What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-07 compared with 2025-05-07 · 111 added, 98 removed, 179 unchanged (54% of the section changed)

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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”).

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 Annual Report on Form 10-K for the year ended December 31, 2024.

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

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

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

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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.

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.

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

Developments During the 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 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 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.

Developments During the Second Quarter June 30, 2025:

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

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

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

The senior loan matures in August 2027.

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

The loan bears interest at a cash rate of 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.

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

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

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

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

Dividends Declared Per Share

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.

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

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

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

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

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

2025 Period Subtotal

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As a commercial real estate finance company, we believe the key financial measures and indicators for our business are Distributable Earnings (as defined below), book value per share and dividends declared per share.

Book Value Per Share

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

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

Non-GAAP Metrics

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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.

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Three months ended

June 30, Six months ended

2025 2024 2025 2024

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

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Distributable earnings per basic weighted average share $ 0.31 $ 0.23 $ 0.62 $ 0.49

Book Value Per Share

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 March 31, 2025 and December 31, 2024 was approximately $13.77 and $16.29, respectively.

Factors Impacting our Operating Results

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

Results of Operations f or the three 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.

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

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

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

Interest expense (1,083,212) — (1,419,371) —

Net interest income 5,669,467 1,979,576 10,291,831 4,005,882

Management and incentive fees 689,140 — 689,140 —

General and administrative expenses 659,957 21,025 1,413,083 21,568

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

Professional fees 234,497 372,954 643,029 636,372

Total expenses 1,842,660 393,979 3,247,939 657,940

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

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

Income tax expense — — — —

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

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

Interest income.

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

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

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

Interest expense.

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

Management and incentive fees.

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

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

General and administrative expenses .

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

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.

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

Stock-based compensation.

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

Professional fees.

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

Professional fees

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

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

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

Provision for Current Expected Credit Losses

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

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

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

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

The 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.

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

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.

We continuously evaluate the credit quality of each loan by assessing the risk factors of each loan.

Loan Portfolio

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

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

Loan Type Location Original Funding Date Loan Maturity Current Commitments as of 6/30/2025 % of Total SUNS Principal Balance as of 6/30/2025 Cash Interest Rate PIK Fixed/

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Residential Dallas, TX 3/14/2025 3/14/2028 46,500,000 12.9% 44,548,166 8.0% N/A Floating No 9%

Residential Park City, UT 6/11/2025 8/1/2027 9,250,000 2.6% 299,312 11.3% N/A Floating No 13%

Subordinate debt:

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

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

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

Actual results could differ from those estimates and assumptions.

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Loans Held for Investment at Carrying Value

As of 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

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

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

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

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

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

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

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

As of June 30, 2025

Principal (1)

Discount Carrying

Premium Carrying

Remaining Life

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Principal (1)

Discount Carrying

Premium Carrying

Remaining Life

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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

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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

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

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.

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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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.

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

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

Capital Markets

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Revolving Credit Facility

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.

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

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

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

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

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

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

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

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 .

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

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

Other Credit Facilities, Warehouse Facilities and Repurchase Agreements

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

As of 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

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

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

Six months ended

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

Net cash (used in) provided by investing activities (108,873,779) (37,557,988)

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Change in cash and cash equivalents $ (179,055,149) $ (19,959,576)

Net Cash Provided by (Used in) Operating Activities

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 Operating Activities

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

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

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

Net Cash (Used in) Provided by Investing Activities

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

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

Net Cash (Used in) 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.

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

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

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

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

As of March 31, 2025

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

As of June 30, 2025

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

2 unchanged sentences

Total $ — $ 89,037,689 $ 20,195,541 $ — $ 109,233,230

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.

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

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

21 unchanged sentences

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