What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-05 compared with 2025-05-01 · 160 added, 110 removed, 101 unchanged (73% of the section changed)

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Significant estimates include the provisions for current expected credit losses, loans held for sale at fair value, and real estate owned.

See Note 2 – Significant Accounting Policies for further details.

See Note 2 – Significant Accounting Policies — to our condensed consolidated financial statements for further details.

Revenue Recognition

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CECL Allowance

We record an allowance for credit losses (“CECL”) in accordance with the CECL standard on our loan portfolio, including unfunded construction commitments, on a collective basis by assets with similar risk characteristics.

We record an allowance for credit losses (“CECL”) on our loan portfolio in accordance with FASB Topic 326, Financial Instruments - Credit Losses, including unfunded construction commitments, on a collective basis by assets with similar risk characteristics.

This methodology replaces the probable incurred loss impairment methodology.

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Further, CECL requires credit losses to be presented as an allowance rather than as a write-down on available-for-sale debt securities if management does not intend to sell and does not believe that it is more likely than not, they will be required to sell.

As allowed under the CECL standard that we have adopted, as a practical expedient, the fair value of the collateral at the reporting date is compared to the net carrying amount of the loan when determining the allowance for credit losses for loans in pending/pre-foreclosure status, as defined.

Fair value of collateral is reduced by estimated cost to sell if the collateral is expected to be sold.

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The loss rate method involves applying a loss rate to a pool of loans with similar risk characteristics to estimate the expected credit losses on that pool of loans.

In determining the CECL allowance, we consider various factors including (1) historical loss experience in its portfolio, (2) loan specific losses for loans deemed collateral dependent based on excess amortized cost over the fair value of the underlying collateral, and (3) its current and future view of the macroeconomic environment.

In determining the CECL allowance, we consider various factors including (1) historical loss experience in our loan portfolio, (2) loan specific losses for loans deemed collateral dependent based on

excess amortized cost over the fair value of the underlying collateral, and (3) management's current and future view of the macroeconomic environment.

We also utilize a reasonable and supportable forecast period equal to the contractual term of the loan plus any applicable short-term extensions that are reasonably expected for construction loans.

Loans, interest receivable, due from borrowers, unfunded commitments, and (available-for-sale debt) investment securities are all presented net on the Condensed Consolidated Balance Sheets with expanded disclosures in the notes to the condensed consolidated financial statements.

The change in the balances during the reporting period are recorded in the Condensed Consolidated Statements of Operations under the provision for credit losses.

Loans, interest receivable, due from borrowers, unfunded commitments, and investment securities are all presented net on our Condensed Consolidated Balance Sheets with expanded disclosures in the notes to our condensed consolidated financial statements.

The change in the balances during the reporting period are recorded in our Condensed Consolidated Statements of Operations under the provision for credit losses.

Our Loan Portfolio

The following table highlights certain information regarding our real estate lending activities for the three months ended March 31, 2025 (in thousands, except number of loans and weighted averages):

March 31, 2025

The following table highlights certain information regarding our real estate lending activities for the three and six months ended June 30, 2025:

Three Months Ended June 30, 2025 Six Months Ended June 30, 2025

(in thousands, except number

of loans and weighted averages)

Loans disbursed $ 39,644 $ 80,952

Loans repaid $ 23,652 $ 71,394

Principal of loans transferred to real estate owned $ 5,888 $ 6,298

Number of loans transferred to real estate owned 1 2

As of June 30, 2025 As of December 31, 2024

(in thousands, except number

of loans and weighted averages)

Number of loans held for investment outstanding 135 157

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Weighted average contractual interest rate (1)

12.72 % 12.53 %

Weighted average term to maturity (in months) (2)

______________________________________________________________

(1) Includes default interest.

(2) Does not give effect to extensions.

At March 31, 2025, our outstanding mortgage loan portfolio included loans ranging in size from $35,000 to $42.8 million.

The table below gives a breakdown of our loans held for investment by loan size as of March 31, 2025:

Aggregate Gross

At June 30, 2025, our outstanding mortgage loan portfolio included loans with outstanding principal balance amount up to $38.3 million.

The table below gives a breakdown of our loans held for investment by loan size as of June 30, 2025:

Amount Number of

Loans Percentage Aggregate Gross

Amount Percentage

(in thousands)

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$10,000,001 or more 11 8.1 % 185,863 48.3 %

As of March 31, 2025, the primary markets in which we were exposed were Connecticut, Florida, Massachusetts and New York.

