What changed in this filing

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Item 1. Financial Statements

2025-08-07 compared with 2025-05-07 · 195 added, 124 removed, 488 unchanged (40% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Loans held for investment at carrying value, net $ 248,337,012 $ 130,733,630

16 unchanged sentences

Shareholders' equity

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

Common stock, par value $ 0.01 per share, 50,000,000 shares authorized at March 31, 2025 and December 31, 2024 and 13,421,494 and 7,004,676 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively

Preferred stock, par value $ 0.01 per share, 10,000 shares authorized at June 30, 2025 and December 31, 2024 and 0 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively

Common stock, par value $ 0.01 per share, 50,000,000 shares authorized at June 30, 2025 and December 31, 2024 and 13,421,176 and 7,004,676 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively

134,212 70,047

7 unchanged sentences

Three months ended

June 30, Six months ended

2025 2024 2025 2024

Interest income $ 6,752,679 $ 1,979,576 $ 11,711,202 $ 4,005,882

19 unchanged sentences

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Three months ended March 31, 2025

Three 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

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

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

Stock-based compensation — 16,818 168 243,453 — 243,621

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

Dividends declared on common shares ($ 0.30 per share)

1 unchanged sentence

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

Three months ended June 30, 2024

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

Shares Amount

Balance as of March 31, 2024 $ — 100 $ 1 $ 45,399,999 $ 1,996,967 $ 47,396,967

Three months ended March 31, 2024

Net income — — — — 1,513,743 1,513,743

Balance as of June 30, 2024 $ — 100 $ 1 $ 45,399,999 $ 3,510,710 $ 48,910,710

See accompanying notes to the consolidated financial statements

SUNRISE REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Six months ended June 30, 2025

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

1 unchanged sentence

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

Capital contributions — — — 17,000,000 — 17,000,000

Distributions — — — ( 2,600,000 ) — ( 2,600,000 )

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

Six months ended June 30, 2024

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

Shares Amount

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

Net transfers and distributions from (to) Former Parent — — — 14,400,000 — 14,400,000

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

Net income — — — — 3,276,088 3,276,088

Balance as of March 31, 2024 $ — 100 $ 1 $ 45,399,999 $ 1,996,967 $ 47,396,967

Balance as of June 30, 2024 $ — 100 $ 1 $ 45,399,999 $ 3,510,710 $ 48,910,710

See accompanying notes to the consolidated financial statements

SUNRISE REALTY TRUST, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

Three months ended

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six months ended

Operating activities:

3 unchanged sentences

Amortization of deferred financing costs 173,931 —

Accretion of deferred loan original issue discount and other discounts ( 292,672 ) ( 14,094 )

Accretion of deferred loan original issue discount and premium, net ( 615,227 ) ( 35,236 )

Stock-based compensation 502,687 —

Interest drawn on loans ( 8,103,971 ) —

PIK interest ( 10,405 ) —

Changes in operating assets and liabilities:

5 unchanged sentences

Accounts payable and other liabilities ( 2,768 ) 525,933

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

Net cash (used in) provided by operating activities ( 1,237,338 ) 3,198,412

Cash flows from investing activities:

6 unchanged sentences

Payment of offering costs - equity offering ( 455,889 ) —

Distributions — ( 2,600,000 )

Payment of financing costs ( 217,731 ) —

2 unchanged sentences

Dividends paid to common shareholders ( 6,968,412 ) —

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

Net increase (decrease) in cash and cash equivalents ( 182,983,990 ) ( 30,896,336 )

Net cash (used in) provided by financing activities ( 68,944,032 ) 14,400,000

Net (decrease) increase in cash and cash equivalents ( 179,055,149 ) ( 19,959,576 )

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

10 unchanged sentences

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

As of March 31, 2025

As of June 30, 2025

Sunrise Realty Trust, Inc.

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

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

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

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

3 unchanged sentences

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

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

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

2 unchanged sentences

On July 9, 2024, Advanced Flower Capital Inc.

