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Item 2. Management’s Discussion and Analysis

2025-05-07 compared with 2024-11-07 · 141 added, 189 removed, 136 unchanged (71% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the accompanying notes and other information included in this Quarterly Report on Form 10-Q (the “Quarterly Report”) and our Information Statement.

This discussion and analysis contains forward-looking statements that involve risks and uncertainties which could cause our actual results to differ materially from those anticipated in these forward-looking statements, including, but not limited to, risks and uncertainties discussed under the heading “Cautionary Note Regarding Forward-Looking Statements,” in this Form 10-Q and “Risk Factors” in our Information Statement.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the accompanying notes and other information included in this Quarterly Report on Form 10-Q (the “Quarterly Report”).

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

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

We are led by a veteran team of commercial real estate investment professionals and our external manager, Sunrise Manager LLC.

We conduct our business through our parent company, Sunrise Realty Trust, Inc., and several subsidiaries.

We consolidate all of our subsidiaries under generally accepted accounting principles in the United States of America (“GAAP”).

We are an institutional lender that provides debt capital solutions to CRE markets in the Southern United States.

SUNS’ focus is on originating 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.

SUNS intends to create a diversified investment portfolio, targeting investments in senior mortgage loans, mezzanine loans, B-notes, CMBS and debt-like preferred equity securities across CRE asset classes.

We intend for SUNS’ investment mix to include high quality residential, including multi-family, condominiums and single-family residential communities, retail, office, hospitality, industrial, mixed-use and specialty-use real estate.

Our investment focus includes originating or acquiring loans backed by single assets or portfolios of assets that typically have (i) an investment hold size of approximately $15-100 million, secured by CRE assets, including transitional or construction projects, across diverse property types, (ii) a duration of approximately 2-5 years, (iii) interest rates that are determined periodically on the basis of a floating base lending rate (e.g., SOFR) plus a credit spread, (iv) a loan-to-value (“LTV”) ratio of no greater than approximately 75% on an individual investment basis and (v) no more than approximately 75% LTV across the portfolio, in each case, at the time of origination or acquisition, and are led by experienced borrowers and well-capitalized sponsors with high quality business plans.

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

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

Our and our Manager’s relationship with TCG provide us with investment opportunities through a

robust relationship network of commercial real estate owners, operators and related businesses as well as significant back-office personnel to assist in management of loans.

Our focus is on originating and investing in secured commercial real estate (“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.

SUNS intends to further diversify its investment portfolio, targeting investments in senior mortgage loans, mezzanine loans, B-notes, commercial mortgage-backed securities (“CMBS”) and debt-like preferred equity securities across CRE asset classes.

We intend for SUNS’ investment mix to include loans secured by high quality residential (including multi-family, condominiums and single-family residential communities), retail, office, hospitality, industrial, mixed-use and specialty-use real estate.

Our investment focus includes originating or acquiring loans backed by single assets or portfolios of assets that typically have (i) an investment hold size of approximately $15-100 million, secured by CRE assets, including transitional or construction projects, across diverse property types, (ii) a duration of approximately 2-5 years, (iii) interest rates that are determined periodically on the basis of a floating base lending rate (e.g., Secured Overnight Financing Rate (“SOFR”)) plus a credit spread, (iv) a loan-to-value (“LTV”) ratio of no greater than approximately 75% on an individual investment basis and (v) no more than approximately 75% LTV across the portfolio, in each case, at the time of origination or acquisition, and are led by experienced borrowers and well-capitalized sponsors with high quality business plans.

Our loans typically feature origination fees and/or exit fees.

We target a portfolio net internal rate of return (“IRR”) in the low-teens, which we aim to be in the mid-teens after including total interest and other revenue from the portfolio, including loans funded from drawing on our leverage, net of our interest expense from our portfolio lenders.

We target a portfolio net internal rate of return (“IRR”) in the low-teens, which we believe may increase to the mid-teens after including total interest and other revenue from the portfolio, including loans funded from drawing on our leverage, net of our interest expense from our portfolio lenders.

We are also targeting a near to mid-term target capitalization of one-third equity, one-third secured debt availability and one-third unsecured debt.

We do not expect to be fully drawn on our anticipated secured debt availability and, as a result, we are targeting an expected leverage ratio of 1.5:1 debt-to-equity.

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (“JOBS Act”), and we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

In addition, Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.

In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.

We have elected to take advantage of the extended transition period.

As a result, we will not be subject to the same implementation timing for new or revised accounting standards as other public companies that are not emerging growth companies, which may make comparison of our financials to those of other public companies more difficult.

We could remain an “emerging growth company” for up to five years from our initial public offering, or until the earliest of (i) the last day of the first fiscal year in which our annual gross revenues exceed $1.235 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of the last business day of our most recently completed second fiscal quarter, or (iii) the date on which we have issued more than $1.0 billion in non-convertible debt during the preceding three-year period.

On February 22, 2024, AFC announced a plan to separate into two independent, publicly traded companies— one focused on providing institutional loans to state law compliant cannabis operators in the United States, the other an institutional commercial real estate lender focused on the Southern United States.

On July 9, 2024, AFC completed the separation of its CRE portfolio through the spin-off of SUNS.

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.

We do not expect to be fully drawn on our secured debt availability and, as a result, we are targeting an expected leverage ratio of 1.5:1 debt-to-equity.

The Spin-Off of SUNS into an independent, publicly traded company was completed on July 9, 2024 through a pro-rata distribution of all of the outstanding shares of our 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 our common stock for every three shares of AFC common stock held as of the Record Date.

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

Prior to the Spin-Off, AFC contributed approximately $114.8 million to us in connection with the Spin-Off, comprised of our loan portfolio and cash.

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

Moreover, concurrent with the completion of the Spin-Off on July 9, 2024, our management agreement with SUNS Manager became effective.

SUNS Manager also entered into (i) an Administrative Services Agreement (the “Administrative Services Agreement”) with TCG Services LLC, an affiliate of the Manager and Leonard Tannenbaum, the Company’s Executive Chairman, and Robyn Tannenbaum, the Company’s President, and (ii) a Services Agreement (the “Services Agreement”) with SRT Group LLC, an affiliate of SUNS Manager, Mr.

Tannenbaum, Mrs.

Tannenbaum, Mr.

Sedrish and Mr.

We adopted the 2024 Stock Incentive Plan (the “2024 Plan”).

A summary of the 2024 Plan can be found in the Information Statement in the section entitled “Management—2024 Stock Incentive Plan.” Such description is incorporated herein by reference.

The description of the foregoing 2024 Plan is intended to provide a general description only, is subject to the detailed terms and conditions of, and is qualified in its entirety by reference to the full text of, the 2024 Plan, which is attached hereto as Exhibit 10.4, which is incorporated herein by reference.

Effective July 1, 2024, Jodi Hanson Bond and James Fagan resigned from AFC’s Board of Directors and joined our Board of Directors.

Additionally, Alexander Frank was appointed as a director of SUNS and remained a director of AFC.

In addition, effective July 1, 2024, Leonard Tannenbaum was appointed Executive Chairman of SUNS (and remained Executive Chairman and Chief Investment Officer of AFC) and Brian Sedrish was appointed Chief Executive Officer and director of SUNS.

Brandon Hetzel continues in his role as Chief Financial Officer and Treasurer of SUNS (and remains the Chief Financial Officer of AFC) and Robyn Tannenbaum continues in her role as President of SUNS (and remains the President of AFC).

During the three and nine months ended September 30, 2024, we incurred approximately $0.0 million and $0.6 million, respectively, related to Spin-Off costs, which are recorded within professional fees in the unaudited interim statements of operations.

Developments During the Third Quarter ended September 30, 2024:

Effective July 9, 2024, AFC completed the separation of its CRE portfolio through the spin-off of SUNS and we became an independent, publicly traded company, trading on the Nasdaq Capital Market under the symbol “SUNS”.

See “—Spin-Off” above.

Updates to Our Loan Portfolio During the Third Quarter ended September 30, 2024

In August 2024, the Company and an affiliate of SUNS entered into amendments to the existing secured mezzanine and senior loan credit agreements for the mixed-use property in Houston, Texas.

The amendments, among other things, (i) extended the maturity date on both loans from November 2024 to February 2026, (ii) modified the senior loan interest rate from floating (3.48% plus SOFR, SOFR floor of 4.0%) to fixed 12.5% and (iii) included a $12.0 million upsize to the senior loan, of which we have commitments for $6.0 million and the affiliate co-investor has commitments for the rest.

In July 2024, SUNS and an affiliate of SUNS entered into a senior secured credit facility for a total aggregate commitment amount of approximately $35.2 million for the refinance of an active adult multi-family residential rental development in southwest Austin, Texas.

We committed a total of approximately $14.1 million and the affiliate committed the remaining approximately $21.1 million.

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

At closing, we funded approximately $11.4 million and the affiliate funded approximately $17.0 million.

Developments During the First Quarter March 31, 2025:

Updates to Our Loan Portfolio During the First Quarter March 31, 2025

In January 2025, our 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.

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

In January 2025, we 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.

We 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, we 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.

We 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 credit facility is secured by a deed of trust on the property and any deposit and reserve accounts established by the terms of the credit facility.

The proceeds of the loan will be used to, among other things, fund the completion of construction and other reserves and refinance existing debt.

In July 2024, SUNS and an affiliate of SUNS entered into a senior secured credit facility for a total aggregate commitment amount of $42.0 million for the refinance of a luxury hotel component of a 20-story mixed-use project in San Antonio, Texas.

We committed a total of approximately $27.3 million , and the affiliate committed the remaining $14.7 million .

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

At closing, we funded approximately $25.0 million and the affiliate funded approximately $13.5 million .

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, we entered into an assignment and assumption agreement with an affiliated co-lender owned by Mr.

Tannenbaum, our Executive Chairman, pursuant to which we 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.

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

Following the purchase, we hold $31.9 million in commitments of the senior term loan and $28.1 million in commitments of the home construction revolver.

In March 2025, we and an affiliated co-investor entered into a $62.0 million senior secured mortgage loan for the refinance of a class A multi-family residential development in Dallas, Texas.

We committed approximately $46.5 million and the affiliate committed the remaining $15.5 million.

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

At closing, we funded approximately $44.3 million and the affiliate funded $14.8 million.

The loan bears interest at a rate of SOFR plus 3.65%, with a rate index floor of 3.90%.

The loan is secured by a first-priority mortgage on the property and a security interest in all of the equity interests held by the borrower.

The proceeds of the credit facility will be used to, among other things, fund the completion of reserves and refinance existing debt.

In August 2024, SUNS and affiliates entered into a $75.0 million senior secured revolving credit facility and a $85.0 million senior secured term credit facility for a total aggregate commitment amount of $160.0 million for the construction of a master-planned single-family residential home community and property development in Palm Beach Gardens, Florida.

We committed a total of approximately $18.8 million and $21.3 million to the revolving loan and term loan, respectively, and funded $8.8 million and $18.8 million towards each respective loan at close.

Affiliates committed the remaining $56.3 million and $63.8 million towards the revolving loan and term loan, funding $26.3 million and $56.3 million , respectively, at close.

The term loan and secured revolver were each issued at a discount of 1.25%.

The revolving loan bears interest at a rate of SOFR plus 6.25% , with a rate index floor of 4.0% , and unused fee of 2.0%.

The proceeds of the revolving loan will be used to, among other things, fund the completion of reserves, fund home construction costs and refinance existing debt.

The term loan bears an interest rate of SOFR plus 8.25% , with a rate index floor of 4.0% .

The proceeds of the senior loan will be used to, among other things, fund the completion of construction and other reserves and refinance existing debt.

The term loan and the secured revolver each mature in three years.

The loans are each secured by senior first mortgage lien on the property and a security interest in all of the equity interests held by the borrower.

Revolving Credit Facility

In September 2024, we entered into the SRT Revolving Credit Facility.

The SRT Revolving Credit Facility provides for 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 SRT Revolving Credit Facility at 1-month SOFR (subject to a 3.0% floor) plus a margin of 2.75% (7.60% at September 30, 2024 ), with a maturity date of December 31, 2025.

The SRT Revolving Credit Facility was terminated on November 6, 2024.

The senior secured loan is secured by a lease-hold and fee joinder mortgage on the property and other customary collateral.

The proceeds of the senior secured loan will be used to, among other things, refinance the existing debt and fund reserves and closing expenses.

In March 2025, we and an affiliated co-investor purchased $35.0 million of a $243 million subordinate loan for the construction of a mixed-use property in Miami, Florida.

We committed approximately $26.3 million and the affiliate committed the remaining $8.8 million.

The subordinate loan matures in December 2028.

At closing, we funded approximately $4.4 million and the affiliate funded approximately $1.5 million.

The loan bears interest at a cash rate of SOFR plus 9.5%, with a rate index floor of 4.0%, and interest paid-in kind of 1.0%.

The subordinate loan is secured by the equity interests of the borrower and other customary collateral.

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

Dividends Declared Per Share

For the nine months ended September 30, 2024, we declared the following cash dividends:

During the three months ended March 31, 2025, we declared the following cash dividends.

No dividends were declared during the three months ended March 31, 2024.

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

August 14, 2024 September 30, 2024 October 15, 2024 $ 0.21 $ 1.5 million

August 14, 2024 December 31, 2024 January 15, 2025 0.42 2.9 million

March 4, 2025 March 31, 2025 April 15, 2025 $ 0.30 $ 4,026,448

2025 Period Subtotal

$ 0.63 $ 4.4 million

$ 0.30 $ 4,026,448

Recent Developments

In November 2024, SUNS and affiliated co-investors entered into a whole loan (the “Whole Loan”) consisting of an aggregate of $96.0 million in loan commitments.

The property securing the loan is a development site and related condominium project located in Fort Lauderdale, Florida.

The proceeds are expected to be used to commence and facilitate construction.