The table below gives a breakdown of our loans held for investment by state as of March 31, 2025:

Total 135 100.0 % $ 384,739 100.0 %

As of June 30, 2025, the primary markets in which we were exposed were Connecticut, Florida, Massachusetts and New York.

The table below gives a breakdown of our loans held for investment by state as of June 30, 2025:

State Number of

Loans Percentage Gross Amount

Outstanding Percentage

(in thousands)

Connecticut 65 48.1 % 113,107 29.4 %

Florida 17 12.6 % 110,822 28.8 %

Georgia 1 0.7 % 3,840 1.0 %

Maine 3 2.2 % 2,508 0.7 %

Maryland 4 3.0 % 3,231 0.8 %

Massachusetts 10 7.4 % 56,213 14.6 %

New Jersey 2 1.5 % 6,455 1.7 %

New York 17 12.6 % 30,519 7.9 %

North Carolina 5 3.7 % 23,323 6.1 %

Pennsylvania 2 1.5 % 4,857 1.3 %

Rhode Island 3 2.2 % 1,927 0.5 %

South Carolina 4 3.0 % 13,816 3.6 %

Tennessee 1 0.7 % 12,895 3.4 %

Washington D.C.

The following table details our loans held for investment as of March 31, 2025 by year of origination:

Aggregate Gross

Year of Origination

1 0.7 % 1,226 0.3 %

Total 135 100.0 % $ 384,739 100.0 %

The following table details our loans held for investment as of June 30, 2025 by year of origination:

Year of Origination Number of

Loans Percentage Aggregate Gross

Amount Percentage

(in thousands)

2025 12 8.9 % 50,040 13.0 %

2024 29 21.5 % 42,614 11.1 %

2023 26 19.3 % 88,157 22.9 %

2022 25 18.5 % 59,745 15.5 %

2021 28 20.7 % 133,399 34.7 %

2020 4 3.0 % 6,311 1.6 %

2019 and prior 11 8.1 % 4,473 1.2 %

The following tables set forth information regarding the types of properties securing loans held for investment as of March 31, 2025 and December 31, 2024:

March 31, 2025

December 31, 2024

Total 135 100.0 % 384,739 100.0 %

The following tables set forth information regarding the types of properties securing loans held for investment as of June 30, 2025 and December 31, 2024:

June 30, 2025 December 31, 2024

(in thousands)

Aggregate Gross Principal

Amount Percentage Aggregate Gross Principal

Amount Percentage

Residential $ 196,319 51.0 % $ 211,939 56.2 %

Commercial 111,395 29.0 % 95,509 25.3 %

Pre-Development Land 15,506 4.0 % 23,466 6.2 %

Mixed Use 61,519 16.0 % 46,077 12.2 %

Total $ 384,739 100.0 % $ 376,991 100.0 %

Allowance for Credit Losses

Our allowance for credit losses is influenced by historical loss experience, current exposure by geographical region, current expected credit losses on loans in foreclosure based on fair value less cost to sell, non-performing status, and other supportable forecasts of economic conditions.

A loan is considered non-performing once it has been delinquent on its monthly payments past 90 days.

The following table presents the allowance for credit losses against unpaid principal balance of loans held for investment as of March 31, 2025 and December 31, 2024:

March 31, 2025

December 31, 2024

A loan is considered non-performing once it has been delinquent on its monthly payments more than 90 days.

The following table presents the allowance for credit losses against unpaid principal balance of loans held for investment as of June 30, 2025 and December 31, 2024:

June 30, 2025 December 31, 2024

(in thousands)

Percentage of

Aggregate Gross

Principal Amount

Principal Amount Allowance Percentage of

Principal Aggregate Gross

Principal Amount Allowance Percentage of

Performing – General reserve $ 265,141 $ (5,058) 1.9 % $ 289,910 $ (5,051) 1.7 %

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Non-performing in Foreclosure – Direct reserves 24,036 (8,330) 34.7 % 23,877 (6,058) 25.4 %

For further information, see Note 4 – Loans and Allowance for Credit Losses.

Non-performing subtotal $ 119,598 $ (12,587) 10.5 % $ 87,081 $ (13,419) 15.4 %

Total $ 384,739 $ (17,645) 4.6 % $ 376,991 $ (18,470) 4.9 %

For further information, see Note 4 – Loans and Allowance for Credit Losses — to our condensed consolidated financial statements.

Real Estate Owned

As of March 31, 2025, we owned twenty properties, each of which previously served as collateral for first mortgage loans.

One property was acquired during the three months ended March 31, 2025 in connection with foreclosure actions.

The following table details the carrying value of each of our real estate owned properties reflected on our condensed consolidated balance sheets as of March 31, 2025:

Property Type

As of June 30, 2025, we owned nineteen properties, each of which previously served as collateral for first mortgage loans.

One and four properties were acquired during the three and six months ended June 30, 2025, respectively, in connection with foreclosure actions.

Three and four properties were sold during the three and six months ended June 30, 2025, respectively.

The following table details the carrying value of each of our real estate owned properties reflected on our Condensed Consolidated Balance Sheets as o f June 30, 2025:

Property Type Location Month of

Acquisition Carrying

(in thousands)

Commercial – Restaurant

December 2019

Sturbridge, MA

November 2022

Residential – Single Family

Bellingham, MA

December 2023

Residential – Multi Family

Westbrook, ME

September 2024

Residential – Multi Family

South Portland, ME

September 2024

Cape Coral, FL

Residential – Multi Family

Flagler Beach, FL

Residential – Single Family

Gainesville, FL

November 2024

New London, CT

November 2024

New London, CT

November 2024

Commercial – Office

December 2024

Commercial – Office

December 2024

For further information, see Note 6 – Real Estate Owned (REO).

Commercial - Restaurant Bristol, CT March 2019 $ 750

Land Bristol, CT December 2019 1,406

Land Sturbridge, MA November 2022 110

Residential - Single Family Bellingham, MA December 2023 293

Land Stamford, CT May 2024 115

Land Cape Coral, FL October 2024 900

Land Cape Coral, FL October 2024 350

Residential - Multi Family Flagler Beach, FL October 2024 3,382

Residential - Single Family Gainsville, FL November 2024 435

Mixed Use New London, CT November 2024 1,750

Commerical - Office Windsor, CT December 2024 1,600

Commerical - Office Windsor, CT December 2024 2,250

Land New London, CT November 2024 2,500

Land Marathon, FL January 2025 410

Residential - Single Family Old Lyme, CT May 2025 1,310

Residential - Single Family Old Lyme, CT May 2025 285

Residential - Single Family Old Lyme, CT May 2025 315

Total $ 18,626

For further information, see Note 6 – Real Estate Owned (REO) — to our condensed consolidated financial statements.

Results of Operations

Three months ended March 31, 2025 compared to three months ended March 31, 2024

Three months ended June 30, 2025 compared to three months ended June 30, 2024

Total revenue

Total revenue for the three months ended March 31, 2025 was $11.4 million compared to $16.8 million for the three months ended March 31, 2024, a decrease of $5.4 million, or 31.9%.

The change in revenue was primarily due to the cumulative effect of fewer originations over the last fifteen months resulting in a reduction in the unpaid principal balance of loans held for investment in addition to a currently elevated amount of nonperforming loans and real estate owned.

On the other hand, income from our preferred membership limited liability company investments increased approximately 71.7%, quarter-over-quarter.

Total revenue for the three months ended June 30, 2025 was $10.8 million compared to $15.1 million for the three months ended June 30, 2024, a decrease of $4.3 million, or 28.9%.

The change in revenue was primarily due to the cumulative effect of materially lower net new origination over the last twelve months, resulting in a reduction in the unpaid principal balance of loans held for investment, in addition to a currently elevated amount of nonperforming loans and real estate owned.

As of June 30, 2025, net loans held for investment totaled $364.5 million, compared to $485.7 million as of June 30, 2024, representing a decline of $121.2 million in the net principal balance.

On the other hand, other income increased by $0.5 million.

This was driven by the recognition of rental income from one project in 2025, which contributed $0.5 million during the quarter.

No such rental income was recorded in the prior year.

Operating costs and expenses

Total operating expenses for three months ended March 31, 2025 were $10.4 million compared to $12.5 million for the three months ended March 31, 2024,a decrease of $2.1 million or 16.9%.

The largest contributors to this decrease were the decreases in interest and amortization of deferred financing fees as a result of the repayment of $58.2 million of aggregate principal amount of our unsecured, unsubordinated notes in 2024, and a aggregate decrease in compensation and employee benefits, provision for credit losses related to loans held for investment, and other expenses totaling $0.9 million, partially offset by $0.01 million increase in general and administrative expenses.

Other income (loss)

For the three month period ended March 31, 2025, we reported a $0.1 million loss on equity securities.

For the three month period ended March 31, 2024, we reported a $0.4 million gain on equity securities.

Net (loss) income attributable to common shareholders and net (loss) income attributable to common shareholders per share

Net loss attributable to common shareholders for the three months ended March 31, 2025 was $0.2 million, or $0.00 per share, compared to net income attributable to common shareholders of $3.6 million, or $0.08 per share, for the three months ended March 31, 2024.

Comprehensive (loss) income

For the three months ended March 31, 2025, we had no transactions which impact comprehensive income.

For the three months ended March 31, 2024, we reported a reclassification of unrealized losses to provision for credit losses of $0.2 million reflecting the recognition of unrealized losses on securities held for over one year, which were not considered temporary losses, as well as an unrealized losses on investment securities of $0.3 million.

Total operating expenses for three months ended June 30, 2025 were $9.7 million compared to $18.3 million for the three months ended June 30, 2024, a decrease of $8.6 million or 46.8%.

The primary contributor to this decrease was the reduction in the provision for credit losses related to loans held for investment, which declined by $7.6 million or 89.1%.

This change was driven by a decrease in direct allowances related to foreclosures and non-performing loans.

Additionally, the change was due to reductions in interest and amortization expense of $0.8 million and change in valuation allowance related to loans held for sale of $1.1 million.

Such reductions were partially offset by an increase in compensation and employee benefits of $0.5 million and other expenses totaling $0.3 million.

Net income (loss) attributable to common shareholders and net income (loss) attributable to common shareholders per share

Net income attributable to common shareholders for the three months ended June 30, 2025 was $0.8 million, or $0.02 per common share, compared to net loss attributable to common shareholders of $4.1 million, or $0.09 per common share, for the three months ended June 30, 2024.

Book value per common share

The following table sets forth the calculation of our book value per common share (in thousands, except share and per share data):

March 31, 2025

December 31, 2024

June 30, 2025 March 31, 2025

Total shareholders’ equity $ 177,907 $ 179,339

Series A Preferred Stock ($25 aggregate liquidation preference)

Series A Preferred Stock ($25 liquidation preference per share) (57,669) (57,669)

Total shareholders’ equity, net of preferred stock $ 120,238 $ 121,670

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Book value per common share $ 2.54 $ 2.57

Book value per common share as of March 31, 2025, was $2.57, a decrease of $0.07 from our book value per common share as of December 31, 2024 of $2.64.

Such decrease is primarily due to cash dividends declared and paid for the three months ended March 31, 2025 on Common Shares and Series A Preferred Stock totaling $3.5 million, or $0.07 per share.

Book value per common share as of June 30, 2025, was $2.54, a decrease of $0.03 from our book value per common share as of March 31, 2025 of $2.57.

Such decrease is primarily due to cash dividends declared and paid for the three months ended June 30, 2025 on issued and outstanding common shares and shares of Series A Preferred Stock totaling $3.5 million, or $0.07 per common share, partially offset by net income for the three months ended June 30, 2025 of $0.8 million, or $0.02 per common share.

Six months ended June 30, 2025 compared to six months ended June 30, 2024

Total revenue

Total revenue for the six month s ended June 30, 2025 was $22.2 million compared to $32.0 million for the six months ended June 30, 2024, a decrease of $9.8 million, or 30.7%.

As of June 30, 2025, net loans held for investment totaled $364.5 million, compared to $485.7 million as of June 30, 2024, representing a decline of $121.2 million in the net principal balance.

On the other hand, income from our preferred membership limited liability company investments increased by $0.6 million or 25.6% from the prior year.

Operating costs and expenses

Total operating e xpenses for six months ended June 30, 2025 were $20.1 million compared to $30.8 million for the six months ended June 30, 2024, a decrease of $10.7 million or 34.7% .

The largest contributors to this decrease was the decrease of $2.2 million in interest and amortization of deferred financing fees as a result of the repayment of $58.2 million of aggregate principal amount of our unsecured, unsubordinated notes in 2024, and a decrease in provision for credit losses related to loans held for investment of $7.9 million, as noted above.

Net income (loss) attributable to common shareholders and net income (loss) attributable to common shareholders per share

Net income attributable to common shareholders for the six months ended June 30, 2025 was $0.6 million, or $0.01 per common share, compared to net loss attributable to common shareholders of $0.5 million, or $0.01 per common share, for the six months ended June 30, 2024.

Book value per common share

The following table sets forth the calculation of our book value per common share (in thousands, except share and per share data):

June 30, 2025 December 31, 2024

Total shareholders’ equity $ 177,907 $ 181,651

Series A Preferred Stock ($25 liquidation preference per share) (57,669) (57,669)

Total shareholders’ equity, net of preferred stock $ 120,238 $ 123,982

Number of common shares outstanding at period end

47,310,139 46,965,306

Book value per common share $ 2.54 $ 2.64

Book value per common share as of June 30, 2025, was $2.54, a decrease of $0.10 from our book value per common share as of December 31, 2024 of $2.64 .

Such decrease is primarily due to cash dividends declared and paid for the six months ended June 30, 2025 on issued and outstanding common shares and Series A Preferred Stock totaling $7.0 million, or $0.15 per common share, partially offset by net income for the six months ended June 30, 2025 of $2.8 million, or $0.06 per common share.

Liquidity and Capital Resources

Total assets at March 31, 2025 were $491.4 million compared to $492.0 million at December 31, 2024, a decrease of $0.6 million, or 0.1%.

The decrease was due primarily to a $9.4 million decrease in loans held for investment, net, partially offset by a $6.3 million increase in cash and $2.4 million increase in investments in real estate, net.

Total liabilities at March 31, 2025 were $312.1 million compared to $310.3 million at December 31, 2024, an increase of $1.8 million, or 0.6%.

This increase is primarily due to a $7.8 million increase in our repurchase agreements, partially offset by a $3.9 million decrease in lines of credit, a $1.7 million decrease in accounts payable and accrued liabilities, and a $1.0 decrease in advances from borrowers.

Total shareholders’ equity at March 31, 2025 was $179.3 million compared to $181.7 million at December 31, 2024, a decrease of $2.3 million, or 1.3%.

This decrease was due primarily to $3.5 million in dividends paid partially offset by $0.9 million of net income for the period and $0.3 million increase in additional paid-in capital related to stock-based compensation.

Total assets at June 30, 2025 were $501.8 million compared to $492.0 million at December 31, 2024, an increase of $9.8 million, or 2.0%.

The net increase was due primarily to increase in cash and cash equivalents and loans held for investment from net proceeds available from our June 2025 private placement of senior secured notes that was not utilized in effective refinancing of existing debt on our balance sheet.

Total liabilities at June 30, 2025 were $323.9 million compared to $310.3 million at December 31, 2024, an increase of $13.5 million, or 4.4%.

This increase is primarily due to a $46.4 million increase in senior secured notes payable net of deferred financing costs of $3.6 million, offset by repayments of repurchase agreements of $19.2 million and lines of credit of $13.7 million.

Total shareholders’ equity at June 30, 2025 was $177.9 million compared to $181.7 million at December 31, 2024, a decrease of $3.7 million, or 2.1%.

This decrease was due primarily to an aggregate of $7.0 million of dividends paid to holders of Series A Preferred Stock and common shares, which was partially offset by $2.8 million of cumulative net earnings for the six month period and $0.4 million increase in additional paid-in capital related to stock-based compensation.

Sources and Uses of Funds

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These sources and uses of cash are reflected in our Condensed Consolidated Statements of Cash Flows as summarized below:

Three Months Ended

One Year-Change

(in thousands)

Six Months Ended One Year-Change

Amount 2025 2024 Amount Percentage

(in thousands) (in thousands)

Cash and cash equivalents, January 1 $ 18,066 $ 12,598 $ 5,468 43.4 %

Net cash provided by operating activities 692 11,179 (10,487) (93.8) %

Net cash provided by investing activities

Net cash (used in) provided by investing activities (2,658) 27,534 (30,192) (109.7) %

Net cash provided by (used in) financing activities 6,374 (40,734) 47,108 (115.6) %

Cash and cash equivalents, March 31

For a detailed breakdown of our cash flows during the three months ended March 31, 2025 and 2024, see the statement of cash flows included in our accompanying condensed consolidated financial statements.

Cash and cash equivalents, June 30 $ 22,474 $ 10,577 $ 11,897 112.5 %

For a detailed breakdown of our cash flows during the six months ended June 30, 2025 and 2024, see our Condensed Consolidated Statement of Cash Flows.

We project anticipated cash requirements for our operating needs as well as cash flows generated from operating activities available to meet these needs.

Our short-term cash requirements primarily include funding of loans, dividend payments, interest and principal payments on our indebtedness, including repayment/refinancing of the Notes maturing in September 2025, and payments for usual and customary operating and administrative expenses, such as employee compensation and sales and marketing expenses.

Our short-term cash requirements primarily include funding of loans, dividend payments, interest and principal payments on our indebtedness, including repayment/refinancing of the unsecured notes payable maturing in September 2025, and payments for usual and customary operating and administrative expenses, such as employee compensation and sales and marketing expenses.

Based on this analysis, we believe that our current cash balances, availability on our debt facilities, and our anticipated cash flows from operations will be sufficient to fund the operations for the next 12 months.

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The new facility matures on March 2, 2026, and includes an option to extend the term by one year upon satisfaction of certain conditions.

Under the new agreement, SN Holdings LLC (“SN Holdings”), our wholly owned subsidiary, serves as the borrower, and Sachem Capital, the parent, serves as guarantor of all obligations.

Under the new agreement, SN Holdings LLC (“SN Holdings”), our wholly owned subsidiary, serves as the borrower, and we serve as guarantor of all SN Holdings' obligations under the new Credit Agreement.

The Needham Credit Facility is secured by a first priority lien on all the assets of SN Holdings, and includes a requirement that SN Holdings maintain assets equal to at least two times the outstanding principal balance under the facility.

In addition, SN Holdings is required to collaterally assign to Needham Bank a portfolio of mortgage loans with an outstanding principal balance of no less than the greater of $30 million or the full drawn balance on the facility.

Sachem Capital, as guarantor, has also granted Needham a blanket lien on substantially all of its assets, with the ability to request lien releases to facilitate other financings.

In addition, SN Holdings is required to collaterally assign to Needham a portfolio of mortgage loans with an outstanding principal balance of no less than the greater of $30 million or the full drawn balance on the facility.

We, as guarantor, have also granted Needham a lien on substantially all of our assets, with the ability to request lien releases to facilitate other financings.

The Needham Credit Facility, at the subsidiary borrower level, is subject to other terms and conditions, including representations and warranties, covenants and agreements typically found in these types of financing arrangements, including a covenant that requires SN Holdings to maintain:

2 unchanged sentences

and (C) an Asset Coverage Ratio (as defined) of at least 150%.

As of March 31, 2025, SN Holdings had borrowed $36.1 million under the facility.

The Company was in compliance with all covenants under the new agreement as of March 31, 2025.

On April 1, 2025, SN Holdings made a principal payment of $9.9 million, further reducing the outstanding indebtedness to $26.2 million.

A copy of the Credit, Security and Guaranty Agreement, dated as of March 20, 2025, among SN Holdings, Sachem and Needham, is filed as Exhibit 10.8 to this Report.

As of June 30, 2025, SN Holdings had borrowed $26.2 million under the new facility and was in compliance with all covenants under the Credit Agreement.

On June 11, 2025, Sachem Capital Corporation Holdings, LLC ("Holdings"), our indirect, wholly-owned subsidiary, consummated a private placement of $100.0 million aggregate principal amount of Senior Secured Notes due June 11, 2030 (the "Senior Secured Notes") to various institutional investors under a Note Purchase and Guaranty Agreement (the "Agreement").

An initial draw of $50.0 million was made at closing, and the remaining $50.0 million may be drawn at any time on or prior to May 15, 2026.

The Company expects that it will draw the remaining $50.0 million during September 2025 immediately prior to its maturity redemption payment of $56.3 million of unsecured notes payable due September 30, 2025.

The Senior Secured Notes bear interest at a fixed rate of 9.875% per annum, with interest only

payable quarterly on the 1st day of March, June, September and December, and include a commitment fee of 1.0% on the undrawn portion of the Senior Secured Notes.

Off-Balance Sheet Arrangements

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Contractual Obligations

As of March 31, 2025, our contractual obligations include unfunded amounts of any outstanding construction loans and unfunded commitments for loans and limited liability company investments.

As of June 30, 2025, our contractual obligations include unfunded amounts of any outstanding construction loans and unfunded commitments for loans and limited liability company investments.

Total Less than

years More than

(In thousands)

Unfunded portions of outstanding construction loans $ 54,564 $ 11,288 $ 43,276 $ — $ —

Unfunded commitments

Unfunded commitments to investments in LLC's 2,420 2,420 — — —

Total contractual obligations $ 56,984 $ 13,708 $ 43,276 $ — $ —

Recent Accounting Pronouncements

See “Note 2 — Significant Accounting Policies” to the unaudited condensed consolidated financial statements for explanation of recent accounting pronouncements impacting us.

See Note 2 — Significant Accounting Policies — to our condensed consolidated financial statements for explanation of recent accounting pronouncements impacting us.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis