also guaranteed by the Parent Company.

have determined that the Company does not need to record any liability under the loan guaranty as of June 30, 2025, since the underlying property’s appraised value exceeds the outstanding debt balance.

The mortgage loan of GVEC is guaranteed by PRES, an affiliate of the Adviser, and its owner, Berniece A.

Patterson and her trust.

As part of the GVEC contribution agreement, the Operating

Partnership indemnified Berneice Patterson and her trust for any losses suffered by her through the default by GVEC on the mortgage loan.

The mortgage loan of MacKenzie Satellite obtained in August 2024 is guaranteed by the Parent

As part of the GVEC contribution agreement, the Operating Partnership indemnified Berneice

Patterson and her trust for any losses suffered by her through the default by GVEC on the mortgage loan.

The mortgage loans for MacKenzie Satellite, obtained in August 2024 and the construction loan for MRC Aurora, LLC are also

guaranteed by the Parent Company.

The note purchase agreement and secured note entered into in June 2025 are guaranteed by MRC QRS.

NOTE 11 – EARNINGS PER SHARE

7 unchanged sentences

Basic and diluted weighted average common shares outstanding

13,293,221.84

13,282,927.98

Basic and diluted earnings per share

The Company incurred a net loss for the year ended June 30, 2025.

As a result, the dilutive securities, the common stock series A and B warrants,

were considered anti-dilutive and excluded from the calculation of diluted net loss per share.

As of June 30, 2025, 423,944.85

shares underlying these instruments were excluded.

In accordance with ASC Topic 260, Earnings Per

Share , shares issuable for little to no consideration should be included in the number of outstanding shares used for basic earnings per share.

The FASB proposed that warrants or options exercisable for little to no cost be included

in the denominator of basic earnings per share (and therefore diluted earnings per share) once there were no further vesting conditions or contingencies associated with them.

Accordingly, as of June 30, 2025, the Company included 129,226.50 pre-funded warrants, discussed in Note 1, in the denominator of basic earnings per share.

There were no warrants issued as of June 30, 2024.

NOTE 12 – SHARE OFFERINGS AND FEES

During the year ended June 30, 2024, we issued 185,819.74 common shares with total gross proceeds of $ 1,371,351 under the D RIP.

Additionally, during the year ended June 30, 2024 , we issued 3,011.35 common shares at $ 10.25 per share, to the Class A unit holders of the Operating Partnership who exercised their option to convert their Class A units to our common shares .

During the year ended June 30, 2024, we issued 85,688.31 Series A preferred shares with total

gross proceeds of $ 2,140,949 and 49,562.45

Series B preferred shares with total gross proceeds of $ 1,227,950 under the Offering Circular and incurred syndication costs of $ 637,490 in relation to preferred shares offering.

For the year ended June 30, 2024, we issued 7,741.20 Series A preferred shares with total gross proceeds of $ 174,179

under the DRIP and 2.11 Series B preferred shares with total gross proceeds of $ 48 under the DRIP.

During the year ended June 30, 2023, we issued 189,289.44 common shares with total gross proceeds of $ 1,638,739 under the DRIP.

In addition, in April 2023 and July 2022, we issued 4,309.17 and 169.67 common shares at $ 10.25

per share, to the Class A unit holders of the Operating Partnership who exercised their option to convert their Class A units to our common shares.

During the year ended June 30, 2023, we issued 549,973.38 Series A preferred shares with total gross proceeds of $ 13,408,089 under the Offering Circular and incurred syndication costs of $ 1,652,903 in relation

to preferred shares offering.

For the year ended June 30, 2023, we issued 3,350.16 Series A preferred shares with total gross

proceeds of $ 75,379 under the DRIP.

As discussed in Note 1, on August 26, 2024, in

connection with our agreement with Maxim, the Company issued through a private placement agreement an aggregate amount of 13,300

shares of common stock to Maxim’s affiliate, approximately 1 % of the Company’s outstanding stock.

As discussed in Note 1, on January 30, 2025, in

connection with our agreement with OTB Capital, the Company issued through a private placement agreement an aggregate amount of 8,583.70

shares of common stock to OTB Capital, approximately $ 0.20 million worth of shares.

As discussed in Note 1, on February 28, 2025, in

connection with the Registered Offering, the Company issued 153,403.40 shares of the Company’s common stock, $ 0.0001 par value per share, pre-funded warrants to purchase up to 129,226.50 shares of common stock and, in a concurrent private placement and together with the Registered Offering, warrants to purchase up to an aggregate of 423,944.85 shares of common stock, approximately $ 4.80

million worth of shares.

In March 2025, we issued 32.18

shares of common stock at $ 102.50 per share to the Class A unit holders of the Operating Partnership who exercised their option to

convert their Class A units to our common share at a 10 :1 ratio, and 15,668.10 shares of common stock to the Series A preferred stock holders who exercised their option to convert their shares of Series A preferred stock to shares of our common stock at

price per shares ranging from $ 11.50 to $ 40.20 .

During the year ended June 30, 2025, we issued 9,044 shares of Series A preferred stock with total gross proceeds of $ 226,100 and 65,903.16 shares of Series B preferred stock with total

gross proceeds of $ 1,647,579 under the Second Offering Circular and incurred syndication costs of $ 1,301,283 in relation to common and preferred stock offerings.

As of the year ended June 30, 2025, we issued 8,567.49 shares of Series A preferred stock with total gross proceeds of $ 192,770 under the preferred stock DRIP, 644.60 shares of Series B

preferred stock with total gross proceeds of $ 14,503 under the preferred stock DRIP, and converted 12,805.38 shares of Series A preferred stock at $ 1

per share to shares of our common stock.

During the year ended June 30, 2024, we issued 18,581.97 shares of common stock with total gross proceeds of $ 1,371,351 under the DRIP.

Additionally, during the year ended June 30, 2024, we issued 301.14

shares of common stock at $ 102.50 per share to the Class A unit holders of the Operating Partnership who exercised their option to

convert their Class A units to shares of our common stock.

During the year ended June 30, 2024, we issued 85,688.31 shares of Series A preferred stock with total gross proceeds of $ 2,140,949 and 49,562.45 shares of Series B preferred stock with total

gross proceeds of $ 1,227,950 under the Offering Circular and incurred syndication costs of $ 637,490 in relation to preferred stock offering.

For the year ended June 30, 2024, we issued 7,741.20 shares of Series A preferred stock with total gross proceeds of $ 174,179

under the preferred stock DRIP and 2.11 Series B preferred stock with total gross proceeds of $ 48 under the preferred stock DRIP.

NOTE 13 – SHARE REPURCHASE PLAN

On March 4, 2024, the Board of Directors suspended the common stock share repurchase program and DRIP in connection with its pursuit of the listing

of its common stock on a securities exchange.

During the years ended June 30, 2024 and 2023, we repurchased our own shares through our Share Repurchase Program and through third-party auctions as noted in the below table:

On March 4, 2024, the Board of Directors suspended the common stock share repurchase program and common stock DRIP in connection with its pursuit of

the listing of its common stock on a securities exchange.

When our common stock became eligible for trading on OTC Markets in April 2024, the share repurchase program automatically terminated, and the Board of

Directors will decide whether, and when, to reinstate the common stock DRIP .

During the years ended June 30, 2025 and 2024, we repurchased shares of our common stock through our share repurchase program and through

third-party auctions as noted in the below table:

of Shares Repurchased

3 unchanged sentences

During the year ended June 30, 2025

September 1, 2023 through September 30, 2023

December 1, 2023 through December 31, 2023

June 1, 2024 through June 30, 2024

Series A Preferred stock

December 1, 2023 through December 31, 2023

March 1, 2024 through March 31, 2024

June 1, 2024 through June 30, 2024

* Cash in-lieu of fractional shares payout.