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

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

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

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

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

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

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

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

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

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

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

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

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

14 unchanged sentences

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

This Quarterly Report on Form 10-Q includes financial information of the Company through July 9, 2024 (prior to consummation of the Separation, the Distribution and the Spin-Off) and the period from July 9, 2024 to March 31, 2025 (from and after consummation of the Separation, the Distribution and the Spin-Off), and does not fully reflect what the Company’s results of operations, cash flows and financial condition would have been had it been an independent company for prior periods presented.

This Quarterly Report on Form 10-Q includes financial information of the Company through July 9, 2024 (prior to consummation of the Separation, the Distribution and the Spin-Off) and the period from July 9, 2024 to June 30, 2025 (from and after consummation of the Separation, the Distribution and the Spin-Off), and does not fully reflect what the Company’s results of operations, cash flows and financial condition would have been had it been an independent company for prior periods presented.

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

4 unchanged sentences

Actual results could differ from those estimates.

Significant estimates include the current expected credit losses (“CECL”) reserve.

Significant estimates include the current expected credit losses reserve (“CECL Reserve”).

Recent Accounting Pronouncements

18 unchanged sentences

LOANS HELD FOR INVESTMENT AT CARRYING VALUE

As of March 31, 2025 and December 31, 2024, t he Company’s 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, resp ectively, 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 months ended March 31, 2025, the Company 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 the Company’s loans held at carrying value had floating interest rates.

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

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

As of March 31, 2025

As of June 30, 2025 and December 31, 2024, t he Company’s portfolio included thirteen and nine loans held at carrying value, respectively.

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

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

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

As of June 30, 2025, t hese floating benchmark rates included one-month Secured Overnight Financing Rate (“SOFR”) quoted at 4.3 % and subject to a weighted average floor of 4.1 % and U.S.

prime rate subject to a weighted average floor of 8.0 % and quoted at 7.5 % based on outstanding principal.

The following tables summarizes the Company’s loans held at carrying value as of June 30, 2025 and December 31, 2024:

As of June 30, 2025

Principal (1)

Discount Carrying

(Discount) Premium Carrying

Remaining Life

5 unchanged sentences

Principal (1)

Discount Carrying

(Discount) Premium Carrying

Remaining Life

3 unchanged sentences

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 March 31, 2025 and December 31, 2024 .

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

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

(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, 2025:

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

Principal Original Issue

Discount Carrying Value

Premium Carrying Value

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

1 unchanged sentence

Interest drawn on loans 8,103,971 — 8,103,971

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

Accretion of original issue discount and premium, net — 615,227 615,227

Loan repayments ( 11,542,613 ) — ( 11,542,613 )

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

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

PIK interest 10,405 — 10,405

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

A more detailed listing of the Company’s loans held at carrying value portfolio based on information available as of June 30, 2025 is as follows:

Loan Type Location Outstanding

Principal (1)

Discount Carrying

Premium Carrying

Rate Maturity

14 unchanged sentences

3/14/2028 I/O

Residential Park City, UT 299,312 44,470 343,782 11.25 % (13)

Subordinate debt:

6 unchanged sentences

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

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

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

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

13 unchanged sentences

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

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

prime rate (U.S.

prime floor of 8.00 %).

(14) Base interest rate of 13.00 %.

2 unchanged sentences

CURRENT EXPECTED CREDIT LOSSES

As of March 31, 2025 and December 31, 2024, the Company’s CECL Reserve for its loans held at carrying value is approximately $ 157.8 thousand and $ 40.2 thousand, respectively, or 0.07 %, and 0.03 %, respectively, of the Company’s total loans held at carrying value of approximately $ 230.5 million and $ 130.7 million, respectively, and is bifurcated between the current expected credit loss reserve (contra-asset) related to outstanding balances on loans held at carrying value of approximately $ 13.7 thousand and $ 21.8 thousand, respectively, and a liability for unfunded commitments of approximately $ 144.1 thousand and $ 18.4 thousand, respectively.

As of June 30, 2025 and December 31, 2024, the Company’s CECL Reserve for its loans held at carrying value was approximately $ 0.6 million and $ 40.2 thousand, respectively, or 0.25 %, and 0.03 %, respectively, of the Company’s total loans held at carrying value of approximately $ 248.3 million and $ 130.7 million, respectively, and is bifurcated between the current expected credit loss reserve (contra-asset) related to outstanding balances on loans held at carrying value of approximately $ 0.4 million and $ 21.8 thousand, respectively, and a liability for unfunded commitments of approximately $ 0.2 million and $ 18.4 thousand, respectively.

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

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

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

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

Activity related to the CECL Reserve for outstanding balances and unfunded commitments on the Company’s loans held at carrying value as of and for the three and six months ended June 30, 2025 was as follows:

Outstanding (1)

Balance at March 31, 2025 $ 13,713 $ 144,115 $ 157,828

Provision for (reversal of) current expected credit losses 370,147 98,346 468,493

Write-offs — — —

Recoveries — — —

Balance at June 30, 2025 $ 383,860 $ 242,461 $ 626,321

Outstanding (1)

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

2 unchanged sentences

Recoveries — — —

Balance at March 31, 2025 $ 13,713 $ 144,115 $ 157,828

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

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

Balance at June 30, 2025 $ 383,860 $ 242,461 $ 626,321

(1) As of June 30, 2025 and December 31, 2024, the CECL Reserve related to outstanding balances on loans held at carrying value is recorded within current expected credit loss reserve in the Company’s consolidated balance sheets.

(2) As of June 30, 2025 and December 31, 2024, the CECL Reserve related to unfunded commitments on loans held at carrying value is recorded within current expected credit loss reserve as a liability in the Company’s consolidated balance sheets.

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

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

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

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

10 unchanged sentences

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

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

As of June 30, 2025, the carrying value, excluding the CECL Reserve, of the Company’s loans held at carrying value within each risk rating by year of origination is as follows:

2025 2024 Total

1 unchanged sentence

2 78,908,742 142,824,032 221,732,774

3 — 26,604,238 26,604,238

Total $ 78,908,742 $ 169,428,270 $ 248,337,012

INTEREST RECEIVABLE

The following table summarizes the interest receivable balance for the Company as of March 31, 2025 and December 31, 2024:

March 31, 2025 As of

The following table summarizes the interest receivable balance for the Company as of June 30, 2025 and December 31, 2024:

June 30, 2025 As of

December 31, 2024

1 unchanged sentence

Unused fees receivable 8,909 11,821

PIK receivable 2,891 —

Other fees receivable 1,718 7,813

2 unchanged sentences

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

The Revolving Credit Agreement provides for a senior secured revolving credit facility (the “Revolving Credit Facility”) that contains initial aggregate commitments of $ 50.0 million from one or more FDIC-insured banking institutions, which may be borrowed, repaid and redrawn, subject to a borrowing base based on eligible loan obligations held by the Company and subject to the satisfaction of other conditions provided under the Revolving Credit Agreement.

The Revolving Credit Agreement provides for a senior secured revolving credit facility (the “Revolving Credit Facility”) that contains initial aggregate commitments of $ 50.0 million from one or

more FDIC-insured banking institutions, which may be borrowed, repaid and redrawn, subject to a borrowing base based on eligible loan obligations held by the Company and subject to the satisfaction of other conditions provided under the Revolving Credit Agreement.

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.

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

Based on the terms of the Revolving Credit Agreement, the Company did not incur an unused line fee during the three months ended March 31, 2025.

In connection with the Revolving Credit Agreement and related amendments, the Company incurred certain closing costs of approximately $ 0.6 million, which were included in prepaid expenses and other assets on the Company’s consolidated balance sheets and amortized over the life of the facility.

The Company incurred an unused line fee of approximately $ 21.9 thousand during the three and six months ended June 30, 2025.

In connection with the Revolving Credit Agreement and related amendments, the Company incurred certain closing costs of approximately $ 0.5 million, which were included in prepaid expenses and other assets on the Company’s consolidated balance sheets and amortized over the life of the Revolving Credit Facility .

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

provided that upon the meeting of certain conditions, the 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.

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

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

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

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

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

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

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

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

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

As of March 31, 2025 and December 31, 2024, outstanding borrowings under the Revolving Credit Facility were $ 43.2 million and $ 123.8 million, respectively, and $ 6.8 million and $ 1.2 million were available for borrowing as of March 31, 2025 and December 31, 2024, respectively.

As of March 31, 2025 , the interest rate on the Company’s borrowings under the Revolving Credit Facility was 7.07 %.

On May 16, 2025, the Company entered into Amendment Number Four to Loan and Security Agreement, by and among the Company and certain of its subsidiaries, as borrowers, the lenders party thereto, and East West Bank, which, among other things (i) facilitated the entry of an additional lender;

(ii) increased the aggregate commitment by $ 40.0 million, for a total maximum revolver usage of $ 90.0 million;

(iii) modified the liquidity financial covenant to require the Company to maintain a base liquidity;

and (iv) added a financial covenant requiring the Company to maintain a certain leverage ratio measured at the end of each fiscal quarter.

On May 29, 2025, the Company entered into Amendment Number Five to Loan and Security Agreement, by and among the Company and certain subsidiaries, as borrowers, the lenders party thereto, and East West Bank, which, among other things (i) facilitated the entry of an additional lender;

(ii) increased the aggregate commitment by $ 50.0 million, for a total

maximum revolver usage of $ 140.0 million;

(iii) included the requirement for additional appraisals and loan title policies;

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

As of June 30, 2025 and December 31, 2024, outstanding borrowings under the Revolving Credit Facility were $ 65.0 million and $ 123.8 million, respectively, and $ 75.0 million and $ 1.2 million were available for borrowing as of June 30, 2025 and December 31, 2024, respectively.

As of June 30, 2025 , the interest rate on the Company’s borrowings under the Revolving Credit Facility was 7.07 %.

SRTF Credit Facility

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

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

SRT Finance LLC is indirectly owned by Leonard M.

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

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

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

1 unchanged sentence

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

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

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

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

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

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

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

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

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

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

As of March 31, 2025 , the interest rate on the Company’s borrowings under the SRTF Credit Facility was 8.00 %.

The Company did not incur any interest expense during the three months ended March 31, 2024.

The following table reflects a summary of interest expense incurred during the three months ended March 31, 2025:

As of June 30, 2025 and December 31, 2024, outstanding borrowings under the SRTF Credit Facility were zero and $ 75.0 million, respectively, and $ 75.0 million and zero were available for borrowing as of June 30, 2025 and December 31, 2024, respectively.

The Company did not incur any interest expense during the three and six months ended June 30, 2024.

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

Three months ended

March 31, 2025

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, 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, 2025 and December 31, 2024, the Company had the following commitments to fund various investments:

March 31, 2025 As of

As of June 30, 2025 and December 31, 2024, the Company had the following commitments to fund various investments:

June 30, 2025 As of

December 31, 2024

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

As of June 30, 2025, the Company was not aware of any legal claims that could materially impact its business, financial condition or results of operations.

SHAREHOLDERS’ EQUITY

3 unchanged sentences

Preferred Stock

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

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

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

As of March 31, 2025 and December 31, 2024, the Company authorized 50,000,000 shares of Common Stock, respectively, and issued 13,421,494 and 7,004,676 shares of Common Stock, respectively.

As of June 30, 2025 and December 31, 2024, the Company was authorized to issue up to 10,000 shares of Preferred Stock, par value $ 0.01 per share (the “Preferred Stock”), respectively, of which none have been issued.

The Board of Directors has the authority, without action by our shareholders, to issue up to 10,000 shares of Preferred Stock in one or more series

or classes and to designate the rights, preferences and privileges of each series or class, which may be greater than the rights of Common Stock.

There were no shares of Preferred Stock designated or outstanding as of June 30, 2025 and December 31, 2024, respectively.

As of June 30, 2025 and December 31, 2024, the Company was authorized to issue up to 50,000,000 shares of Common Stock, respectively, and issued 13,421,176 and 7,004,676 shares of Common Stock, respectively.

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

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

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

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

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

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

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

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

In February 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.

In February 2025, the 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, 2025 , there were 132,462 shares of restricted stock granted under the 2024 Plan.

As of March 31, 2025 , the maximum number of shares of the Company’s Common Stock that may be delivered pursuant to awards under the 2024 Plan (the “Share Limit”) equaled 1,191,122 shares, of which 1,058,660 shares remained available for future issuance under the 2024 Plan.

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

As of June 30, 2025 , there were 132,144 shares of restricted stock granted under the 2024 Plan.

As of June 30, 2025 , the maximum number of shares of the Company’s Common Stock that may be delivered pursuant to awards under the 2024 Plan (the “Share Limit”) equaled 1,191,122 shares, of which 1,058,978 shares remained available for future issuance under the 2024 Plan.

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

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

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

The stock-based compensation expense for the Company was approximately $ 0.2 million and zero for the three months ended March 31, 2025 and 2024, respectively.

The following table summarizes restricted stock (i) converted upon Spin-Off, (ii) granted, (iii) vested and (iv) forfeited for the Company’s directors and officers and employees of the Manager as of March 31, 2025 and December 31, 2024:

March 31, 2025

Stock Compensation

The following table summarize s the stock-based compensation expense incurred by the Company for the three and six months ended June 30, 2025 and 2024:

Three months ended

June 30, Six months ended

2025 2024 2025 2024

Stock-based compensation $ 259,066 $ — $ 502,687 $ —

Restricted Stock

June 30, 2025 As of

December 31, 2024

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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, 2025:

The following tables summarize the restricted stock activity as of and during the six months ended June 30, 2025:

Number of shares of restricted stock Weighted-average

4 unchanged sentences

Forfeited ( 3,125 ) 13.12

Balance as of March 31, 2025 185,671 $ 13.02

The total fair value of shares vested during the three months ended March 31, 2025 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 .

There were no shares of restricted stock that were granted or that vested during the three months ended March 31, 2024.

As of March 31, 2025 , there was approximately $ 2.1 million of total unrecognized compensation cost related to non-vested restricted stock.

Balance as of June 30, 2025 185,353 $ 13.02

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

There were no shares of restricted stock granted during the three months ended June 30, 2025.

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 .

There were no shares of restricted stock that were granted or that vested during the three and six months ended June 30, 2024.

As of June 30, 2025 , there was approximately $ 1.8 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 2.09 years.

5 unchanged sentences

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

The following information sets forth the computations of basic and diluted weighted average earnings per common share for the three months ended March 31, 2025 and 2024:

The following information sets forth the computations of basic and diluted weighted average earnings per common share for the three and six months ended June 30, 2025 and 2024:

Three months ended

Net income attributable to common shareholders $ 3,099,437 $ 1,762,345

June 30, Six months ended

2025 2024 2025 2024

Net income $ 3,358,314 $ 1,513,743 $ 6,457,751 $ 3,276,088

Dividends paid on unvested restricted stock ( 55,701 ) — ( 141,181 ) —

6 unchanged sentences

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

Diluted weighted average earnings per common share excluded 87,463 and zero weighted average unvested restricted stock due to anti-dilutive effect for the three months ended March 31, 2025 and 2024, respectively.

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

There were no shares of weighted average unvested restricted stock due to anti-dilutive effect excluded from diluted weighted average earnings per common share for the three and six months ended June 30, 2024.

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

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

The income tax provision for the Company was zero for the three months ended March 31, 2025 .

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

The income tax provision for the Company was zero for the three and six months ended June 30, 2025 .

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

federal excise tax.

5 unchanged sentences

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

The following table details the book value and fair value of the Company’s financial instruments not recognized at fair value in the unaudited interim balance sheets as of March 31, 2025 :

As of March 31, 2025

The following table details the book 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, 2025 :

As of June 30, 2025

Carrying Value Fair Value

2 unchanged sentences

Loans held for investment at carrying value $ 248,337,012 $ 249,047,098

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

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

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

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

2 unchanged sentences

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

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

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

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

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

There was no Base Management Fees incurred for the three months ended March 31, 2025 and 2024.

Refer to fee waiver below.

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

There were no Base Management Fees incurred during the three and six months ended June 30, 2024.

Refer to the fee waiver below.

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

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

There was no Incentive Compensation incurred for the three months ended March 31, 2025 and 2024.

Refer to fee waiver below.

“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 and six months ended June 30, 2025 were zero .

There were no Incentive Fees incurred during the three and six months ended June 30, 2024.

Refer to the fee waiver below.

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

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

For the three months ended March 31, 2025, $ 568,790 of Base Management Fees and $ 298,306 of Incentive Fees were waived.

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 and six months ended June 30, 2025, Base Management Fees waived were $ 7.3 thousand and $ 576.1 thousand, respectively, and Incentive Fees waived were $ 165.8 thousand and $ 464.1 thousand, respectively .

Administrative Services Agreement

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

The following table summarizes the related party costs incurred by the Company for the three months ended March 31, 2025 and 2024:

The following table summarizes the related party costs incurred by the Company for the three and six months ended June 30, 2025 and 2024:

Three months ended

June 30, Six months ended

2025 2024 2025 2024

Affiliate costs

2 unchanged sentences

General and administrative expenses reimbursable to Manager 532,262 — 1,144,827 —

Professional fees reimbursable to Manager 12,905 — 17,894 —

Total $ 1,234,307 $ — $ 1,851,861 $ —

Amounts payable to the Company’s Manager as of March 31, 2025 and December 31, 2024 were approximately $ 0.6 million and $ 1.1 million , respectively.

The Company’s Manager is beneficially owned by certain officers as of the date of this Quarterly Report on Form 10-Q :

Amounts payable to the Manager as of June 30, 2025 and December 31, 2024 were approximately $ 1.4 million and $ 1.1 million , respectively.

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

63.1 %, by Mr.

7 unchanged sentences

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

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

As of June 30, 2025, there were thirteen co-invested loans held by the Company and affiliates of the Company.

Unsecured Revolving Credit Facility with Affiliate

2 unchanged sentences

DIVIDENDS AND DISTRIBUTIONS

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

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

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

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

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

2 unchanged sentences

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

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

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

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

9 unchanged sentences

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 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 $ 2.0 million, or 98 %, of consolidated interest income during the three months ended March 31, 2024.

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 two borrowers each comprising more than 10% of consolidated interest income for an aggregate amount of $ 1.9 million, or 98 %, of consolidated interest income during the three months ended June 30, 2024.

Interest income earned on the Company’s portfolio was concentrated with four borrowers each comprising more than 10% of consolidated interest income for an aggregate amount of $ 8.1 million, or 64 %, of consolidated interest income during the six months ended June 30, 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 $ 3.9 million, or 98 %, of consolidated interest income during the six months ended June 30, 2024.

SUBSEQUENT EVENTS

48 unchanged sentences

• we may have indemnification liabilities to AFC under the Separation and Distribution Agreement;

• there had been no public market for SUNS Common Stock prior to the Distribution and an active trading market may not be sustained or be liquid in the future, which may cause the market price of SUNS Common Stock to decline significantly and make it difficult for investors to sell their shares;

• there had been no public market for Common Stock prior to the Distribution and an active trading market may not be sustained or be liquid in the future, which may cause the market price of Common Stock to decline significantly and make it difficult for investors to sell their shares;

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

2 unchanged sentences

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 6, 2025 , for a further discussion of these and other risks and uncertainties which could affect our future results.

Please see the section entitled “ Risk Factors ” located in our Annual Report on Form 10-K, filed with the SEC on March 6, 2025 , and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, 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.

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