What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-13 compared with 2025-08-07 · 106 added, 75 removed, 215 unchanged (46% of the section changed)

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This discussion and analysis contains forward-looking statements that involve risks and uncertainties which could cause our actual results to differ materially from those anticipated in these forward-looking statements, including, but not limited to, risks and uncertainties discussed under the heading “Cautionary Note Regarding Forward-Looking Statements,” in this Form 10-Q, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 and Item 1A.

“Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025.

SUNS is a Maryland corporation that was formed on August 28, 2023, that intends to elect to be treated as a real estate investment trust for U.S.

“Risk Factors” in our subsequently filed Quarterly Reports on Form 10-Q.

SUNS is a Maryland corporation that was formed on August 28, 2023, that elected to be treated as a real estate investment trust for U.S.

federal income tax purposes and that made its first investment in January 2024.

SUNS is an integral part of the platform of affiliated asset managers under the Tannenbaum Capital Group (“TCG”).

We are led by a veteran team of commercial real estate investment professionals and our external manager, Sunrise Manager LLC (our “Manager”), which, alongside other TCG platform asset managers pursuing similar or adjacent opportunities, are supported by the marketing, reporting, legal and other non-investment support services provided by the team of professionals within

the TCG platform.

Our and our Manager’s relationship with TCG provide us with investment opportunities through a robust relationship network of commercial real estate owners, operators and related businesses as well as significant back-office personnel to assist in management of loans.

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AFC’s shareholders of record as of the Record Date received one share of our common stock for every three shares of AFC common stock held as of the Record Date.

Developments During the Second Quarter June 30, 2025:

Updates to Our Loan Portfolio During the Second Quarter June 30, 2025

In June 2025, we and an affiliated co-investor purchased $14.25 million of a $59.8 million senior loan for the construction of a residential property in Park City, Utah.

We committed a total of $9.25 million and the affiliate committed the remaining $5.0 million.

The senior loan matures in August 2027.

At closing, we funded approximately $0.3 million and the affiliate funded approximately $0.2 million.

The loan bears interest at a cash rate of U.S.

prime rate plus 3.25%, with a rate index floor of 8.0%.

Developments During the Third Quarter Ended September 30, 2025:

Updates to Our Loan Portfolio During the Third Quarter Ended September 30, 2025

In September 2025, we and affiliated co-investors purchased $60.0 million of a $370.0 million senior first mortgage loan for the construction of a residential property in Miami, Florida.

We committed a total of $35.0 million and the affiliates committed the remaining $25.0 million.

The senior loan matures in September 2028.

At closing, we funded approximately $13.7 million and the affiliates funded approximately $9.8 million.

The loan bears interest at a cash rate of SOFR plus 4.75%, with a rate index floor of 3.50%.

The senior loan is secured by a first priority lien and security interest in certain real property as described on the loan agreement.

The proceeds of the senior loan will be used to, among other things, fund the completion of construction.

In September 2025, our subordinate loan for the residential property in Sarasota, Florida was repaid in full.

The loan had an original maturity date of May 2027.

The outstanding principal on the date of repayment was approximately $25.5 million.

Dividends Declared Per Share

During the six months ended June 30, 2025, we declared the following cash dividends.

No dividends were declared during the six months ended June 30, 2024.

During the nine months ended September 30, 2025, we declared the following cash dividends:

Date Declared Payable to Shareholders of Record at the Close of Business on Payment Date Amount per Share Total Amount

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June 13, 2025 June 30, 2025 July 15, 2025 0.30 4,026,353

September 15, 2025 September 30, 2025 October 15, 2025 0.30 4,026,296

2025 Period Subtotal

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Recent Developments

In October 2025, the Company and an affiliated co-investor entered into two separate senior secured mortgage loans with the same commercial real estate developer for an aggregate commitment of $36.6 million, comprised of a $13.4 million industrial senior loan in Doral, Florida (the “Doral Loan”), and a $23.2 million industrial senior loan in West Palm Beach, Florida (the “West Palm Beach Loan” and, together, the “Loans”).

The Company (i) committed $9.4 million and funded $8.6 million upon closing to the Doral Loan, while the affiliated co-investor committed $4.0 million and funded $3.7 million and (ii) committed $16.2 million and funded $1.8 million upon closing to the West Palm Beach Loan, while the affiliated co-investor committed $7.0 million and funded $0.8 million.

The Loans were issued at a discount of 1.0% and mature in October 2027.

The Loans bear interest at a rate of SOFR plus 6.20%, with a rate index floor of 3.75%.

Each Loan is secured by a first mortgage, equity pledge, and other customary collateral with regard to the properties.

The Loans are not cross collateralized and are separately secured by their respective collateral.

The proceeds will be used to finance the development of luxury industrial suites featuring showroom-style layouts, mezzanine lounges, and premium finishes.

The West Palm Beach Loan will be used to finance closing costs, construction, and reserves for a new development, while the Doral Loan will be used to refinance existing debt and repatriate equity associated with a comparable project.

In October 2025, the Company and an affiliated co-investor entered into a $45.0 million senior bridge loan to refinance a retail property located in Houston, Texas.

The Company committed a total of $30.0 million, and an affiliated co-investor committed the remaining $15.0 million, funding $21.6 million and $10.8 million, respectively, upon closing.

The senior bridge loan was issued at a discount of 1.0% and matures in October 2028.

The loan bears interest at a rate of SOFR plus 5.75%, with a rate index floor of 3.75%.

The senior bridge loan is secured by a first priority deed of trust and related collateral interests pursuant to the terms of the credit agreement and related loan documents.

The proceeds of the senior bridge loan will be used to refinance existing debt and fund tenant improvements, leasing costs, reserves, and closing expenses.

Key Financial Measures and Indicators

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We believe that book value per share is helpful to shareholders in evaluating our growth as we scale our equity capital base and continue to invest in our target investments.

The book value per share of our Common Stock as of June 30, 2025 and December 31, 2024 was approximately $13.73 and $16.29, respectively.

The book value per share of our Common Stock as of September 30, 2025 and December 31, 2024 was approximately $13.76 and $16.29, respectively.

Non-GAAP Metrics

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We define Distributable Earnings as, for a specified period, the net income (loss) computed in accordance with GAAP, excluding (i) stock-based compensation expense, (ii) depreciation and amortization, (iii) any unrealized gains, losses or other non-cash items recorded in net income (loss) for the period, regardless of whether such items are included in other comprehensive income or loss, or in net income (loss);

provided that Distributable Earnings does not exclude, in the case of investments with a deferred interest feature (such as OID, debt instruments with PIK interest and zero coupon securities), accrued income that we have not yet received in cash, (iv) provision for (reversal of) current expected credit losses, (v) TRS (income) loss, net of any dividends received from TRS and (vi) one-time events pursuant to changes in GAAP and certain non-cash charges, in each case after discussions between our Manager and our independent directors and after approval by a majority of such independent directors.

TRS (income) loss, net of any dividends received from TRS and (vi) one-time events pursuant to changes in GAAP and certain non-cash charges, in each case after discussions between our Manager and our independent directors and after approval by a majority of such independent directors.

We believe providing Distributable Earnings on a supplemental basis to our net income as determined in accordance with GAAP is helpful to shareholders in assessing the overall performance of our business.

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Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

2025 2024 2025 2024

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Unrealized (gains) losses, or other non-cash items — — — —

Provision for (reversal of) current expected credit losses 468,493 71,854 586,141 71,854

(Reversal of) provision for current expected credit losses (193,865) (47,527) 392,276 24,327

TRS (income) loss — — — —

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Our operating results may also be impacted by credit losses in excess of initial anticipations or unanticipated credit events experienced by our borrowers.

Results of Operations f or the three and six months ended June 30, 2025 and 2024

The following table summarizes our consolidated results of operations for the three and six months ended June 30, 2025 and 2024:

Results of Operations f or the three and nine months ended September 30, 2025 and 2024

The following table summarizes our consolidated results of operations for the three and nine months ended September 30, 2025 and 2024:

Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

2025 2024 2025 2024

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Total expenses 2,195,072 1,486,897 5,443,011 2,144,837

(Provision for) reversal of current expected credit losses (468,493) (71,854) (586,141) (71,854)

Reversal of (provision for) current expected credit losses 193,865 47,527 (392,276) (24,327)

Net income before income taxes 4,054,959 1,738,363 10,512,710 5,014,451

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Net income $ 4,054,959 $ 1,738,363 $ 10,512,710 $ 5,014,451

Our net income allocable to our common shareholders for the three and six months ended June 30, 2025, was approximately $3.4 million and $6.5 million, or $0.25 and $0.52 per basic weighted average common share, respectively, compared to net income allocable to our common shareholders of approximately $1.5 million and $3.3 million, or $0.22 and $0.48 per basic weighted average common share for the three and six months ended June 30, 2024.

Our net income allocable to our common shareholders for the three and nine months ended September 30, 2025, was approximately $4.1 million and $10.5 million, or $0.30 and $0.82 per basic common share, respectively, compared to net income allocable to our common shareholders of approximately $1.7 million and $5.0 million, or $0.26 and $0.74 per basic common share for the three and nine months ended September 30, 2024.

Interest income.

Interest income increased approximately $4.8 million, or 241.1%, for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024.

Interest income increased approximately $7.7 million, or 192.4%, for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024.

The increase was due to the expansion of our portfolio from two borrowers to thirteen as we deploy capital.

Interest income increased approximately $4.3 million, or 132.7%, for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024.

Interest income increased approximately $12.0 million, or 165.8%, for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024.

The increase was due to the expansion of our portfolio from six loans to thirteen loans as we deploy capital.

Interest expense.

Interest expense increased approximately $1.1 million and $1.4 million for the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024, respectively, due to the lines of credit available in the current period and related borrowings that were not in place in the prior period.

Interest expense increased approximately $1.4 million and $2.8 million for the three and nine months ended September 30, 2025, as compared to the three and nine months ended September 30, 2024, respectively, due to the lines of credit available in the current period and increase in related borrowings.

Management and incentive fees.

Management fees increased approximately $0.7 million and $0.7 million for the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024, respectively.

There were no Incentive Fees incurred in the current period due to the fee waiver, or the prior period, as the Management Agreement was not in place in the prior period until the completion of the Spin-Off in July 2024.

Management fees increased approximately $0.3 million and $1.0 million for the three and nine months ended September 30, 2025, as compared to the three and nine months ended September 30, 2024, respectively.

Incentive Fees increased approximately $0.4 million and $0.4 million for the three and nine months ended September 30, 2025, as compared to the three and nine months ended September 30, 2024, respectively.

In the prior period, the Management Agreement was not in place in the prior period until the completion of the Spin-Off in July 2024, while the current period year-to-date amounts were reduced by the fee waiver in conjunction with the January 2025 Offering during the first and second quarters of 2025.

For the three and nine months ended September 30, 2025, Base Management Fees waived were zero and $0.6 million, respectively, and Incentive Fees waived were zero and $0.5 million, respectively .

General and administrative expenses .

General and administrative expenses increased $0.6 million and $1.4 million during the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024.

General and administrative expenses increased $0.1 million and $1.5 million during the three and nine months ended September 30, 2025, as compared to the three and nine months ended September 30, 2024.

The increase was primarily due to reimbursable shared expenses under the Management Agreement, which did not take effect until the completion of the Spin-Off in July 2024.

Reimbursable shared expenses recorded within general and administrative expenses were approximately $0.5 million and $1.1 million for the three and six months ended June 30, 2025, compared to zero in the prior periods.

Reimbursable shared expenses recorded within general and administrative expenses increased approximately $0.1 million and $1.2 million for the three and nine months ended September 30, 2025, compared to the three and nine months ended September 30, 2024, respectively.

Stock-based compensation.

Stock-based compensation increased $0.3 million and $0.5 million during the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024, driven by restricted stock awards granted and restricted stock awards converted as part of the Spin-Off.

Professional fees.

Professional fees decreased $(0.1) million and increased $6.7 thousand during the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024, respectively.

Stock-based compensation increased $0.1 million and $0.6 million during the three and nine months ended September 30, 2025, as compared to the three and nine months ended September 30, 2024, driven by restricted stock awards granted and restricted stock awards converted as part of the Spin-Off.

Professional fees.

included approximately $0.3 million and $0.6 million in Spin-Off costs incurred in the prior periods during the three and six months ended June 30, 2024, respectively.

No Spin-Off costs were incurred during the three and six months ended June 30, 2025.

Professional fees decreased $(0.1) million and decreased $(0.1) million during the three and nine months ended September 30, 2025, as compared to the three and nine months ended September 30, 2024, respectively.

Professional fees included approximately $0.0 million and $0.6 million in Spin-Off costs incurred in the prior periods during the three and nine months ended September 30, 2024, respectively.

No Spin-Off costs were incurred during the three and nine months ended September 30, 2025.

Other costs within professional fees related to legal, audit, and board of director fees.

Provision for Current Expected Credit Losses

The provision for current expected credit losses increased $0.4 million, or 552.0%, for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024.

The provision for current expected credit losses increased $0.5 million, or 715.7%, for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024.

The CECL Reserve balance as of June 30, 2025 was approximately $0.6 million, or 0.25%, of our total loans held at carrying value of approximately $248.3 million and was bifurcated between (i) the current expected credit loss reserve (contra-asset) related to outstanding balances on loans held at carrying value of $0.4 million and (ii) a liability for unfunded commitments of approximately $0.2 million.

The CECL Reserve balance as of June 30, 2024 was approximately $71.9 thousand, or 0.19%, of our total loans held at carrying value balance of approximately $37.6 million and was bifurcated between (i) the current expected credit loss reserve (contra-asset) related to outstanding balances on loans held at carrying value of approximately $37.4 thousand and (ii) a liability for unfunded commitments of approximately $34.4 thousand.

The provision for current expected credit losses decreased $(0.1) million for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024.

The provision for current expected credit losses increased $0.4 million for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024.

The CECL Reserve balance as of September 30, 2025 was approximately $0.4 million, or 0.17%, of our total loans held at carrying value of approximately $250.4 million and was bifurcated between (i) the current expected credit loss reserve (contra-asset) related to outstanding balances on loans held at carrying value of $0.1 million and (ii) a liability for unfunded commitments of approximately $0.3 million.

The CECL Reserve balance as of September 30, 2024 was approximately $24.3 thousand, or 0.03%, of our total loans held at carrying value balance of approximately $96.4 million and was bifurcated between (i) the current expected credit loss reserve (contra-asset) related to outstanding balances on loans held at carrying value of zero and (ii) a liability for unfunded commitments of approximately $24.3 thousand.

The liability is based on the unfunded portion of loan commitments over the full contractual period over which we are exposed to credit risk through a current obligation to extend credit.

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Loan Portfolio

The table below summarizes our total loan portfolio as of June 30, 2025, unless otherwise specified.

The table below summarizes our total loan portfolio as of September 30, 2025, unless otherwise specified.

Loan Type Location Original Funding Date Loan Maturity Current Commitments as of 9/30/2025 % of Total SUNS Principal Balance as of 9/30/2025 Cash Interest Rate PIK Fixed/

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Residential Park City, UT 6/11/2025 8/1/2027 9,250,000 2.5% 2,017,729 11.3% N/A Floating No 13%

Residential Miami, FL 9/26/2025 9/25/2028 35,000,000 9.6% 13,716,216 8.9% N/A Floating No 10%

Subordinate debt:

Residential Sarasota, FL 1/31/2024 5/12/2027 28,188,776 7.8% 24,705,249 13.0% N/A Fixed No 14%

Residential Miami, FL 11/15/2024 11/15/2027 13,000,000 3.5% 10,552,110 13.3% N/A Fixed No 15%

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The estimated YTM calculations require management to make estimates and assumptions, including, but not limited to, the timing and amounts of loan draws on delayed draw loans, the timing and collectability of exit fees, the probability and timing of prepayments and the probability of contingent features occurring.

For example, certain credit agreements contain provisions pursuant to which certain interest rates and fees earned by us under such credit agreements will decrease upon the satisfaction of certain specified criteria which we believe may improve the risk profile of the applicable borrower.

For example, certain credit agreements contain provisions

pursuant to which certain interest rates and fees earned by us under such credit agreements will decrease upon the satisfaction of certain specified criteria which we believe may improve the risk profile of the applicable borrower.

To be conservative, we have not assumed any prepayment penalties or early payoffs in our estimated YTM calculation.

Estimated YTM is based on current management estimates and assumptions, which may change.

Estimated YTM is calculated using the interest rate as of June 30, 2025 applied through maturity.

Estimated YTM is calculated using the interest rate as of September 30, 2025 applied through maturity.

Actual results could differ from those estimates and assumptions.

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Loans Held for Investment at Carrying Value

As of June 30, 2025 and December 31, 2024, our portfolio included thirteen and nine loans held at carrying value, respectively.

The aggregate originated commitment under these loans was approximately $360.2 million and $190.9 million, respectively, and outstanding principal was approximately $251.0 million and $132.6 million, respectively, as of June 30, 2025 and December 31, 2024 .

During the six months ended June 30, 2025 , we funded approximately $130.0 million of new loans and additional principal on existing loans and had approximately $11.5 million of principal repayments of loans held at carrying value.

As of June 30, 2025 and December 31, 2024, approximately 86% and 79%, respectively, of our loans held at carrying value had floating interest rates.

As of June 30, 2025, t hese floating benchmark rates included one-month SOFR quoted at 4.3% and subject to a weighted average floor of 4.1% and U.S.

As of September 30, 2025 and December 31, 2024, our portfolio included thirteen and nine loans held at carrying value, respectively.

The aggregate originated commitment under these loans was approximately $367.0 million and $190.9 million, respectively, and outstanding principal was approximately $253.0 million and $132.6 million, respectively, as of September 30, 2025 and December 31, 2024 .

During the nine months ended September 30, 2025 , we funded approximately $163.1 million of new loans and additional principal on existing loans and had approximately $42.7 million of principal repayments of loans held at carrying value.

As of September 30, 2025 and December 31, 2024, approximately 96% and 79%, respectively, of our loans held at carrying value had floating interest rates.

As of September 30, 2025, t hese floating benchmark rates included one-month SOFR quoted at 4.1% and subject to a weighted average floor of 4.1% and U.S.

prime rate subject to a weighted average floor of 8.0% and quoted at 7.25% based on outstanding principal.

The following tables summarize our loans held at carrying value as of June 30, 2025 and December 31, 2024 :

As of June 30, 2025

The following tables summarize our loans held at carrying value as of September 30, 2025 and December 31, 2024 :

As of September 30, 2025

Principal (1)

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(1) The difference between the carrying value and the outstanding principal amount of the loans consists of unaccreted OID or premium and loan origination costs.

(2) Weighted average remaining life is calculated based on the carrying value of each respective group of loans as of June 30, 2025 and December 31, 2024 .

(2) Weighted average remaining life is calculated based on the carrying value of each respective group of loans as of September 30, 2025 and December 31, 2024 .

(3) Senior mortgage loans include senior loans that also have a contiguous subordinate loan because as a whole, the expected credit quality of the subordinate loan is more similar to that of a senior loan.

(4) If the Company holds both the A-note and B-note, the loan is categorized as a senior mortgage loan.

The following table presents changes in loans held at carrying value as of and for the six months ended June 30, 2025:

The following table presents changes in loans held at carrying value as of and for the nine months ended September 30, 2025:

Principal Original Issue

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PIK interest 24,018 — 24,018

Total loans held at carrying value at June 30, 2025 $ 250,995,522 $ (2,658,510) $ 248,337,012

Total loans held at carrying value at September 30, 2025 $ 252,987,103 $ (2,608,376) $ 250,378,727

Collateral Overview

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Our primary sources of cash generally consist of net proceeds of future debt or equity offerings, debt financing, including borrowings under the Revolving Credit Facility and the SRTF Credit Facility, payments of principal and interest we receive on our portfolio of assets and cash generated from our operating results.

As of June 30, 2025 and December 31, 2024, all of our cash was unrestricted and totaled approximately $5.6 million and $184.6 million, respectively.

As of June 30, 2025, we believe that our cash on hand, capacity available under the Revolving Credit Facility, SRTF Credit Facility and cash flows from operations will be sufficient to satisfy the operating requirements of our business through at least the next twelve months.

As of September 30, 2025 and December 31, 2024, all of our cash was unrestricted and totaled approximately $5.5 million and $184.6 million, respectively.

As of September 30, 2025, we believe that our cash on hand, capacity available under the Revolving Credit Facility, SRTF Credit Facility and cash flows from operations will be sufficient to satisfy the operating requirements of our business through at least the next twelve months.

Capital Markets

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The net proceeds totaled approximately $71.3 million.

Our registration statement on Form S-3 (File No.

333-289188) (the “Shelf Registration Statement”) became effective on August 6, 2025, allowing us to issue and sell, from time to time in one or more offerings, up to $500.0 million of our securities, including common stock, preferred stock, debt securities, warrants and rights (including as part of a unit) to purchase shares of our common stock or preferred stock.

The specifics of any future offerings, along with the use of proceeds of any securities offered, will be described in detail in a prospectus supplement, or other offering materials, at the time of any offering.

We may also access liquidity through our at-the-market offering program (the “ATM Program”), which was established in August 2025, pursuant to which we may offer and sell, from time to time, up to $50.0 million of our common stock.

During the three and nine months ended September 30, 2025, we did not sell any shares of our common stock under the ATM Program.

On September 3, 2025, the Company also established a dividend reinvestment plan ( the “DRIP”).

The DRIP allows shareholders to reinvest all or a portion of their cash dividends in additional shares of the Company’s common stock (which shares, at the Company’s option, are either newly issued directly from the Company or purchased by the plan administrator in the open market).

A total of 1,000,000 shares of common stock has been registered for issuance under the DRIP.

There were no shares issued under the DRIP during the three and nine months ended September 30, 2025.

We intend to raise future equity capital and issue debt securities in order to fund our future investments in loans.

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On November 6, 2024, we entered into the Revolving Credit Facility, which contained an initial aggregate commitment of $50.0 million, which may be borrowed, repaid and redrawn (subject to a borrowing base based on eligible loan obligations held by us and subject to the satisfaction of other conditions provided under the Revolving Credit Agreement).

Subsequently, we entered into a series of amendments to the Revolving Credit Facility that, among other things, increased the aggregate commitment from $50.0 million to $140.0 million.

The amount of total commitments under the Revolving Credit Facility may be increased to up to $200.0 million in aggregate, subject to available borrowing base and lenders’ commitment to provide additional commitments.

During the three months ended June 30, 2025 , we entered into a series of amendments to the Revolving Credit Facility that, among other things, increased the aggregate commitment from $50.0 million to $140.0 million.

As amended, the Revolving Credit Facility modified certain financial covenants, requiring us to, among other things:

(i) maintain liquidity equal to the greater of (A) $5 million and (B) an amount equal to 10% of the outstanding obligations thereunder so long as we maintain at least $5 million in qualified cash (ii) maintain a quarterly debt service coverage ratio of at least 1.50 to 1.0 and (iii) maintain a leverage ratio of not more than 3.25x measured as of the end of each fiscal quarter.

As of June 30, 2025, we had $65.0 million outstanding borrowings under the Revolving Credit Facility and $75.0 million availability under our Revolving Credit Agreement, which may be borrowed, repaid and redrawn (subject to a borrowing base based on eligible loan obligations held by the Company and subject to the satisfaction of other conditions provided under the Revolving Credit Agreement).

To the best of our knowledge, as of June 30, 2025 , we were in compliance in all material respects with all covenants contained in our Revolving Credit Agreement.

As of September 30, 2025, we had $67.2 million outstanding borrowings under the Revolving Credit Facility and $72.8 million availability under our Revolving Credit Agreement, which may be borrowed, repaid and redrawn (subject to a borrowing base based on eligible loan obligations held by the Company and subject to the satisfaction of other conditions provided under the Revolving Credit Agreement).

To the best of our knowledge, as of September 30, 2025 , we were in compliance in all material respects with all covenants contained in our Revolving Credit Agreement.

SRTF Credit Facility

On December 9, 2024, we entered into the SRTF Credit Facility, which provides for an unsecured revolving credit facility with a $75.0 million commitment, which may be borrowed, repaid and redrawn, subject to a draw fee and the other conditions provided in the SRTF Credit Agreement .

As of June 30, 2025, we had no outstanding borrowings and $75.0 million availability under our SRTF Credit Agreement.

As of September 30, 2025, we had no outstanding borrowings under the SRTF Credit Facility and $75.0 million availability under our SRTF Credit Agreement.

Other Credit Facilities, Warehouse Facilities and Repurchase Agreements

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We expect that these facilities will typically have maturities ranging from two to five years and may accrue interest at either fixed or floating rates.

As of June 30, 2025 , we believe that our cash on hand, capacity available under our Revolving Credit Facility and SRTF Credit Facility, and cash flows from operations will be sufficient to service our outstanding debt during the next twelve months.

The following table sets forth changes in cash and cash equivalents for the six months ended June 30, 2025 and 2024:

Six months ended

As of September 30, 2025 , we believe that our cash on hand, capacity available under our Revolving Credit Facility and SRTF Credit Facility, and cash flows from operations will be sufficient to service our outstanding debt during the next twelve months.

The following table sets forth changes in cash and cash equivalents for the nine months ended September 30, 2025 and 2024:

Nine months ended

September 30,

Net cash (used in) provided by operating activities $ (1,893,601) $ 2,685,307

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Net Cash (Used in) Provided by Operating Activities

Net cash used in operating activities during the six months ended June 30, 2025 was approximately $(1.2) million, compared to net cash provided by operating activities of approximately $3.2 million for the six months ended June 30, 2024.

The decrease of approximately $(4.4) million during the period from June 30, 2024 to the six months ended June 30, 2025 was primarily due to an increase in net income of approximately $3.2 million, partially offset by changes in net working capital.

The most significant items in working capital were an increase in non-cash interest income capitalized of $(8.1) million, an increase in accrued management and incentive fees of $0.3 million and an increase in prepaid expenses and other assets of approximately $0.3 million, partially offset by an increase in interest receivable of approximately $(0.4) million and a decrease in accounts payable of approximately $(0.5) million, respectively.

Net cash used in operating activities during the nine months ended September 30, 2025 was approximately $(1.9) million, compared to net cash provided by operating activities of approximately $2.7 million for the nine months ended September 30, 2024.

The decrease of approximately $(4.6) million period over period was primarily due to an increase in interest income paid from interest drawn on loans and related incoming cash payments from our borrowers due to the expansion of our portfolio.

Net Cash (Used in) Provided by Investing Activities

Net cash used in investing activities during the six months ended June 30, 2025 was approximately $(108.9) million, compared to $(37.6) for the six months ended June 30, 2024.

The decrease of approximately $(71.3) million was primarily due to an increase in issuance and fundings on loans of approximately $(69.6) million and a decrease in principal repayments of loans of approximately $(1.7) million.

Net cash used in investing activities during the nine months ended September 30, 2025 was approximately $(105.6) million, compared to $(93.9) for the nine months ended September 30, 2024.

The decrease of approximately $(11.7) million was primarily due to an increase in issuance and fundings on loans of approximately $(29.5) million, offset by an increase in principal repayments of loans of approximately $17.8 million.

Net Cash (Used in) Provided by Financing Activities

Net cash used in financing activities during the six months ended June 30, 2025 was approximately $(68.9) million, compared to net cash provided by financing activities of $14.4 million for the six months ended June 30, 2024.

The decrease of approximately $(83.3) million was primarily due to $(240.3) million in repayments on the revolving credit facilities, partially offset by an increase of $106.4 million in borrowings on the revolving credit facilities and an increase of $72.6 million from offering proceeds relating to the January 2025 Offering.

Net cash used in financing activities during the nine months ended September 30, 2025 was approximately $(71.6) million, compared to net cash provided by financing activities of $130.1 million for the nine months ended September 30, 2024.

The increase of approximately $(201.7) million was primarily due to an increase of $(269.9) million in repayments on the revolving credit facilities and decrease in net transfers and distributions from our Former Parent of approximately $(80.1)

million, partially offset by an increase of $88.2 million in borrowings on the revolving credit facilities and an increase of $72.6 million from offering proceeds relating to the January 2025 Offering.

Contractual Obligations, Other Commitments, and Off-Balance Sheet Arrangements

Our contractual obligations as of June 30, 2025 are as follows:

As of June 30, 2025

Our contractual obligations as of September 30, 2025 are as follows:

As of September 30, 2025

1 year 1-3 years 3-5 years More than

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Total $ — $ 96,104,586 $ 17,960,774 $ — $ 114,065,360

As of June 30, 2025 , all unfunded commitments were related to our total loan commitments and were available for funding in less than four years.

As of September 30, 2025 , all unfunded commitments were related to our total loan commitments and were available for funding in less than four years.

We may enter into certain contracts that may contain a variety of indemnification obligations.

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Further, we have not guaranteed any obligations of unconsolidated entities or entered into any commitment to provide, nor do we intend to provide, additional funding to any such entities.

We intend to elect to be taxed as a REIT for U.S.

We elected to be taxed as a REIT for U.S.

federal income tax purposes, commencing with the taxable year ending December 31, 2024, and, as such, intend to annually distribute to our shareholders at least 90% of our REIT taxable income, prior to the deduction for dividends paid and excluding our net capital gain.

11 unchanged sentences

Many of these accounting policies require judgment and the use of estimates and assumptions when they are applied in the preparation of our financial statements.

On a quarterly basis, we evaluate these estimates and judgments based on historical experience as well as other factors that we believe to be reasonable under the circumstances.

On a quarterly basis, we evaluate these estimates and judgments based on historical experience as well as other factors that we believe to be

reasonable under the circumstances.

These estimates are subject to change in the future if underlying assumptions or factors change.

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