We committed a total of $30.0 million and affiliated co-investors committed $60.0 million, with the remaining $6.0 committed by an unaffiliated investor (the “Originating Lender”).

At closing, we funded approximately $3.6 million and the affiliated co-investors funded approximately $7.2 million and the Originating Lender funded approximately $0.7 million.

The Whole Loan is split into a Senior Loan and Mezzanine Loan, each with two A-Notes ($62.4 million of the total commitment amount) and two B-Notes ($33.6 million of the total commitment amount, of which $6.0 million was committed by the Originating Lender).

The A-Notes bear interest at a rate of SOFR plus 4.75%, with a rate index floor of 4.75%.

The B-Notes bear interest at a rate of SOFR plus 11.00%, with a rate index floor of 4.75%.

The A-Notes and B-Notes were issued at a discount of 1.0% and mature in 26 months, subject to two, six-month extension options.

On November 6, 2024, we entered into the Loan and Security Agreement (the “Revolving Credit Agreement”) by and among us, the lenders party thereto (the “Lenders”), and East West Bank, as Agent, Joint Lead Arranger, Joint Book Runner, Co-Syndication Agent and Co-Documentation Agent.

The Revolving Credit Agreement provides for a senior secured revolving credit facility (the “Revolving Credit Facility”) with $50.0 million in initial aggregate commitments, 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 in the Revolving Credit Agreement.

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.

The Revolving Credit Facility has a maturity date of November 8, 2027.

Interest is payable on the Revolving Credit Facility in cash in arrears at the rate per annum of SOFR plus 2.75%, with a SOFR floor of 2.63%;

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).

We are required to pay certain fees to the agent and the lenders under the Revolving Credit Agreement, including a $75,000 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.

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 cash balance exceeds the minimum balance required per the Revolving Credit Agreement.

The Revolving Credit Facility contains customary covenants, including covenants that limit or restrict the Company’s and its subsidiaries’ ability to incur liens, incur indebtedness, make certain restricted payments, merger or consolidate or make dispositions of assets.

In addition, the Company and its subsidiaries are subject to certain financial covenants, including a liquidity and debt service coverage ratio covenant.

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.

The description above is only a summary of the material provisions of the Revolving Credit Agreement and is qualified in its entirety by reference to the Revolving Credit Agreement, a copy of which is filed as Exhibit 10.7 to this Quarterly Report on Form 10-Q and incorporated by reference herein.

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

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.

Relationships

Certain of the lenders and their affiliates may in the future engage in investment banking, commercial banking and other financial advisory and commercial dealings with the Company and its affiliates.

Key Financial Measures and Indicators

6 unchanged sentences

Our management believes that these non-GAAP financial measures and the information they provide are useful to investors since these measures permit investors and shareholders to assess the overall performance of our business using the same tools that our management uses to evaluate our past performance and prospects for future performance.

The determination of Distributable Earnings is substantially similar to the determination of Core Earnings under our Management Agreement, provided that Core Earnings is a component of the calculation of any Incentive Compensation earned under the Management Agreement for the applicable time period.

The determination of Distributable Earnings is substantially similar to the determination of Core Earnings under our Management Agreement,

provided that Core Earnings is a component of the calculation of any Incentive Compensation earned under the Management Agreement for the applicable time period.

Thus, Core Earnings is calculated without giving effect to Incentive Compensation expense, while the calculation of Distributable Earnings accounts for any Incentive Compensation earned for such time period.

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

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

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

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

6 unchanged sentences

Three months ended

September 30, Period from August 28, 2023 to September 30, Nine months ended

September 30, Period from August 28, 2023 to September 30,

2024 2023 2024 2023

Net income $ 3,099,437 $ 1,762,345

3 unchanged sentences

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

(Decrease) increase in provision for current expected credit losses (47,527) — 24,327 —

Provision for (reversal of) current expected credit losses 117,648 —

TRS (income) loss — —

5 unchanged sentences

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

The book value per share of our Common Stock as of September 30, 2024 and December 31, 2023 was approximately $16.19 and $4.53, respectively, on a post-split share basis.

The September 30, 2024 book value per share of our Common Stock includes a reduction in book value due to the declaration of the fourth quarter dividend, declared on August 14, 2024.

The book value per share of our Common Stock as of September 30, 2024 would have been $16.61, absent the declaration of the fourth quarter dividend.

The book value per share of our Common Stock as of March 31, 2025 and December 31, 2024 was approximately $13.77 and $16.29, respectively.

Factors Impacting our Operating Results

3 unchanged sentences

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

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

We were formed on August 28, 2023 with limited operational activity during the period from August 28, 2023 to September 30, 2023.

We did not make our first investment until January 2024;

and therefore, have no period to compare results for the three and nine months ended September 30, 2024.

Our net income allocable to our common shareholders for the three months ended September 30, 2024, was approximately $1.7 million, or $0.26 per basic weighted average common share.

Net interest income was comprised of interest income earned of approximately $3.2 million, net of interest expense of approximately $(43.2) thousand.

For the three months ended September 30, 2024, operating expenses were approximately $1.5 million, mainly relating to approximately $0.6 million in general and administrative expenses, $0.3 million in professional fees and $0.4 million in management fees.

Concurrent with the completion of the Spin-Off on July 9, 2024, our Management Agreement with SUNS Manager became effective.

As a result of this agreement, SUNS management fee was approximately $0.4 million and no incentive fee was incurred for the three months ended September 30, 2024.

Reimbursable shared expenses under the Management Agreement were approximately $0.5 million for the three months ended September 30, 2024.

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

Our net income allocable to our common shareholders for the nine months ended September 30, 2024, was approximately $5.0 million, or $0.74 per basic weighted average common share.

Net interest income was comprised of interest income earned of approximately $7.2 million, net of interest expense of approximately $(43.2) thousand.

For the nine months ended September 30, 2024, operating expenses were approximately $2.1 million, mainly relating to approximately $0.6 million in general and administrative expenses, $1.0 million in professional fees and $0.4 million in management fees.

As a result of our Management Agreement with SUNS Manager, SUNS management fee was approximately $0.4 million and no incentive fee was incurred for the nine months ended September 30, 2024.

Reimbursable shared expenses under the Management Agreement were approximately $0.5 million for the nine months ended September 30, 2024.

Professional fees included approximately $0.6 million in spin-off costs incurred during the nine months ended September 30, 2024.

Results of Operations f or the three months ended March 31, 2025 and 2024

Our net income allocable to our common shareholders for the three months ended March 31, 2025, was approximately $3.1 million, or $0.27 per basic weighted average common share, compared to net income allocable to our common shareholders of approximately $1.8 million, or $0.26 per basic weighted average common share for the three months ended March 31, 2024.

Interest income increased approximately $2.9 million, or 144.7%, for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024.

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

Interest expense increased approximately $0.3 million due to the lines of credit available in the current period and related borrowings that were not in place in the prior period.

General and administrative expenses increased $0.8 million during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024.

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

Stock-based compensation increased $0.2 million during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, driven by restricted stock awards granted and restricted stock awards converted as part of the Spin-Off.

Professional fees increased $0.1 million during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024.

Professional fees included approximately $0.2 million in Spin-Off costs incurred in the prior period.

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

Stock-based compensation was approximately $0.2 million for the three and nine months ended September 30, 2024, driven by restricted stock awards granted and restricted stock awards converted as part of the Spin-Off.

Provision for Current Expected Credit Losses

The decrease (increase) in provision for current expected credit losses for the three and nine months ended September 30, 2024 was approximately $47.5 thousand and $(24.3) thousand, respectively.

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

The provision for current expected credit losses for the three months ended March 31, 2025 was approximately $117.6 thousand.

The CECL Reserve balance as of March 31, 2025 was approximatel y $157.8 thousand, or 0.07%, of our total loans held at carrying value of approximately $230.5 million and was bifurcated between (i) the current expected credit loss reserve (contra-asset) related to outstanding balances on loans held at carrying value of $13.7 thousand and (ii) a liability for unfunded commitments of approximately $144.1 thousand .

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

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Loan Portfolio

The table below summarizes our total loan portfolio as of September 30, 2024, unless otherwise specified.

Loan Type Location Original Funding Date Loan Maturity Current Commitments as of 9/30/2024 % of Total SUNS Principal Balance as of 9/30/2024 Cash Interest Rate Fixed/

The table below summarizes our total loan portfolio as of March 31, 2025, unless otherwise specified.

Loan Type Location Original Funding Date Loan Maturity Current Commitments as of 3/31/2025 % of Total SUNS Principal Balance as of 3/31/2025 Cash Interest Rate PIK Fixed/

Floating Amortization During Term YTM (1)

Senior mortgage loans:

Mixed-use Houston, TX (2)

1/4/2024 2/26/2026 $ 11,994,037 9.8% $ 10,629,036 16.5% Floating No 20%

Residential Austin, TX 7/3/2024 7/3/2027 14,087,288 11.6% 12,079,636 9.1% Floating No 10%

Hospitality San Antonio, TX 7/31/2024 8/9/2027 27,300,000 22.5% 25,342,611 11.2% Floating No 13%

Residential Austin, TX 7/3/2024 7/3/2027 $ 14,087,288 4.0% $ 13,818,709 9.0% N/A Floating No 10%

Hospitality San Antonio, TX 7/31/2024 8/9/2027 27,300,000 7.7% 26,793,821 10.9% N/A Floating No 13%

Residential PBG, FL (2)

8/5/2024 9/1/2027 21,250,000 17.5% 18,262,152 13.1% Floating No 13%

8/5/2024 9/1/2027 31,875,000 9.1% 28,614,957 12.6% N/A Floating No 13%

Residential PBG, FL (2)

8/5/2024 9/1/2027 18,750,000 15.4% 8,866,115 11.1% Floating No 12%

8/5/2024 9/1/2027 28,125,000 8.0% 24,321,302 10.6% N/A Floating No 12%

Residential Fort Lauderdale, FL (3)

11/1/2024 12/30/2026 30,000,000 8.5% 4,964,427 11.4% N/A Floating No 14%

Hospitality Austin, TX 12/12/2024 12/11/2027 32,000,000 9.1% 30,635,540 9.8% N/A Floating No 11%

Residential Aventura, FL 1/27/2025 1/27/2027 30,750,872 8.7% 28,711,352 9.3% N/A Floating No 11%

Net Leased Tenant New Orleans, LA (3)

1/30/2025 1/30/2028 44,000,000 12.5% 599,378 10.1% N/A Floating No 11%

Residential Dallas, TX 3/14/2025 3/14/2028 46,500,000 13.2% 44,250,000 8.0% N/A Floating No 9%

Subordinate debt:

Residential Sarasota, FL 1/31/2024 5/12/2027 28,188,776 23.2% 22,367,562 13.0% Fixed No 14%

Residential Sarasota, FL 1/31/2024 5/12/2027 28,188,776 8.0% 23,891,764 13.0% N/A Fixed No 14%

Residential Miami, FL 11/15/2024 11/15/2027 13,000,000 3.7% 2,246,271 13.3% N/A Fixed No 15%

Residential Miami, FL 3/21/2025 12/13/2028 26,250,000 7.5% 4,533,185 13.8% 1.0% Floating No 15%

$ 352,076,936 100.0% $ 233,380,706 10.4% 0.0% 12%

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

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

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

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

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

Estimated YTM is calculated using the interest rate as of September 30, 2024 applied through maturity.

Estimated YTM is calculated using the interest rate as of March 31, 2025 applied through maturity.

Actual results could differ from those estimates and assumptions.

(2) Cash interest rate represents a blended rate of differing cash interest rates applicable to each of the senior and subordinate loans to which the Company is a lender under the credit agreements.

The subordinate loan component bears interest at a base interest rate of 15.31% plus SOFR (SOFR floor of 2.42%) and the senior loan component bears interest at a base interest rate of 12.50%.

(2) This loan is structured as a senior term loan and home construction revolver, of which the proceeds will be used to fund varying development projects.

Under each credit facility, the borrower is able to re-draw funds after repayment through maturity.

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

(4) The interest subtotal rate is a weighted average rate.

Loans Held for Investment at Carrying Value

As of September 30, 2024 and December 31, 2023, our portfolio included six and zero loans held at carrying value, respectively.

The aggregate originated commitment under these loans was approximately $121.6 million and zero, respectively, and outstanding principal was approximately $97.5 million and zero, respectively, as of September 30, 2024 and December 31, 2023 .

During the nine months ended September 30, 2024 , we funded approximately $122.5 million of new loans and additional principal and had approximately $24.9 million of principal repayments of loans held at carrying value.

As of September 30, 2024 and December 31, 2023, approximately 72% and zero , respectively, of our loans held at carrying value had floating interest rates.

As of September 30, 2024, t hese floating benchmark rates included one-month SOFR subject to a weighted average floor of 4.2% and quoted at 4.8%.

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

As of September 30, 2024

As of March 31, 2025 and December 31, 2024, our portfolio included twelve and nine loans held at carrying value, respectively.

The aggregate originated commitment under these loans was approximately $352.1 million and $190.9 million, respectively, and outstanding principal was approximately $233.4 million and $132.6 million, respectively, as of March 31, 2025 and December 31, 2024 .

During the three March 31, 2025 , we funded approximately $109.8 million of new loans and additional principal on existing loans and had approximately $9.0 million of principal repayments of loans held at carrying value.

As of March 31, 2025 and December 31, 2024, approximately 89% and 79%, respectively, of our loans held at carrying value had floating interest rates.

As of March 31, 2025, t hese floating benchmark rates included one-month SOFR quoted at 4.3% and subject to a weighted average floor of 4.1% based on outstanding principal.

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

As of March 31, 2025

Principal (1)

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Total loans held at carrying value $ 233,380,706 $ (2,886,515) $ 230,494,191 2.5

As of December 31, 2024

Principal (1)

Discount Carrying

Remaining Life

Senior mortgage loans (3)

$ 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 and loan origination costs.

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

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

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

The following table presents changes in loans held at carrying value as of and for the nine months ended September 30, 2024:

(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, 2025:

Principal Original Issue

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New fundings 106,100,104 (1,356,528) 104,743,576

Funded interest 2,428,444 — 2,428,444

Interest drawn on loans 3,740,082 — 3,740,082

Accretion of original issue discount — 292,672 292,672

Loan repayments (9,015,769) — (9,015,769)

Total loans held at carrying value at September 30, 2024 $ 97,547,112 $ (1,141,366) $ 96,405,746

Total loans held at carrying value at March 31, 2025 $ 233,380,706 $ (2,886,515) $ 230,494,191

Collateral Overview

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Our debt investments will primarily be secured by real estate assets that are expected to be diversified across asset classes, including high quality residential (including multi-family, condominiums and single-family residential communities), retail, office, hospitality, industrial, mixed-use and specialty-use real estate.

Upon default of a loan, we may seek to sell the loan to a third party or have an affiliate or a third party work with the borrower to have the borrower sell collateral securing the loan to a third party or institute a foreclosure proceeding to have such collateral sold, in each case, to generate funds towards the payoff of the loan.

Upon default of a loan, we may seek to sell the loan to a third-party or have an affiliate or a third party work with the borrower to have the borrower sell collateral securing the loan to a third party or institute a foreclosure proceeding to have

such collateral sold, in each case, to generate funds towards the payoff of the loan.

While we believe that the appraised value of any real estate assets or other collateral securing our loans may impact the amount of the recovery in each such scenario, the amount of any such recovery from the sale of such real estate or other collateral may be less than the appraised value of such collateral and the sale of such collateral may not be sufficient to pay off the remaining balance on the defaulted loan.

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The sources of financing for our target investments are described below.

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

As of September 30, 2024 and December 31, 2023, all of our cash was unrestricted and totaled approximately $70.2 million and $31.2 million, respectively.

As of September 30, 2024, we believe that our cash on hand, capacity available under our Revolving Credit Facility and cash flows from operations will be sufficient to satisfy the operating requirements of our business through at least the next twelve months.

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

As of March 31, 2025 and December 31, 2024, all of our cash was unrestricted and totaled approximately $1.6 million and $184.6 million, respectively.

As of March 31, 2025, we believe that our cash on hand, capacity available under the Revolving Credit Facility, SRTF Credit Facility and cash flows from operations will be sufficient to satisfy the operating requirements of our business through at least the next twelve months.

Capital Markets

Given the nature of our business, we constantly explore both the public and private capital markets to raise capital, subject to market and other considerations.

On January 29, 2025, we completed a registered public offering of 5,750,000 shares of common stock at a public offering price of $12.00 per share, of which 1,000,000 shares of common stock were sold to Leonard M.

Tannenbaum, our Executive Chairman, at the public offering price.

We 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 our common stock.

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

We incurred approximately $1.2 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 us 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 us, were approximately $76.8 million.

The net proceeds totaled approximately $71.4 million.

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

Revolving Credit Facility

On September 26, 2024, we entered into the SRT 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 SRT Revolving Credit Facility at 1-month SOFR (subject to a 3.0% floor) plus a margin of 2.75% (7.60% at September 30, 2024 ), with a maturity date of December 31, 2025.

We did not incur any fees or costs related to the origination of the SRT Revolving Credit Facility, and the SRT Revolving Credit Facility does not have any unused fees.

As of September 30, 2024 , we drew on the full amount of the Revolving Credit Facility, resulting in $50.0 million in outstanding borrowings and zero available for borrowing.

The borrowings were subsequently repaid on October 1, 2024.

The SRT Revolving Credit Facility was terminated on November 6, 2024.

The Revolving Credit Facility contains aggregate commitments of $50.0 million, with a maturity date of November 8, 2027, which may be borrowed, repaid and redrawn (subject to a borrowing base based on eligible loan obligations held by us and subject to the satisfaction of o ther conditions provided under the Revolving Credit Facility).

Interest is payable on the Revolving Credit Facility at the rate per annum of SOFR plus 2.75%, with a SOFR floor of 2.63%;

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 $75,000 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.

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 cash balance exceeds the minimum balance required per the Revolving Credit Agreement.

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

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;

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

On November 6, 2024, the Company entered into the Revolving Credit Facility, which contains initial aggregate commitments of $50.0 million, 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).

The amount of total commitments under the Revolving Credit Facility may be increased to up to

$200.0 million in aggregate, subject to available borrowing base and lenders’ willingness to provide additional commitments.

SRTF Credit Facility

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

Other Credit Facilities, Warehouse Facilities and Repurchase Agreements

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

The following table sets forth changes in cash and cash equivalents for the nine months ended September 30, 2024 and during the period from August 28, 2023 to September 30, 2023 :

Nine months ended September 30, 2024 Period from August 28, 2023 to September 30, 2023

As of March 31, 2025 , we believe that our cash on hand, capacity available under our Revolving Credit Facility and SRTF Credit Facility, and cash flows from operations will be sufficient to service our outstanding debt during the next twelve months.

The following table sets forth changes in cash and cash equivalents for the three months ended March 31, 2025 and 2024:

Three months ended

Net cash provided by (used in) operating activities $ (914,591) $ 1,117,808

Net cash (used in) provided by investing activities (95,727,807) (46,414,144)

Net cash provided by (used in) financing activities 130,104,097 21,000,000

Net cash (used in) provided by financing activities (86,341,592) 14,400,000

Change in cash and cash equivalents $ (182,983,990) $ (30,896,336)

Net Cash Provided by (Used in) Operating Activities

Net cash provided by operating activities during the nine months ended September 30, 2024 was approximately $2.7 million, compared to approximately $7.8 thousand for the period from August 28, 2023 to September 30, 2023.

The increase of approximately $2.7 million during the period from August 28, 2023 to September 30, 2023 to the nine months ended September 30, 2024 was primarily due to an increase in net income of approximately $5.0 million, partially offset by changes in net working capital.

The most significant items in working capital were an increase in non-cash interest income capitalized of $(2.4) million, an increase in interest receivable of approximately $(1.0) million, increase in prepaid expenses and other assets of approximately $(0.3) million, partially offset by an increase in accrued management and incentive fees of $0.4 million, increase in accrued direct administrative expenses of $0.5 million and increase in accounts payable and other liabilities of approximately $0.3 million.

Net cash provided by operating activities during the three months ended March 31, 2025 was approximately $(0.9) million, compared to approximately $1.1 million for the three months ended March 31, 2024.

The decrease of approximately $(2.0) million during the March 31, 2024 to the three months ended March 31, 2025 was primarily due to an increase in net income of approximately $1.3 million, partially offset by changes in net working capital.

The most significant items in working capital were an increase in non-cash interest income capitalized of $(3.7) million, an increase in accrued management and incentive fees of $(0.4) million, partially offset by a decrease in interest receivable of approximately $0.3 million and an increase in prepaid expenses and other assets of approximately $0.4 million.

Net Cash (Used in) Provided by Investing Activities

Net cash used in investing activities during the nine months ended September 30, 2024 was approximately $(93.9) million, compared to zero for the period from August 28, 2023 to September 30, 2023.

Net cash used in investing activities during the three months ended March 31, 2025 was approximately $(95.7) million, compared to $(46.4) for the three months ended March 31, 2024.

The decrease of approximately $(49.3) million was primarily due to an increase in issuance and fundings on loans of approximately $(55.9) million, partially offset by an increase in principal repayments of loans of approximately $6.6 million.

Net Cash Provided by (Used in) Financing Activities

Net cash provided by financing activities during the nine months ended September 30, 2024 was approximately $130.1 million, compared to $21.0 million for the period from August 28, 2023 to September 30, 2023.

The increase of approximately $109.1 million during the period from August 28, 2023 to September 30, 2023 to the nine months ended September 30, 2024 was primarily due to an increase in net transfers and distributions from our Former Parent of approximately $59.1 million and an increase of $50.0 million in borrowings on the revolving credit facility.

Net Cash (Used in) Provided by Financing Activities

Net cash used in financing activities during the three months ended March 31, 2025 was approximately $(86.3) million, compared to $14.4 million for the three months ended March 31, 2024.

The decrease of approximately $(100.7) million was primarily due to $(236.7) million in repayments on the revolving credit facilities, partially offset by an increase of $81.1 million in borrowings on the revolving credit facilities and an increase of $72.6 million from offering proceeds relating to the January 2025 Offering.

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

Our contractual obligations as of September 30, 2024 are as follows:

As of September 30, 2024

Our contractual obligations as of March 31, 2025 are as follows:

As of March 31, 2025

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

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Total $ — $ 96,979,415 $ 21,716,815 $ — $ 118,696,230

As of September 30, 2024 , all unfunded commitments were related to our total loan commitments and were available for funding in less than three years.

As of March 31, 2025 , all unfunded commitments were related to our total loan commitments and were available for funding in less than four years.

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

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Critical Accounting Policies and Estimates

There have been no significant changes in our critical accounting policies and estimates from what was previously disclosed in the Information Statement included as Exhibit 99.1 to the Company’s Registration Statement on Form 10, the final version of which was included as Exhibit 99.1 to the Current Report on Form 8-K filed with the SEC on July 3, 2024 .

There have been no significant changes in our critical accounting policies and estimates from what was previously disclosed in our Annual Report on Form 10-K.

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

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis