What changed in this filing

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Item 1. Financial Statements

2026-08-06 compared with 2026-05-14 · 190 added, 169 removed, 446 unchanged (45% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

Loans held for investment at carrying value, net $ 296,753,498 $ 302,674,743

17 unchanged sentences

Shareholders' equity

Preferred stock, par value $ 0.01 per share, 10,000 shares authorized at March 31, 2026 and December 31, 2025 and 0 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively

Common stock, par value $ 0.01 per share, 50,000,000 shares authorized at March 31, 2026 and December 31, 2025 and 13,519,655 and 13,420,986 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively

Preferred stock, par value $ 0.01 per share, 10,000 shares authorized at June 30, 2026 and December 31, 2025 and 0 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively

Common stock, par value $ 0.01 per share, 50,000,000 shares authorized at June 30, 2026 and December 31, 2025 and 13,517,402 and 13,420,986 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively

135,174 134,210

7 unchanged sentences

Three months ended

June 30, Six months ended

2026 2025 2026 2025

Interest income $ 8,564,695 $ 6,752,679 $ 18,837,381 $ 11,711,202

7 unchanged sentences

Provision for current expected credit losses ( 557,248 ) ( 468,493 ) ( 617,531 ) ( 586,141 )

Equity in earnings of unconsolidated real estate joint venture 32,287 — 32,287 —

Net income before income taxes 3,076,025 3,358,314 7,329,375 6,457,751

10 unchanged sentences

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Three Months Ended March 31, 2026

Three Months Ended June 30, 2026

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

Shares Amount

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

Stock-based compensation 98,669 987 368,975 — 369,962

Balance as of March 31, 2026 13,519,655 $ 135,197 $ 187,114,464 $ ( 4,719,865 ) $ 182,529,796

Stock-based compensation, net of forfeitures ( 2,253 ) ( 23 ) 297,507 — 297,484

Dividends declared on common shares ($ 0.30 per share)

1 unchanged sentence

Net income — — — 3,076,025 3,076,025

Balance as of March 31, 2026 13,519,655 $ 135,197 $ 187,114,464 $ ( 4,719,865 ) $ 182,529,796

Three Months Ended March 31, 2025

Balance as of June 30, 2026 13,517,402 $ 135,174 $ 187,411,971 $ ( 5,699,060 ) $ 181,848,085

Three Months Ended June 30, 2025

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

Shares Amount

Balance as of March 31, 2025 13,421,494 $ 134,215 $ 186,555,228 $ ( 1,881,345 ) $ 184,808,098

Stock-based compensation, net of forfeitures ( 318 ) ( 3 ) 259,069 — 259,066

Dividends declared on common shares ($ 0.30 per share)

— — — ( 4,026,353 ) ( 4,026,353 )

Issuance of common stock, net of offering costs ( 76,524 ) — ( 76,524 )

Net income — — — 3,358,314 3,358,314

Balance as of June 30, 2025 13,421,176 $ 134,212 $ 186,737,773 $ ( 2,549,384 ) $ 184,322,601

See accompanying notes to the unaudited interim consolidated financial statements

SUNRISE REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Six Months Ended June 30, 2026

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

Shares Amount

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

Issuance of common stock, net of offering costs — — — — — —

Stock-based compensation, net of forfeitures — 96,416 964 666,482 — 667,446

1 unchanged sentence

— — — — ( 8,111,117 ) ( 8,111,117 )

Net income — — — — 7,329,375 7,329,375

Balance as of June 30, 2026 $ — 13,517,402 $ 135,174 $ 187,411,971 $ ( 5,699,060 ) $ 181,848,085

Six Months Ended June 30, 2025

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

Shares Amount

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

Issuance of common stock, net of offering costs — 6,400,000 64,000 71,213,217 — 71,277,217

Stock-based compensation, net of forfeitures — 16,500 165 502,522 — 502,687

Dividends declared on common shares ($ 0.60 per share)

— — — — ( 8,052,801 ) ( 8,052,801 )

Net income — — — — 6,457,751 6,457,751

Balance as of March 31, 2025 13,421,494 $ 134,215 $ 186,555,228 $ ( 1,881,345 ) $ 184,808,098

Balance as of June 30, 2025 $ — 13,421,176 $ 134,212 $ 186,737,773 $ ( 2,549,384 ) $ 184,322,601

See accompanying notes to the unaudited interim consolidated financial statements

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

Six months ended

Operating activities:

7 unchanged sentences

PIK interest ( 78,549 ) ( 10,405 )

Equity in earnings of unconsolidated real estate joint venture ( 32,287 ) —

Changes in operating assets and liabilities:

8 unchanged sentences

Issuance of and fundings on loans ( 108,315,156 ) ( 120,416,392 )

Contributions to unconsolidated real estate joint venture ( 1,258,647 ) —

Principal repayment of loans 96,130,931 11,542,613

15 unchanged sentences

Dividends declared and not yet paid $ 4,055,220 $ 4,026,353

Offering costs included in accounts payable and other liabilities $ — $ 920,838

Supplemental information:

4 unchanged sentences

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As of March 31, 2026

As of June 30, 2026

Sunrise Realty Trust, Inc.

11 unchanged sentences

The accompanying unaudited interim consolidated financial statements should be read in conjunction with the audited financial statements and results of operations included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 filed with the U.S.

Securities and Exchange Commission (“SEC”).

Securities and Exchange Commission (“SEC”) on March 12, 2026 (“Annual Report on Form 10-K”).

Refer to Note 2 to the Company’s Annual Report on Form 10-K for a description of the Company’s significant accounting policies.

11 unchanged sentences

Under the equity method, the Company initially records the investment at cost and subsequently adjusts the carrying value of the investment to recognize the Company’s proportionate share of the investee’s earnings or losses, which are included in equity in earnings (loss) of unconsolidated joint ventures in the consolidated statements of operations.

For certain equity method investments, the Company records its share of earnings and losses on a one-quarter reporting lag when financial information of the investee is not available on a timely basis.

Distributions received from equity method investees are recorded as reductions of the investment balance to the extent they represent returns of investment.

In instances where the Company acquires real estate through foreclosure proceedings and contributes such real estate to an unconsolidated real estate joint venture, the Company initially records its investment in the joint venture at the fair value of the real estate contributed on the date of contribution.

Fair value is generally determined based on the appraised value of the underlying real estate, less estimated costs to sell, as applicable.

Distributions received from equity method investees are recorded as reductions of the investment balance to the extent they represent returns of investment.

The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying value of the investment may not be recoverable or that a decline in value may be other-than-temporary.

1 unchanged sentence

If the Company determines that a decline in value is other-than-temporary, the investment is written down to its estimated fair value, with the resulting impairment recognized in earnings.

Recent Accounting Pronouncements Pending Adoption

Recent Accounting Pronouncements

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

4 unchanged sentences

LOANS HELD FOR INVESTMENT AT CARRYING VALUE

As of March 31, 2026 and December 31, 2025, t he Company’s portfolio included 15 and 16 loans held at carrying value, respectively.

The aggregate originated commitment under these loans was approximately $ 397.1 million and $ 420.7 million, resp ectively, and outstanding principal was approximately $ 299.3 million and $ 305.5 million, respectively, as of March 31, 2026 and December 31, 2025.

During the three months ended March 31, 2026, the Company funded approximately $ 90.2 million of new loans and additional principal on existing loans and had approximately $ 70.1 million of principal repayments of loans held at carrying value.

As of March 31, 2026 and December 31, 2025, approximately 96.2 % and 96.4 % , respectively, of the Company’s loans held at carrying value had floating interest rates.

As of March 31, 2026, 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 3.9 %, and U.S.

As of June 30, 2026 and December 31, 2025, t he Company’s portfolio included 14 and 16 loans held at carrying value, respectively.

The aggregate originated commitment under these loans was approximately $ 377.4 million and $ 420.7 million, resp ectively, and outstanding principal was approximately $ 298.7 million and $ 305.5 million, respectively, as of June 30, 2026 and December 31, 2025.

During the six months ended June 30, 2026, the Company funded approximately $ 115.6 million of new loans and additional principal on existing loans and had approximately $ 96.1 million of principal repayments of loans held at carrying value.

As of June 30, 2026 and December 31, 2025, approximately 96.1 % and 96.4 % , respectively, of the Company’s loans held at carrying value had floating interest rates.

As of June 30, 2026, 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 3.9 %, 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 March 31, 2026 and December 31, 2025:

As of March 31, 2026

The following tables summarizes the Company’s loans held at carrying value as of June 30, 2026 and December 31, 2025:

As of June 30, 2026

Principal (1)

14 unchanged sentences

(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 March 31, 2026 and December 31, 2025 .

(2) Weighted average remaining life is calculated based on the carrying value of each respective group of loans as of June 30, 2026 and December 31, 2025 .

(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 three months ended March 31, 2026:

The following table presents changes in loans held at carrying value as of and for the six months ended June 30, 2026:

Principal Original Issue

7 unchanged sentences

PIK interest 78,549 — 78,549

Total loans held at carrying value at March 31, 2026 $ 299,286,738 $ ( 2,445,708 ) $ 296,841,030

As of March 31, 2026, there were no loans in the Company’s portfolio on nonaccrual status.

Total loans held at carrying value at June 30, 2026 $ 298,664,348 $ ( 1,910,850 ) $ 296,753,498

As of June 30, 2026, there were no loans in the Company’s portfolio on nonaccrual status.

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

During the three months ended March 31, 2026 , the Company derecognized its senior hospitality loan in San Antonio, Texas (the “San Antonio Loan”) in connection with the foreclosure on the underlying collateral and the contemporaneous contribution of the acquired real estate to a newly formed unconsolidated joint venture.

In exchange, the Company received

an equity interest in the joint venture, which is accounted for under the equity method.

The contribution was recorded based on the fair value of the underlying collateral of approximately $ 24.6 million.

In March 2026, the Company derecognized its senior hospitality loan in San Antonio, Texas (the “San Antonio Loan”) in connection with the foreclosure on the underlying collateral and the contemporaneous contribution of the acquired real estate to a newly formed unconsolidated joint venture.

In exchange, the Company received an equity interest in the joint venture, which is accounted for under the equity method.

The contribution was recorded based on the fair value of the

underlying collateral of approximately $ 24.6 million.

See Note 6 included in these consolidated financial statements for additional information.

A more detailed listing of the Company’s loans held at carrying value portfolio based on information available as of March 31, 2026 is as follows:

A more detailed listing of the Company’s loans held at carrying value portfolio based on information available as of June 30, 2026 is as follows:

Loan Type Location Outstanding

3 unchanged sentences

Senior mortgage loans:

Residential Austin, TX $ 14,087,288 $ ( 136,919 ) $ 13,950,369 9.75 % (4)

Residential Palm Beach Gardens, FL 31,239,158 ( 157,511 ) 31,081,647 12.25 % (4)

29 unchanged sentences

The Company may also extend contractual maturities and amend other terms of the loans in connection with loan modifications.

(3) I/O = interest-only, P/I = principal and interest.

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

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

(3) I/O = interest-only.

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

15 unchanged sentences

CURRENT EXPECTED CREDIT LOSSES

As of March 31, 2026 and December 31, 2025, the Company’s CECL Reserve for its loans held at carrying value was approximately $ 0.6 million and $ 2.1 million, respectively, or 0.19 % and 0.68 %, respectively, of the Company’s total loans held at carrying value of approximately $ 296.8 million and $ 302.7 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 $ 0.3 million and $ 1.9 million, respectively, and a liability for unfunded commitments of approximately $ 0.2 million and $ 0.2 million, 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 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 three months ended March 31, 2026 was as follows:

As of June 30, 2026 and December 31, 2025, the Company’s CECL Reserve for its loans held at carrying value was approximately $ 1.1 million and $ 2.1 million, respectively, or 0.37 % and 0.68 %, respectively, of the Company’s total loans held at carrying value of approximately $ 296.8 million and $ 302.7 million, respectively.

The CECL reserve consisted of an allowance on outstanding loan balances of approximately $ 0.9 million and $ 1.9 million, respectively, and a liability for unfunded loan commitments of approximately $ 0.2 million at both June 30, 2026 and December 31, 2025.

The liability for unfunded commitments represents expected credit losses on the unfunded portion of loan commitments over the contractual period during which the Company is exposed to credit risk through its obligation to extend credit.

In estimating this liability, management considered the likelihood that commitments will be funded and, if funded, the expected credit losses on the funded portion of those commitments.

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 three and six months ended June 30, 2026 was as follows:

Outstanding (1)

Balance at March 31, 2026 $ 322,786 $ 228,826 $ 551,612

Provision for current expected credit losses 609,435 ( 52,187 ) 557,248

Write-offs — — —

Recoveries — — —

Balance at June 30, 2026 $ 932,221 $ 176,639 $ 1,108,860

Outstanding (1)

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

3 unchanged sentences

Recoveries — — —

Balance at March 31, 2026 $ 322,786 $ 228,826 $ 551,612

(1) As of March 31, 2026 and December 31, 2025 , 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 March 31, 2026 and December 31, 2025 , 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.

(3) During the three months ended March 31, 2026 , the Company wrote off the provision for credit losses associated with the San Antonio Loan that was derecognized in connection with the foreclosure and contribution to a joint venture.

Balance at June 30, 2026 $ 932,221 $ 176,639 $ 1,108,860

(1) As of June 30, 2026 and December 31, 2025 , 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 June 30, 2026 and December 31, 2025 , 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.

(3) During the six months ended June 30, 2026 , the Company wrote off the provision for credit losses associated with the San Antonio Loan that was derecognized in connection with the foreclosure and contribution to a joint venture.

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.

12 unchanged sentences

The risk ratings are primarily based on historical data as well as taking into account future economic conditions.

As of March 31, 2026, 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:

As of June 30, 2026, 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:

2026 2025 2024 Total

3 unchanged sentences

Gross write-offs $ — $ — $ ( 1,577,907 ) $ ( 1,577,907 )

During the three months ended March 31, 2026 , the Company and its affiliate co-lender exercised their rights to foreclose on the hotel property underlying the San Antonio Loan.

In March 2026, the Company and its affiliate co-lender exercised their rights to foreclose on the hotel property underlying the San Antonio Loan.

Upon foreclosure, the Company derecognized the loan and the related CECL reserve of approximately $ 1.6 million.

3 unchanged sentences

INTEREST RECEIVABLE

The following table summarizes the interest receivable balance for the Company as of March 31, 2026 and December 31, 2025:

March 31, 2026 As of

The following table summarizes the interest receivable balance for the Company as of June 30, 2026 and December 31, 2025:

June 30, 2026 As of

December 31, 2025

5 unchanged sentences

INVESTMENT IN UNCONSOLIDATED REAL ESTATE JOINT VENTURE

In February 2026, the Company, together with the affiliate co-lender to the San Antonio Loan, formed 123 Lex Ave Hotel Holdings LLC (the “Lex Ave JV”) in proportion to their respective interests in the San Antonio Loan.

In March 2026, the lenders exercised their rights to foreclose on the hotel property that served as the underlying collateral for the San Antonio Loan.

Upon foreclosure, legal title to the property was obtained by the lenders, and the property was contemporaneously contributed to the Lex Ave JV.

Upon foreclosure, the Company recognized real estate owned (“REO”) at the lesser of the carrying value of the San Antonio Loan and the fair value of the underlying collateral.

The Company’s contribution to the Lex Ave JV was recorded at the fair value of the contributed REO of approximately $ 24.6 million.

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

Following the contribution, the Company holds a 65.0 % ownership interest in the Lex Ave JV.

The Company’s investment in the Lex Ave JV was initially recorded based on its proportionate share of the fair value of the contributed net assets.

No gain or loss was recognized upon foreclosure and contribution, as the transaction was accounted for as an exchange of the loan for an equity method investment.

Activity in the Company’s investment in the Lex Ave JV during the three months ended March 31, 2026 consisted of the initial contribution described above.

There were no additional capital contributions, distributions, or equity in earnings (loss) during the period.

The formation of the Lex Ave JV and related contribution resulted in the derecognition of the San Antonio Loan from the Company’s consolidated balance sheet.

The following table summarizes the Company’s investment in unconsolidated real estate joint ventures as of March 31, 2026 and December 31, 2025:

In February 2026, the Company and the affiliate co-lender to the San Antonio Loan formed 123 Lex Ave Hotel Holdings LLC (the “Lex Ave JV”) based on their respective interests in the San Antonio Loan.

On March 3, 2026, following the lenders' exercise of their foreclosure rights, the Lex Ave JV acquired the San Antonio hotel property that served as the underlying collateral for the San Antonio Loan through a credit bid equal to the aggregate unpaid principal balance of the San Antonio Loan of approximately $ 40.6 million (the “Lex Ave Hotel Foreclosure”).

Following the Lex Ave Hotel Foreclosure, the Company exchanged its 65.0 % interest in the San Antonio Loan for a 65.0 % equity interest in the Lex Ave JV and recognized real estate owned (“REO”) at the lower of the carrying value of the San Antonio Loan and the fair value of the REO.

The Company's investment in the Lex Ave JV was initially recognized at the fair value of the contributed REO of approximately $ 24.6 million.

Following the Lex Ave Hotel Foreclosure, the Company owns a 65.0 % membership interest in the Lex Ave JV.

No gain or loss was recognized upon foreclosure and contribution because the Lex Ave Hotel Foreclosure was accounted for as an exchange of the San Antonio Loan for an equity method investment in the Lex Ave JV.

During the three and six months ended June 30, 2026 , the Company recognized equity in earnings of approximately $ 32.3 thousand, representing its 65.0 % share of the Lex Ave JV's net income for the month ended March 31, 2026.

The Company records its share of earnings and losses from the Lex Ave JV using a one-quarter reporting lag.

Activity in the Company's investment in the Lex Ave JV during the six months ended June 30, 2026 was as follows:

Activity Six months ended June 30, 2026

Initial contribution of REO $ 24,635,000

Additional capital contributions 1,258,647

Equity in earnings of unconsolidated real estate joint venture 32,287

Ending investment balance at June 30, 2026 $ 25,925,934

Additional capital contributions primarily related to funding operating costs and capital requirements of the hotel property.

The following table summarizes the Company’s investment in its unconsolidated real estate joint venture as of June 30, 2026 and December 31, 2025:

Entity Date Formed Ownership % As of

March 31, 2026 As of

June 30, 2026 As of

December 31, 2025

123 Lex Ave Hotel Holdings LLC 2/27/2026 65 % $ 25,925,934 $ —

On May 21, 2026, the Company, through its investment in the Lex Ave JV, entered into a definitive agreement to sell the San Antonio hotel property.

See Note 16 for additional information.

Revolving Credit Facility

9 unchanged sentences

The Company is required to pay certain fees under the Revolving Credit Agreement, including a $ 75.0 thousand agent fee and a 0.25 % per annum unused commitment fee, payable semi-annually in arrears, subject to waiver if specified utilization thresholds are met.

During the three months ended March 31, 2026 and 2025, the Company did not incur any unused commitment fees.

Unused commitment fees were $ 17.8 thousand and $ 21.9 thousand during the six months ended June 30, 2026 and 2025, 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 .

4 unchanged sentences

(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.

To the best of the Company’s knowledge, as of March 31, 2026, the Company was in compliance in all material respects with these covenants.

As of March 31, 2026 and December 31, 2025 , outstanding borrowings under the Revolving Credit Facility were $ 88.1 million and $ 102.3 million, respectively, and $ 76.9 million and $ 37.7 million were available for borrowing as of March 31, 2026 and December 31, 2025 , respectively.

As of March 31, 2026 and December 31, 2025 , the interest rate on the Company’s borrowings under the Revolving Credit Facility was 6.41 % and 6.59 %, respectively.

To the best of the Company’s knowledge, as of June 30, 2026, the Company was in compliance in all material respects with these covenants.

As of June 30, 2026 and December 31, 2025 , outstanding borrowings under the Revolving Credit Facility were $ 82.6 million and $ 102.3 million, respectively, and $ 82.4 million and $ 37.7 million were available for borrowing as of June 30, 2026 and December 31, 2025 , respectively.

As of June 30, 2026 and December 31, 2025 , the interest rate on the Company’s borrowings under the Revolving Credit Facility was 6.40 % and 6.59 %, respectively.

SRTF Credit Facility

6 unchanged sentences

In connection with the SRTF Credit Agreement, the Company incurred approximately $ 25.5 thousand of deferred financing costs, which are included in prepaid expenses and other assets and are amortized over the term of the facility.

As of March 31, 2026 and December 31, 2025 , outstanding borrowings under the SRTF Credit Facility were $ 51.4 million and $ 19.8 million, respectively, and $ 23.6 million and $ 55.2 million were available for borrowing as of March 31, 2026 and December 31, 2025 , respectively.

The following tables reflect a summary of interest expense incurred during the three months ended March 31, 2026 and 2025 :

Three Months Ended

March 31, 2026

As of June 30, 2026 and December 31, 2025 , outstanding borrowings under the SRTF Credit Facility were $ 59.1 million and $ 19.8 million, respectively, and $ 15.9 million and $ 55.2 million were available for borrowing as of June 30, 2026 and December 31, 2025 , respectively.

The following tables reflect a summary of interest expense incurred during the three and six months ended June 30, 2026 and 2025 :

Three months ended June 30, 2026

Revolving Credit Facility SRTF Revolving Credit Facility Total Borrowings

3 unchanged sentences

Total interest expense $ 1,495,168 $ 1,250,613 $ 2,745,781

Three Months Ended

March 31, 2025

Three months ended June 30, 2025

Revolving Credit Facility SRTF Revolving Credit Facility Total Borrowings

3 unchanged sentences

Total interest expense $ 1,064,134 $ 19,078 $ 1,083,212

Six months ended June 30, 2026

Revolving Credit Facility SRTF Revolving Credit Facility Total Borrowings

Interest expense $ 3,012,748 $ 1,982,489 $ 4,995,237

Unused fee expense 17,821 — 17,821

Amortization of deferred financing costs 321,423 378,937 700,360

Total interest expense $ 3,351,992 $ 2,361,426 $ 5,713,418

Six months ended June 30, 2025

Revolving Credit Facility SRTF Revolving Credit Facility Total Borrowings

Interest expense $ 1,183,278 $ 40,249 $ 1,223,527

Unused fee expense 21,913 — 21,913

Amortization of deferred financing costs 171,081 2,850 173,931

Total interest expense $ 1,376,272 $ 43,099 $ 1,419,371

COMMITMENTS AND CONTINGENCIES

As of March 31, 2026 and December 31, 2025, the Company had the following commitments to fund various investments:

March 31, 2026 As of

As of June 30, 2026 and December 31, 2025, the Company had the following commitments to fund various investments:

June 30, 2026 As of

December 31, 2025

5 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 March 31, 2026, the Company was not aware of any legal claims that could materially impact its business, financial condition or results of operations.

As of June 30, 2026, the Company was not aware of any legal claims that could materially impact its business, financial condition or results of operations.

SHAREHOLDERS’ EQUITY

Preferred Stock

As of March 31, 2026 and 2025, 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.

As of June 30, 2026 and December 31, 2025, 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 March 31, 2026 and December 31, 2025, respectively.

As of March 31, 2026 and December 31, 2025, the Company was authorized to issue up to 50,000,000 shares of Common Stock, respectively, and issued 13,519,655 and 13,420,986 shares of Common Stock, respectively.

There were no shares of Preferred Stock designated or outstanding as of June 30, 2026 and December 31, 2025, respectively.

As of June 30, 2026 and December 31, 2025, the Company was authorized to issue up to 50,000,000 shares of Common Stock, respectively, and issued 13,517,402 and 13,420,986 shares of Common Stock, respectively.

Shelf Registration Statement

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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 three months ended March 31, 2026.

There were no shares issued under the ATM Program during the six months ended June 30, 2026.

Dividend Reinvestment Plan

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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 three months ended March 31, 2026.

There were no shares issued under the DRIP during the six months ended June 30, 2026.

Stock Incentive Plan

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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 three months ended March 31, 2026 , 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 98,669 shares of restricted stock granted to such eligible persons.

The restricted stock awards granted during the three months ended March 31, 2026 under the 2024 Plan contain vesting periods that vary from immediately, vesting over a one-year period, and vesting 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 three months ended March 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.

During the six months ended June 30, 2026 , 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 98,669 shares of restricted stock granted to such eligible persons.

The restricted stock awards granted during the six months ended June 30, 2026 under the 2024 Plan contain vesting periods that vary from immediately, vesting over a one-year period, and vesting 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 six months ended June 30, 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 in February 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.

As of March 31, 2026 , there were 230,623 shares of restricted stock granted under the 2024 Plan.

As of March 31, 2026 , 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 960,499 shares remained available for future issuance under the 2024 Plan.

As of June 30, 2026 , there were 228,370 shares of restricted stock granted under the 2024 Plan.

As of June 30, 2026 , 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 962,752 shares remained available for future issuance under the 2024 Plan.

Stock Compensation

The following table summarize s the stock-based compensation expense incurred by the Company for the three months ended March 31, 2026 and 2025:

The following table summarize s the stock-based compensation expense incurred by the Company for the three and six months ended June 30, 2026 and 2025:

Three months ended

June 30, Six months ended

2026 2025 2026 2025

Stock-based compensation $ 297,484 $ 259,066 $ 667,446 $ 502,687

Restricted Stock

The following table summarizes restricted stock (i) converted, (ii) granted, (iii) vested and (iv) forfeited for the Company’s directors and officers and employees of the Manager as of March 31, 2026 and December 31, 2025:

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

Converted 88,685 88,685

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The fair value of the Company’s restricted stock awards is based on the Company’s stock price on the date of grant.

The following tables summarize the restricted stock activity as of and during the three months ended March 31, 2026:

The following tables summarize the restricted stock activity as of and during the six months ended June 30, 2026:

Number of shares of restricted stock Weighted-average

4 unchanged sentences

Forfeited ( 2,253 ) 9.34

Balance as of March 31, 2026 192,077 $ 11.31

The total fair value of shares vested during the three months ended March 31, 2026 was approximately $ 0.5 million.

During the three months ended March 31, 2025, 19,625 shares of restricted stock were granted with a weighted-average grant date fair value of $ 11.78 .

During the three months ended March 31, 2025, 34,671 shares of restricted stock vested with a weighted-average grant date fair value of $ 13.13 .

The total fair value of shares vested during the three months ended March 31, 2025 was approximately $ 0.5 million.

As of March 31, 2026 , there was approximately $ 1.8 million of total unrecognized compensation cost related to non-vested restricted stock.

Balance as of June 30, 2026 186,924 $ 11.37

The total fair value of shares vested during the six months ended June 30, 2026 was approximately $ 0.6 million.

During the six months ended June 30, 2025, 19,625 shares of restricted stock were granted with a weighted-average grant date fair value of $ 11.78 .

During the six months ended June 30, 2025, 34,671 shares of restricted stock vested with a weighted-average grant date fair value of $ 13.13 .

The total fair value of shares vested during the six months ended June 30, 2025 was approximately $ 0.5 million.

As of June 30, 2026 , there was approximately $ 1.5 million of total unrecognized compensation cost related to non-vested restricted stock.

That cost is expected to be recognized over a weighted-average period of 1.76 years.

EARNINGS PER SHARE

The following information sets forth the computations of basic and diluted earnings per common share for the three months ended March 31, 2026 and 2025:

The following information sets forth the computations of basic and diluted earnings per common share for the three and six months ended June 30, 2026 and 2025 :

Three months ended

June 30, Six months ended

2026 2025 2026 2025

Net income $ 3,076,025 $ 3,358,314 $ 7,329,375 $ 6,457,751

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

Diluted earnings per common share excluded 120,222 and 87,463 weighted average shares of unvested restricted stock due to anti-dilutive effect for the three months ended March 31, 2026 and 2025 , respectively .

Diluted earnings per common share excluded 95,475 and 81,850 weighted average shares of unvested restricted stock due to anti-dilutive effect for the three and six months ended June 30, 2026, respectively, and 108,488 and 115,125 for the three and six months ended June 30, 2025, respectively .

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

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

The Company had no income tax provision for the three months ended March 31, 2026 and 2025.

For the three months ended March 31, 2026 and 2025, the Company incurred no expense for U.S.

The Company had no income tax provision for the three and six months ended June 30, 2026 and 2025.

For the three and six months ended June 30, 2026 and 2025, the Company incurred no expense for U.S.

federal excise tax.

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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 carrying value and fair value of the Company’s financial instruments not recognized at fair value in the unaudited interim balance sheets as of March 31, 2026 :

As of March 31, 2026

The following table details the carrying value and fair value of the Company’s financial instruments not recognized at fair value in the unaudited interim balance sheets as of June 30, 2026 :

As of June 30, 2026

Carrying Value Fair Value

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The Manager receives base management fees (the “Base Management Fees”), calculated and payable quarterly in arrears, 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 three months ended March 31, 2026 were approximately $ 0.7 million.

There were no Base Management Fees incurred for the three months ended March 31, 2025.

Refer to the fee waiver below.

Base Management Fees incurred for the three and six months ended June 30, 2026 were approximately $ 0.7 million and $ 1.4 million, respectively.

Base Management Fees incurred for the three and six months ended June 30, 2025 were approximately $ 0.7 million and $ 1.3 million, respectively.

As discussed under “Fee Waiver” below, the Manager waived approximately $ 7.3 thousand and $ 0.6 million of Base Management Fees for the three and six months ended June 30, 2025, respectively.

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.

Incentive Fees incurred for the three months ended March 31, 2026 were approximately $ 0.9 million.

There were no Incentive Fees incurred for the three months ended March 31, 2025.

Refer to the fee waiver below.

Incentive Fees incurred for the three and six months ended June 30, 2026 were approximately $ 0.2 million and $ 1.1 million, respectively.

Incentive Fees incurred for the three and six months ended June 30, 2025 were approximately $ 0.2 million and $ 0.5 million, respectively.

As discussed under “Fee Waiver” below, the Manager waived approximately $ 0.2 million and $ 0.5 million of Incentive Fees for the three and six months ended June 30, 2025, 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 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 three months ended March 31, 2026, no Base Management Fees or Incentive Fees were waived.

For the three months ended March 31, 2025 , approximately $ 0.6 million of Base Management Fees and $ 0.3 million of Incentive Fees were waived.

For the three and six months ended June 30, 2026 , no Base Management Fees or Incentive Fees were waived.

For the three and six months ended June 30, 2025 , Base Management Fees waived were $ 7.3 thousand and $ 0.6 million, respectively, and Incentive Fees waived were $ 0.2 million and $ 0.5 million, respectively .

Administrative Services Agreement

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The Company is required to pay all of its allocable costs and expenses and reimburse the Manager or its affiliates for such expenses paid or incurred on behalf of the Company by the Manager or its affiliates, excepting only those expenses that are specifically the responsibility of the Manager pursuant to the Management Agreement.

The following table summarizes the related party costs incurred by the Company for the three months ended March 31, 2026 and 2025:

The following table summarizes the related party costs incurred by the Company for the three and six months ended June 30, 2026 and 2025 :

Three months ended

June 30, Six months ended

2026 2025 2026 2025

Affiliate costs

Base management fees $ 698,604 $ —

Incentive fees earned 936,532 —

Base management fees, net of waivers $ 695,302 $ 689,140 $ 1,393,906 $ 689,140

Incentive fees earned, net of waivers 183,693 — 1,120,225 —

General and administrative expenses reimbursable to Manager 692,677 532,262 1,304,918 1,144,827

1 unchanged sentence

Total $ 1,608,891 $ 1,234,307 $ 3,873,491 $ 1,851,861

Amounts payable to the Manager as of March 31, 2026 and December 31, 2025 were approximately $ 2.3 million and $ 1.0 million , respectively, and are recorded within accrued management and incentive fees and accrued direct administrative expenses in the Company’s consolidated Balance Sheets.

Amounts payable to the Manager as of June 30, 2026 and December 31, 2025 were approximately $ 1.8 million and $ 1.0 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 and directors as of the date of this Quarterly Report on Form 10-Q.

4 unchanged sentences

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 March 31, 2026, there were 15 co-invested loans held by the Company and affiliates of the Company.

As of June 30, 2026, there were 14 co-invested loans held by the Company and affiliates of the Company.

In March 2026, in connection with the foreclosure of the San Antonio Loan, the Company formed a joint venture with an affiliate co-lender to acquire the underlying hotel property.

5 unchanged sentences

DIVIDENDS AND DISTRIBUTIONS

The following table summarizes the Company’s dividends declared during the three months ended March 31, 2026 and 2025:

The following table summarizes the Company’s dividends declared during the six months ended June 30, 2026 and 2025 :

Declaration Date Record Date Payment Date Per Common Share Distribution Amount Total Distribution Amount

Regular cash dividend 3/4/2025 3/31/2025 4/15/2025 $ 0.30 $ 4,026,448

Regular cash dividend 6/13/2025 6/30/2025 7/15/2025 0.30 4,026,353

2025 Period Subtotal

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Regular cash dividend 3/10/2026 3/31/2026 4/15/2026 $ 0.30 $ 4,055,897

Regular cash dividend 6/15/2026 6/30/2026 7/15/2026 $ 0.30 $ 4,055,220

2026 Period Subtotal $ 0.60 $ 8,111,117

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The CODM uses net income to evaluate income generated from segment assets and in deciding the amount of dividends to be distributed, as well as using net income as a basis for evaluating lender terms for CRE loans with borrowers and sponsors.

Interest income earned on the Company’s portfolio was concentrated with two borrowers each comprising more than 10% of consolidated interest income for an aggregate amount of $ 4.0 million, or 39 %, of consolidated interest income during the three months ended March 31, 2026.

Interest income earned on the Company’s portfolio was concentrated with five borrowers each comprising more than 10% of consolidated interest income for an aggregate amount of $ 4.0 million, or 81 %, of consolidated interest income during the three months ended March 31, 2025.

Interest income earned on the Company’s portfolio was concentrated with two borrowers each comprising more than 10% of consolidated interest income for an aggregate amount of $ 3.0 million, or 35 %, of consolidated interest income during the three months ended June 30, 2026.

Interest income earned on the Company’s portfolio was concentrated with six borrowers each comprising more than 10% of consolidated interest income for an aggregate amount of $ 5.7 million, or 85 %, of consolidated interest income during the three months ended June 30, 2025.

Interest income earned on the Company’s portfolio was concentrated with three borrowers each comprising more than 10% of consolidated interest income for an aggregate amount of $ 7.7 million, or 41 %, of consolidated interest income during the six months ended June 30, 2026.

Interest income earned on the Company’s portfolio was concentrated with five borrowers each comprising more than 10% of consolidated interest income for an aggregate amount of $ 8.8 million, or 75 %, of consolidated interest income during the six months ended June 30, 2025.

SUBSEQUENT EVENTS

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

On April 1, 2026, the Company’s senior loan for a residential property in Austin, TX was repaid in full.

The outstanding principal balance of the senior secured term loan on the date of repayment was approximately $ 14.1 million.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Quarterly Report”), filed by Sunrise Realty Trust, Inc.

(the “Company,” “SUNS,” “we,” “us,” and “our”), and the information incorporated by reference herein, or made in other reports, filings with the SEC, and press releases contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and we intend such statements to be covered by the safe harbor provisions contained therein.

These forward-looking statements are based on our current intent, belief, expectations and views of future events.

The forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results or performance, and may contain the words “believe,” “anticipate,” “expect,” “estimate,” “project,” “could,” “would,” “will,” “can,” “continuing,” “may,” “aim,” “intend,” “ongoing,” “plan,” “predict,” “potential,” “should,” “seeks,” “likely to” or words or phrases of similar meaning.

Specifically, this Quarterly Report includes forward-looking statements regarding (i) our portfolio and strategies for the growth of our commercial real estate lending business;

(ii) our working capital, liquidity and capital requirements;

(iii) potential state and federal legislative and regulatory matters;

(iv) our expectations and estimates regarding certain tax, legal and accounting matters, including the impact on our financial statements and/or those of our borrowers;

(v) the amount, collectability and timing of cash flows, if any, from our loans;

(vi) our expected ranges of originations and repayments;

(vii) estimates relating to our ability to make distributions to our shareholders in the future;

and (viii) our investment strategy.

These forward-looking statements reflect management’s current views about future events, and are subject to risks, uncertainties and assumptions.

Our actual results may differ materially from the future results and events expressed or implied by the forward-looking statements.

Key factors that could prevent us from achieving our goals, and cause the assumptions underlying forward-looking statements and the actual results to differ materially from those expressed in or implied by those forward-looking statements include, but are not limited to, the following:

• our ability to identify a successful business and investment strategy and execute on our strategy;

• the ability of our Manager to locate suitable loan opportunities for us and to monitor and actively manage our portfolio and implement our investment strategy;

• our ability to meet our expected ranges of originations and repayments;

• our ability to obtain our target mix of loan and collateral types with our expected ranges of yields;

• the allocation of loan opportunities to us by our Manager and our ability to close those loans;

• changes in general economic conditions, in our industry and in the commercial finance and commercial real estate markets;

• we have limited history of operating as an independent company, and our historical financial information is not necessarily representative of the results that we would have achieved as a separate, publicly traded company and may not be a reliable indicator of our future results;

• the state of the U.S.

economy generally or in the specific geographic regions in which we operate, including as a result of the impact of natural disasters;

• the impact of a protracted decline in the liquidity of credit markets on our business;

• the amount, collectability and timing of our cash flows, if any, from our loans;

• our ability to obtain and maintain competitive financing arrangements;

• our ability to achieve our expected leverage;

• changes in the value of our loans;

• losses that may be exacerbated due to the concentration of our portfolio in a limited number of loans and borrowers;

• our investment and underwriting process;

• the rates of default or recovery rates on our loans;

• the degree to which our hedging strategies may or may not protect us from interest rate volatility;

• the availability of investment opportunities in mortgage-related and real estate-related instruments and other securities;

• interest rate mismatches between our loans and our borrowings used to fund such loans;

• the departure of any of the executive officers or key personnel supporting and assisting us from our Manager or its affiliates;

• impact of and changes in governmental regulations, tax law and rates, accounting guidance, tariffs and similar matters;

• the impact of a changing interest rate and inflation environment on our results of operations, cash flows and the market value of our loans;

• our ability to maintain our exemption from registration under the Investment Company Act of 1940 (the “Investment Company Act”);

• our ability to qualify and maintain our qualification as a real estate investment trust (a “REIT”) for U.S.

federal income tax purposes;

• estimates relating to our ability to make distributions to our shareholders in the future;

• our understanding of our competition;

• market trends in our industry, interest rates, real estate values, the securities markets or the general economy;

• we may issue shares of preferred or common stock in the future, which could dilute your percentage ownership of SUNS;

• use of proceeds of our securities offerings;

• litigation, including costs associated with prosecuting or defending claims and any adverse outcomes.

The above list of factors is not exhaustive or necessarily in order of importance.

Please see the section entitled “ Risk Factors ” located in our Annual Report on Form 10-K, filed with the SEC on March 12, 2026 , for a further discussion of these and other risks and uncertainties which could affect our future results.

These forward-looking statements apply only as of the date of this report and we undertake no obligation to update or revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events, except as required by applicable law.

On July 17, 2026, the Company’s senior term loan and a residential development project revolver for various residential development projects in Palm Beach Gardens, FL, were repaid in full.

The outstanding principal balances of the senior term loan and residential development project revolver, on the date of repayment were approximately $ 31.6 million and $ 23.8 million, respectively.

In connection with the repayment, the Company recognized approximately $ 0.2 million of default interest and breakage fees.

On May 21, 2026, the Company, through its investment in the Lex Ave JV, entered into a definitive agreement (the “Agreement”) to sell its San Antonio hotel property for a purchase price of $ 41.0 million, subject to closing costs and other transaction expenses, and customary closing conditions.

Based on the Company's 65.0 % ownership interest in the Lex Ave JV, the Company expects to receive consideration of approximately $ 26.7 million, subject to its proportionate share of such closing costs and transaction expenses.

Under the terms of the Agreement, the purchaser paid a $ 4.0 million earnest money deposit upon execution of the agreement, with the remaining purchase price to be funded at closing through approximately $ 5.0 million of purchaser cash and a $ 32.0 million senior secured loan to be originated by the Company and its affiliate co-lender in proportion to their respective ownership interests in the Lex Ave JV, with the Company owning 65.0 %.

On July 30, 2026, the Company, through its investment in the Lex Ave JV, entered into an amendment to the Agreement granting the purchaser an exclusive option to acquire the San Antonio hotel property on or before September 30, 2026.

In connection with the amendment, the $ 4.0 million earnest money deposit was released and the purchaser made an additional $ 2.0 million payment, with the remaining purchase price expected to be funded at closing through $ 3.0 million of purchaser cash and a $ 32.0 million senior secured loan from the Company and its affiliate co-lender.

No assurance can be given that the transaction will close on the currently contemplated terms, or at all.

See Note 6 for additional information regarding the Lex Ave JV, the Lex Ave Hotel Foreclosure, and related accounting treatment.

On August 5, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which the Company will acquire Southern Realty Trust Inc.

(“SRT”), subject to the approval of its stockholders and the approval of the SRT stockholders.

Under the terms of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each outstanding share of SRT common stock will be converted into the right to receive the following:

(i) 1.45 shares, or approximately 8.4 million shares in aggregate, of the Company’s common stock;

and (ii) from the Manager, an amount in cash per share equal to $ 0.05 .

Further, in the Merger Agreement, the Company has agreed to take all necessary corporate action so that upon and after the effective time of the Merger, the size of its Board of Directors will be increased by one member (the “SRT Director Designee”).

The SRT Director Designee will be appointed to the Company’s Board of Directors.

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

What changed 10-Q

Item 1. Financial Statements