September 1, 2024 through December 31, 2024

* Fees paid for redemption lockup agreements.

of Shares Repurchased

5 unchanged sentences

December 1, 2023 through December 31, 2023

March 1, 2023 through March 31, 2023

June 1, 2024 through June 30, 2024

Series A Preferred stock

April 1, 2023 through April 30, 2023

NOTE 14 – STOCKHOLDER DIVIDENDS

The following table reflects the dividends per share that we have declared on

our common stock and preferred stock during the year ended June 30, 2024:

December 1, 2023 through December 31, 2023

March 1, 2024 through March 31, 2024

June 1, 2024 through June 30, 2024

** Cash in-lieu of fractional shares payout.

NOTE 14 – STOCKHOLDER DIVIDENDS AND DRIP

The following table reflects the dividends per share that

we have declared on our common stock and preferred stock during the year ended June 30, 2025:

Series A Preferred Stock

7 unchanged sentences

$ 204,889 was an increase in liquidation preference and $ 68,292 was the cash dividend.

On March 4, 2024, the Board of Directors suspended DRIP in connection with its pursuit of the listing of its common stock on a securities

Prior to the suspension, during the year ended June 30, 2024, of the total dividends paid to common stockholders, $ 1,371,351

have been reinvested under our DRIP.

Similarly, during the year ended June 30, 2024, of the total dividends paid to Series A and Series B preferred stockholders, $ 174,179 and $ 48 , respectively, have been reinvested under our DRIP.

Preferred (Series A and B), and common dividends declared during the year ended June 30, 2024 were paid in July 2024 .

On May 10, 2024 , we

declared the Series A Preferred stock quarterly dividend of $ 0.375 per share payable at the rate of $ 0.125 per month for holders of record as of July 31, 2024 , August 31, 2024 and September 30, 2024 .

Series A and B preferred stock and common stock dividends

declared during the quarter ended June 30, 2025, were paid in July 2025.

During the year ended June 30, 2025, we did no t issue any common shares under our common

stock DRIP since the plan was suspended in March 2024.

During the year ended June 30, 2025, $ 192,770 of Series A preferred dividends and $ 14,503 of Series B preferred dividends were reinvested under the

preferred stock DRIP.

On May 19, 2025, following a review of the Company’s

financials, the current economic climate, the potential impact of new tariffs on demand for office and retail space, and the increased likelihood of a near-term recession, the Board of Directors approved the suspension of the regular

quarterly dividend on the Company’s common stock effective immediately.

This decision was made to preserve liquidity , enable the Company to make further

investments in its own properties and developments where prudent, and to provide financial flexibility as to near-term commitments;

the suspension will remain in effect until further notice.

On May 12, 2025 , we declared the Series A Preferred stock quarterly dividend of $ 0.375 per share payable at the rate of $ 0.125 per month for holders of record as of July 31, 2025 , August 30, 2025 ,

and September 30, 2025 .

The Series A preferred stock dividend declared on May 12, 2025 will be paid in October 2025 .

On May 10, 2024 , we also

declared the Series B Preferred stock quarterly 3 % dividend of $ 0.1875 per share payable at the rate of $ 0.0625 per month

for holders of record as of July 31, 2024 , August 31, 2024 and September 30, 2024 .

The Series B preferred stock dividend declared on July 12, 2024 , will be paid in October 2024 .

In addition, the Series B Preferred Stock will accrue dividends at the rate of 9 % per annum on the stated value as an increase

in liquidation preference.

On September 20, 2024 , we

also declared the common stock quarterly dividend of $ 0.125 per share which will be paid in October 2024 .

The following table reflects the distributions declared

by the Operating Partnership for the Class A and Preferred unit holders during the year ended June 30, 2024:

On May 12, 2025 , we also declared the Series B preferred stock quarterly 3 %

dividend of $ 0.1875 per share payable at the rate of $ 0.0625 per month for holders of record as of July 31, 2025 ,

August 30, 2025 , and September 30, 2025 .

The Series B preferred stock dividend declared on May 12, 2025 , will be paid in October 2025 .

In addition, the Series B preferred Stock will accrue dividends at the rate of 9 % per annum on the stated value as an increase in liquidation preference.

On September 15, 2025 , we declared the Series C Preferred stock quarterly dividend of $ 0.5625

per share payable at the rate of $ 0.1875 per month for holders of record as of July 31, 2025 , August 30, 2025 , and September 30, 2025 .

The Series C preferred stock dividend declared on May 12, 2025 will be paid in October 2025 .

The following table reflects the

distributions declared by the Operating Partnership for the Class A and Preferred unit holders during the year ended June 30, 2025:

Distributions

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June 30, 2025

* Of the total dividends declared for Series B during the year ended June 30,

2024, $ 16,205 was an increase in liquidation preference and $ 5,402 was the cash dividend.

During the year

ended June 30, 2024, the Operating Partnership paid Class A distributions of $ 41,346 .

Similarly, during year ended June 30, 2024

the Operating Partnership paid Series A preferred distributions of $ 857,477 , of which $ 83,883 have been reinvested under our DRIP.

Preferred (Series A and B), and common dividends declared during the year ended June 30, 2024 were paid in July 2024 .

* Of the total distributions declared for Series B during the year ended June 30, 2025, $ 97,229 was an increase in liquidation preference and $ 32,409 was the cash dividend.

During the year ended June 30, 2025, the

Operating Partnership paid Class A distributions of $ 28,738 , none of which was reinvested.

During the year ended June 30, 2025, the Operating Partnership paid Series A preferred distributions of $ 1,521,500 , of which $ 98,968 have been reinvested under the preferred stock DRIP.

During the year ended June 30, 2025, the Operating Partnership paid Series B preferred distributions

of $ 29,709 , none

of which was reinvested.

The following table reflects the dividends per share that we have declared on our common stock and preferred stock during the year ended June 30,

Series A Preferred Stock

Series B Preferred Stock

During the Quarter Ended

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June 30, 2024

During the year

ended June 30, 2023, we paid common dividends of $ 5,691,554 , of which $ 1,638,739 have been reinvested under our DRIP.

During the year ended June 30, 2023, we paid Series A preferred dividends of $ 491,410 , of which $ 75,379 have

been reinvested under our DRIP.

Series A preferred dividends and common dividends declared during the year ended June 30, 2023 were paid in July 2023 .

The following table reflects the distributions declared by the Operating Partnership for the Class A and Preferred

unit holders during the year ended June 30, 2023 :

* Of the total dividends declared for Series B during the year ended June 30, 2024, $ 31,497 was an increase in liquidation preference and $ 10,451

was the cash dividend.

On March 4, 2024, the Board of Directors suspended the common stock DRIP in connection with its pursuit of the listing of its common stock

on a securities exchange.

Prior to the suspension, during the year ended June 30, 2024, of the total dividends paid to common stockholders, $ 1,371,351

have been reinvested under our DRIP.

During the year ended June 30, 2024, of the total dividends paid to Series A preferred stockholders, $ 174,179 have been reinvested under our DRIP.Similarly, during the year ended June 30, 2024, of the total dividends paid to Series B preferred

stockholders, $ 48 have been reinvested under our preferred stock DRIP.

Preferred (Series A and B), and common dividends

declared during the year ended June 30, 2024 were paid in July 2024 .

The following table reflects the distributions declared

by the Operating Partnership for the Class A and Preferred unit holders during the year ended June 30, 2024:

Distributions

Class A Units

Preferred Units

Series A Preferred Units

Series B Preferred Units

During the Quarter Ended

3 unchanged sentences

June 30, 2024

* Of the total dividends declared for Series B during the year ended June 30, 2024, $ 16,205 was an increase in liquidation preference and $ 5,402 was the cash dividend.

During the year

ended June 30, 2024, the Operating Partnership paid Class A distributions of $ 41,346 .

Similarly, during year ended June 30, 2024

the Operating Partnership paid Series A preferred distributions of $ 857,477 , of which $ 83,883 have been reinvested under our DRIP.

Preferred (Series A and B), and common dividends declared during the year ended June 30, 2024 were paid in July 2024 .

15 – WARRANTS

On February 28, 2025, the Company entered into a securities purchase agreement with a single institutional investor

pursuant to which the company offered and sold 153,403.40 shares of the Company’s common stock, $ 0.0001 par value per share, pre-funded warrants to purchase up to 129,226.50 shares of common stock, and warrants to purchase up to an aggregate of 423,944.85 shares of

common stock.

The purchase price for each share and the exercise price for each common stock warrant to purchase one share of common

stock was $ 17.10 per share, and the purchase price for each pre-funded warrant to purchase one share of common stock was $ 17.099 .

The common stock warrants

consist of Series A common stock warrants and Series B common stock warrants.

The Series A common stock warrants to purchase up to 141,314.95

shares of common stock are exercisable following the six-month anniversary of the closing date of the offering and expire 18 months from

the date of issuance.

The Series B common stock warrants to purchase up to 282,629.90 shares of common stock are exercisable following

the six-month anniversary of the closing date of the offering and expire five years from the date of issuance.

The gross proceeds to the Company from this offering were $ 2.62 million from the sale of the common stock and $ 2.62 million

from the sale of the pre-funded warrants.

Because the Series A and B warrants were issued in conjunction with the sale of the common stock and the pre-funded warrants, the total gross proceeds of $ 4.80 million from the sale of the common stock and pre-funded warrants were proportionally allocated between the common stock, prefunded warrants, and the Series A and B

warrants based on the estimated fair values of the stock and the warrants at the time of the issuance in accordance with ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity .

The total fair

value allocation was:

$ 2.30 million to common stock, $ 1.94 million to the pre-funded warrants, $ 0.38 million to Series A warrants and $ 0.22 million to Series B warrants.

As of June 30, 2025, there were 129,226.50 , 141,314.95 , and 282,629.90 in prefunded, Series A common stock warrants and Series B common stock warrants, respectively, issued and outstanding.

The exercise price for the pre-funded warrants

is $ 0.001 per share and $ 17.10

per share for the Series A and B warrants.

The Company evaluated the terms of the warrants under ASC 815-40, Derivatives and Hedging

– Contracts in Entity ’ s Own Equity , and determined that they qualify for equity classification.

This conclusion was based on the fact that:

The warrants are indexed to the Company’s own stock;

The contracts require physical or net share settlement;

The Company has sufficient authorized and unissued shares to settle the contracts;

There are no settlement provisions

requiring cash payment by the Company;

There are no variables or conditions that could cause the warrants to be reclassified as liabilities.

Accordingly, the warrants are classified as a component of stockholders’ equity, and no subsequent remeasurement is required.

The proceeds from the issuance of the warrants were allocated to additional paid-in capital upon

The following table summarizes warrant activity for the year ended June 30, 2025:

Number of Warrants

Weighted average

exercise price

Outstanding as of July 1, 2024

Issued during the year

Exercised during the year

Expired during the year

Oustanding as of June 30, 2025

As of June 30, 2025, there were no exercisable Series A and Series B common stock warrants as they are not

exercisable until after September 3, 2025.

All 129,226.50 prefunded warrants were exercised at an exercise price of $ 0.001 per share in July and August 2025.

16 – SEGMENT REPORTING

ASC 280, Segment Reporting (“ASC 280”), establishes standards for reporting financial and

descriptive information about an enterprise’s reportable segments.

We operate as a single

reportable segment, income-producing real estate properties, which includes activities related to acquiring, owning, developing, and managing real estate investments.

Although our properties are geographically diversified throughout the United

States, we do not distinguish or group our operations on a geographical basis for purposes of allocating resources or measuring performance.

Our business is managed as one segment for internal purposes.

The investment committee led by the Chief

Executive Officer serves as the Chief Operating Decision Maker (“CODM”) and evaluates performance and makes resource allocation decisions on this basis.

The CODM evaluates operating performance primarily based on the Company’s net income (loss).

While our real estate portfolio could be categorized into residential and commercial properties, the CODM does not evaluate performance or allocate resources using these categories.

Expenses that are significant are the same as those presented in our

consolidated statements of operations.

Additionally, the CODM reviews the asset information and capital expenditures on a consolidated basis that are the same as shown on the accompanying consolidated balance sheets and statements of cash flows.

Our customers in the United States accounted for 100 % of our revenues and we do not have any property or equipment outside of the United States.

We also have a real estate-related debt and equity securities investment portfolio;

however, this portfolio does not constitute a

reportable segment under ASC 280.

Segment net loss includes the direct costs of the reportable segment.

Certain costs, including asset management fees to related party, administrative cost

reimbursements to related party, directors’ fees, and transfer agent cost reimbursements to related party, and various other general corporate costs that are not specifically allocable to the segment, are included in unallocated corporate expenses

The Company’s single

segment derives revenue primarily from rental and other property income.

The following financial metrics are regularly reviewed by the CODM:

June 30, 2025

June 30, 2024

Segment revenue

Depreciation and amortization

Interest expense

Property operating and maintenance

General and administrative

Professional fees

Impairment loss

Segment net loss

Reconciliation of loss:

Unallocated corporate expenses (1)

Other income (loss), net

Loss before income tax

(1) Unallocated corporate expenses include corporate overhead expenses that are not directly attributable to our

reportable segment and include interest expense, asset management fees to related party, general and administrative, professional fees, administrative cost reimbursements to related party, directors’ fees, and transfer agent cost reimbursements

to related party.

The CODM does not review disaggregated expense information beyond the categories listed above.

Entity-wide disclosures:

Revenue by geographic area:

United States:

Major customers:

There is no one customer accounted for with more than 10% of total revenue, aside from the early lease termination income of $ 3,000,000 from one of the tenants, OS National, LLC, of our Satellite Place Office Building.

NOTE 17 – COMMITMENTS

We commenced the Aurora Project site preparation and grading work in April 2024 and the building construction will begin in

September 2024.

As of June 30, 2024, MRC Aurora has entered into several contracts with third parties for the construction of the Aurora Project.

These contracts represent MRC Aurora’s commitment to incur future expenditures for the development of

The total commitments as of June 30, 2024, amounted to $ 19.56 million.

We commenced the Aurora at Green Valley construction in September 2024.

As of June 30, 2025, MRC Aurora has entered into

several contracts with third parties for the construction of the project.

These contracts represent MRC Aurora’s commitment to incur future expenditures for the development of the project.

The total commitments as of June 30, 2025 and 2024,

amounted to $ 5.91 million and $ 19.56

million, respectively.

The total commitments as of June 30, 2025, will be funded by drawing on the

construction loan discussed in Note 10.

MacKenzie Realty Capital, Inc.

12 unchanged sentences

March 5, 2021

Hollywood Apartments

October 4, 2021

Shoreline Apartments

Satellite Place

Satellite Place Office Building

First & Main Office Building

8 unchanged sentences

September 1, 2023

Campus Lane Residential

Campus Lane Land

September 1, 2023

2 unchanged sentences

One Harbor Center

Green Valley Medical Center

August 1, 2024

A summary of activity for real estate and accumulated depreciation for the

3 unchanged sentences

Additions - acquisitions

Impairment loss

Balance at the end of the year

3 unchanged sentences

Balance at end of the year

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

MACKENZIE REALTY CAPITAL, INC.

2 unchanged sentences

September 29, 2025

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Robert Dixon

14 unchanged sentences

September 29, 2025

/s/ Kjerstin Hatch

September 29, 2025

Kjerstin Hatch

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures