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Item 9A. Controls and Procedures

2026-03-12 compared with 2025-03-06 · 333 added, 229 removed, 593 unchanged (49% of the section changed)

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Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in the Company’s reports under the Exchange Act is recorded, processed, and summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of

achieving the desired control objectives.

We maintain disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, and summarized and reported within the time periods specified in the SEC’s 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 disclosures.

An evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Annual Report was made under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer.

Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (a) are effective to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is timely recorded, processed, summarized and reported and (b) include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act 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.

Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of December 31, 2025.

Notwithstanding the foregoing, any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that it will detect or uncover failures within the Company to disclose material information otherwise required to be set forth in the Company’s periodic reports.

Management’s Annual Report on Internal Control over Financial Reporting

This Annual Report on Form 10-K does not include a report of management’s assessment regarding internal control over financial reporting due to a transition period established by rules of the SEC for newly public companies.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a‐15(f) and 15d-15(f) of the Exchange Act.

Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures are being made only in accordance with authorizations of management and our directors;

and (iii) provide reasonable assurance regarding prevention or timely detection of the unauthorized acquisition, use or disposition of assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management has assessed the effectiveness of our internal control over financial reporting as of December 31, 2025, using the framework specified in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Based on such assessment, management has concluded that our internal control over financial reporting was effective as of December 31, 2025.

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.

Effectiveness of Internal Control

It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system will be met.

In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events.

Because of these and other inherent limitations of control systems, there is only the reasonable assurance that our controls will succeed in achieving their goals under all potential future conditions.

Changes in Internal Control over Financial Reporting

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Insider Trading Arrangements

None of the Company’s directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company’s fiscal quarter ended December 31, 2024.

None of the Company’s directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as defined in paragraph (c) of Item 408(a) of Regulation S-K) during the Company’s fiscal quarter ended December 31, 2025.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

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2 to the Company’s Registration Statement on Form 10-12B on May 20, 2024 and incorporated herein by reference).

Description of the Registrant’s Securities.

Description of the Registrant’s Securities (filed as Exhibit 4.1 to the Company’s Annual Report on Form 10-K on March 6, 2025 and incorporated herein by reference).

Tax Matters Agreement, dated as of July 8, 2024, by and between Advanced Flower Capital Inc.

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Unsecured Revolving Credit Agreement, dated September 26, 2024, by and between Sunrise Realty Trust, Inc., as borrower, and SRT Finance LLC, as agent and lender (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K on September 26, 2024 and incorporated herein by reference).

Unsecured Revolving Credit Agreement, dated December 9, 2024, by and among Sunrise Realty Trust, Inc.

as borrower, the lenders party thereto from time to time and SRT Finance LLC, as agent and lender (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K on December 9, 2024 and incorporated herein by reference).

Amendment Number One to Unsecured Revolving Credit Agreement, dated December 30, 2025, by and among Sunrise Realty Trust, Inc.

as borrower, the lenders party thereto from time to time and SRT Finance LLC, as agent and lender.

Loan and Security Agreement, dated as of November 6, 2024, among Sunrise Realty Trust, Inc., as borrower, the lenders party thereto, and East West Bank, as Agent, Joint Lead Arranger, Joint Book Runner, Co-Syndication Agent and Co-Documentation Agent (filed as Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q on November 7, 2024 and incorporated herein by reference).

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and Sunrise Realty Trust Holdings I LLC, as borrowers, the lenders party thereto, and East West Bank, as Agent, Joint Lead Arranger and Joint Book Runner (filed as Exhibit 10.7 to the Company’s Registration Statement on Form S-11 on January 21, 2025 and incorporated herein by reference).

Unsecured Revolving Credit Agreement, dated December 9, 2024, by and among Sunrise Realty Trust, Inc.

Amendment Number Two to Loan and Security Agreement, dated as of December 30, 2024, among Sunrise Realty Trust, Inc.

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Amendment Number Three to Loan and Security Agreement, dated as of February 26, 2025, among Sunrise Realty Trust, Inc.

Insider Trading Policy.

and Sunrise Realty Trust Holdings I LLC, as borrowers, East West Bank, as agent, joint lead arranger, co-syndication agent and co-documentation agent, and the financial institutions party thereto, as lenders (filed as Exhibit 10.11 to the Company’s Annual Report on Form 10-K on March 6, 2025 and incorporated herein by reference).

Amendment Number Four to Loan and Security Agreement, dated as of May 16, 2025, among Sunrise Realty Trust, Inc.

and Sunrise Realty Trust Holdings I LLC, as borrowers, East West Bank, as agent, sole book runner, co-syndication agent and co-documentation agent, East West Bank and City National Bank of Florida, as joint lead arrangers, and the lenders party thereto (filed as Exhibit 10.12 to the Company’s Current Report on Form 8-K on May 20, 2025 and incorporated herein by reference).

Amendment Number Five to Loan and Security Agreement, dated as of May 29, 2025, among Sunrise Realty Trust, Inc.

and Sunrise Realty Trust Holdings I LLC, as borrowers, East West Bank, as administrative agent, sole book runner, co-syndication agent and co-documentation agent, East West Bank, City National Bank of Florida and Everbank, N.A., as joint lead arrangers, and the lenders party thereto (filed as Exhibit 10.13 to the Company’s Current Report on Form 8-K on May 29, 2025 and incorporated herein by reference).

Amendment Number Six to Loan and Security Agreement, dated as of November 7, 2025, among Sunrise Realty Trust, Inc.

and Sunrise Realty Trust Holdings I LLC, as borrowers, East West Bank, as administrative agent, sole book runner, co-syndication agent and co-documentation agent, East West Bank, City National Bank of Florida and EverBank, N.A., as joint lead arrangers, and the lenders party thereto (filed as Exhibit 10.14 to the Company’s Quarterly Report on Form 10-Q on November 13, 2025 and incorporated herein by reference).

Amendment Number Seven to Loan and Security Agreement, dated as of February 27, 2026, among Sunrise Realty Trust, Inc.

and Customers Bank, as joint lead arrangers, and the lenders party thereto (filed as Exhibit 10.9G to the Company’s Current Report on Form 8-K on March 5, 2026 and incorporated herein by reference).

Equity Distribution Agreement, dated August 13, 2025, by and among the Company, the Manager and Raymond James & Associates, Inc.

(filed as Exhibit 1.1 to the Company’s Current Report on Form 8-K on August 13, 2025 and incorporated herein by reference).

Insider Trading Policy (filed as Exhibit 19 to the Company’s Annual Report on Form 10-K on March 6, 2025 and incorporated herein by reference).

List of Subsidiaries of the Registrant (filed as Exhibit 21.1 to the Company’s Registration Statement on Form S-11 on January 21, 2025 and incorporated herein by reference).

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Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Clawback Policy.

Clawback Policy (filed as Exhibit 97 to the Company’s Annual Report on Form 10-K on March 6, 2025 and incorporated herein by reference).

101.INS 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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Consolidated Balance Sheets as of December 31, 2025 and 2024

Consolidated Statements of Operations for the year ended December 31, 202 4 and the period from August 28, 2023 (date of formation) to December 31, 2023

Consolidated Statements of Shareholders’ Equity for the year ended December 31, 202 4 and the period from August 28, 2023 (date of formation) to December 31, 2023

Consolidated Statements of Cash Flows for the year ended December 31, 2024 and the period from August 28, 2023 (date of formation) to December 31, 2023

Consolidated Statements of Operations for the years ended December 31, 2025 and 2024 and 2024

Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2025 and 2024

Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024

Notes to Consolidated Financial Statements

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We have audited the accompanying consolidated balance sheets of Sunrise Realty Trust, Inc.

and subsidiaries as of December 31, 2024 and 2023, and the related consolidated statements of operations, shareholders’ equity, and cash flows for the year ended December 31, 2024 and the period from August 28, 2023 (date of formation) to December 31, 2023, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of Sunrise Realty Trust, Inc.

and subsidiaries as of December 31, 2024 and 2023, and the results of their operations and their cash flows for the for the year ended December 31, 2024 and for the period August 28, 2023 (date of formation) to December 31, 2023 , in conformity with accounting principles generally accepted in the United States of America.

and subsidiaries, as of December 31, 2025 and 2024, and the related consolidated statements of operations, shareholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Sunrise Realty Trust, Inc.

and subsidiaries as of December 31, 2025 and 2024, and the results of their operations and their cash flows for the years then ended , in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the entity’s management.

Our responsibility is to express an opinion on these financial statements based on our audits.

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

Our responsibility is to express an opinion on these 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 Sunrise Realty Trust, Inc.

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Shareholders' equity

Member's equity — 31,234,622

Preferred stock, par value $ 0.01 per share, 10,000 and 0 shares authorized at December 31, 2024 and 2023 and 0 shares issued and outstanding at December 31, 2024 and 2023, respectively

Common stock, par value $ 0.01 per share, 50,000,000 and 0 shares authorized at December 31, 2024 and 2023 and 7,004,676 and 0 shares issued and outstanding at December 31, 2024 and 2023, respectively

Preferred stock, par value $ 0.01 per share, 10,000 shares authorized at December 31, 2025 and 2024 and 0 shares issued and outstanding at December 31, 2025 and 2024, respectively

Common stock, par value $ 0.01 per share, 50,000,000 shares authorized at December 31, 2025 and 2024 and 13,420,986 and 7,004,676 shares issued and outstanding at December 31, 2025 and 2024, respectively

134,210 70,047

Additional paid-in capital 186,745,489 115,022,034

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CONSOLIDATED STATEMENTS OF OPERATIONS

Year Ended December 31, 2024 Period from August 28, 2023 to December 31, 2023

Interest income $ 26,373,418 $ 10,844,718

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Total expenses 7,399,969 3,719,849

(Provision for) reversal of current expected credit losses ( 40,180 ) —

Provision for current expected credit losses ( 2,029,056 ) ( 40,180 )

Net income before income taxes 12,142,409 6,868,421

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Earnings per common share:

Basic earnings per common share $ 1.01 $ 0.03

Diluted earnings per common share $ 1.00 $ 0.03

Basic $ 0.93 $ 1.01

Diluted $ 0.93 $ 1.00

Weighted average number of common shares outstanding:

Basic weighted average shares of common stock outstanding 6,800,841 6,889,032

Diluted weighted average shares of common stock outstanding 6,835,797 6,889,032

Basic 12,742,894 6,800,841

Diluted 12,774,328 6,835,797

See accompanying notes to the consolidated financial statements

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Balance as of December 31, 2024 $ — 7,004,676 $ 70,047 $ 115,022,034 $ ( 954,334 ) $ 114,137,747

Net transfers and distributions from (to) Former Parent — — — 14,400,000 ( 3,661,080 ) 10,738,920

Effect of corporate conversion on member's equity ( 31,234,622 ) 100 1 30,999,999 234,622 —

Stock-based compensation — 115,644 1,157 325,747 — 326,904

Issuance of common stock, net of offering costs — 6,400,000 64,000 70,704,450 — 70,768,450

Stock-based compensation, net of forfeitures — 16,310 163 1,019,005 — 1,019,168

Dividends declared on common shares ($ 1.20 per share)

— — — — ( 16,105,393 ) ( 16,105,393 )

Issuance of common stock in connection with the Spin-Off — 6,888,932 68,889 69,296,288 — 69,365,177

Net income — — — — 12,142,409 12,142,409

Balance as of December 31, 2025 $ — 13,420,986 $ 134,210 $ 186,745,489 $ ( 4,917,318 ) $ 181,962,381

Period from August 28, 2023 to December 31, 2023

Year ended December 31, 2024

Member's Equity Common Stock Additional Paid-In Capital Accumulated Earnings (Deficit) Total Shareholders' Equity

Shares Amount

Balance as of August 28, 2023 $ — — $ — $ — $ — $ —

Balance as of December 31, 2023 $ 31,234,622 — $ — $ — $ — $ 31,234,622

Effect of corporate conversion on member's equity ( 31,234,622 ) 100 1 30,999,999 234,622 —

Stock-based compensation — 115,644 1,157 325,747 — 326,904

Dividends declared on common shares ($ 0.63 per share)

— — — — ( 4,396,297 ) ( 4,396,297 )

Issuance of common stock in connection with the Spin-Off — 6,888,932 68,889 69,296,288 — 69,365,177

Net transfers and distributions from (to) Former Parent — — — 14,400,000 ( 3,661,080 ) 10,738,920

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SUNRISE REALTY TRUST, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

Year ended December 31, Period from August 28, 2023 to December 31, 2023

CONSOLIDATED STATEMENTS OF CASH FLOWS

Operating activities:

Net income $ 12,142,409 $ 6,868,421

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Provision for (reversal of) current expected credit losses 40,180 —

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

Provision for current expected credit losses 2,029,056 40,180

Amortization of deferred financing costs 477,989 41,455

Accretion of deferred loan original issue discount and other discounts ( 263,102 ) —

Accretion of deferred loan original issue discount and premium, net ( 1,481,495 ) ( 263,102 )

Stock-based compensation 1,019,168 326,904

Interest drawn on loans ( 17,354,062 ) ( 5,291,615 )

PIK interest ( 45,722 ) —

Changes in operating assets and liabilities:

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Accounts payable and other liabilities ( 3,749 ) 347,417

Net cash provided by (used in) operating activities 1,640,535 244,622

Net cash (used in) provided by operating activities ( 3,430,578 ) 1,640,535

Cash flows from investing activities:

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Principal repayment of loans 51,516,841 33,160,685

Net cash (used in) provided by investing activities ( 125,178,913 ) —

Net cash used in investing activities ( 153,059,834 ) ( 125,178,913 )

Cash flows from financing activities:

Net transfers and distributions from (to) Former Parent — 80,104,097

Proceeds from sale of common stock 72,588,000 —

Payment of offering costs - equity offering ( 1,817,353 ) —

Payment of financing costs ( 600,616 ) ( 569,238 )

Borrowings on revolving credit facilities 214,060,000 248,840,000

Repayment of revolving credit facility ( 50,000,000 ) —

Repayment of revolving credit facilities ( 290,900,000 ) ( 50,000,000 )

Dividends paid to common shareholders ( 15,021,061 ) ( 1,454,333 )

Net cash provided by (used in) financing activities 276,920,526 31,000,000

Net increase (decrease) in cash and cash equivalents 153,382,148 31,244,622

Net cash (used in) provided by financing activities ( 21,691,030 ) 276,920,526

Net (decrease) increase in cash and cash equivalents ( 178,181,442 ) 153,382,148

Cash and cash equivalents, beginning of period 184,626,770 31,244,622

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Dividends declared and not yet paid $ 4,026,296 $ 2,941,964

Offering costs included in accounts payable and other liabilities $ 2,197 $ —

Supplemental information:

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(the “Company” or “SUNS”) was formed on August 28, 2023, and converted from a Delaware limited liability company to a Maryland corporation in February 2024.

The Company is an institutional lender that provides debt capital solutions to the commercial real estate (“CRE”) market in the Southern United States.

The Company is an institutional lender that provides debt capital solutions to the commercial real estate (“CRE”) market in the Southern United States, with a primary focus on opportunities in Arizona, Florida, Georgia, Nevada, North Carolina, South Carolina, Tennessee and Texas.

The Company focuses on originating, underwriting and managing CRE debt investments and providing capital to high-quality borrowers and sponsors with transitional business plans collateralized by CRE assets with opportunities for near-term value creation, as well as recapitalization opportunities.

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SUNS is externally managed and advised by Sunrise Manager LLC (“SUNS Manager” or the “Manager”), a registered investment adviser under the Investment Advisers Act of 1940, as amended (the “Advisers Act”) .

The Company conducts its business through the parent company, Sunrise Realty Trust, Inc., and several subsidiaries.

The Company consolidates all of its subsidiaries under generally accepted accounting principles in the United States of America (“GAAP”).

The Company intends to elect to be taxed as a REIT for United States federal income tax purposes under the Internal Revenue Code (the “Code”), commencing with the taxable year ending December 31, 2024.

The Company consolidates all of its subsidiaries, which are consolidated within the Company’s consolidated financial statements.

The Company has elected to be taxed as a REIT for United States federal income tax purposes under the Internal Revenue Code (the “Code”), commencing with the taxable year ending December 31, 2024.

The Company generally will not be subject to United States federal income taxes on its REIT taxable income as long as it annually distributes all of its REIT taxable income prior to the deduction for dividends paid to shareholders and complies with various other requirements as a REIT.

On July 9, 2024, Advanced Flower Capital Inc.

(f/k/a AFC Gamma, Inc.) (“AFC” or the “Former Parent”) announced the completion of the previously announced separation and spin-off of AFC’s CRE portfolio into an independent, publicly traded company, SUNS (the “Spin-Off”).

The Spin-Off was effected by the transfer of AFC’s CRE portfolio from AFC to SUNS and the distribution of all of the outstanding shares of SUNS’ common stock, par value $ 0.01 per share (the “Common Stock”) to all of AFC’s shareholders of record as of the close of business on July 8, 2024 (the “Record Date”).

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

(“AFC” or the “Former Parent”) announced the completion of the previously announced separation (the “Separation”) and spin-off of AFC’s CRE portfolio into an independent, publicly traded company, SUNS (the “Spin-Off”).

The Spin-Off was effected by the transfer of AFC’s CRE portfolio from AFC to SUNS and the distribution of all of the outstanding shares of SUNS’ common stock, par value $ 0.01 per share (the “Common Stock”) to all of AFC’s shareholders of record (the “Distribution”) as of the close of business on July 8, 2024 (the “Record Date”).

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

The Spin-Off was completed on July 9, 2024 (the “Distribution Date”).

On the Distribution Date, SUNS became an independent, publicly traded company, trading on the Nasdaq Capital Market under the symbol “SUNS”.

AFC retained no ownership interest in the Company following the Spin-Off.

In connection with the Spin-Off, the Company entered into several agreements with AFC that govern the relationship between the Company and AFC following the Spin-Off, including the Separation and Distribution Agreement and the Tax Matters Agreement.

On the Distribution Date, SUNS became an independent, publicly traded company, trading on the Nasdaq Stock Market LLC under the symbol “SUNS.” AFC retained no ownership interest in the Company following the Spin-Off.

In connection with the Spin-Off, the Company entered into several agreements with AFC that govern the relationship between the Company and AFC following the Spin-Off, including the separation and distribution agreement (the “Separation and Distribution Agreement”) and a tax matters agreement (the “Tax Matters Agreement”).

These agreements provide for the allocation between AFC and SUNS of the assets, liabilities and obligations (including, among others, investments, property and tax-related assets and liabilities) of AFC and its subsidiaries attributable to periods prior to, at and after the Spin-Off.

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The accompanying consolidated financial statements and related notes have been prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company, and its wholly-owned subsidiaries.

The consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary for the fair presentation of the Company’s results of

operations and financial condition as of and for the periods presented.

The consolidated financial statements reflect all

adjustments that, in the opinion of management, are necessary for the fair presentation of the Company’s results of operations and financial condition as of and for the periods presented.

All intercompany balances and transactions have been eliminated in consolidation.

The historical financial statements of the Company for the periods prior to the completion of the Spin-Off are prepared from AFC’s historical accounting records and are presented on a standalone basis as if the Company’s operations have been conducted independently from AFC.

This Annual Report on Form 10-K presents the financial information of the Company for the fiscal year ended December 31, 2024, which includes the period from January 1, 2024 to July 8, 2024 (prior to consummation of the Separation, the Distribution and the Spin-Off) and the period from July 9, 2024 to December 31, 2024 (from and after consummation of the Separation, the Distribution and the Spin-Off).

This Annual Report on Form 10-K presents the financial information of the Company for the fiscal years ended December 31, 2025 and 2024, which includes the period from January 1, 2024 to July 8, 2024 (prior to consummation of the Separation, the Distribution and the Spin-Off) and the period from July 9, 2024 to December 31, 2024 (from and after consummation of the Separation, the Distribution and the Spin-Off).

The aggregate net effect of transactions between the Company and related parties that have been historically settled other than in cash are reflected in the Balance Sheets as Member’s Equity and Shareholder’s Equity and in the Statements of Cash Flows as Net Transfers and Distributions From (to) Former Parent.

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Fair Value Measurements

The Company follows ASC 820-10, Fair Value Measurements Overall (“ASC 820-10”), which expands the application of fair value accounting and defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands disclosure of fair value measurements.

The Company follows ASC 820-10, Fair Value Measurement (“ASC 820-10”), within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), which defines fair value, establishes a framework for measuring fair value, and requires certain disclosures regarding fair value measurements.

ASC 820-10 determines fair value to be the price that would be received for an investment in a current sale, which assumes an orderly transaction between market participants on the measurement date.

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Market participants are defined as buyers and sellers in the principal or most advantageous market that are independent, knowledgeable, and willing and able to transact.

In accordance with ASC 820-10, if the Company elects the ASC 825-10 fair value option, the Company would consider its principal market as the market in which the Company exits its loans with the greatest volume and level of activity.

In accordance with ASC 820-10, if the Company elects the fair value option under ASC 825-10, Financial Instruments, the Company would consider its principal market as the market in which the Company exits its loans with the greatest volume and level of activity.

ASC 820-10 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable.

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Current Expected Credit Losses

The Company measures current expected credit losses (“CECL”) in accordance with Accounting Standards Codification (“ASC”) Topic 326, Financial Instruments - Credit Losses (Topic 326), which requires a methodology that reflects on both the outstanding balances and unfunded commitments on loans held for investment and requires consideration of a broader range of historical experience adjusted for current conditions and reasonable and supportable forecast information to derive credit loss estimates (the “CECL Reserve”).

The Company measures current expected credit losses (“CECL”) in accordance with ASC Topic 326, Financial Instruments - Credit Losses (“ASC 326”), which requires a methodology that reflects on both the outstanding balances and unfunded commitments on loans held for investment and requires consideration of a broader range of historical experience adjusted for current conditions and reasonable and supportable forecast information to derive credit loss estimates (the “CECL Reserve”).

Subsequent period increases and decreases to expected credit losses impact earnings and are recorded within the provision for current expected credit losses in the Company’s statements of operations.

The CECL Reserve related to outstanding balances on loans held for investment required under Topic 326 is a valuation account that is deducted from the amortized cost basis of the Company’s loans held at carrying value in the Company’s balance sheets.

The CECL Reserve related to unfunded commitments on loans held at carrying value is

recorded within the current expected credit loss reserve financial statement line in the Company’s balance sheets.

The CECL Reserve related to outstanding balances on loans held for investment required under ASC 326 is a valuation account that is deducted from the amortized cost basis of the Company’s loans held at carrying value in the Company’s balance sheets.

The CECL Reserve related to unfunded commitments on loans held at carrying value is recorded within the current expected credit

loss reserve financial statement line in the Company’s balance sheets.

The Company has elected not to measure an allowance for credit losses for accrued interest receivable.

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To maintain the Company’s status as a REIT, this non-cash source of income is included in taxable income and will increase the dividend paid to shareholders for the year earned, even though the Company has not yet collected the cash.

The Company is a Maryland corporation and intends to elect to be taxed as a REIT under the Code, commencing with its taxable year ended December 31, 2024.

The Company believes that its proposed method of operation will enable it to qualify as a REIT.

The Company is a Maryland corporation and elected to be taxed as a REIT under the Code, commencing with its taxable year ended December 31, 2024.

The Company believes that its proposed method of operation will enable it to remain qualified as a REIT.

However, no assurances can be given that the Company’s beliefs or expectations will be fulfilled, since qualification as a REIT depends on the Company satisfying numerous asset, income and distribution tests which depend, in part, on the Company’s operating results.

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The income and excise tax provision is included in the line item income tax expense.

FASB ASC Topic 740, Income Taxes (“ASC 740”), prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

ASC Topic 740, Income Taxes (“ASC 740”), prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

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Accrued interest and penalties, if any, are included within other liabilities in the consolidated balance sheets.

The Company will file income tax returns in the United States federal jurisdiction as well as various state and local jurisdictions beginning with the calendar year ended December 31, 2024.

The Company files income tax returns in the United States federal jurisdiction as well as various state and local jurisdictions.

The filings are subject to normal reviews by tax authorities until the related statute of limitations expires.

The Company has not filed its initial U.S.

federal income tax return;

therefore, there are no tax years that are subjected to examination by taxing authorities.

As of December 31, 2025, tax years since 2024 remain subject to examination by taxing authorities.

Earnings per Share

(loss) allocated to the Company’s restricted stock, which are participating securities as defined in GAAP.

Diluted earnings (loss) per share takes into effect any dilutive instruments, such as stock options, restricted stock, restricted stock units (“RSUs”) and convertible debt, except when doing so would be anti-dilutive.

The Company calculates basic earnings (loss) per share by dividing net income (loss) allocable to common shareholders for the period by the weighted average shares of Common Stock outstanding for that period after consideration of the earnings (loss) allocated to the Company’s restricted stock, which are participating securities as defined in GAAP.

Diluted earnings

(loss) per share takes into effect any dilutive instruments, such as stock options, restricted stock, restricted stock units (“RSUs”) and convertible debt, except when doing so would be anti-dilutive.

As of December 31, 2025, there were dilutive instruments relating to restricted shares.

5 unchanged sentences

Recently Adopted Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023 - 07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

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

The amendments should be applied retrospectively to all prior period s presented in the financial statements.

Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption.

The Company has adopted ASU 2023-07 effective December 31, 2024.

See Note 14 for more information on the effects of the adoption of ASU 2023-07.

Recent Accounting Pronouncements Pending Adoption

In December 2023, the FASB issued ASU 2023-09—Income Taxes (Topic 740):

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The amendments should be applied prospectively, however, retrospective application is permitted.

The adoption of ASU 2023-09 is not expected to have a material impact on the Company’s consolidated financial statements.

The Company adopted ASU 2023-09 effective December 31, 2025 and concluded that the application of this guidance did not have any material impact on its consolidated financial statements.

Recent Accounting Pronouncements Pending Adoption

In November 2024, the FASB issued ASU 2024-03—Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

3 unchanged sentences

The adoption of ASU 2024-03 is not expected to have a material impact on the Company’s consolidated financial statements.

In December 2025, the FASB issued ASU 2025-12—Codification Improvements ("ASU 2025-12"), which refines existing guidance to further enhance the interpretation and application of the Codification.

ASU 2025-12 is effective for annual and interim reporting periods beginning after December 15, 2026, with early adoption permitted, and applied either prospectively or retrospectively for all prior periods presented.

The Adoption of ASU 2025-12 is not expected to have a material impact on the Company's consolidated financial statements.

LOANS HELD FOR INVESTMENT AT CARRYING VALUE

As of December 31, 2024 and 2023, t he Company’s portfolio included nine and zero loans held at carrying value, respectively.

The aggregate originated commitment under these loans was approximately $ 190.9 million and zero , resp ectively, and outstanding principal was approximately $ 132.6 million and zero , respectively, as of December 31, 2024 and 2023.

During the year ended December 31, 2024, the Company funded approximately $ 165.7 million of new loans and additional principal and had approximately $ 33.2 million of principal repayments of loans held at carrying value.

As of December 31, 2024 and 2023, approximately 79 % and zero , respectively, of the Company’s loans held at carrying value had floating interest rates.

As of December 31, 2024, t hese floating benchmark rates included one-month Secured Overnight Financing Rate (“SOFR”) subject to a weighted average floor of 4.2 % and quoted at 4.3 %.

The following table summarizes the Company’s loans held at carrying value as of December 31, 2024:

As of December 31, 2025 and 2024, t he Company’s portfolio included sixteen and nine loans held at carrying value, respectively.

The aggregate originated commitment under these loans was approximately $ 420.7 million and $ 190.9 million, resp ectively, and outstanding principal was approximately $ 305.5 million and $ 132.6 million, respectively, as of December 31, 2025 and 2024.

During the year ended December 31, 2025, the Company funded approximately $ 224.4 million of new loans and additional principal on existing loans and had approximately $ 51.5 million of principal repayments of loans held at carrying value.

As of December 31, 2025 and 2024, approximately 96 % and 79 % , respectively, of the Company’s loans held at carrying value had floating interest rates.

As of December 31, 2025, t hese floating benchmark rates included one-month Secured Overnight Financing Rate (“SOFR”) quoted at 3.7 % and subject to a weighted average floor of 4.1 %, and U.S.

prime rate quoted at 6.75 % and subject to a weighted average floor of 8.0 % based on outstanding principal.

The following tables summarizes the Company’s loans held at carrying value as of December 31, 2025 and 2024:

As of December 31, 2025

Principal (1)

Discount Carrying

(Discount) Premium Carrying

Remaining Life

3 unchanged sentences

Total loans held at carrying value $ 305,513,185 $ ( 2,838,442 ) $ 302,674,743 1.9

(1) The difference between the Carrying Value and the Outstanding Principal amount of the loans consists of unaccreted OID and loan origination costs.

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

As of December 31, 2024

Principal (1)

(Discount) Premium Carrying

Remaining Life

Senior mortgage loans (3)(4)

$ 109,300,553 $ ( 1,495,512 ) $ 107,805,041 2.6

Subordinate debt 23,255,736 ( 327,147 ) 22,928,589 2.4

Total loans held at carrying value $ 132,556,289 $ ( 1,822,659 ) $ 130,733,630 2.6

(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 December 31, 2025 and 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 year ended December 31, 2025:

Principal Original Issue

Premium Carrying Value

Total loans held at carrying value at December 31, 2024 $ 132,556,289 $ ( 1,822,659 ) $ 130,733,630

New fundings 207,073,953 ( 2,497,278 ) 204,576,675

Interest drawn on loans 17,354,062 — 17,354,062

Accretion of original issue discount and premium, net — 1,481,495 1,481,495

Loan repayments ( 51,516,841 ) — ( 51,516,841 )

PIK interest 45,722 — 45,722

Total loans held at carrying value at December 31, 2025 $ 305,513,185 $ ( 2,838,442 ) $ 302,674,743

The following table presents changes in loans held at carrying value as of and for the year ended December 31, 2024:

Principal Original Issue

Discount Carrying Value

2 unchanged sentences

Interest drawn on loans 5,291,615 — 5,291,615

Accretion of original issue discount — 263,102 263,102

Accretion of original issue discount and premium, net — 263,102 263,102

Loan repayments ( 33,160,685 ) — ( 33,160,685 )

Total loans held at carrying value at December 31, 2024 $ 132,556,289 $ ( 1,822,659 ) $ 130,733,630

As of December 31, 2025, the Company had one loan held at carrying value on nonaccrual status.

In 2024, there were no loans in the Company’s portfolio on nonaccrual status.

In December 2025, TCG RE Agent LLC (“TCG RE Agent”) delivered a notice of default on behalf of the lenders with respect to the Company’s senior hospitality loan in San Antonio, Texas (the “San Antonio Loan”) based on certain payment defaults, including failure to make its November interest payment when due, for which the Company determined foreclosure was probable.

The San Antonio Loan was placed on nonaccrual status effective October 10, 2025.

In connection with the event of default, took control of cash escrows held by TCG RE Agent of $ 0.6 million that were available for capital expenditure reserves to the loan and applied it toward a principal repayment in accordance with the terms of the loan agreement, of which the Company was proportionally allocated $ 0.4 million during the year ended December 31, 2025 .

As of December 31, 2025, the Company’s portion of the San Antonio Loan had an unpaid principal balance of approximately $ 26.4 million and amortized cost of $ 26.2 million.

Additionally, in anticipation of a potential foreclosure, the Company formed a joint venture entity with the affiliate co-lender on the San Antonio Loan in proportion to their holdings in the San Antonio Loan, with the Company owning 65.0 % of the joint venture.

In March 2026, the co-lenders exercised their right to foreclose on the hotel property that was the underlying collateral for the San Antonio Loan.

The joint venture acquired the hotel property through a credit bid equal to the aggregate unpaid principal balance of approximately $ 40.6 million.

The timing and outcome of the proceedings and the amount of any recovery remain uncertain.

A more detailed listing of the Company’s loans held at carrying value portfolio based on information available as of December 31, 2025 is as follows:

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Principal (1)

Discount Carrying

Premium Carrying

Rate Maturity

Senior mortgage loans:

Mixed-use Houston, TX $ 5,120,604 $ ( 46,667 ) $ 5,073,937 12.5 % (4)

2/26/2026 I/O

Residential Austin, TX $ 14,087,288 $ ( 164,303 ) $ 13,922,985 9.75 % (4)

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12/11/2027 I/O

Residential Aventura, FL 30,750,872 ( 160,439 ) 30,590,433 9.00 % (10)

1/27/2027 I/O

Net Leased Tenant New Orleans, LA 10,241,076 ( 305,556 ) 9,935,520 10.10 % (11)

1/30/2028 I/O

Residential Dallas, TX 44,822,482 ( 335,833 ) 44,486,649 7.55 % (12)

3/14/2028 I/O

Residential Park City, UT 3,269,089 ( 168,990 ) 3,100,099 11.25 % (13)

Residential Miami, FL 19,094,668 ( 160,417 ) 18,934,251 8.44 % (14)

9/25/2028 I/O

Industrial Doral, FL 8,653,728 ( 82,075 ) 8,571,653 9.95 % (15)

10/6/2027 I/O

Industrial West Palm Beach, FL 1,770,103 ( 148,867 ) 1,621,236 9.95 % (16)

10/16/2027 I/O

Retail Houston, TX 21,972,177 ( 283,333 ) 21,688,844 9.50 % (17)

10/24/2028 I/O

Subordinate debt:

Residential Sarasota, FL 23,121,470 ( 204,369 ) 22,917,101 13.0 % (11)

Residential Miami, FL 10,920,110 ( 79,444 ) 10,840,666 13.25 % (18)

11/15/2027 I/O

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Total loans held at carrying value $ 305,513,185 $ ( 2,838,442 ) $ 302,674,743

(1) The difference between the Carrying Value and the Outstanding Principal amount of the loans consists of unaccreted OID and loan origination costs.

(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) Certain loans are subject to contractual extension options and may be subject to performance based or other conditions as stipulated in the loan agreement.

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P/I loans may include interest-only periods for a portion of the loan term.

(4) Base interest rate of 12.50 %.

(4) Base interest rate of 5.00 % plus SOFR (SOFR floor of 4.75 %).

(5) Base interest rate of 6.35 % plus SOFR (SOFR floor of 4.50 %).

Effective October 10, 2025, the Company placed the borrower on nonaccrual status.

(6) Base interest rate of 8.25 % plus SOFR (SOFR floor of 4.00 %).

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(9) Base interest rate of 5.50 % plus SOFR (SOFR floor of 4.00 %).

(11) Base interest rate of 13.00 %.

(10) Base interest rate of 5.00 % plus SOFR (SOFR floor of 4.00 %).

(11) Base interest rate of 5.60 % plus SOFR (SOFR floor of 4.50 %).

(12) Base interest rate of 3.65 % plus SOFR (SOFR floor of 3.90 %).

(13) Base interest rate of 3.25 % plus U.S.

prime rate (U.S.

prime floor of 8.00 %).

(14) Base interest rate of 4.75 % plus SOFR (SOFR floor of 3.50 %).

(15) Base interest rate of 6.20 % plus SOFR (SOFR floor of 3.75 %).

(16) Base interest rate of 6.20 % plus SOFR (SOFR floor of 3.75 %).

(17) Base interest rate of 5.75 % plus SOFR (SOFR floor of 3.75 %).

(18) Base interest rate of 13.25 %.

(19) Base interest rate of 9.50 % plus SOFR (SOFR floor of 4.00 %) and PIK interest rate of 1.00 %.

CURRENT EXPECTED CREDIT LOSSES

As of December 31, 2024, the Company’s CECL Reserve for its loans held at carrying value is approximately $ 40.2 thousand, or 0.03 %, of the Company’s total loans held at carrying value of approximately $ 130.7 million, and is bifurcated between the current expected credit loss reserve (contra-asset) related to outstanding balances on loans held at carrying value of approximately $ 21.8 thousand, and a liability for unfunded commitments of approximately $ 18.4 thousand.

The Company made its first investment in January 2024 and therefore did not have a CECL Reserve as of December 31, 2023.

As of December 31, 2025 and 2024, the Company’s CECL Reserve for its loans held at carrying value was approximately $ 2.1 million and $ 40.2 thousand, respectively, or 0.68 % and 0.03 %, respectively, of the Company’s total loans held at carrying value of approximately $ 302.7 million and $ 130.7 million, respectively, and is bifurcated between the current expected credit loss reserve (contra-asset) related to outstanding balances on loans held at carrying value of approximately $ 1.9 million and $ 21.8 thousand, respectively, and a liability for unfunded commitments of approximately $ 0.2 million and $ 18.4 thousand, respectively.

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

Management considered the likelihood that funding will occur and, if funded, the expected credit loss on the funded portion.

Activity related to the CECL Reserve for outstanding balances and unfunded commitments on the Company’s loans held at carrying value as of and for the year ended December 31, 2024 was as follows:

Management considered the likelihood that funding will occur and, if funded, the expected credit loss on the funded portion when determining the amount to allocate to its CECL Reserve.

Activity related to the CECL Reserve for outstanding balances and unfunded commitments on the Company’s loans held at carrying value as of and for the years ended December 31, 2025 and 2024 was as follows:

Outstanding (1)

Balance at December 31, 2024 $ 21,782 $ 18,398 $ 40,180

Provision for (reversal of) current expected credit losses 21,782 18,398 40,180

Provision for current expected credit losses 1,869,388 159,668 2,029,056

Write-offs — — —

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Balance at December 31, 2025 $ 1,891,170 $ 178,066 $ 2,069,236

(1) As of December 31, 2024, the CECL Reserve related to outstanding balances on loans held at carrying value is recorded within current expected credit loss reserve in the Company’s consolidated balance sheets.

(2) As of December 31, 2024, the CECL Reserve related to unfunded commitments on loans held at carrying value is recorded within current expected credit loss reserve as a liability in the Company’s consolidated balance sheets.

Outstanding (1)

Balance at December 31, 2023 $ — $ — $ —

Provision for current expected credit losses 21,782 18,398 40,180

Write-offs — — —

Recoveries — — —

Balance at December 31, 2024 $ 21,782 $ 18,398 $ 40,180

(1) As of December 31, 2025 and 2024, the CECL Reserve related to outstanding balances on loans held at carrying value is recorded within current expected credit loss reserve in the Company’s consolidated balance sheets.

(2) As of December 31, 2025 and 2024, the CECL Reserve related to unfunded commitments on loans held at carrying value is recorded within current expected credit loss reserve as a liability in the Company’s consolidated balance sheets.

The Company continuously evaluates the credit quality of each loan by assessing the risk factors of each loan and assigning a risk rating based on a variety of factors.

Risk factors include property type, geographic and local market dynamics, physical condition, projected cash flow, loan structure and exit plan, loan-to-value ratio, fixed charge coverage ratio, project sponsorship, and other factors deemed necessary by the Company.

Such factors may include property type, geographic and local market dynamics, physical condition, projected cash flow, loan structure and exit plan, loan-to-value ratio, fixed charge coverage ratio, project sponsorship, and other factors deemed necessary by the Company.

Based on a 5-point scale, the Company’s loans are rated “1” through “5,” from less risk to greater risk, which ratings are defined as follows:

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As of December 31, 2025, the carrying value, excluding the CECL Reserve, of the Company’s loans held at carrying value within each risk rating by year of origination is as follows:

2025 2024 Total

1 $ — $ — $ —

2 150,887,840 125,573,996 276,461,836

5 — 26,212,907 26,212,907

Total $ 150,887,840 $ 151,786,903 $ 302,674,743

3 unchanged sentences

Unused fees receivable 2,203 11,821

PIK receivable 7,037 —

Other fees receivable 3,193 7,813

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On November 6, 2024, the Company entered into the Loan and Security Agreement (as amended, restated or otherwise modified from time to time, the “Revolving Credit Agreement”) by and among the Company, as borrower, the lenders party thereto, and East West Bank, as administrative agent, joint lead arranger, joint book runner, co-syndication agent and co-documentation agent (“East West Bank”).

on eligible loan obligations held by the Company and subject to the satisfaction of other conditions provided under the Revolving Credit Agreement.

The Revolving Credit Agreement provides for a senior secured revolving credit facility (the “Revolving Credit Facility”) that contains initial aggregate commitments of $ 50.0 million from one or more FDIC-insured banking institutions, 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.

During the year ended December 31, 2025 , the Company 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.

Pursuant to the terms of the Revolving Credit Agreement, the amount of total commitments may be increased to up to $ 200.0 million in aggregate, subject to available borrowing base and lenders’ willingness to provide additional commitments.

2 unchanged sentences

provided, however, that the interest rate will increase by an additional 0.25 % during any Increase Rate Month (as defined in the Revolving Credit Agreement).

The Company is required to pay certain fees to the agent and the lenders under the Revolving Credit Agreement, including a $ 75.0 thousand agent fee payable to the agent and an 0.25 % per annum loan fee payable ratably to the lenders, in each case, payable on the closing date and on the annual anniversary thereafter.

The Company is required to pay certain fees to the agent and the lenders under the Revolving Credit Agreement, including a $ 75.0 thousand agent fee payable to the agent and a 0.25 % per annum loan fee payable ratably to the lenders, in each case, payable on the closing date and on the annual anniversary thereafter.

Commencing on the six-month anniversary of the closing date, the Revolving Credit Facility has an unused line fee of 0.25 % per annum, payable semi-annually in arrears.

Based on the terms of the Revolving Credit Agreement, the unused line fee is waived if our average revolver usage exceeds the minimum amount required per the Revolving Credit Agreement.

Upon entering into the Revolving Credit Agreement, the Company incurred certain closing costs of approximately $ 0.5 million, which are included in prepaid expenses and other assets on the Company’s consolidated balance sheets and amortized over the life of the facility.

The Revolving Credit Facility is guaranteed by certain material subsidiaries of the Company and is secured by substantially all assets of the Company and certain of its material subsidiaries;

provided that upon the meeting of certain conditions, the facility will be secured only by certain assets of the Company comprising of or relating to loan obligations designed for inclusion in the borrowing base.

During the years ended December 31, 2025 and 2024, the Company incurred an unused line fee of approximately $ 48.7 thousand and zero , respectively .

In connection with the Revolving Credit Agreement and related amendments, the Company incurred certain closing costs of

approximately $ 0.5 million, which were included in prepaid expenses and other assets on the Company’s consolidated balance sheets and amortized over the life of the Revolving Credit Facility .

The Revolving Credit Facility is guaranteed by certain material subsidiaries of the Company and is secured by substantially all assets of the Company;

provided that upon the meeting of certain conditions, the Revolving Credit Facility will be secured only by certain assets of the Company comprising of or relating to loan obligations designed for inclusion in the borrowing base.

In addition, the Company is subject to various financial and other covenants, including a liquidity and debt service coverage ratio covenant.

On December 9, 2024, the Company entered into Amendment Number One to Loan and Security Agreement, by and among the Company and certain of its subsidiaries, as borrowers, the lenders party thereto and East West Bank, pursuant to which, among other things, the maximum revolver usage was temporarily increased until January 8, 2025 to the sum of (i) $ 50.0 million plus (ii) the lesser of $ 75.0 million and the aggregate amount of funds maintained in the Company’s borrowing base cash account.

Following January 8, 2025, the maximum revolver usage automatically reverted back to $ 50.0 million.

On December 30, 2024, the Company entered into Amendment Number Two to Loan and Security Agreement, by and among the Company and certain of its subsidiaries, as borrowers, the lenders party thereto, and East West Bank, pursuant to which, among other things, the parties agreed to additional representations, covenants and other amendments to maintain its REIT status and limit the use of participation interests in any underlying obligor loan receivables secured as collateral.

As of December 31, 2024 , outstanding borrowings under the Revolving Credit Facility were $ 123.8 million and $ 1.2 million was available for borrowing.

As of March 1, 2025, all outstanding borrowings under the Revolving Credit Facility were subsequently repaid in full.

As of December 31, 2024 , the interest rate on the Company’s borrowings under the Revolving Credit Facility was 7.28 %.

Interest expense incurred for the year ended December 31, 2024 was approximately $ 0.1 million.

Based on the terms of the Revolving Credit Agreement, the Company’s estimated revolver usage will exceed the minimum amount required to waive the unused line fee and as such, the Company did not incur an unused line fee during the year ended December 31, 2024.

On February 26, 2025, the Company entered into Amendment Number Three to Loan and Security Agreement, by and among the Company and certain of its subsidiaries, as borrowers, the lenders party thereto, and East West Bank, pursuant to which, among other things, the parties agreed to reduce the procedural requirements for obligor loan receivables to become eligible under the borrowing base.

As amended, the Revolving Credit Facility requires 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 3.25 x measured as of the end of each fiscal quarter.

As of December 31, 2025 and 2024, outstanding borrowings under the Revolving Credit Facility were $ 102.3 million and $ 123.8 million, respectively, and $ 37.7 million and $ 1.2 million were available for borrowing as of December 31, 2025 and 2024, respectively.

As of December 31, 2025 and 2024, the interest rate on the Company’s borrowings under the Revolving Credit Facility was 6.59 % and 7.28 %, respectively.

SRTF Credit Facility

In September 2024, the Company entered into an unsecured revolving credit agreement (the “Credit Agreement”), by and between the Company, as borrower, and SRT Finance LLC, as agent and lender.

On September 26, 2024, the Company entered into an unsecured revolving credit agreement (the “Credit Agreement”), by and between the Company, as borrower, and SRT Finance LLC, as agent and lender.

SRT Finance LLC is indirectly owned by Leonard M.

Tannenbaum, Executive Chairman of the Company’s Board of Directors and one of the Company’s officers, and Robyn Tannenbaum, President of the Company, along with their family members and associated family trusts.

Tannenbaum, Executive Chairman of the Company’s Board of Directors (the “Board of Directors”) and one of the Company’s officers, and Robyn Tannenbaum, President of the Company, along with their family members and associated family trusts.

The Credit Agreement provides for an unsecured revolving credit facility (the “SRTF Revolving Credit Facility”) with a $ 50.0 million commitment, which may be borrowed, repaid and redrawn, subject to a draw fee and the other conditions provided in the Credit Agreement.

Interest is payable on the SRTF Revolving Credit Facility at 1-month SOFR (subject to a 3.0 % floor) plus a margin of 2.75 %, with a maturity date of December 31, 2025.

The Company did not incur any fees or

costs related to the origination of the SRTF Revolving Credit Facility, and the SRTF Revolving Credit Facility did not have any unused fees.

On November 6, 2024, in conjunction with the entry by the Company into the Revolving Credit Facility, the Company terminated the unsecured revolving credit agreement (the “Credit Agreement”) dated September 26, 2024, by and between the Company, as borrower, and SRT Finance LLC, as agent and lender.

The Company did not incur any fees or costs related to the origination of the SRTF Revolving Credit Facility, and the SRTF Revolving Credit Facility did not have any unused fees.

On November 6, 2024, in conjunction with the entry by the Company into the Revolving Credit Facility, the Company terminated the Credit Agreement.

Upon execution of the Revolving Credit Facility, the lenders’ commitments under the Credit Agreement were terminated and the liability of the Company and its subsidiaries with respect to their obligations under the Credit Agreement was discharged.

6 unchanged sentences

The SRTF Credit Facility matures on the earlier of (i) May 31, 2028 and (ii) the date of the closing of any Refinancing Indebtedness (as defined in the SRTF Credit Agreement) with an aggregate principal amount equal to or greater than $ 75.0 million.

Commencing on January 1, 2026, the Company is required to pay an annual fee equal to 1.00 % of the aggregate commitments ratably to the lenders, payable on the first business day of each calendar year;

provided that the fee due and payable on January 3, 2028 will be pro rated on the basis of a year of 360 days for the actual number of days elapsed from and including January 1, 2028 until and excluding May 31, 2028.

Upon entering into the SRTF Credit Agreement, the Company incurred certain closing costs of approximately $ 20.0 thousand, which are included in prepaid expenses and other assets on the Company’s consolidated balance sheets and amortized over the life of the facility.

As of December 31, 2024 , the Company drew on the full amount of the SRTF Credit Facility, resulting in $ 75.0 million in outstanding borrowings and zero available for borrowing.

As of March 1, 2025, all outstanding borrowings under the SRTF Credit Facility were subsequently repaid in full.

As of December 31, 2024 , the interest rate on the Company’s borrowings under the SRTF Credit Facility was 8.00 %.

Interest expense incurred for the year ended December 31, 2024 was approximately $ 0.1 million.

The following table reflects a summary of interest expense incurred during the year ended December 31, 2024:

As amended, commencing on January 1, 2026, the Company will be required to pay an annual fee equal to 1.00 % of the aggregate commitments ratably to the lenders, payable on the first business day of each quarter;

provided that the fee due and payable on January 3, 2028 will be prorated on the basis of a year of 360 days for the actual number of days elapsed from and including January 1, 2028 until and excluding May 31, 2028.

In connection with the SRTF Credit Agreement and related amendments, the Company incurred certain closing costs of approximately $ 25.5 thousand, which were included in prepaid expenses and other assets on the Company’s consolidated balance sheets and amortized over the life of the SRTF Revolving Credit Facility.

As of December 31, 2025 and 2024, outstanding borrowings under the SRTF Credit Facility were $ 19.8 million and $ 75.0 million, respectively, and $ 55.2 million and zero were available for borrowing as of December 31, 2025 and 2024, respectively.

The following tables reflect a summary of interest expense incurred during the years ended December 31, 2025 and 2024:

December 31, 2025

4 unchanged sentences

Total interest expense $ 4,469,856 $ 332,128 $ 4,801,984

December 31, 2024

Revolving Credit Facility SRTF Revolving Credit Facility Total Borrowings

Interest expense $ 97,283 $ 77,530 $ 174,813

Unused fee expense — — —

Amortization of deferred financing costs 41,092 363 41,455

Total interest expense $ 138,375 $ 77,893 $ 216,268

COMMITMENTS AND CONTINGENCIES

6 unchanged sentences

If the potential loss from any claim or legal claim is considered probable and the amount can be estimated, the Company accrues a liability for the estimated loss.

As of December 31, 2024, the Company is not aware of any legal claims that could materially impact its business, financial condition or results of operations.

As of December 31, 2025, the Company was not aware of any legal claims that could materially impact its business, financial condition or results of operations.

SHAREHOLDERS’ EQUITY

3 unchanged sentences

Preferred Stock

As of December 31, 2024 and December 31, 2023, the Company authorized 10,000 and zero shares of Preferred Stock, par value $ 0.01 per share (the “Preferred Stock”), respectively, of which none have been issued.

The Company’s Board of Directors (the “Board of Directors”) has the authority, without action by our shareholders, to issue up to 10,000 shares of Preferred Stock in one or more series or classes and to designate the rights, preferences and privileges of each series or class, which may be greater than the rights of SUNS’ Common Stock.

There were no shares of Preferred Stock designated or outstanding as of December 31, 2024 and December 31, 2023, respectively.

As of December 31, 2024 and December 31, 2023, the Company authorized 50,000,000 and zero shares of Common Stock, respectively, and issued 7,004,676 and zero shares of Common Stock, respectively.

As of December 31, 2025 and 2024, the Company was authorized to issue up to 10,000 shares of Preferred Stock, par value $ 0.01 per share (the “Preferred Stock”), respectively, of which none have been issued.

The Board of Directors has the authority, without action by our shareholders, to issue up to 10,000 shares of Preferred Stock in one or more series or classes and to designate the rights, preferences and privileges of each series or class, which may be greater than the rights

of Common Stock.

There were no shares of Preferred Stock designated or outstanding as of December 31, 2025 and 2024, respectively.

As of December 31, 2025 and 2024, the Company was authorized to issue up to 50,000,000 shares of Common Stock, respectively, and issued 13,420,986 and 7,004,676 shares of Common Stock, respectively.

Shelf Registration Statement

On August 1, 2025, the Company filed a shelf registration statement on Form S-3 (File No.

333-289188) (the “Shelf Registration Statement”), which was declared effective on August 6, 2025.

Under the Shelf Registration Statement, the Company may, from time to time, issue and sell up to $ 500.0 million of the Company’s common stock, preferred stock, debt securities, warrants and rights (including as part of a unit) to purchase shares of the Company’s common stock or preferred stock.

On January 29, 2025, the Company completed a registered public offering of 5,750,000 shares of common stock at a public offering price of $ 12.00 per share (the “January 2025 Offering”), of which 1,000,000 shares of common stock were sold to Leonard M.

Tannenbaum, the Company’s Executive Chairman, at the public offering price.

The Company received net proceeds from the January 2025 Offering of $ 65.3 million, net of underwriting discounts of $ 3.7 million.

In connection with the January 2025 Offering, the underwriters were granted an over-allotment option to purchase up to an additional 862,500 shares of the Company’s common stock.

On January 31, 2025, the underwriters partially exercised the over-allotment option with respect to 650,000 shares of common stock and the Company received additional net proceeds of $ 7.3 million, net of underwriting discounts of $ 0.5 million.

The Company incurred approximately $ 1.8 million of expenses in connection with the offering.

After giving effect to the partial exercise of the over-allotment option, the total number of shares sold by the Company in the public offering was 6,400,000 shares and total gross proceeds, before deducting underwriting discounts and commissions, and other offering expenses payable by the Company, were approximately $ 76.8 million.

The net proceeds to the Company totaled approximately $ 70.8 million .

At-the-Market Offering Program (“ATM Program”)

On August 13, 2025, the Company entered into an Equity Distribution Agreement (the “Equity Distribution Agreement”) by and among the Company, SUNS Manager and Raymond James & Associates, Inc.

(the “Sales Agent”) under which the Company may, from time to time, offer and sell shares of common stock, having an aggregate offering price of up to $ 50.0 million.

Under the terms of the Equity Distribution Agreement, the Company has agreed to pay the Sales Agents a commission of up to 2.0 % of the gross sales price of common stock sold through the Sales Agents.

Sales of common stock, if any, may be made in transactions that are deemed to be “at-the-market” offerings, as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended (the “Securities Act”).

There were no shares issued under the ATM Program during the year ended December 31, 2025.

Dividend Reinvestment Plan

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

The Company may issue up to 1,000,000 shares of common stock under the DRIP.

There were no shares issued under the DRIP during the year ended December 31, 2025.

On July 1, 2024, the Board of Directors approved a forward stock split of shares of the Company’s Common Stock, at a ratio of 68,890.32 -for-one (to be effected in the form of a stock dividend for purposes of the Maryland General Corporation Law), pursuant to which 68,890.32 additional shares of the Company’s Common Stock were issued for each outstanding share of the Company’s Common Stock (the “Forward Stock Split”), payable prior to the consummation of the Spin-Off.

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As a result of the Forward Stock Split, the number of outstanding shares of the Company’s Common Stock increased to 6,889,032 shares outstanding as of July 9, 2024, of which 88,685 were restricted shares at the time of Spin-Off.

The Spin-Off was effected by the transfer of AFC’s CRE portfolio from AFC to SUNS and the distribution of all of the outstanding shares of SUNS Common Stock to all of AFC’s shareholders of record as of the close of business on July 8, 2024.

AFC’s shareholders of record as of the Record Date received one share of SUNS Common Stock for every three shares of AFC common stock held as of the close of business on July 8, 2024, the Record Date for the distribution, as well as a cash payment in lieu of any fractional shares.

The Spin-Off was effected by the transfer of AFC’s CRE portfolio from AFC to SUNS and the distribution of all of the outstanding shares of Common Stock to all of AFC’s shareholders of record as of the close of business on July 8, 2024.

AFC’s shareholders of record as of the Record Date received one share of Common Stock for every three shares of AFC common stock held as of the close of business on July 8, 2024, the Record Date for the distribution, as well as a cash payment in lieu of any fractional shares.

The Spin-Off was completed on July 9, 2024.

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The Company has granted, and currently intends to continue to grant, restricted stock awards to participants in the 2024 Plan, but it may also grant any other type of award available under the 2024 Plan in the future.

Persons eligible to receive awards under the 2024 Plan include officers or employees of the Company or any of its subsidiaries, directors of the Company,

employees of the Manager and certain directors, consultants and other service providers to the Company or any of its subsidiaries.

In July 2024, the Company’s Board of Directors approved grants of 36,363 shares of restricted stock to Brian Sedrish in connection with his appointment as CEO, which vest over a three-year period with approximately 33 % vesting on each of the first, second and third anniversaries of July 9, 2024.

In December 2024, the Company’s Board of Directors approved grants of restricted stock to the Company’s directors and certain officers, as well as certain employees of the Manager or its affiliates, with an aggregate of 79,281 shares of restricted stock granted to such eligible persons.

The restricted stock awards granted in December 2024 under the 2024 Plan contain vesting periods that vary from vesting upon the one-year anniversary of the grant date to vesting over a three-year period, with approximately 33 % vesting on each of the first, second and third anniversaries of the vesting commencement date.

Persons eligible to receive awards under the 2024 Plan include officers or employees of the Company or any of its subsidiaries, directors of the Company, employees of the Manager and certain directors, consultants and other service providers to the Company or any of its subsidiaries.

During the year ended December 31, 2025 , the Company’s Board of Directors approved grants of restricted stock to the Company’s directors and certain officers, as well as certain employees of the Manager or its affiliates, with an aggregate of 19,625 shares of restricted stock granted to such eligible persons.

The restricted stock awards granted during the year ended December 31, 2025 under the 2024 Plan vest over a three-year period, with approximately 33 % vesting on each of the first, second and third anniversaries of the vesting commencement date.

During the year ended December 31, 2024, the Company’s Board of Directors approved grants of restricted stock to the Company’s directors and certain officers, as well as certain employees of the Manager or its affiliates, with an aggregate of 115,644 shares of restricted stock granted to such eligible persons.

The restricted stock awards granted during the year ended December 31, 2024 under the 2024 Plan contain vesting periods that vary from one-year vesting to vesting over a three-year period, with approximately 33% vesting on each of the first, second and third anniversaries of the vesting commencement date.

As of December 31, 2025 , there were 131,954 shares of restricted stock granted under the 2024 Plan.

As of December 31, 2025 , the maximum number of shares of the Company’s Common Stock that may be delivered pursuant to awards under the 2024 Plan (the “Share Limit”) equaled 1,191,122 shares, of which 1,059,168 shares remained available for future issuance under the 2024 Plan.

At the Board’s discretion, the Company’s Board waived the evergreen provision in connection with the Minimum Annual Increase (as defined in the 2024 Plan) under the 2024 Plan for the 2024 fiscal year.

At the discretion of the Board of Directors, the Company waived the evergreen provision in connection with the Minimum Annual Increase (as defined in the 2024 Plan) under the 2024 Plan for the 2024 fiscal year.

In January 2025, the Company completed an offering of the Company’s Common Stock and pursuant to the evergreen provision in the 2024 Plan with respect to the public offerings, the total number of shares reserved for issuance under the 2024 Plan automatically increased by ten percent of the total number of shares of Common Stock sold by the Company in the January 2025 Offering, which equaled 640,000 shares.

Shares that are subject to or underlie awards that expire or, for any reason, are cancelled, terminated, forfeited, fail to vest or are not paid or delivered under the 2024 Plan will not be counted against the Share Limit and will again be available for subsequent awards under the 2024 Plan.

The stock-based compensation expense for the Company was approximately $ 0.3 million for the year ended December 31, 2024 and zero during the period from August 28, 2023 to December 31, 2023, respectively.

The following table summarizes restricted stock (i) converted upon Spin-Off, (ii) granted, (iii) vested and (iv) forfeited for the Company’s directors and officers and employees of the Manager as of December 31, 2024.

There was no stock award activity during the period from August 28, 2023 (date of formation) to December 31, 2023.

December 31, 2024

Stock Compensation

The following table summarize s the stock-based compensation expense incurred by the Company for the years ended December 31, 2025 and 2024:

Stock-based compensation $ 1,019,168 $ 338,404

Restricted Stock

Converted upon Spin-Off 88,685 88,685

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Vested ( 76,350 ) ( 805 )

Forfeited ( 3,315 ) —

Balance 144,289 203,524

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grant date fair value

Balance as of July 9, 2024 (1)

88,685 $ 13.00

Balance as of December 31, 2024 203,524 $ 13.16

Granted 19,625 11.78

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Balance as of December 31, 2025 144,289 $ 12.88

(1) Effective date of conversion upon Spin-Off.

The total fair value of shares vested during the year ended December 31, 2024 was approximately $ 11.8 thousand.

During the year ended December 31, 2024 , 115,644 shares of restricted stock were granted with a weighted-average grant date fair

value of $ 13.34 .

There were no shares of restricted stock that were granted or that vested during the period from August 28, 2023 to December 31, 2023.

During the year ended December 31, 2024, 115,644 shares of restricted stock were granted with a weighted-average grant date fair value of $ 13.34 .

During the year ended December 31, 2024, 805 shares of restricted stock vested with a weighted-average grant date fair value of $ 21.64 .

The total fair value of shares vested during the years ended December 31, 2025 and 2024, was approximately $ 0.9 million and $ 11.8 thousand, respectively.

As of December 31, 2025 , there was approximately $ 1.3 million of total unrecognized compensation cost related to non-vested restricted stock.

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EARNINGS PER SHARE

In connection with the Spin-Off, all of the outstanding shares of the Company’s Common Stock were distributed to AFC’s shareholders of record as of the close of business on July 8, 2024 and AFC’s shareholders received one share of the Company’s Common Stock for every three shares of AFC common stock held.

As a result, on July 9, 2024, the Company had 6,889,032 shares of Common Stock outstanding.

This share amount is utilized for the calculation of basic and diluted earnings per share for all periods presented prior to the Spin-Off.

For periods prior to the Spin-Off, there were no dilutive equity instruments, as there were no equity awards of the Company outstanding prior to the Spin-Off.

After the Spin-Off, actual outstanding shares are used to calculate both basic and diluted weighted average number of common shares outstanding.

The following information sets forth the computations of basic and diluted weighted average earnings per common share for the year ended December 31, 2024 and for the period from August 28, 2023 to December 31, 2023 :

December 31, 2024 Period from August 28, 2023 to December 31, 2023

Net income attributable to common shareholders $ 6,868,421 $ 234,622

The following information sets forth the computations of basic and diluted earnings per common share for the years ended December 31, 2025 and 2024:

Net income $ 12,142,409 $ 6,868,421

Dividends paid on unvested restricted stock ( 248,458 ) ( 26,091 )

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Diluted weighted average shares of common stock outstanding 12,774,328 6,835,797

Basic weighted average earnings per common share $ 1.01 $ 0.03

Diluted weighted average earnings per common share $ 1.00 $ 0.03

Basic earnings per common share $ 0.93 $ 1.01

Diluted earnings per common share $ 0.93 $ 1.00

Diluted earnings per common share was computed using the treasury stock method for restricted stock.

Diluted weighted average earnings per common share excluded 35,447 weighted average unvested restricted stock due to anti-dilutive effect for the year ended December 31, 2024 and zero for the period from August 28, 2023 to December 31, 2023 .

Diluted earnings per common share excluded 63,489 and 35,447 weighted average shares of unvested restricted stock due to anti-dilutive effect for the years ended December 31, 2025 and 2024, respectively .

Prior to the Spin-Off, the Company was a wholly-owned subsidiary of AFC and was a disregarded entity for tax purposes.

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The Company’s entire share of taxable income or loss was previously included in the tax return of AFC.

The Company was formed on August 28, 2023 and converted from a Delaware limited liability company to a Maryland corporation in February 2024.

The Company intends to elect to be taxed as a REIT for U.S.

The Company elected to be taxed as a REIT for U.S.

federal income tax purposes, commencing with the taxable year ending December 31, 2024.

The Company believes that, commencing with such taxable year, the Company is organized and operated in such manner as to qualify for taxation as a REIT under the U.S.

federal income tax laws, and the Company intends to continue to operate in such a manner.

However, no assurances can be given that our beliefs or expectations will be fulfilled, since qualification as a REIT depends on our continuing to satisfy numerous asset, income, and distribution tests, which in turn depends, in part, on our operating results.

The Company will elect to be taxed as a REIT only if the Company believes that we have been organized in conformity with the requirements for qualification and taxation as a REIT under the U.S.

federal income tax laws, and that our method of operation will enable us to satisfy the requirements for qualification and taxation as a REIT under the U.S.

The Company believes that we have been organized in conformity with the requirements for qualification and taxation as a REIT under the U.S.

federal income tax laws, and that our method of operation enables us to satisfy the requirements for qualification and taxation as a REIT under the U.S.

federal income tax laws for such taxable year and thereafter.

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federal income tax on the portion of our taxable income or capital gain that is distributed to shareholders annually.

The income tax provision for the Company was zero for the year ended December 31, 2024 .

For the year ended December 31, 2024 , the Company incurred no expense for U.S.

The Company had no income tax provision for the years ended December 31, 2025 and 2024.

For the years ended December 31, 2025 and 2024, the Company incurred no expense for U.S.

federal excise tax.

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The Company does not have any unrecognized tax benefits and the Company does not expect that to change in the next 12 months.

As of December 31, 2025, tax years 2024-2025 remain subject to examination by taxing authorities.

Fair Value of Financial Instruments

GAAP requires disclosure of fair value information about financial instruments, whether or not recognized at fair value in the balance sheets, for which it is practicable to estimate that value.

The following table details the book value and fair value of the Company’s financial instruments not recognized at fair value in the consolidated balance sheets as of December 31, 2024 :

The following table details the carrying value and fair value of the Company’s financial instruments not recognized at fair value in the consolidated balance sheets as of December 31, 2025 :

As of December 31, 2025

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Cash and cash equivalents $ 6,445,328 $ 6,445,328

Loans held for investment at carrying value $ 130,733,630 $ 131,831,687

Estimates of fair value for cash and cash equivalents are measured using observable, quoted market prices, or Level 1 inputs.

Loans held for investment, net $ 302,674,743 $ 302,338,242

Cash and cash equivalents have a carrying value which approximates their fair value due to the short-term nature of these instruments.

The Company categorizes the fair value measurement of these assets as Level 1.

The Company’s loans held for investment are measured using unobservable inputs, or Level 3 inputs.

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On February 22, 2024, the Company and the Manager, entered into a management agreement (the “Management Agreement”), effective upon the listing of the Company’s Common Stock.

Following the completion of the Spin-Off on July 9, 2024, the Company is managed by its Board of Directors and the Company’s executive officers and by SUNS Manager, as provided for under our Management Agreement.

Pursuant to the Management Agreement, the Manager manages the loans and day-to-day operations of the Company, subject at all times to the further terms and conditions set forth in the Management Agreement and such further limitations or parameters as may be imposed from time to time by the Company’s Board of Directors.

Following the completion of the Spin-Off on July 9, 2024, the Company became managed by its Board of Directors and the Company’s executive officers and by SUNS Manager, as provided for under our Management Agreement.

The Manager receives base management fees (the “Base Management Fees”) that are calculated and payable quarterly in arrears, in an amount equal to 0.375 % of the Company’s Equity (as defined in the Management Agreement), subject to certain adjustments, less 50 % of the aggregate amount of any other fees (“Outside Fees”), including any agency fees relating to the Company’s loans, but excluding the Incentive Compensation (as defined below) and any diligence fees paid to and earned by the Manager and paid by third parties in connection with the Manager’s due diligence of potential loans.

Base Management Fees incurred for the years ended December 31, 2025 and 2024 were approximately $ 2.1 million and $ 0.8 million, respectively.

Refer to the fee waiver below.

In addition to the Base Management Fees, the Manager is entitled to receive incentive compensation (the “Incentive Compensation” or “Incentive Fees”) with respect to each fiscal quarter (or portion thereof that the Management Agreement is in effect) based upon the Company’s achievement of targeted levels of Core Earnings.

“Core Earnings” is defined in the Management Agreement as, for a given period, the net income (loss) for such period, computed in accordance with GAAP, excluding (i) non-cash equity compensation expense, (ii) Incentive Compensation, (iii) depreciation and amortization, (iv) any unrealized gains or losses or other non-cash items that are included in net income for the applicable reporting period, regardless of whether such items are included in other comprehensive income or loss, or in net income and (v) one-time events pursuant to changes in GAAP and certain non-cash charges, in each case after discussions between the Manager and the Company’s independent directors and approval by a majority of the independent directors.

There was no Incentive Compensation incurred for the year ended December 31, 2024 or during the period from August 28, 2023 to December 31, 2023.

Incentive Fees incurred for the year ended December 31, 2025 were approximately $ 0.4 million.

There were no Incentive Fees incurred for the year ended December 31, 2024.

Refer to the fee waiver below.

From time to time, the Manager may waive fees it would otherwise be entitled to under the terms of the Management Agreement.

The Manager agreed to waive (i) the inclusion of the net proceeds from the January 2025 Offering in the Company’s Equity for purposes of calculating the management fee until the earlier of (a) December 31, 2025 and (b) the quarter in which the total amount of the net proceeds of the January 2025 Offering have been utilized to fund loans in our portfolio and (ii) an additional $ 1.0 million in fees.

For the year ended December 31, 2025, Base Management Fees waived were $ 0.6 million and Incentive Fees waived were $ 0.5 million .

Administrative Services Agreement

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Services Agreement

In July 2024, SUNS Manager entered into a Services Agreement with SRT Group LLC, an affiliate of SUNS Manager, Mr.

Tannenbaum, Mrs.

Tannenbaum, Mr.

Sedrish and Mr.

In July 2024, SUNS Manager entered into a Services Agreement with SRT Group LLC, an affiliate of SUNS Manager and certain officers.

The Services Agreement sets forth the terms on which SRT Group LLC will provide SUNS its investment personnel.

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Until the completion of the Spin-Off, there were no Base Management Fees or Incentive Fees incurred by the Company.

The following table summarizes the related party costs incurred by the Company for the year ended December 31, 2024 and for the period from August 28, 2023 to December 31, 2023 :

Year Ended December 31, 2024 Period from August 28, 2023 to December 31, 2023

The following table summarizes the related party costs incurred by the Company for the years ended December 31, 2025 and 2024:

Affiliate costs

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General and administrative expenses reimbursable to Manager 2,412,177 1,072,527

Professional fees reimbursable to Manager 44,671 13,106

Total $ 4,910,978 $ 1,900,934

Amounts payable to the Company’s Manager as of December 31, 2024 and December 31, 2023 were approximately $ 1.1 million and zero , respectively.

Certain officers have ownership in the outstanding equity of the Manager, including Mr.

Tannenbaum and Mrs.

Tannenbaum, who beneficially owned 67.8 % and 8.8 % as of December 31, 2024, respectively.

From time to time, the Manager may waive fees it would otherwise be entitled to under the terms of the Management Agreement.

The Manager has agreed to waive (i) the inclusion of the net proceeds from the January 2025 Offering (hereinafter defined) in the Company’s Equity for purposes of calculating the management fee until the earlier of (a) December 31, 2025 and (b) the quarter in which the total amount of the net proceeds of the January 2025 Offering have been utilized to fund loans in our portfolio and (ii) an additional $ 1.0 million in fees.

Amounts payable to the Manager as of December 31, 2025 and 2024 were approximately $ 1.0 million and $ 1.1 million , respectively, and are recorded within Accrued management and incentive fees and Accrued direct administrative expenses in the Company’s consolidated Balance Sheets.

The Manager is beneficially owned by certain officers as of the date of this Annual Report on Form 10-K :

Tannenbaum, the Company’s Executive Chairman, 8 % by Mrs.

Tannenbaum, the Company’s President, 42 % by other Tannenbaum family members and trusts, 7 % by Mr.

Sedrish, the Company’s Chief Executive Officer, 2 % by Brandon Hetzel, the Company’s Chief Financial Officer, and 1 % by Gabriel Katz, the Company’s Chief Legal Officer.

Investments in Loans

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As such, the Company’s risk is limited to the carrying value of its investment in any such loan.

Additionally, SUNS Manager or its affiliates, may from time to time serve as administrative and collateral agents to the lenders under our co-investments.

As of December 31, 2024, there were nine co-invested loans held by the Company and affiliates of the Company.

Additionally, SUNS Manager or its affiliates, including TCG RE Agent, may from time to time serve as administrative and collateral agents to the lenders under the loans in the Company’s portfolio.

As of December 31, 2025, there were 16 co-invested loans held by the Company and affiliates of the Company.

Additionally, in connection with the Company’s exercise of its right to foreclose on the hotel property that was the underlying collateral for the San Antonio Loan, in March 2026, the Company formed a joint venture entity with the affiliate co-lender on the San Antonio Loan to acquire ownership of the San Antonio property proportional to their respective holdings in the San Antonio Loan, with the Company owning 65.0 % of the joint venture.

Refer to Note 3 for more information.

Unsecured Revolving Credit Facility with Affiliate

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DIVIDENDS AND DISTRIBUTIONS

The following table summarizes the Company’s dividends declared during the year ended December 31, 2024:

The following table summarizes the Company’s dividends declared during the years ended December 31, 2025 and 2024:

Declaration Date Record Date Payment

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$ 0.63 $ 0.63 $ — $ — $ 0.63

3/4/2025 3/31/2025 4/15/2025 $ 0.30 $ 0.30 $ — $ — $ 0.30

6/13/2025 6/30/2025 7/15/2025 0.30 0.30 — — 0.30

9/15/2025 9/30/2025 10/15/2025 0.30 0.30 — — 0.30

12/15/2025 12/31/2025 1/15/2026 0.30 0.30 — — 0.30

2025 Total cash dividend $ 1.20 $ 1.20 $ — $ — $ 1.20

REPORTABLE SEGMENTS

ASC 280, Segment Reporting, establishes standards for reporting financial and descriptive information about an enterprise’s reportable segments.

The Company is an institutional lender that provides debt capital solutions to CRE markets in the Southern United States.

The Company is an institutional lender that provides debt capital solutions to CRE markets in the Southern United States , with a primary focus on opportunities in Arizona, Florida, Georgia, Nevada, North Carolina, South Carolina, Tennessee and Texas.

The Company generates revenue from originating and investing in secured CRE loans and providing capital to high-quality borrowers and sponsors with transitional business plans collateralized by CRE assets with opportunities for near-term value creation, as well as recapitalization opportunities.

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Interest income earned on the Company’s portfolio was concentrated with four borrowers each comprising more than 10% of consolidated interest income for an aggregate amount of $ 15.3 million, or 58 %, of consolidated interest income during the year ended December 31, 2025.

The Company made its first investment in January 2024 and therefore, there was no interest income earned from borrowers during the period from August 28, 2023 to December 31, 2023.

Interest income earned on the Company’s portfolio was concentrated with four borrowers each comprising more than 10% of consolidated interest income for an aggregate amount of $ 9.3 million, or 86 %, of consolidated interest income during the year ended December 31, 2024.

SUBSEQUENT EVENTS

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There were no material subsequent events, other than those described below, that required disclosure in these consolidated financial statements.

Tannenbaum, the Company’s Executive Chairman, at the public offering price.

The Company received net proceeds from the January 2025 Offering of $ 65.3 million, net of underwriting discounts of $ 3.7 million.

In connection with the January 2025 Offering, the underwriters were granted an over-allotment option to purchase up to an additional 862,500 shares of the Company’s common stock.

The Manager has agreed to waive (i) the inclusion of the net proceeds from the January 2025 Offering in the Company’s Equity for purposes of calculating the management fee until the earlier of (a) December 31, 2025 and (b) the quarter in which the total amount of the net proceeds of the January 2025 Offering have been utilized to fund loans in our portfolio and (ii) an additional $ 1.0 million in fees.

In January 2025, the Company’s senior loan for the mixed-use property in Houston, Texas was repaid in full.

The outstanding principal on the date of repayment was approximately $ 0.2 million.

The Company received and recognized approximately $ 23.5 thousand relating to the repayment premium.

In January 2025, the Company and an affiliated co-investor entered into a $ 41.0 million note-on-note financing agreement for the acquisition of a senior secured mortgage loan (the “Note”).

The Note is secured by a residential property consisting of senior living, medical offices and retail space located in Aventura, Florida.

The Company committed a total of $ 30.8 million, and the affiliate committed the remaining $ 10.3 million, funding $ 28.5 million and $ 9.5 million, respectively, on close.

The Note was issued at a discount of 1.0 % and matures in two years with an exit fee of 1.0 % and one 12-month extension option.

The Note bears interest at a rate of SOFR plus 5.00 %, with a rate index floor of 4.00 %.

The Note is secured by a first priority collateral assignment of the senior mortgage loan, including assignment in blank of the mortgage and other loan documents, a pledge of 100 % of the issued and outstanding limited liability company interests in borrower, reserve accounts, and other customary collateral.

In January 2025, the Company and affiliated co-investors entered into a $ 74.5 million senior secured mortgage loan for the construction of a build-to-suit net leased credit tenant project located in New Orleans, Louisiana.

The loan proceeds will be used to commence and facilitate construction.

The Company committed a total of $ 44.0 million, and affiliated co-investors committed the remaining $ 30.5 million, funding $ 0.6 million and $ 0.4 million, respectively, on close.

The senior secured loan was issued at a discount of 1.0 % and matures in three years .

The loan bears interest at a rate of SOFR plus 5.60 %, with a rate index floor of 4.50 %.

The senior loan is secured by a first priority mortgage on the property subject only to the ground lease, pledge of 100 % of borrower’s equity interest, assignment of leases, security deposits, and reserve accounts as well as all future rental and sales income associated with the project.

In March 2025, the Company entered into an assignment and assumption agreement with an affiliated co-lender owned by Mr.

Tannenbaum, the Company’s Executive Chairman, pursuant to which the Company purchased $ 10.6 million of the senior term loan and $ 9.4 million of the home construction revolver on the property in Palm Beach Gardens, FL, with $ 9.9 million and $ 7.4 million currently funded under such loans, respectively.

The loans were purchased at par less remaining unamortized OID plus accrued interest.

The Company did not pay any fees or premium to the affiliate for the Company’s acquisition of the affiliate’s loan commitments.

Following the purchase, the Company holds $ 31.9 million in commitments of the senior term loan with $ 29.8 million in principal outstanding, and $ 28.1 million in commitments of the home construction revolver with $ 22.2 million of principal outstanding.

In January 2026, the Company and an affiliated co-investor entered into and exited a $ 21.6 million senior bridge loan to finance the acquisition of a ranch located in Colorado.

The Company committed a total of $ 14.0 million, and an affiliated co-investor committed the remaining $ 7.6 million, funding $ 14.0 million and $ 7.6 million, respectively, upon closing.

The senior bridge loan was issued at a discount of 3.0 % and matures in July 2026.

The senior bridge loan was fully paid off four days after closing in January 2026.

In December 2025, TCG RE Agent delivered a notice of default on behalf of the lenders with respect to the Company’s senior hospitality loan in San Antonio, Texas (the “San Antonio Loan”) based on certain payment defaults, including failure to make its November interest payment when due, for which we determined foreclosure was probable.

The San Antonio Loan was placed on nonaccrual status effective October 10, 2025.

In connection with the event of default, TCG RE Agent took control of cash escrows held by TCG RE Agent of $ 0.6 million that were available for capital expenditure reserves to the loan and applied it toward a principal repayment in accordance with the terms of the loan agreement, of which the Company was proportionally allocated $ 0.4 million during the year ended December 31, 2025.

As of December 31, 2025, the Company’s portion of the San Antonio Loan had an unpaid principal balance of approximately $ 26.4 million and amortized cost of $ 26.2 million.

In March 2026, the co-lenders exercised their right to foreclose on the hotel property that was the underlying collateral for the San Antonio Loan.

The joint venture acquired the hotel property through a credit bid equal to the aggregate unpaid principal balance of approximately $ 40.6 million.

The timing and outcome of the proceedings and the amount of any recovery remain uncertain.

In February 2026, the Company and an affiliated co-investor entered into a $ 69.3 million subordinate B-note secured by a portfolio of hotel properties.

The Company committed approximately $ 48.3 million, and an affiliated co-investor committed the remaining $ 21.0 million, funding $ 45.3 million and $ 19.7 million, respectively, upon closing.

The financing also included approximately $ 336.7 million of Senior A-note debt held by an unaffiliated third party and will refinance existing indebtedness on the properties.

The subordinate B-note bears interest at a rate of SOFR plus 8.25 %, with a rate index floor of 3.00 %.

The subordinate B-note is secured by a first mortgage (and lease-hold mortgage on two properties) and related collateral interests pursuant to the terms of the credit agreement and related loan documents.

The proceeds of the loan will be used to refinance existing debt, provides an “earn out” and stabilizes the assets.

In February 2026, the Company entered into Amendment Number Seven to the Loan and Security Agreement (“Amendment Number Seven”), by and among the Company and certain subsidiaries, as borrowers, the lenders party thereto, and East West Bank, which, among other things (i) facilitated the entry of an additional lender;

(ii) increased the aggregate commitment by $ 25.0 million, for a total maximum revolver usage of $ 165.0 million;

and (iii) revised the required consent from certain lenders to advance additional funds under the Revolving Credit Agreement.

In March 2026, the Company’s Board of Directors declared a regular cash dividend of $ 0.30 per outstanding share of common stock for the first quarter of 2026 to shareholders of record as of March 31, 2026, which will be paid on April 15, 2026.

Pursuant to the requirements 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.

22 unchanged sentences

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What changed 10-K

Item 9A. Controls and Procedures