What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-05-09 compared with 2024-11-08 · 431 added, 630 removed, 1158 unchanged (48% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Cash and cash equivalents $ 11,941,464 $ 8,578,456

1 unchanged sentence

Cash held in escrow by lender 6,744,251 7,448,611

Marketable securities 1,134,314 4,961,879

Loans held for investment, net of allowance for credit losses of $ 33,021,571

and $ 56,749,498

Available-for-sale debt securities 1,108,922 963,178

Loans held for investment, net of allowance for credit losses of $ 47,678,644 and $ 45,381,465

192,866,547 233,571,416

2 unchanged sentences

32,582,673 41,077,729

Equity investment in unconsolidated investments 80,800,634 37,171,326

Equity interest in unconsolidated investments 108,132,968 106,816,146

Real estate owned, net ( Note 5 )

9 unchanged sentences

Obligations under participation agreements ( Note 7 )

18,849,311 18,177,106

Interest reserve and other deposits held on investments 1,490,779 2,937,959

11 unchanged sentences

Class A Common Stock, $ 0.01 par value, 450,000,000 shares authorized and no shares

issued, as of both September 30, 2024 and December 31, 2023

issued, as of both March 31, 2025 and December 31, 2024

Class B Common Stock, $ 0.01 par value, 450,000,000 shares authorized and 24,338,581

and 24,336,033 shares issued and outstanding as of September 30, 2024 and

and 24,337,952 shares issued and outstanding as of March 31, 2025 and

December 31, 2024, respectively

7 unchanged sentences

Terra Property Trust, Inc.

Consolidated Statements of Operations and Comprehensive (Loss) Income

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Consolidated Statements of Operations and Comprehensive Income (Loss)

Three Months Ended March 31,

Interest income $ 10,205,897 $ 12,148,735

6 unchanged sentences

Asset servicing fee 329,600 406,525

(Reversal of) provision for credit losses ( 687,598 ) 27,096,841 3,761,838 30,899,434

Provision for credit losses 2,119,736 1,873,111

Real estate operating expenses 975,228 691,006

3 unchanged sentences

Other 202,190 262,911

Impairment charge — — — 11,765,540

8,372,537 10,212,760

Operating income (loss) 6,607,576 ( 20,653,463 ) 12,105,995 ( 17,667,390 )

Operating income 4,084,212 4,796,585

Other income and expenses

1 unchanged sentence

Interest expense on unsecured notes payable ( 2,491,537 ) ( 2,440,375 )

Interest expense on obligations under participation

agreements ( 779,793 ) ( 243,945 ) ( 2,168,936 ) ( 1,353,006 )

Unrealized (loss) gain on investments, net ( 74,849 ) ( 1,040,192 ) 103,721 ( 982,384 )

Income (loss) from equity investment in

unconsolidated investments 1,025,176 41,839 2,223,759 ( 2,154,955 )

Loss on repayment of loan ( 5,629,510 ) — ( 5,629,510 ) —

Gain on extinguishment of debt — 14,079,379 — 14,079,379

Interest expense on obligations under participation agreements ( 888,904 ) ( 618,495 )

Unrealized loss on investments, net ( 75 ) ( 22,931 )

Income (loss) from equity interest in unconsolidated investments 2,560,110 ( 473,387 )

Realized loss on investments, net — ( 135,459 )

1 unchanged sentence

Net loss $ ( 1,285,064 ) $ ( 6,183,974 )

Series A preferred stock dividend declared $ — $ — $ — $ ( 3,907 )

Net loss allocable to common stock $ ( 7,803,936 ) $ ( 17,477,698 ) $ ( 21,527,220 ) $ ( 36,171,191 )

Other comprehensive income (loss)

22 unchanged sentences

Net loss — — — — — — ( 1,285,064 ) — ( 1,285,064 )

Other comprehensive loss:

Unrealized loss on available-for-sale debt securities — — — — — — — ( 335,782 ) ( 335,782 )

Balance at March 31, 2024 — — — 24,336,424 243,364 444,462,676 ( 213,882,368 ) ( 335,782 ) 230,487,890

Shares issued from reinvestment of shareholder

distributions — — — 447 5 5,045 — — 5,050

Distributions declared on common shares ($ 0.19 per share)

— — — — — — ( 4,650,718 ) — ( 4,650,718 )

Net loss — — — — — — ( 7,539,310 ) — ( 7,539,310 )

Other comprehensive income:

— — — — — — — —

Unrealized gain on available-for-sale debt securities — — — — — — — 145,744 145,744

Balance at June 30, 2024

Balance at March 31, 2025

$ — — $ — 24,338,581 $ 243,386 $ 444,485,095 $ ( 264,746,858 ) $ ( 39,731 ) $ 179,941,892

Preferred Stock Class A Common Stock Class B Common Stock Additional

Capital Accumulated Deficit Accumulated Other Comprehensive Loss

$ 0.01 Par Value

Shares Amount Shares Amount Total Equity

Balance at January 1, 2024 $ — — $ — 24,336,033 $ 243,360 $ 444,458,206 $ ( 203,047,758 ) $ — $ 241,653,808

Shares issued from reinvestment of shareholder

3 unchanged sentences

Net loss — — — — — — ( 6,183,974 ) ( 6,183,974 )

Other comprehensive income:

— — — — — — — —

Unrealized gain on available-for-sale debt securities — — — — — — — 5,051 5,051

Balance at September 30, 2024

$ — — $ — 24,337,371 $ 243,374 $ 444,473,089 $ ( 238,527,136 ) $ ( 14,339 ) $ 206,174,988

See notes to unaudited consolidated financial statements .

Terra Property Trust, Inc.

Consolidated Statements of Changes in Equity (Continued)

Preferred Stock 12.5 % Series A Cumulative Non-Voting Preferred Stock

Class A Common Stock Class B Common Stock Additional

Capital Accumulated Deficit

$ 0.01 Par Value

Shares Amount Shares Amount Shares Amount Total equity

Balance at January 1, 2023 $ — 125 $ 125,000 — $ — 24,335,370 $ 243,354 $ 444,449,813 $ ( 122,935,993 ) $ 321,882,174

Cumulative effect of credit loss

accounting standard effective

January 1, 2023 ( Note 2 )

— — — — — — — — ( 4,619,723 ) ( 4,619,723 )

Shares issued from reinvestment of

shareholder distributions — — — — — 34 — 478 — 478

Redemption of Series A Preferred

Stock — ( 125 ) ( 125,000 ) — — — — — — ( 125,000 )

Distributions declared on common

shares ($ 0.19 per share)

— — — — — — — — ( 4,650,492 ) ( 4,650,492 )

Distributions declared on preferred

shares — — — — — — — — ( 3,907 ) ( 3,907 )

Net income — — — — — — — — 547,479 547,479

Other comprehensive loss:

Unrealized loss on available-for-sale debt securities $ — — $ — — $ — $ — — ( 335,782 ) ( 335,782 )

Balance at March 31, 2024 $ — — $ — 24,336,424 $ 243,364 $ 444,462,676 $ ( 213,882,368 ) $ ( 335,782 ) $ 230,487,890

Shares issued from reinvestment of

shareholder distributions — — — — — 109 — 1,510 — 1,510

Distributions declared on common

shares ($ 0.19 per share)

— — — — — — — — ( 4,650,501 ) ( 4,650,501 )

Net loss — — — — — — — — ( 19,237,065 ) ( 19,237,065 )

Balance at June 30, 2023 — — — — — 24,335,513 243,354 444,451,801 ( 155,550,202 ) 289,144,953

Shares issued from reinvestment of

shareholder distributions — — — — — 198 3 2,572 — 2,575

Distributions declared on common

shares ($ 0.19 per share)

— — — — — — — — ( 4,650,531 ) ( 4,650,531 )

Net loss — — — — — — — — ( 17,477,698 ) ( 17,477,698 )

Balance at September 30, 2023 $ — — $ — — $ — 24,335,711 $ 243,357 $ 444,454,373 $ ( 177,678,431 ) $ 267,019,299

See notes to unaudited consolidated financial statements .

1 unchanged sentence

Consolidated Statements of Cash Flows

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

Net loss $ ( 1,285,064 ) $ ( 6,183,974 )

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

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

Depreciation and amortization 1,345,937 2,116,682

6 unchanged sentences

Amortization and accretion of investment-related fees, net ( 562,336 ) ( 475,630 )

Amortization of above-market rent ground lease — ( 97,761 )

Impairment charge — 11,765,540

Loss on repayment of loan 5,629,510 —

Gain on extinguishment of debt — ( 14,079,379 )

Realized loss on investments, net — 135,459

Unrealized (gain) loss on investments, net ( 103,721 ) 982,384

Distributions received from equity investment in unconsolidated investments 2,918,307 5,805,494

(Income) loss from equity investment in unconsolidated investments ( 2,223,759 ) 3,959,892

Unrealized loss on investments, net 75 22,931

Distributions received from equity interest in unconsolidated investments 1,267,522 648,911

(Income) loss from equity interest in unconsolidated investments ( 2,560,110 ) 473,387

Changes in operating assets and liabilities:

Deal deposits — 4,241,892

Interest receivable ( 667,113 ) ( 1,476,810 )

6 unchanged sentences

Other liabilities 69,313 ( 77,673 )

Net cash (used in) provided by operating activities ( 5,571,455 ) 5,957,953

See notes to unaudited consolidated financial statements.

Terra Property Trust, Inc.

Consolidated Statements of Cash Flows (Continued)

Nine Months Ended September 30,

Net cash provided by (used in) operating activities 861,561 ( 4,186,780 )

Cash flows from investing activities:

1 unchanged sentence

Origination, purchase and funding of loans ( 7,883,421 ) ( 7,173,474 )

Purchase of equity interests in unconsolidated investments ( 47,159,126 ) ( 1,218,449 )

Distributions received in excess of equity income 2,835,270 —

Capital contributions to and purchase of equity interests in unconsolidated investments ( 263,387 ) ( 6,476,877 )

Distributions in excess of income 239,154 —

Repayments of promissory note receivable 168,966 —

1 unchanged sentence

Proceeds from sale of marketable securities — 1,292,897

Purchase of marketable securities — ( 7,905,211 )

Purchase of equity securities ( 2,022,353 ) —

Purchase of held-to-maturity securities — ( 20,025,024 )

Proceeds from redemption of held-for-maturity securities — 20,000,000

Purchase of real estate properties — ( 52,508,252 )

Cash acquired in purchase of real estate — 712,608

Return of capital on equity interests in unconsolidated investments — 11,287,839

Net cash provided by investing activities 46,219,625 33,398,210

See notes to unaudited consolidated financial statements .

Terra Property Trust, Inc.

Consolidated Statements of Cash Flows (Continued)

Three Months Ended March 31,

Cash flows from financing activities:

5 unchanged sentences

Change in interest reserve and other deposits held on investments ( 1,447,180 ) 142,378

Redemption of Series A Preferred Stock — ( 125,000 )

Net cash used in financing activities ( 45,869,718 ) ( 22,194,237 )

Net increase (decrease) in cash, cash equivalents and restricted cash 13,638,492 ( 6,913,744 )

Net increase in cash, cash equivalents and restricted cash 1,211,468 7,017,193

Cash, cash equivalents and restricted cash at beginning of period 18,965,026 19,536,777

1 unchanged sentence

$ 20,176,494 $ 26,553,970

Nine Months Ended September 30,

Supplemental Disclosure of Cash Flows Information:

Three Months Ended March 31,

Supplemental disclosure of cash flow information:

Cash paid for interest $ 6,936,220 $ 9,091,697

3 unchanged sentences

Terra Property Trust, Inc.

Consolidated Statements of Cash Flows (Continued)

Supplemental non-cash investing information:

In May 2023, the Company acquired five industrial buildings for a $ 3.5 million cash payment and the settlement of a mezzanine loan that was accounted for as an equity investment and five senior loans that were held for investment.

The following table presents a summary of the total capitalized costs and the values of the net assets acquired:

Total Capitalized Costs:

Cash and cash equivalents $ 3,515,466

Loans held for investment 68,737,877

Equity investment in unconsolidated investment 10,149,642

Interest receivable 456,650

Other assets 429,326

Net Assets Acquired

Cash and cash equivalents $ 712,608

Other assets 33,802

Land 14,457,149

Buildings and Improvements 65,365,376

Intangible asset and liability:

In-please lease 8,403,667

Below-market rent ( 4,770,870 )

Accounts payable and accrued expenses ( 912,771 )

See notes to unaudited consolidated financial statements .

Terra Property Trust, Inc.

Notes to Consolidated Financial Statements (Unaudited)

September 30, 2024

March 31, 2025

Terra Property Trust, Inc.

21 unchanged sentences

Notes to Unaudited Consolidated Financial Statements

As of September 30, 2024, Terra Fund 7 and Terra Offshore Funds REIT, LLC (“Terra Offshore REIT”) held 8.7 % and 10.1 %, respectively, of the issued and outstanding shares of the Company’s common stock.

As of March 31, 2025, Terra Fund 7 and Terra Offshore Funds REIT, LLC (“Terra Offshore REIT”) held 8.7 % and 10.1 %, respectively, of the issued and outstanding shares of the Company’s common stock.

Summary of Significant Accounting Policies

Basis of Presentation

The accompanying interim consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S.

The accompanying consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S.

GAAP”) and include the accounts of the Company and its consolidated subsidiaries.

The accompanying interim consolidated financial statements of the Company and related financial information have been prepared pursuant to the requirements for reporting on Form 10-Q and Articles 6 or 10 of Regulation S-X.

The accompanying consolidated financial statements of the Company and related financial information have been prepared pursuant to the requirements for reporting on Form 10-Q and Articles 6 or 10 of Regulation S-X.

Certain prior period amounts have been reclassified to conform to the current period presentation.

17 unchanged sentences

Allowance for Credit Losses

On January 1, 2023, the Company adopted the provisions of Accounting Standards Codification (“ASC”) 326, Financial Instruments – Credit Losses .

ASC 326 mandates the use of a current expected credit loss (“CECL”) methodology for estimating future credit losses of certain financial instruments measured at amortized cost, instead of the “incurred loss” methodology previously required under United States generally accepted accounting principles (“U.S.

The Company follows the provisions of Accounting Standards Codification (“ASC”) 326, Financial Instruments – Credit Losses to estimate potential credit losses related to its loans .

The CECL methodology requires the consideration of possible credit losses over the life of an instrument as opposed to estimating credit losses upon the occurrence of an actual loss event under the previous “incurred loss” methodology.

As permitted by ASC 326, the Company elected not to measure an allowance for credit losses on accrued interest receivable (which is presented separately on the

As permitted by ASC 326, the Company elected not to measure an

Notes to Unaudited Consolidated Financial Statements

consolidated balance sheet), but rather write off in a timely manner by reversing interest income that would likely be uncollectible.

The Company’s adoption of the ASC 326 resulted in a $ 4.6 million increase to total reserve, including reserve on future funding commitments, which was recognized as a cumulative-effect adjustment to member’s capital as of January 1, 2023.

Subsequent to the adoption of the CECL methodology, any increase or decrease to the allowance for credit losses is recorded in earnings on the consolidated statement of operations.

allowance for credit losses on accrued interest receivable (which is presented separately on the consolidated balance sheets), but rather write off in a timely manner by reversing interest income that would likely be uncollectible.

Performing Loans

4 unchanged sentences

The Company has chosen to incorporate a weighted average macroeconomic forecast that encompasses baseline, upside and downside scenarios, into its allowance for credit losses on performing loans estimate during the reasonable and supportable forecast period which is currently eight quarters.

The Company selects certain economics variables from a group of independent variables such as Commercial Real Estate Price Index, unemployment and interest rate which are included in the model as part of macroeconomic forecast and updated regularly based on current economic trends.

The Company selects certain economic variables from a group of independent variables such as Commercial Real Estate Price Index, unemployment and interest rate which are included in the model as part of macroeconomic forecast and updated regularly based on current economic trends.

The specific loan level information input into the model includes loan-to-value and debt service coverage ratio metrics, as well as principal balances, property type, location, coupon rate, coupon rate type, original or remaining term, expected repayment dates and contractual future funding commitments.

16 unchanged sentences

This allowance for credit losses is estimated using the same method outlined above for the Company’s outstanding performing loan balances and increases or decreases are also recorded in earnings on the consolidated statements of operations.

Notes to Unaudited Consolidated Financial Statements

Non-Performing Loans

During the loan review process, if the Company determines that it is not able to collect all amounts due for both principal and interest according to the contractual terms of a loan, or if a loan is in maturity default, the Company considers that loan non-performing.

For all non-performing loans, such as those in default, collateral-dependent or modified loans, including historical troubled debt restructurings, the Company removes these loans from the industry loss rate approach described above and analyzes them separately.

During the loan review process, all non-performing loans are evaluated for collectability, which includes both loans in default and loans where we do not expect to collect all amounts due for both principal and interest according to the contractual terms of the loan.

The Company removes these loans from the model-based approach described above and analyzes them

Notes to Unaudited Consolidated Financial Statements

The credit loss reserve for these loans is calculated as any excess of the amortized cost of the loan over (i) the present value of expected future cash flows discounted at the appropriate discount rate or (ii) the fair value of collateral, if repayment is expected solely from the collateral.

Loans Not Secured by Real Estate

As of September 30, 2024 and December 31, 2023, the Company has one loan and two loans, respectively, that were not secured by real estate.

These loans, which are included in other assets on the consolidated balance sheets, are recorded at amortized cost.

The Company performs a separate analysis based on recoverability to determine the allowance for credit losses on these loans.

As of September 30, 2024 and December 31, 2023, the Company did not record any allowance for credit losses on these loans because the Company believes that it will be able to collect all outstanding interest and principal on or before the maturity date of each loan.

Equity Investment in Unconsolidated Investments

As of both March 31, 2025 and December 31, 2024, the Company had one loan that was not secured by real estate.

This loan, which is included in other assets on the consolidated balance sheets, is recorded at amortized cost.

The Company performs a separate analysis based on recoverability to determine the allowance for credit losses on this loan.

As of March 31, 2025 and December 31, 2024, the Company did not record any allowance for credit losses on this loan because the Company believes that it will be able to collect all outstanding interest and principal on or before the loan’s maturity date.

Equity Interest in Unconsolidated Investments

The Company accounts for its equity interests in unconsolidated investments under the equity method of accounting, i.e., at cost, increased or decreased by its share of earnings or losses, less distributions, plus contributions and other adjustments required by equity method accounting.

2 unchanged sentences

If, however, the investor’s cumulative distributions received, less distributions received in prior periods determined to be returns of investment, exceed cumulative equity in earnings recognized, the excess is considered a return of investment and is classified as cash inflows from investing activities.

The Company evaluates its equity investment unconsolidated investments on a periodic basis to determine if there are any indicators that the value of its equity investments may be impaired and whether or not that impairment is other-than-temporary.

The Company evaluates its equity interest in unconsolidated investments on a periodic basis to determine if there are any indicators that the value of its equity investments may be impaired and whether or not that impairment is other-than-temporary.

To the extent an impairment has occurred and is determined to be other-than-temporary, the Company measures the charge as the excess of the carrying value of its investment over its estimated fair value, which is determined by calculating its share of the estimated fair market value of the underlying net assets based on the terms of the applicable partnership or joint venture agreements.

Equity Securities Without Readily Determinable Fair Value

The Company accounts for its equity security without readily determinable fair value at cost, which is included in other assets on the consolidated balance sheets.

The Company accounts for its equity securities without readily determinable fair value at cost, which is included in other assets on the consolidated balance sheets.

The Company has elected the measurement alternative and therefore will evaluate whether the security continues to qualify for the alternative at each reporting period.

1 unchanged sentence

The Company will make fair value adjustments, if any, or reductions for any impairment to derive the carrying value of the investment.

Marketable Securities

From time to time, the Company may invest in short-term debt securities.

These securities are classified as available-for-sale securities and are carried at fair value.

Changes in the fair value of debt securities are reported in other comprehensive income until a gain or loss on the securities is realized.

The Company may also invest in short-term equity securities classified as held for trading.

Changes in the fair value of equity securities are recognized in earnings.

Notes to Unaudited Consolidated Financial Statements

Available-For-Sale Debt Securities

From time to time, the Company may invest in debt securities.

These securities are classified as available-for-sale debt securities and are carried at fair value.

Changes in the fair value of the available-for-sale debt securities are reported in other comprehensive income or loss until a gain or loss on the securities is realized.

Real Estate Owned, Net

4 unchanged sentences

The Company amortizes the value allocated to in-place leases over the remaining lease term, which is reported in depreciation and amortization expense on its consolidated statements of operations.

Notes to Unaudited Consolidated Financial Statements

The value allocated to above or below market leases are amortized over the remaining lease term as an adjustment to rental income.

6 unchanged sentences

If impaired, the real estate asset will be written down to its estimated fair value.

The Company determines if an arrangement is a lease at inception.

Operating leases in which the Company is the lessee are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities in the consolidated balance sheets.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease.

Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.

As the Company’s lease typically does not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

The Company uses the implicit rate when readily determinable.

The operating lease ROU asset also includes any lease payments made in advance and excludes lease incentives if there were any.

The Company’s lease term may include options to extend or terminate the lease when it is reasonably certain that it will exercise that option.

Lease expense is recognized on a straight-line basis over the lease term.

As of October 19, 2023, in connection with the deed in lieu of foreclosure discussed in Note 5 , the Company is no longer a party to the ground lease and the related ROU assets and liabilities were written off.

Revenue Recognition

8 unchanged sentences

Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability.

Notes to Unaudited Consolidated Financial Statements

The Company holds loans in its portfolio that may contain paid-in-kind (“PIK”) interest provisions.

18 unchanged sentences

Cash held in escrow is restricted and is not available for general corporate purposes.

Notes to Unaudited Consolidated Financial Statements

The following table provides a reconciliation of cash, cash equivalents and restricted cash in the Company’s consolidated balance sheets to the total amount shown in its consolidated statements of cash flows as of:

September 30,

Cash and cash equivalents $ 11,941,464 $ 17,914,875

9 unchanged sentences

Secured Financing Agreements, Net

The Company's secured financing agreements include two master repurchase agreements, a revolving line of credit, non-recourse property mortgages, note-on-note financing arrangements and a term loan.

The Company's secured financing agreements include two master repurchase agreements, a revolving line of credit, non-recourse property mortgages, note-on-note financing arrangements, secured borrowing and a term loan.

The Company accounts for borrowings under these financing arrangements as secured transactions, which are carried at their contractual amounts (cost), net of unamortized deferred financing fees.

See “ Secured Financing Arrangements ” in Note 8 for additional information.

Notes to Unaudited Consolidated Financial Statements

Fair Value Measurements

5 unchanged sentences

Deferred financing costs represent fees and expenses incurred in connection with obtaining financing for investments.

These costs are presented in the consolidated balance sheets as a direct deduction of the debt liability to which the costs pertain.

These costs are presented on the consolidated balance sheets as a direct deduction of the debt liability to which the costs pertain.

These costs are amortized using the effective interest method and are included in interest expense on the applicable borrowings in the consolidated statements of operations over the life of the borrowings.

6 unchanged sentences

federal and state income taxes at regular corporate rates.

As of September 30, 2024, the Company has satisfied all the requirements for a REIT.

As of March 31, 2025, the Company had satisfied all the requirements for a REIT.

Notes to Unaudited Consolidated Financial Statements

The Company did not have any uncertain tax positions that met the recognition or measurement criteria of ASC 740-10-25, Income Taxes , nor did the Company have any unrecognized tax benefits as of the periods presented herein.

The Company recognizes interest and penalties, if any, related to unrecognized tax liabilities as income tax expense in its consolidated statements of operations.

For the three and nine months ended September 30, 2024 and 2023, the Company did not incur any interest or penalties.

For the three months ended March 31, 2025 and 2024, the Company did not incur any interest or penalties.

Although the Company files federal and state tax returns, its major tax jurisdiction is federal.

1 unchanged sentence

Earnings Per Share

The Company has a simple equity capital structure with only common stock outstanding as of September 30, 2024 and December 31, 2023, and common stock and preferred stock outstanding prior to March 31, 2023.

The Company has a simple equity capital structure with only common stock outstanding.

As a result, earnings per share, as presented, represents both basic and dilutive per-share amounts for the periods presented in the consolidated financial statements.

6 unchanged sentences

The Company’s primary business is originating, acquiring and structuring real estate-related loans related to high quality commercial real estate.

From time to time, the Company may acquire real estate encumbering the senior loans through foreclosure, may invest in real estate related joint ventures and may directly acquire real estate properties.

The Company operates in a single segment focused on mezzanine loans, other loans and preferred equity investments, and to a lesser extent, owning and managing real estate.

From time to time, the Company may assume control of properties acquired in connection with foreclosures or deed in lieu of foreclosure, or it may acquire operating real estate properties that meet its investment criteria.

The Company operates as one segment, which is also its sole reportable segment, focused on mezzanine loans, senior loans and preferred equity investments, and to a lesser extent, owning and managing real estate.

The Company’s chief operating decision maker (“CODM”) is its senior management team, comprised of its chief executive officer who is also the chief investment officer, chief operating officer, chief financial officer, chief originations officer and the head of asset management of the Manager.

The Company generates its revenue primarily from originating, acquiring, investing in, and managing real estate-related debt investments.

The CODM evaluates the performance of any real estate owned assets with that of its real estate-related debt investments.

Additionally, the Company seeks to enhance its returns on equity by utilizing leverage, and generally finance its real estate-related investments with leverage obtained through a variety of sources, including secured and unsecured debt instruments.

The CODM evaluates performance and allocates resources based on consolidated net income (loss), which is also reported as consolidated net income (loss) on the Company’s consolidated statement of operations.

The Company’s consolidated net income (loss) is primarily derived through the difference between the interest income earned on its loans and the cost at which its to finance them.

Accordingly, interest expense, as reported on its consolidated statement of operations, is its most significant segment expense.

Additionally, the measure of segment assets is reflected on the balance sheet as total consolidated assets.

The CODM uses consolidated net income (loss) to make key operating decisions, such as identifying attractive investment opportunities, evaluating underwriting standards, determining the appropriate level of leverage to enhance returns on equity and deciding on the sources of financing.

Recent Accounting Pronouncements

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

Improvements to Reportable Segment Disclosures” (“ASU 2023-07”).

ASU 2023-07 intends to improve reportable segment disclosure requirements, enhance interim disclosure requirements and provide new segment disclosure requirements for entities with a single reportable segment.

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

ASU 2023-07 is to be adopted retrospectively to all prior periods presented.

The Company adopted this ASU on December 31, 2024.

The adoption of the standard has not impacted the Company's financial statements but has resulted in incremental disclosures, which are included within “Segment Information” above.

Notes to Unaudited Consolidated Financial Statements

In December 2023, the FASB issued ASU 2023-09 “Improvements to Income Tax Disclosures” (“ASU 2023-09”).

ASU 2023-09 intends to improve the transparency of income tax disclosures.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 and is to be adopted on a prospective basis with the option to apply retrospectively.

The Company is currently assessing the impact of this guidance;

however, it does not expect the adoption of this standard to have a material impact to its consolidated financial statements.

Loans Held for Investment

The Company elected the practical expedient under ASC 326 to exclude accrued interest from amortized cost.

As of September 30, 2024 and December 31, 2023, accrued interest receivable of $ 4.7 million and $ 6.5 million, respectively, is included in interest receivable on the consolidated balance sheets, and is excluded from the amortized cost of loans held for investment.

As of March 31, 2025 and December 31, 2024, accrued interest receivable of $ 6.1 million and $ 5.4 million, respectively, is included in interest receivable on the consolidated balance sheets, and is excluded from the amortized cost of loans held for investment.

Portfolio Summary

The following table provides a summary of the Company’s loan portfolio as of:

September 30, 2024 December 31, 2023

The table below provides a summary of the Company’s loan portfolio.

Carrying value represents the amortized cost of loan, net of applicable allowance for credit losses.

March 31, 2025 December 31, 2024

Fixed Rate Floating

6 unchanged sentences

Fair value $ 11,786,330 $ 214,841,092 $ 226,627,422 $ 11,740,671 $ 264,796,547 $ 276,537,218

Weighted-average coupon rate 10.32 % 13.20 % 13.06 % 12.95 % 12.92 % 12.93 %

Weighted-average coupon

8.50 % 14.06 % 13.86 % 8.50 % 13.18 % 13.04 %

Weighted-average remaining

1 unchanged sentence

2.44 0.74 0.82 2.68 0.84 0.91

_______________

(1) These loans pay a coupon rate of Secured Overnight Financing Rate (“SOFR”) or forward-looking term rate based on SOFR (“Term SOFR”), as applicable, plus a fixed spread.

Coupon rates shown were determined using the average SOFR of 5.16 % and Term SOFR of 4.85 % as of September 30, 2024 and average SOFR of 5.34 % and Term SOFR of 5.35 % as of December 31, 2023.

(2) As of September 30, 2024 and December 31, 2023, amount included $ 201.4 million and $ 342.9 million of senior mortgages used as collateral for $ 120.6 million and $ 204.9 million of borrowings under secured financing arrangements, respectively ( Note 9 ).

(3) As of September 30, 2024 and December 31, 2023, 10 and 14 loans, respectively, were subject to a SOFR or Term SOFR floor, as applicable.

Coupon rates shown were determined using the average SOFR of 4.33 % and Term SOFR of 4.32 % as of March 31, 2025 and average SOFR of 4.53 % and Term SOFR of 4.33 % as of December 31, 2024.

(2) As of March 31, 2025 and December 31, 2024, amount included $ 169.1 million and $ 208.0 million of senior mortgages used as collateral for $ 82.8 million and $ 123.2 million of borrowings under secured financing agreements, respectively ( Note 8 ).

(3) As of March 31, 2025 and December 31, 2024, 7 and 10 loans, respectively, were subject to a SOFR or Term SOFR floor, as applicable.

(4) Excludes non-performing loans for which recovery of interest income was not probable.

(5) Excludes loans that are in maturity default and represents current effective maturity as of March 31, 2025 and December 31, 2024, exclusive of any extension available.

Notes to Unaudited Consolidated Financial Statements

Lending Activities

5 unchanged sentences

Origination, purchase and funding of loans 6,467,740 1,415,681 7,883,421

Loss on repayment of loan (1)

( 5,629,510 ) — ( 5,629,510 )

Net amortization of premiums on loans ( 6,913 ) — ( 6,913 )

2 unchanged sentences

(Provision for) reversal of provision for credit losses ( 2,297,180 ) 112,913 ( 2,184,267 )

Balance, September 30, 2024

$ 243,502,933 $ 39,608,554 $ 283,111,487

Balance, March 31, 2025

$ 192,866,547 $ 32,582,673 $ 225,449,220

(1) In August 2024, a $ 65.0 million senior loan was repaid, resulting in a loss on repayment of $ 5.6 million, which included the write-off of interest receivable of $ 4.8 million.

Notes to Unaudited Consolidated Financial Statements

Loans Held for Investment, Net Loans Held for Investment through Participation Interests, Net Total

Balance, January 1, 2024 $ 417,913,773 $ 38,558,485 $ 456,472,258

Cumulative effect of credit loss accounting standard effective

January 1, 2023 ( Note 2 )

( 4,123,143 ) ( 126,909 ) ( 4,250,052 )

Origination, purchase and funding of loans 73,104,166 — 73,104,166

Principal repayments received ( 46,981,320 ) — ( 46,981,320 )

Origination, purchase and funding of loans 7,173,474 — 7,173,474

Net amortization of premiums on loans ( 78,132 ) — ( 78,132 )

Settlement of loans in exchange for real estate properties ( Note 5 )

( 68,737,877 ) — ( 68,737,877 )

Accrual, payment and accretion of investment-related fees and other,

1 unchanged sentence

Provision for credit losses ( 1,306,358 ) ( 461,412 ) ( 1,767,770 )

Balance, September 30, 2023 $ 432,327,832 $ 38,354,459 $ 470,682,291

Balance, March 31, 2024 $ 377,169,978 $ 38,089,285 $ 415,259,263

Portfolio Information

1 unchanged sentence

Carrying value represents the amortized cost of loan, net of applicable allowance for credit losses.

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Loan Structure Principal Balance Carrying Value % of Total Principal Balance Carrying Value % of Total

3 unchanged sentences

Total $ 271,180,133 $ 225,449,220 100.0 % $ 317,255,023 $ 274,649,145 100.0 %

September 30, 2024 December 31, 2023

Notes to Unaudited Consolidated Financial Statements

March 31, 2025 December 31, 2024

Property Type Principal Balance Carrying Value % of Total Principal Balance Carrying Value % of Total

Office $ 116,221,158 $ 84,604,062 29.8 % $ 144,812,619 $ 106,462,535 23.3 %

Infill land 54,870,512 56,197,733 19.9 % 52,839,509 54,024,545 11.8 %

Multifamily $ 66,461,136 $ 66,128,294 29.3 % $ 60,969,051 $ 60,662,514 22.1 %

Infill land 55,816,006 56,634,067 25.1 % 56,307,815 57,050,952 20.8 %

Office 100,819,571 54,785,090 24.3 % 116,539,650 72,991,791 26.6 %

Mixed-use 41,083,420 40,923,081 18.2 % 48,438,507 48,067,655 17.5 %

Student housing 31,000,000 31,859,506 11.3 % 31,000,000 31,758,493 7.0 %

Industrial 7,000,000 6,978,688 3.1 % 7,000,000 6,966,233 2.5 %

Hotel - full/select service — — — % 43,222,382 43,460,206 9.5 %

Infrastructure — — — % 21,250,000 21,443,089 4.7 %

Student housing — — — % 28,000,000 28,910,000 10.5 %

Total $ 271,180,133 $ 225,449,220 100.0 % $ 317,255,023 $ 274,649,145 100.0 %

Notes to Unaudited Consolidated Financial Statements

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Geographic Location Principal Balance Carrying Value % of Total Principal Balance Carrying Value % of Total

1 unchanged sentence

California $ 48,255,341 $ 48,673,189 21.5 % $ 71,006,023 $ 71,273,115 26.0 %

New York 75,517,822 43,916,695 15.5 % 90,483,672 49,041,668 10.7 %

Arizona 32,909,916 32,582,673 14.5 % 33,407,815 33,005,952 12.0 %

Washington 31,638,858 31,744,601 14.1 % 26,894,593 26,907,157 9.8 %

Georgia 30,842,779 30,934,415 13.7 % 30,562,858 30,586,450 11.1 %

Utah 28,000,000 28,910,000 10.2 % 49,250,000 50,293,850 11.0 %

New York 75,800,670 29,004,553 12.9 % 75,657,255 31,536,808 11.5 %

New Jersey 22,906,090 24,051,394 10.7 % 22,900,000 24,045,000 8.8 %

Washington 22,459,274 22,360,105 7.9 % 34,052,223 33,908,737 7.4 %

North Carolina 21,826,479 21,479,707 9.5 % 21,826,479 21,418,430 7.8 %

Massachusetts 7,000,000 6,978,688 3.1 % 7,000,000 6,966,233 2.5 %

Utah — — — % 28,000,000 28,910,000 10.5 %

Total $ 271,180,133 $ 225,449,220 100.0 % $ 317,255,023 $ 274,649,145 100.0 %

Allowance for Credit Losses

As described in Note 2 , on January 1, 2023, the Company adopted the provisions of Accounting Standards Updates (“ASU”) 2016-13, Financial Instruments — Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires entities to recognize credit losses on financial instruments based on an estimate of current expected credit losses.

The adoption of ASU 2016-13 resulted in a $ 4.6 million increase to total reserve, including reserve on future funding commitments, which was recognized as a cumulative-effect adjustment to accumulated deficits as of January 1, 2023.

As described in Note 2 , the Company follows the provisions of ASC 326, which requires entities to recognize credit losses on financial instruments based on an estimate of current expected credit losses.

Certain of the Company’s performing loans contain provisions for future funding commitments, which are subject to the borrower meeting certain performance-related metrics that are monitored by the Company.

These unfunded commitments amounted to approximately $ 23.7 million and $ 35.7 million as of September 30, 2024 and December 31, 2023, respectively.

These unfunded commitments amounted to approximately $ 11.2 million and $ 18.7 million as of March 31, 2025 and December 31, 2024, respectively.

The liability for credit losses on unfunded commitments is included in other liabilities on the consolidated balance sheets.

As discussed in Note 2 , for loans that are considered non-performing, the Company removes them from the industry loss rate approach and analyzes them separately for recoverability.

As of September 30, 2024 and December 31, 2023, the Company had four and six non-performing loans with total carrying value, excluding specific allowance, of $ 128.5 million and $ 209.3 million, respectively.

Accordingly, the Company utilized the estimated fair value of the loan collateral or sponsor’s guarantee to estimate the total specific allowance for credit losses of $ 31.6 million and $ 54.6 million as of September 30, 2024 and December 31, 2023, respectively.

As discussed in Note 2 , for loans that are considered non-performing, the Company removes them from the model-based approach and analyzes them separately for recoverability.

As of March 31, 2025 and December 31, 2024, the Company had four and four non-performing loans with total amortized cost of $ 119.3 million and $ 128.6 million, respectively.

Accordingly, the Company utilized the estimated fair value of the loan collateral or sponsor’s guarantee to estimate the total specific allowance for credit losses of $ 46.8 million and $ 44.1 million as of March 31, 2025 and December 31, 2024, respectively.

Please see “Note 6.

1 unchanged sentence

The following table presents the activity in allowance for credit losses:

Nine Months Ended September 30, 2024

Specific Allowance General Allowance Total

Three Months Ended March 31, 2025

Allowance on Non-Performing Loans Allowance on Performing Loans Total

Funded Unfunded

1 unchanged sentence

Provision for (reversal of provision for) credit losses 2,675,670 ( 491,403 ) ( 64,531 ) 2,119,736

Charge-offs ( 27,639,191 ) — — ( 27,639,191 )

Allowance for credit losses, end of period $ 46,796,117 $ 1,529,605 $ 85,493 $ 48,411,215

Notes to Unaudited Consolidated Financial Statements

Nine Months Ended September 30, 2023

Specific Allowance General Allowance Total

Three Months Ended March 31, 2024

Allowance on Non-Performing Loans Allowance on Performing Loans Total

Funded Unfunded

Allowance for credit losses, beginning of period $ 54,642,775 $ 2,333,250 $ 326,907 $ 57,302,932

Cumulative effect of credit loss accounting

standard effective January 1, 2023 ( Note 2 )

— 4,250,052 369,671 4,619,723

Provision for credit losses 1,065,480 702,290 105,341 1,873,111

Charge-offs — — — —

Allowance for credit losses, end of period $ 55,708,255 $ 3,035,540 $ 432,248 $ 59,176,043

2 unchanged sentences

If the Company determines it has uncollectible accrued interest receivable, it generally would reverse the accrued and unpaid interest against interest income and no longer accrue for interest.

For the nine months ended September 30, 2024, the Company reversed $ 0.7 million of accrued interest income because such income was deemed uncollectible.

For the three months ended September 30, 2024 and the three and nine months ended September 30, 2023, the Company did no t reverse any interest income accrual because all accrued interest income was deemed collectible.

For the three months ended September 30, 2024 and 2023, the Company suspended interest income accrual of $ 5.3 million and $ 5.4 million on five and five loans, respectively, because recovery of such income was not probable.

For the nine months ended September 30, 2024 and 2023, the Company suspended interest income accrual of $ 17.8 million and $ 12.6 million on five and five loans, respectively, because recovery of such income was not probable.

In August 2024, in connection with the repayment of a $ 65.0 million senior loan, the Company wrote off the related interest receivable of $ 4.8 million.

As of September 30, 2024 and December 31, 2023, interest receivable recognized on these loans was zero and $ 3.4 million, respectively.

For the three months ended March 31, 2025 and 2024, the Company did no t reverse any interest income accrual because all accrued interest income was deemed collectible.

For the three months ended March 31, 2025 and 2024, the Company suspended interest income accrual of $ 3.4 million and $ 5.8 million on two and four loans, respectively, because recovery of such income was not probable.

As of both March 31, 2025 and December 31, 2024, there was no interest receivable recognized on these loans.

Loan Risk Rating

11 unchanged sentences

Additionally, as discussed in Note 2 , during the loan review process, if the Company determines that it is not able to collect all amounts due for both principal and interest according to the contractual terms of a loan, or if a loan is in maturity default, the Company considers that loan non-performing.

Notes to Unaudited Consolidated Financial Statements

The following tables present the amortized cost of the Company’s loan portfolio by year of origination and loan risk rating:

September 30, 2024

March 31, 2025

Loan Risk Rating Number of Loans Amortized Cost % of Total Amortized Cost by Year Originated

10 unchanged sentences

Total carrying value, net $ 225,449,220

_______________

(1) Amount includes two loans that are in maturity default with total amortized costs of $ 43.5 million.

The Company expects to recover the principal and interest payments in full and therefore, no specific allowance for loan losses was recorded on these two loans.

Notes to Unaudited Consolidated Financial Statements

December 31, 2024

10 unchanged sentences

Total carrying value, net $ 274,649,145

_______________

(1) Amount included two loans that are currently in maturity default with total amortized costs of $ 53.0 million.

The Company expects to recover the principal and interest payments in full and therefore, no specific allowance for loan losses was recorded on these two loans.

Equity Investment in Unconsolidated Investments

Equity Interest in Unconsolidated Investments

The Company owns interests in a limited partnership, joint ventures and a preferred equity investment with profit-sharing feature.

The Company accounts for its interests in these investments under the equity method of accounting ( Note 2 ).

Equity Investment in a Limited Partnership

Equity Interest in a Limited Partnership

On August 3, 2020, the Company entered into a subscription agreement with Mavik Real Estate Special Opportunities Fund, LP (“RESOF”) whereby the Company committed to fund up to $ 50.0 million to purchase a limited partnership interest in RESOF.

4 unchanged sentences

Accordingly, the equity interest in RESOF is accounted for as an equity method investment.

Notes to Unaudited Consolidated Financial Statements

The following tables present a summary of information regarding the Company’ equity investment in RESOF:

September 30, 2024 December 31, 2023

The following tables present a summary of information regarding the Company’ equity interest in RESOF:

March 31, 2025 December 31, 2024

Ownership Interest Carrying Value Unfunded Commitment Ownership Interest Carrying Value Unfunded Commitment

Equity investment in RESOF 14.9 % $ 42,651,437 $ 14,777,811 14.9 % $ 18,196,583 $ 37,444,080

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Income (loss) from equity investment in RESOF $ 1,932,624 $ 902,412 $ 4,706,892 $ 46,624

Equity interest in RESOF 14.9 % $ 49,110,580 $ 11,333,135 14.9 % $ 48,171,168 $ 10,065,613

Three Months Ended March 31,

Income from equity interest in RESOF $ 2,206,934 $ 998,339

Distributions received from RESOF $ 1,267,522 $ 648,911

The following tables present summarized financial information of the Company’s equity investment in RESOF.

Notes to Unaudited Consolidated Financial Statements

The following tables present summarized financial information of the Company’s equity interest in RESOF.

Amounts provided are the total amounts attributable to the investment and do not represent the Company’s proportionate share:

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Investments at fair value (cost of $ 481,517,550 and $ 465,401,329 , respectively)

2 unchanged sentences

Total assets 504,349,926 503,632,180

Revolving line of credit, net of financing costs 116,349,597 44,762,534

Secured financing agreements, net of financing costs 124,395,845 100,033,166

Obligations under participation agreement (proceeds of $ 43,347,388 and

4 unchanged sentences

Partners’ capital $ 320,676,995 $ 315,812,248

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Total investment income $ 19,150,780 $ 10,833,147

1 unchanged sentence

Net investment income 12,330,386 6,650,818

Unrealized (depreciation) appreciation

on investments ( 625,086 ) 533,266 1,423,306 ( 350,676 )

Provision for income tax — — — ( 138,944 )

Net increase in partners’ capital resulting

from operations $ 11,809,074 $ 6,056,041 $ 29,149,393 $ 14,414,687

Equity Investment in Joint Ventures

Net change in unrealized appreciation (depreciation) on investments 1,038,111 ( 527,912 )

Net increase in partners’ capital resulting from operations $ 13,368,497 $ 6,122,906

Equity Interest in Joint Ventures

The Company beneficially owns equity interests in joint ventures that invest in real estate properties, opportunistic debt and equity securities, and indirectly, together with other non-affiliated entities, non-real estate operating companies.

Non-real estate-related investments may take various forms, including preferred and common equity interests in private companies and other financial assets.

The Company evaluated its equity interests in these entities and determined it does not have a controlling financial interest and is not the primary beneficiary.

Accordingly, the equity interests in the joint ventures are accounted for as equity method investments.

Notes to Unaudited Consolidated Financial Statements

The following tables present a summary of the Company’s equity investment in the joint ventures:

September 30, 2024 December 31, 2023

The following tables present a summary of the Company’s equity interest in the joint ventures:

March 31, 2025 December 31, 2024

Entity Co-owner Beneficial Ownership Interest Carrying Value Beneficial Ownership Interest Carrying Value

LEL Arlington JV LLC Third party/Affiliate 27.2 % $ 5,433,333 27.2 % $ 5,761,522

LEL NW 49th JV LLC (1)

Third party/Affiliate — % — 27.2 % 1,619,157

TCG Corinthian FL Portfolio

9 unchanged sentences

_______________

(1) In June 2024, this joint venture sold its underlying real estate property and distributed proceeds to the members.

The Company’s portion of the distribution was $ 2.8 million.

(1) In May 2024, the Company contributed $ 50,000 to this entity for the purpose of investing in opportunistic equity and debt securities.

1 unchanged sentence

(2) In June 2024, the Company made a $ 20.0 million capital commitment to an entity that has indirectly invested, together with other non-affiliated entities, in a non-real estate operating company.

As of September 30, 2024, the total amount contributed was $ 5.0 million.

Through November 2024, $ 10.0 million of the

Notes to Unaudited Consolidated Financial Statements

commitment was funded.

In December 2024, through a series of transactions, a wholly owned subsidiary of the Company issued a $ 10.0 million term loan payable to the entity in exchange for the satisfaction of the remaining funding commitment to this entity ( Note 8 ).

The Company determined it is not a primary beneficiary of the entity and therefore accounts for the investment using the equity method of accounting.

(4) In September 2024, the Company purchased preferred and common units in an entity that invests in another non-real estate operating company.

(3) In September 2024, the Company purchased preferred and common units in an entity that invests in a non-real estate operating company.

The preferred units carry interest at an annual rate of 15 %, of which 10 % is paid in cash and 5 % is accrued.

The Company determined it is not a primary beneficiary of the entity and therefore accounts for the investment using the equity method of accounting.

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Loss from equity investment in the joint ventures $ ( 1,488,677 ) $ ( 860,573 ) $ ( 3,140,340 ) $ ( 2,201,579 )

Three Months Ended March 31,

Loss from equity interest in the joint ventures $ ( 250,393 ) $ ( 1,471,726 )

Distributions received from the joint ventures $ 239,154 $ —

The following tables present estimated combined summarized financial information of the Company’s equity investment in the joint ventures.

The following tables present estimated combined summarized financial information of the Company’s equity interest in the joint ventures.

Amounts provided are the total amounts attributable to the joint ventures and do not represent the Company’s proportionate share.

Additionally, amounts as of and for the three and nine months ended September 30, 2024 did not include the financial information of XS Acquisition Holdco LLC because this entity is still in the process of finalizing its purchase price allocation.

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Net investments in real estate $ 194,923,267 $ 196,206,089

1 unchanged sentence

Total assets 295,745,587 296,585,417

Mortgage loans payable 160,307,293 187,269,209

Secured financing agreements 211,820,808 210,398,952

Other liabilities 8,441,714 8,948,512

1 unchanged sentence

Members’ capital $ 75,483,065 $ 77,237,953

Notes to Unaudited Consolidated Financial Statements

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Revenues $ 6,187,151 $ 4,462,871

2 unchanged sentences

Interest expense ( 4,271,689 ) ( 3,362,558 )

Gain on sale of real estate — — 4,816,477 —

Unrealized loss ( 230,430 ) ( 995,658 ) ( 1,814,507 ) ( 2,245,640 )

Unrealized gain (loss) 780,091 ( 852,253 )

Net loss $ ( 2,437,982 ) $ ( 4,179,985 )

4 unchanged sentences

Because the Company shares residual profit from the sale of underlying property with the borrower, the Company accounts for the investment using the equity method of accounting.

As of September 30, 2024, the Company's investment had a carrying value of $ 15.3 million.

For both the three and nine months ended September 30, 2024, the Company recorded $ 0.6 million and $ 0.7 million, respectively, in equity income from TCC Boundary Partners LLC and did not receive any distributions.

As of March 31, 2025 and December 31, 2024, the Company's investment had a carrying value of $ 16.5 million and $ 15.9 million, respectively.

For the three months ended March 31, 2025, the Company recorded $ 0.6 million in equity income from TCC Boundary Partners LLC and did not receive any distributions.

There was no such equity income recorded or distributions received during the three months ended March 31, 2024.

Real Estate Owned, Net

1 unchanged sentence

2024 — In January 2024, a lease for a space in one of the industrial properties was terminated and the Company received a termination fee of $ 0.03 million.

In connection with the lease termination, the Company wrote off the related unamortized in-place lease of $ 0.3 million and unamortized below-market rent of $ 0.1 million.

Subsequent to the lease termination, the Company entered into a new lease with another tenant for the same space.

2023 — During the nine months ended September 30, 2023, the Company recorded an impairment charge of $ 11.8 million on the multi-tenant office building located in California in order to reduce the carrying value of the building to its estimated fair value.

In October 2023, the Company conveyed its interest in the office building to the lender by deed-in-lieu of foreclosure.

Accordingly, the Company no longer owns the multi-tenant office building.

Additionally, during the nine months ended September 30, 2023, the Company made the following investments:

Location Number of

Properties Date of

Acquisition Property Type Total Capitalized

Texas, United States 3 3/24/2023 Industrial $ 48,798,273

Texas, United States 5 5/25/2023 Industrial 83,288,961

$ 132,087,234

In connection with the lease termination, the Company wrote off the related unamortized in-

Notes to Unaudited Consolidated Financial Statements

These acquisitions were deemed to be real estate asset acquisitions, and therefore total transaction costs were capitalized to the cost basis of the assets.

The following table presents an allocation of the total capitalized costs:

Total Capitalized Costs:

Cash and cash equivalents $ 52,313,739

Loans held for investment 68,737,877

Equity investment in unconsolidated investment 10,149,642

Interest receivable 456,650

Other assets 429,326

$ 132,087,234

Net Assets Acquired

Cash and cash equivalents $ 712,608

Other assets 33,802

Land 23,785,004

Buildings and Improvements 104,613,728

Intangible assets and liabilities:

In-place lease (weighted-average expected life of 3.95 years)

Below-market rent (weighted-average expected life of 3.98 years)

( 8,864,137 )

Accounts payable and accrued expenses ( 912,771 )

$ 132,087,234

place lease of $ 0.3 million and unamortized below-market rent of $ 0.1 million.

Subsequent to the lease termination, the Company entered into a new lease with another tenant for the same space.

Real Estate Owned, Net

1 unchanged sentence

The following table presents the components of real estate owned, net as of:

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Cost Accumulated Depreciation/Amortization Net Cost Accumulated Depreciation/Amortization Net

11 unchanged sentences

Total real estate $ 132,150,992 $ ( 7,759,072 ) $ 124,391,920 $ 132,150,992 $ ( 6,814,589 ) $ 125,336,403

Notes to Unaudited Consolidated Financial Statements

Real Estate Operating Revenues and Expenses

The following table presents the components of real estate operating revenues and expenses that are included in the consolidated statements of operations:

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Real estate operating revenues:

7 unchanged sentences

Management fees 63,873 62,254

Lease expense, including amortization of above-

market ground lease — 487,163 — 1,461,489

Other operating expenses 304,208 199,250

1 unchanged sentence

The following table presents the amortization of intangibles that is included in the consolidated statements of operations:

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Net amortization of above- and below-market rent

intangibles (1)

Three Months Ended March 31,

Net amortization of above- and below-market rent intangibles (1)

$ ( 404,245 ) $ ( 824,843 )

2 unchanged sentences

_______________

Notes to Unaudited Consolidated Financial Statements

(1) Net amortization of above- and below-market rent intangibles is recorded as an adjustment to real estate operating revenue on the consolidated statements of operations.

(2) Amortization of in-place lease intangibles is included in depreciation and amortization expense on the consolidated statements of operations.

Supplemental Ground Lease Disclosures

The Company previously owned an office building that was subject to a ground lease whereby the Company was the lessee (or a tenant) to the ground lease.

On October 19, 2023, the Company conveyed its interest in the office building to a subsidiary of Centennial Bank by deed in lieu of foreclosure.

Accordingly, the Company is no longer a party to the ground lease.

The component of lease expense for the ground lease was as follows:

Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023

Operating lease cost $ 519,750 $ 1,559,250

Notes to Unaudited Consolidated Financial Statements

Supplemental non-cash information related to the ground lease was as follows:

Nine Months Ended September 30, 2023

Amounts included in the measurement of lease liability:

Operating cash flows from an operating lease $ 1,559,250

Right-of-use asset obtained in exchange for lease obligations:

Operating lease $ 1,559,250

Fair Value Measurements

13 unchanged sentences

The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment.

As of September 30, 2024 and December 31, 2023, the Company had not elected the fair value option for its financial instruments, including loans held for investment, loans held for investment acquired through participation, equity securities, secured financing agreements, unsecured notes payable and obligations under participation agreements.

As of March 31, 2025 and December 31, 2024, the Company had not elected the fair value option for its financial instruments, including loans held for investment, loans held for investment acquired through participation, equity securities without readily determinable fair value, secured financing agreements, unsecured notes payable and obligations under participation agreements.

Such financial instruments are carried at cost, less impairment or less net deferred costs, where applicable.

1 unchanged sentence

Financial Instruments Carried at Fair Value on a Recurring Basis

From time to time, the Company may invest in short-term equity securities, which are presented at fair value and included in Other assets in the consolidated balance sheets.

The Company may also invest in short term debt securities, which are classified as available-for sale securities, which are presented at fair value and included in Marketable securities in the

Notes to Unaudited Consolidated Financial Statements

consolidated balance sheets.

Changes in the fair value of equity securities are recognized in earnings.

Changes in the fair value of debt securities are reported in other comprehensive income until the securities are realized.

From time to time, the Company may invest in debt securities.

These securities are classified as available-for-sale debt securities and are carried at fair value.

Changes in the fair value of the available-for-sale debt securities are reported in other comprehensive income or loss until a gain or loss on the securities is realized.

In 2024, the Company owned certain trading equity securities that were carried at fair value.

Changes in the fair value of the trading equity securities were reported in earnings.

The trading equity securities were sold by April 2024.

Additionally, the Company may invest in short-term money market funds.

These funds are included in cash and cash equivalents on the consolidated balance sheet due to their short-term nature and can be easily converted to cash.

As discussed in Note 8 , in March 2023, the Company entered into a loan agreement with a lender to provide financing for the acquisition of real estate properties ( Note 5 ).

In connection with the financing, the Company purchased an interest rate cap for $ 258,500 to effectively cap the related index rate at 5.0 %.

The interest rate cap met all the criteria of a derivative under ASC 815, but it did not meet the criteria under ASC 815-20-25 to qualify for hedging accounting.

As such, the interest rate cap is reported at fair value and is included in other assets in the consolidated balance sheet, and the change in the fair value of the interest rate cap is reported in the consolidated statements of operations.

The interest rate cap met all the criteria of a derivative under ASC

Notes to Unaudited Consolidated Financial Statements

815, but it did not meet the criteria under ASC 815-20-25 to qualify for hedging accounting.

As such, the interest rate cap is reported at fair value and is included in other assets on the consolidated balance sheets, and the change in the fair value of the interest rate cap is reported in Unrealized gain (loss) on investments, net on the consolidated statements of operations.

The following tables present fair value measurements of marketable securities and derivatives, by major class according to the fair value hierarchy as of:

September 30, 2024

March 31, 2025

Fair Value Measurements

2 unchanged sentences

$ 2,385,577 $ — $ — $ 2,385,577

Marketable securities - debt securities 1,134,314 — — 1,134,314

Available-for-sale debt securities 1,108,922 — — 1,108,922

Derivative - interest rate cap (2)

— 3,647 — 3,647

Total $ 3,494,499 $ — $ — $ 3,494,499

4 unchanged sentences

$ 2,360,936 $ — $ — $ 2,360,936

Marketable securities - debt securities 1,148,653 — — 1,148,653

Marketable securities - equity securities 3,813,226 — — 3,813,226

Available-for-sale debt securities 963,178 — — 963,178

Derivative - interest rate cap (2)

— 83,807 — 83,807

Total $ 3,324,114 $ 75 $ — $ 3,324,189

2 unchanged sentences

(2) Amount is included in other assets on the consolidated balance sheets.

The following table presents the activities of the marketable securities and derivatives:

Nine Months Ended September 30,

Marketable Securities Derivatives Marketable Securities Derivatives

The interest rate cap matures in May 2025.

The following table presents the activities of the securities and derivatives:

Three Months Ended March 31,

Available-For-Sale Debt Securities Derivatives Available-For-Sale Debt Securities Trading Equity Securities Derivatives

Beginning balance $ 963,178 $ 75 $ 1,148,653 $ 3,813,226 $ 83,807

Purchases — — 7,905,211 258,500

Proceeds from sale — — ( 1,292,897 ) —

Reclassification of net realized loss on marketable securities

Reclassification of net realized loss on investments

into earnings — — ( 135,459 ) —

Unrealized gain (loss) on marketable securities and derivatives 169,542 ( 80,160 ) ( 998,680 ) ( 45,746 )

Unrealized gain (loss) on investments 145,744 ( 75 ) ( 335,781 ) ( 23,052 ) 121

Ending balance $ 1,108,922 $ — $ 812,872 $ 2,361,818 $ 83,928

2 unchanged sentences

The following table presents the carrying value, which represents the amortized cost of loan, net of applicable allowance for credit losses, and estimated fair value of the Company’s financial instruments that are not carried at fair value on the consolidated balance sheets as of:

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Level Principal Amount Carrying Value Fair Value Principal Amount Carrying Value Fair Value

3 unchanged sentences

participation 3 32,909,916 32,582,673 33,244,967 41,452,547 41,077,729 41,871,690

3 39,414,869 39,608,554 39,796,109 38,444,357 38,558,485 38,881,033

Total loans 271,180,133 225,449,220 226,627,422 317,255,023 274,649,145 276,537,218

Equity securities (1)

Equity securities without readily determinable fair value (1)

3 2,000,000 2,002,353 2,000,000 2,000,000 2,002,353 2,000,000

7 unchanged sentences

(1) Amount is included in Other assets on the consolidated balance sheets.

The Company estimated that its other financial assets and liabilities, not included in the tables above, had fair values that approximated their carrying values at both September 30, 2024 and December 31, 2023 due to their short-term nature.

Items Measured at Fair Value on a Non-Recurring Basis (Including Impairment Charges)

The Company periodically assesses whether there are any indicators that the value of its real estate investments may be impaired or that their carrying value may not be recoverable ( Note 2 ).

There were no impairment charges for the three months ended September 30, 2024 and 2023, and the nine months ended September 30, 2024.

The following table presents information about assets for which the Company recorded an impairment charge and that were measured at fair value on a non-recurring basis for the nine months ended September 30, 2023:

Nine Months Ended

September 30, 2023

Fair Value Impairment Charges

Impairment Charges

Real estate and intangibles $ 27,603,118 $ 11,765,540

During the nine months ended September 30, 2023, the Company recorded an impairment charge of $ 11.8 million on the multi-tenant office building located in California in order to reduce the carrying value of the building to its estimated fair value.

The fair value measurement was determined by estimating discounted cash flows using two significant unobservable inputs, which were the cash flow discount rate ( 8.50 %) and terminal capitalization rate ( 7.50 %).

The Company estimated that its other financial assets and liabilities, not included in the tables above, had fair values that approximated their carrying values at both March 31, 2025 and 2024 due to their short-term nature.

Valuation Process for Fair Value Measurement

The fair value of the Company’s investment in equity securities, available for sale debt securities and its unsecured notes payable is determined based on quoted prices in an active market and is classified as Level 1 of the fair value hierarchy.

Notes to Unaudited Consolidated Financial Statements

The fair value of the Company’s investment in available-for-sale debt securities and its unsecured notes payable is determined based on quoted prices in an active market and is classified as Level 1 of the fair value hierarchy.

Market quotations are not readily available for the Company’s real estate-related loan investments, all of which are included in Level 3 of the fair value hierarchy, and therefore these investments are valued utilizing a yield approach, i.e., a discounted cash flow methodology to arrive at an estimate of the fair value of each respective investment in the portfolio using an estimated market yield.

12 unchanged sentences

Because there is no readily available market for these investments, the fair values of these investments are approved in good faith by the Company’s board of directors (which is made up exclusively of independent directors).

The fair values of the Company’s mortgage loan payable, secured borrowing, term loan payable and revolving line of credit are determined by discounting the contractual cash flows at the interest rate the Company estimates such arrangements would bear if executed in the current market.

The following tables summarize the valuation techniques and significant unobservable inputs used by the Company to value the Level 3 loans as of September 30, 2024 and December 31, 2023.

Notes to Unaudited Consolidated Financial Statements

The fair values of the Company’s secured financing agreements, which includes mortgage loan payable, secured borrowing, term loan payable and revolving line of credit are determined by discounting the contractual cash flows at the interest rate the Company estimates such arrangements would bear if executed in the current market.

The following tables summarize the valuation techniques and significant unobservable inputs used by the Company to value the Level 3 loans as of March 31, 2025 and December 31, 2024.

The tables are not intended to be all-inclusive, but instead identify the significant unobservable inputs relevant to the determination of fair values.

Fair Value at September 30, 2024

Primary Valuation Technique Unobservable Inputs September 30, 2024

Fair Value at March 31, 2025

Primary Valuation Technique Unobservable Inputs March 31, 2025

Asset Category Minimum Maximum Weighted Average

Loans held for investment, net (1)

$ 244,686,745 Discounted cash flow Discount rate 9.48 % 15.40 % 10.62 %

Loans held for investment, net $ 193,382,455 Discounted cash flow Discount rate 6.75 % 19.33 % 10.12 %

Discounted cash flow Terminal capitalization rate 5.75 % 5.75 % 5.75 %

Loans held for investment acquired through

9 unchanged sentences

Asset Category Minimum Maximum Weighted Average

Loans held for investment, net (1)

$ 418,458,916 Discounted cash flow Discount rate 9.58 % 16.95 % 7.02 %

Loans held for investment, net $ 234,665,528 Discounted cash flow Discount rate 6.75 % 16.48 % 9.63 %

Discounted cash flow Terminal capitalization rate 5.75 % 5.75 % 5.75 %

Loans held for investment acquired through

participation, net 41,871,690 Discounted cash flow Discount rate 15.07 % 17.03 % 16.65 %

Equity securities (1)

2,000,000 N/A N/A N/A N/A N/A

Total Level 3 Assets $ 278,537,218

Secured financing agreements $ 206,731,436 Discounted cash flow Discount rate 6.33 % 11.28 % 12.17 %

Obligation under participation agreement 18,254,853 Discounted cash flow Discount rate 14.78 % 14.78 % 14.78 %

Total Level 3 Liabilities $ 224,986,289

_______________

Notes to Unaudited Consolidated Financial Statements

(1) Amount includes $ 96.9 million and $ 154.6 million of non-performing loans ( Note 3 ) as of September 30, 2024 and December 31, 2023, respectively.

The fair market value estimates of these non-performing loans were determined primarily using discounted cash flow models and Level 3 inputs, which include estimates of property-specific cash flows over a specific holding period, a discount rate range of 6.75 % to 7.00 % and a terminal capitalization rate range of 5.75 % to 6.00 % as of both September 30, 2024 and December 31, 2023.

These inputs are based on the location, type and nature of the property, current sales and lease comparables, anticipated real estate and capital market conditions, and management’s knowledge, experience and judgment.

Additionally, the Company may use sales comparables, purchase price and appraisals to corroborate the estimated value of a loan’s collateral or may use sponsor’s guarantee to estimate the value of a non-performing loan.

(1) Fair market value is based on purchase price.

3 unchanged sentences

The following table presents a summary of fees paid and costs reimbursed to the Manager in connection with providing services to the Company that are included on the consolidated statements of operations:

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Origination and extension fee expense (1)

6 unchanged sentences

Total $ 4,146,221 $ 4,902,503

Notes to Unaudited Consolidated Financial Statements

_______________

(1) Origination and extension fee expense is generally offset with origination and extension fee income.

Any excess is deferred and amortized to interest income over the term of the loan.

Any excess is deferred and amortized to interest income over the term of the loan on the consolidated statements of operations.

(2) Disposition fee is generally offset with exit fee income and included in interest income on the consolidated statements of operations.

Origination and Extension Fee Expense

Pursuant to the Management Agreement, the Manager or its affiliates receives an origination fee in the amount of 1 % of the amount used to originate, fund, acquire or structure real estate-related investments, including any third-party expenses related to such loans.

In the event that the term of any real estate-related loan held by the Company is extended, the Manager also receives an extension fee equal to the lesser of (i) 1 % of the principal amount of the loan being extended or (ii) the amount of fee paid to the Company by the borrower in connection with such extension.

Pursuant to the Management Agreement, the Manager or its affiliates receives an origination fee in the amount of 1.0 % of the amount used to originate, fund, acquire or structure investments, including any third-party expenses related to such investments.

In the event that the term of any loan held by the Company is extended, the Manager also receives an extension fee equal to the lesser of (i) 1.0 % of the principal amount of the loan being extended or (ii) the amount of fee paid to the Company by the borrower in connection with such extension.

Asset Management Fee

Under the terms of the Management Agreement, the Manager or its affiliates provides the Company with certain investment management services in return for a management fee.

The Company pays a monthly asset management fee at an annual rate of 1 % of the aggregate funds under management, which includes the loan origination price or aggregate gross acquisition price, as defined in the Management Agreement, for each real estate related loan and cash held by the Company.

The Company pays a monthly asset management fee at an annual rate of 1.0 % of the aggregate funds under management, which includes the loan origination price or aggregate gross acquisition price, as defined in the Management Agreement, for each investment and cash held by the Company.

Asset Servicing Fee

The Manager or its affiliates receives from the Company a monthly servicing fee at an annual rate of 0.25 % of the aggregate gross origination price or acquisition price, as defined in the Management Agreement, for each real estate-related loan held by the Company.

Notes to Unaudited Consolidated Financial Statements

Transaction Breakup Fee

In the event that the Company receives any “breakup fees,” “busted-deal fees,” termination fees, or similar fees or liquidated damages from a third-party in connection with the termination or non-consummation of any loan or disposition transaction, the Manager will be entitled to receive one-half of such amounts, in addition to the reimbursement of all out-of-pocket fees and expenses incurred by the Manager with respect to its evaluation and pursuit of such transactions.

As of September 30, 2024 and December 31, 2023, the Company had not received any breakup fees.

In the event that the Company receives any “breakup fees,” “busted-deal fees,” termination fees, or similar fees or liquidated damages from a third-party in connection with the termination or non-consummation of any investment or disposition transaction, the Manager will be entitled to receive one-half of such amounts, in addition to the reimbursement of all out-of-pocket fees and expenses incurred by the Manager with respect to its evaluation and pursuit of such transactions.

As of March 31, 2025 and December 31, 2024, the Company had not received any breakup fees.

Operating Expenses

1 unchanged sentence

Disposition Fee

Pursuant to the Management Agreement, the Manager or its affiliates receives a disposition fee in the amount of 1 % of the gross sale price received by the Company from the disposition of any real estate-related loan, or any portion of, or interest in, any real estate-related loan.

The disposition fee is paid concurrently with the closing of any such disposition of all or any portion of any real estate-related loan or any interest therein, which is the lesser of (i) 1 % of the principal amount of the loan or debt-related loan prior to such transaction or (ii) the amount of the fee paid by the borrower in connection with such transaction.

Pursuant to the Management Agreement, the Manager or its affiliates receive a disposition fee in the amount of 1.0 % of the gross sale price received by the Company from the disposition of an investment, but not upon the maturity, prepayment, workout, modification or extension of a loan unless there is a corresponding fee paid by the borrower, in which case the disposition fee will be the lesser of (i) 1.0 % of the principal amount of the loan and (ii) the amount of the fee paid by the borrower in connection with such transaction.

If the Company takes ownership of a property as a result of a workout or foreclosure of a loan, the Company will pay a disposition fee upon the sale of such property equal to 1.0 % of the sales price.

The term of the Management Agreement will expire on December 31, 2027 (the “Initial Term”) and will automatically renew for an unlimited number of additional one-year terms upon each anniversary date of the last day of the Initial Term (each, a “Renewal Term”), unless terminated by the Company or the Manager during the Initial Term or a Renewal Term in accordance with the terms of the Management Agreement (as described below).

The Management Agreement may be terminated by the Company during the Initial Term or any Renewal Term upon a finding by either (i) at least two-thirds of the independent directors on the Board or (ii) the holders of a majority of the

Notes to Unaudited Consolidated Financial Statements

outstanding shares of the Company’s common stock (other than those shares held by members of the Company’s senior management team or affiliates of the Manager) that either (a) there has been unsatisfactory performance by the Manager that is materially detrimental to the Company, or (b) the compensation payable to the Manager pursuant to the Management Agreement is unfair;

provided, however, that the Company will not have the right to terminate the Management Agreement on the basis of unfair compensation to the Manager if the Manager agrees to continue to provide its services under the Management Agreement in exchange for reduced fees that at least two-thirds of the independent directors on the Board determine to be fair pursuant to the procedures set forth in the Management Agreement.

The Company must deliver prior written notice of any such termination to the Manager at least 180 days prior to the last calendar day of the Initial Term or the then-current Renewal Term, as applicable, and the Management Agreement will terminate effective as of the last calendar day of the Initial Term or the then-current Renewal Term, as applicable.

Upon any termination of the Management Agreement by the Company as discussed above, the Company will pay the Manager, on the date on which such termination is effective, a termination fee in an amount equal to three times the average annual fees of all types and expense reimbursements received by or owed to the Manager pursuant to the Management Agreement during the 24-month period immediately preceding such termination (the “Termination Fee”), calculated as of the end of the most recently completed monthly prior to the date of such termination.

The Company may also terminate the Management Agreement, effective upon 30 calendar days’ prior written notice from the Board to the Manager, without payment of any Termination Fees or other penalties, upon (i) the material breach of the Management Agreement by the Manager or its affiliates that continues for 30 days after written notice thereof to the Manager (or 45 days after delivery of written notice thereof if the Manager takes diligent steps to cure such breach within 30 days of delivery of the written notice), (ii) any fraud or other criminal conduct, gross negligence or breach of fiduciary duty by the Manager or its affiliates in connection with the Management Agreement, as determined by a final, non-appealable judgment of a court of competent jurisdiction, (iii) the Manager’s bankruptcy, insolvency or dissolution, or (iv) an Internalization Event (as defined in the Management Agreement).

No Termination Fee or other penalty is payable upon such a termination by the Company.

The Manager may terminate the Management Agreement, effective upon 60 days’ prior written from the Manager to the Company, if the Company breaches the Management Agreement and such breach continues for 30 days after written notice thereof.

The Company will pay the Manager the Termination Fee upon such termination by the Manager.

Management Agreement Amendment

As discussed herein, the Company may make real estate and non-real estate related investments of any type that align with its investment objectives and criteria.

Accordingly, on May 8, 2025, the Company and the Manager entered into an amendment to the Management Agreement, effective as of January 1, 2025 (the “Amendment”), in order to clarify that the origination, asset management, asset servicing, disposition and breakup fees that the Company pays to the Manager pursuant to the Management Agreement are payable with respect to all real estate and non-real estate investments of any type that the Company originates or acquires.

Unless otherwise specifically noted, all references herein to the “Management Agreement” refer to the Management Agreement as modified by the Amendment.

Due From Affiliate

2 unchanged sentences

In January 2024, the promissory note was amended to (i) extend the maturity date from June 30, 2024 to April 30, 2025 and to (ii) modify the interest rate from Prime Rate, as such Prime Rate is published in the Wall Street Journal, computed on the basis of the actual number of days elapsed and a year of 365 days, to 15.0 %.

During the nine months ended September 30, 2024 and 2023, the Company provided funding under the promissory note receivable of $ 5.0 million and $ 0.8 million, respectively, and received repayments of $ 8.8 million and zero , respectively.

As of September 30, 2024, the promissory note receivable was fully repaid.

As of December 31, 2023, amount outstanding under the promissory note receivable was $ 3.8 million, which is included in Other assets on the consolidated balance sheets.

During the three months ended March 31, 2025 and 2024, the Company provided funding under the promissory note receivable of none and $ 1.2 million, respectively.

In July 2024, the promissory note receivable was repaid in full, and has a balance of zero as of both March 31, 2025 and December 31, 2024.

Due from Related Parties

As of September 30, 2024 and December 31, 2023, amount due from related parties was $ 0.8 million and $ 0.7 million, primarily related to operational cash requirements the Company paid on behalf of its affiliates.

As of March 31, 2025 and December 31, 2024, amount due from related parties was $ 0.9 million and $ 0.9 million, primarily related to operational cash requirements the Company paid on behalf of its affiliates.

Notes to Unaudited Consolidated Financial Statements

Promissory Note Payable

2 unchanged sentences

The promissory note matures on March 31, 2027.

As of September 30, 2024, amount outstanding under this promissory note payable was $ 35.1 million.

As of March 31, 2025 and December 31, 2024, amount outstanding under this promissory note payable was $ 43.6 million and $ 45.1 million, respectively.

The activity associated with this agreement is eliminated in consolidation and therefore has no impact on the Company’s consolidated financial statements.

2 unchanged sentences

These fees are eliminated in consolidation and therefore have no impact on the Company’s consolidated financial statements.

Notes to Unaudited Consolidated Financial Statements

Distributions Paid

For the three months ended September 30, 2024 and 2023, the Company made distributions to investors totaling $ 4.7 million and $ 4.7 million, respectively, all of which were returns of capital.

For the nine months ended September 30, 2024 and 2023, the Company made distributions to investors totaling $ 14.0 million and $ 14.0 million, respectively, of which $ 14.0 million and $ 13.5 million were returns of capital, respectively ( Note 10 ).

For the three months ended March 31, 2025 and 2024, the Company made distributions to investors totaling $ 4.7 million and $ 4.7 million, respectively, all of which were returns of capital ( Note 10 ).

Due to Manager

As of September 30, 2024 and December 31, 2023, approximately $ 0.6 million and $ 4.2 million, respectively, was due to the Manager, as reflected on the consolidated balance sheets, primarily related to the present value of the disposition fees on individual loans due to the Manager.

As of March 31, 2025 and December 31, 2024, approximately $ 0.8 million and $ 1.6 million, respectively, was due to the Manager, as reflected on the consolidated balance sheets, primarily related to the present value of the disposition fees on individual loans due to the Manager.

Mavik Real Estate Special Opportunities Fund, LP

11 unchanged sentences

In accordance with the terms of each participation agreement, each Participant’s rights and obligations, as well as the proceeds received from the related borrower/issuer of the loan, are based upon their respective pro rata participation interest in the loan.

Notes to Unaudited Consolidated Financial Statements

The table below lists the participation interests purchased by the Company pursuant to participation agreements as of:

September 30, 2024

March 31, 2025

Participating Interests Principal Balance Carrying Value

1 unchanged sentence

38.27 % $ 32,909,916 $ 32,582,673

UNJ Sole Member, LLC (1)

$ 32,909,916 $ 32,582,673

$ 39,414,869 $ 39,608,554

December 31, 2024

7 unchanged sentences

(1) The loan is held in the name of Mavik Real Estate Special Opportunities Fund REIT, LLC, a related-party REIT managed by the Manager.

Notes to Unaudited Consolidated Financial Statements

(2) This loan was repaid in January 2025.

Transfers of Participation Interests by the Company

The following table summarizes the investment that was subject to a participation agreement with an investment partnership affiliated with the Manager as of September 30, 2024.

There was no such investment as of December 31, 2023.

September 30, 2024

The following table summarizes the investment that was subject to a participation agreement with an investment partnership affiliated with the Manager as of:

March 31, 2025

Transfers treated as

3 unchanged sentences

$ 19,256,941 $ 19,443,374 96.9 % $ 18,668,574 $ 18,849,311

December 31, 2024

Transfers treated as

obligations under participation agreements

Principal Carrying Value % Transferred Principal Carrying Value

Asano Bankers Hill, LLC (1)

$ 18,567,296 $ 18,577,448 96.9 % $ 18,000,000 $ 18,177,106

________________

(1) Participant is a certain separately managed account, an investment partnership managed by the Manager.

In September 2023, a participant who purchased interest in an investment from the Company via a participation agreement conveyed its interest in the obligation under participation agreements to the Company and the Company recognized a gain on debt extinguishment of $ 14.1 million.

This investment is held in the name of the Company, but the Participant’s rights and obligations, including interest income and other income (e.g., exit fee, prepayment income) and related fees/expenses (e.g., disposition fees, asset management and asset servicing fees), are based upon its pro rata participation interest in such participated investment, as specified in the participation agreement.

2 unchanged sentences

The Participant pays any expenses, including any fees to the Manager, only on its pro rata participation interest, subject to the terms of the governing fee arrangements.

Notes to Unaudited Consolidated Financial Statements

Unsecured Notes Payable

1 unchanged sentence

Coupon Rate Effective Rate (1)

Maturity Date September 30, 2024 December 31, 2023

Maturity Date March 31, 2025 December 31, 2024

6.00 % Senior Notes Due 2026

13 unchanged sentences

On June 10, 2021, the Company issued $ 78.5 million in aggregate principal amount of its 6.00 % notes due 2026, and on June 25, 2021, the underwriters partially exercised their option to purchase an additional $ 6.6 million of the notes (collectively the “ 6.00 % Senior Notes Due 2026”).

The 6.00 % Senior Notes Due 2026 may be redeemed in whole or in part at any time or

Notes to Unaudited Consolidated Financial Statements

from time to time at the Company’s option on or after June 10, 2023, at a redemption price equal to 100 % of the outstanding principal amount thereof, plus accrued and unpaid interest.

The 6.00 % Senior Notes Due 2026 may be redeemed in whole or in part at any time or from time to time at the Company’s option on or after June 10, 2023, at a redemption price equal to 100 % of the outstanding principal amount thereof, plus accrued and unpaid interest.

The 7.00 % Senior Notes Due 2026

On February 10, 2021, Terra BDC issued $ 34.8 million in aggregate principal amount of 7.00 % fixed-rate notes due 2026, and on February 26, 2021, the underwriters exercised the option to purchase an additional $ 3.6 million of the notes (collectively the “ 7.00 % Senior Notes Due 2026”).

The 7.00 % Senior Notes Due 2026 may be redeemed in whole or in part at any time or from time to time at Terra BDC’s option on or after February 10, 2023, at a redemption price equal to 100 % of the outstanding principal amount thereof, plus accrued and unpaid interest.

In connection with the BDC Merger, Terra LLC agreed to take all necessary action to assume the payment of the principal of and interest on all of the outstanding 7.00 % Senior Notes Due 2026.

The 7.00 % Senior Notes Due 2026 may be redeemed in whole or in part at any time or from time to time at Terra LLC’s option on or after February 10, 2023, at a redemption price equal to 100 % of the outstanding principal amount thereof, plus accrued and unpaid interest.

Covenant Compliance

The Company’s unsecured notes payable contain certain financial covenants.

As of September 30, 2024, the Company was in compliance with such covenants.

As of March 31, 2025, the Company was in compliance with such covenants.

Notes to Unaudited Consolidated Financial Statements

Secured Financing Arrangements

The following table is a summary of the Company’s secured financing agreements in place as of:

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Current Maturity Extended Maturity Weighted Average Interest Rate (1)

8 unchanged sentences

Promissory notes payable (2)(6)

March 2025 - March 2026 March 2026 - March 2027 10.07 % 75,545,634 N/A 37,652,205 63,509,518

September 2025 - March 2026 March 2026 - March 2027 9.36 % 55,795,995 N/A 24,948,481 40,694,390

Property mortgages - fixed rate June 2028 June 2028 6.25 % 77,807,437 N/A 40,250,000 40,250,000

4 unchanged sentences

Revolving line of credit (2)(8)

December 2024 September 2025 8.20 % 60,523,700 34,761,111 34,761,111 47,461,730

June 2025 June 2025 7.67 % 32,582,673 12,571,390 12,571,390 16,361,111

Term loan (9)

— — — 15,000,000

December 2027 December 2028 (9) 49,110,580 10,000,000 10,000,000 10,000,000

Secured borrowing November 2026 November 2026 9.85 % 29,229,815 13,250,000 13,250,000 18,000,000

Total 110,923,068 35,821,390 35,821,390 44,361,111

3 unchanged sentences

_______________

(1) Amount is calculated using the applicable index rate as of September 30, 2024.

(1) Amount is calculated using the applicable index rate as of March 31, 2025.

(2) These facilities were used to finance the Company’s senior loan investments.

(3) Interest rate is based on Term SOFR (subject to underlying loan floors on a case-by-case basis) plus a spread ranging from 4.25 % to 5.25 %.

In March 2024, the Company amended the Goldman Sachs Bank facility agreement to extend the maturity date to February 18, 2025 and to reduce the minimum interest coverage ratio covenant.

(4) Interest rate is based on Term SOFR plus a spread of 1.97 %.

3 unchanged sentences

(5) The maturity of this facility can be extended annually on mutually agreeable terms.

Notes to Unaudited Consolidated Financial Statements

(6) Interest rate is based on Term SOFR plus a spread ranging from 4.75 % to 5.98 % with a combined floor rate ranging from 9.0 % to 11.28 %.

1 unchanged sentence

(8) Interest rate is based on Term SOFR + 3.5 % with a combined floor of 7.0 %.

In March 2024, the Company amended the facility agreement to extend the maturity date to September 12, 2024 with an option to extend the facility term for an additional 12 -month period, reduce the credit limit to $ 75.0 million, increase the coupon rate and revise the minimum profitability and net worth covenants.

In June 2024, the Company amended the facility agreement to extend the maturity date of the facility agreement to December 31, 2024, eliminate the ability to make additional revolving borrowings under the facility agreement, decrease the minimum net worth covenant of the Company for future quarterly measurement dates, introduce a minimum liquidity covenant of the Company, establish an interest reserve account and remove the minimum profitability and maximum global leverage covenants of the Company.

(9) In March 2024, the term loan was repaid in full.

(9) In December 2024, through a series of transactions, a wholly owned subsidiary of the Company issued a $ 10.0 million term loan payable to an entity in which the Company has an equity investment in exchange for the satisfaction of the remaining funding commitment of the Company to that entity ( Note 4 ).

This loan is interest-free until June 30, 2025, after that interest is charged at a fixed rate of 9.0 % per annum.

The term loan payable is collateralized by the Company’s equity interest in RESOF and the Company serves as a guarantor under the loan.

Under the terms of the loan agreement, the Company is required to maintain certain loan-to-value ratio and investment rating.

Additionally, the Company’s interest in RESOF is only available to pay the debt under the term loan and not available to pay the debt under any other financing arrangements.

In the normal course of business, the Company is in discussions with its lenders to extend, amend, or replace any financing facilities which contain near term expirations.

The following table presents certain information about the Company’s secured financing arrangements:

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Notes to Unaudited Consolidated Financial Statements

The following table presents certain information about the Company’s secured financing agreements:

Three Months Ended March 31,

Amortization of deferred financing costs and others $ 526,414 $ 946,148

9 unchanged sentences

In the event of a default or any breach of covenant of a related agreement, the lender has the right to accelerate all amounts due, charge interest at a default rate, retain all cash flow from the loans originated and/or sell such loans in a private sale on terms possibly unfavorable to the Company.

As of September 30, 2024, the Company was in compliance with all such covenants, as amended or waived.

As of March 31, 2025, the Company was in compliance with all such covenants, as amended or waived.

Scheduled Debt Principal Payments

Scheduled debt principal payments for each of the five calendar years following September 30, 2024 are as follows:

Scheduled debt principal payments for each of the five calendar years following March 31, 2025 are as follows:

Years Ending December 31, Total

2024 (October 1 through December 31)

2025 70,438,441

2025 (April 1 through December 31) $ 15,821,390

2026 158,448,481

3 unchanged sentences

Total $ 286,654,888

Notes to Unaudited Consolidated Financial Statements

Obligations Under Participation Agreements

2 unchanged sentences

Loan participations from the Company which do not qualify for sale treatment remain on the Company’s consolidated balance sheets and the proceeds are recorded as obligations under participation agreements.

As of September 30, 2024, obligations under participation agreements were $ 15.1 million (see “Participation Agreements” in Note 7 ).

The interest rate on the obligations under participation agreements was 20.16 %.

There were no such obligations under participation agreements as of December 31, 2023.

As of March 31, 2025 and December 31, 2024, obligations under participation agreements were $ 18.8 million and $ 18.2 million, respectively.

(see “Participation Agreements” in Note 7 ).

The interest rate on the obligations under participation agreements was 19.33 % and 19.53 %, respectively.

Commitments and Contingencies

1 unchanged sentence

Certain of the Company’s loans contain provisions for future fundings, which are subject to the borrower meeting certain performance-related metrics that are monitored by the Company.

These fundings amounted to approximately $ 23.7 million and $ 35.7 million as of September 30, 2024 and December 31, 2023, respectively.

The Company expects to maintain sufficient cash on hand to fund such commitments through matching these commitments with principal repayments on outstanding loans or draw downs on credit facilities.

These fundings amounted to approximately $ 11.2 million and $ 18.7 million as of March 31, 2025 and December 31, 2024, respectively.

The Company expects to maintain sufficient cash on

Notes to Unaudited Consolidated Financial Statements

hand to fund such commitments through matching these commitments with principal repayments on outstanding loans or draw downs on credit facilities.

Unfunded Investment Commitment

As discussed in Note 4 , on August 3, 2020, the Company entered into a subscription agreement with RESOF whereby the Company committed to fund up to $ 50.0 million to purchase limited partnership interests in RESOF.

As of September 30, 2024 and December 31, 2023, the unfunded investment commitment was $ 14.8 million and $ 37.4 million, respectively.

Additionally, in June 2024, the Company made a $ 20.0 million capital commitment to an entity that will invest, indirectly, together with other non-affiliated entities, in a non-real estate operating company.

As of September 30, 2024, the unfunded commitment was $ 15.0 million.

As of March 31, 2025 and December 31, 2024, the unfunded investment commitment was $ 11.3 million and $ 10.1 million, respectively.

The Company enters into contracts that contain a variety of indemnification provisions.

2 unchanged sentences

The Manager has reviewed the Company’s existing contracts and expects the risk of loss to the Company to be remote.

Additionally, from time to time, we and individuals employed by us and our Manager may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under contracts with our borrowers and investees.

While the outcome of these legal proceedings cannot be predicted with certainty, we do not expect that such proceedings will have a material effect upon our financial condition or results of operations.

Additionally, from time to time, the Company and individuals employed by the Company and the Company’s Manager may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of the Company’s rights under contracts with borrowers and investees.

While the outcome of these legal proceedings cannot be predicted with certainty, the Company does not expect that such proceedings will have a material effect upon the financial condition or results of operations.

See Note 7 for a discussion of the Company’s commitments to the Manager.

1 unchanged sentence

The following table presents earnings per share:

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Net loss $ ( 1,285,064 ) $ ( 6,183,974 )

Series A preferred stock dividend declared — — — ( 3,907 )

Net loss allocable to common stock $ ( 7,803,936 ) $ ( 17,477,698 ) $ ( 21,527,220 ) $ ( 36,171,191 )

Weighted-average shares outstanding - basic

and diluted 24,337,029 24,335,576 24,336,591 24,335,460

Weighted-average shares outstanding - basic and diluted 24,338,162 24,336,157

Loss per share - basic and diluted $ ( 0.05 ) $ ( 0.25 )

Notes to Unaudited Consolidated Financial Statements

Preferred Stock Classes

Preferred Stock

1 unchanged sentence

The Board may classify any unissued shares of Preferred Stock and reclassify any previously classified but unissued shares of Preferred Stock of any series from time to time, into one or more classes or series of stock.

As of September 30, 2024, there were no shares of Preferred Stock issued or outstanding.

As of December 31, 2023 there were no shares of Series A Preferred Stock (as defined below) issued and outstanding.

Series A Preferred Stock

On November 30, 2016, the Board classified and designated 125 shares of Preferred Stock as a separate class of Preferred Stock to be known as the 12.5 % Series A Redeemable Cumulative Preferred Stock, $ 1,000 liquidation value per share (“Series A Preferred Stock”).

In December 2016, the Company sold 125 shares of the Series A Preferred Stock for $ 125,000 .

The Series A Preferred Stock paid dividends at an annual rate of 12.5 % of the liquidation preference.

In March 2023, the Series A Preferred Stock was fully redeemed at par for a total of $ 125,000 plus accrued dividends.

As of March 31, 2025 and December 31, 2024, there were no shares of Preferred Stock issued or outstanding.

On October 1, 2022, in connection with the BDC Merger, the Company amended its charter to increase the shares authorized from 500,000,000 to 950,000,000 , consisting of 450,000,000 shares of Class A Common Stock, $ 0.01 par value per share (“Class A Common Stock”), 450,000,000 shares of Class B Common Stock, and 50,000,000 shares of Preferred Stock.

Concurrently, 4,847,910 shares of Class B Common Stock were issued to former Terra BDC stockholders and each share of the Company’s common stock issued and outstanding immediately prior to the effective time of the BDC Merger was automatically changed into one issued and outstanding share of Class B Common Stock.

As of September 30, 2024, Terra Fund 7 and Terra Offshore REIT held 8.7 % and 10.1 %, respectively, of the issued and outstanding shares of the Company’s common stock.

As of March 31, 2025, Terra Fund 7 and Terra Offshore REIT held 8.7 % and 10.1 %, respectively, of the issued and outstanding shares of the Company’s common stock.

The Class B Common Stock rank equally with and have identical preferences, rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications, and terms and conditions of redemption as each other share of the Company’s common stock, except as set forth below with respect to conversion.

Notes to Unaudited Consolidated Financial Statements

In connection with the potential liquidity transactions discussed in Note 1 , on December 1, 2023, the Company amended its articles of amendment and restatement (the “A&R Articles”) to provide the Board with greater flexibility to pursue a direct listing.

7 unchanged sentences

All distributions will be made at the discretion of the Board and will depend upon its taxable income, financial condition, maintenance of REIT status, applicable law, and other factors as the Board deems relevant.

For both the three months ended September 30, 2024 and 2023, the Company made distributions to investors totaling $ 4.7 million, all of which were returns of capital.

For the nine months ended September 30, 2024 and 2023, the Company made distributions to investors totaling $ 14.0 million and $ 14.0 million, of which $ 14.0 million and $ 13.5 million were returns of capital, respectively.

Additionally, for the three and nine months ended September 30, 2023, the Company made distributions to preferred stockholders of none and $ 3,907 , respectively.

There were no such distributions for the three and nine months ended September 30, 2024.

For the three months ended March 31, 2025 and 2024, the Company made distributions to investors totaling $ 4.7 million and $ 4.7 million respectively, all of which all were returns of capital.

Dividend Reinvestment Plan

On January 20, 2023, the Board adopted a distribution reinvestment plan (the “Plan”), pursuant to which the Company’s stockholders may elect to reinvest cash distributions payable by the Company in additional shares of Class A Common Stock and Class B Common Stock, at the price per share determined pursuant to the Plan.

For the nine months ended September 30,

Notes to Unaudited Consolidated Financial Statements

2024 and 2023, the Company issued 1,338 and 341 shares of Class B Common Stock for a total of $ 14,897 and $ 4,563 pursuant to the Plan, respectively.

For the three months ended March 31, 2025 and 2024, the Company issued 629 and 391 shares of Class B Common Stock for a total of $ 6,165 and $ 4,474 pursuant to the Plan, respectively.

Subsequent Events

30 unchanged sentences

Mavik Real Estate Special Opportunities Fund, LP (“RESOF”);

Mavik Real Estate Special Opportunities VS2, LP (“VS2”);

or any of their affiliates;

13 unchanged sentences

• changes in the economy;

• tariffs imposed by the current presidential administration and the threat of such tariffs;

• the availability of financing on acceptable terms or at all;

• risks associated with possible disruption in our operations or the economy generally due to terrorism or natural disasters;

10 unchanged sentences

We may also make strategic real estate equity and non-real estate-related investments that align with our investment objectives and criteria.

As of September 30, 2024, we held a net loan portfolio (gross loans less obligations under participation agreements and secured borrowing) comprised of 14 loans in nine states with an aggregate net principal balance of $297.9 million, a weighted average coupon rate of 12.7% and a weighted average remaining term to maturity of 1.0 years.

As of March 31, 2025, we held a net loan portfolio (gross loans less obligations under participation agreements and secured borrowing) comprised of 10 loans in eight states with an aggregate net principal balance of $252.5 million, a weighted average coupon rate of 13.3% and a weighted average remaining term to maturity of 0.8 years.

Each of our loans was originated by Terra Capital Partners or its affiliates.

Our portfolio is diversified based on location of the underlying properties, loan structure and property type.

As of September 30, 2024, our portfolio included underlying properties located in 14 markets, across nine states and includes property types such as multifamily housing, student housing, commercial offices, medical offices, mixed-use and industrial properties.

As of March 31, 2025, our portfolio included underlying properties located in 10 markets, across eight states and includes property types such as multifamily housing, student housing, commercial offices, medical offices, mixed-use and infill properties.

The profile of these properties ranges from stabilized and value-added properties to pre-development and construction.

8 unchanged sentences

Pursuant to the terms of the transactions described in the Merger Agreement, approximately 4,847,910 shares of our Class B Common Stock, $0.01 par value per share (“Class B Common Stock”), were issued to former Terra BDC stockholders in connection with the BDC Merger, based on the number of outstanding shares of Terra BDC Common Stock as of October 1, 2022.

As of September 30, 2024, Terra Fund 7 and Terra Offshore REIT held approximately 8.7% and 10.1%, respectively, of our issued and outstanding Class B Common Stock.

As of March 31, 2025, Terra Fund 7 and Terra Offshore REIT held approximately 8.7% and 10.1%, respectively, of our issued and outstanding Class B Common Stock.

As previously disclosed, we continue to explore alternative liquidity transactions on an opportunistic basis to maximize stockholder value.

9 unchanged sentences

Net Loan Portfolio

The following tables provide a summary of our net loan portfolio as of:

September 30, 2024

The following tables provide a summary of our net loan portfolio.

Carrying value represents the amortized cost of loan, net of applicable allowance for credit losses.

March 31, 2025

Fixed Rate Floating

6 unchanged sentences

Weighted average coupon rate (4)

8.50 % 14.06 % 13.86 % 19.33 % 13.28 %

Weighted-average remaining term (years) (5)

2.44 0.74 0.82 — 0.82

December 31, 2024

7 unchanged sentences

Weighted average coupon rate (4)

8.50 % 13.18 % 13.04 % 19.53 % 12.52 %

Weighted-average remaining term (years) (5)

2.68 0.84 0.91 0.10 0.99

(1) These loans pay a coupon rate of Secured Overnight Financing Rate (“SOFR”), or forward-looking term rate SOFR (“Term SOFR”) plus a fixed spread.

Coupon rates shown were determined using average SOFR of 5.16% and Term SOFR of 4.85% as of September 30, 2024, and average SOFR of 5.34% and Term SOFR of 5.35% as of December 31, 2023.

(2) As of September 30, 2024 and December 31, 2023, amount included $201.4 million and $342.9 million of senior mortgages used as collateral for $120.6 million and $204.9 million of borrowings under credit facilities, respectively.

(3) As of September 30, 2024 and December 31, 2023, 10 and 14 loans, respectively, are subject to a SOFR, or Term SOFR floor, as applicable.

_______________

(1) These loans pay a coupon rate of Secured Overnight Financing Rate (“SOFR”) or forward-looking term rate based on SOFR (“Term SOFR”), as applicable, plus a fixed spread.

Coupon rates shown were determined using the average SOFR of 4.33% and Term SOFR of 4.32% as of March 31, 2025 and average SOFR of 4.53% and Term SOFR of 4.33% as of December 31, 2024.

(2) As of March 31, 2025 and December 31, 2024, amount included $169.1 million and $208.0 million of senior mortgages used as collateral for $82.8 million and $123.2 million of borrowings under secured financing agreements, respectively ( Note 8 ).

(3) As of March 31, 2025 and December 31, 2024, 7 and 10 loans, respectively, were subject to a SOFR or Term SOFR floor, as applicable.

(4) Excludes non-performing loans for which recovery of interest income was not probable.

(5) Excludes loans that are in maturity default and represents current effective maturity as of March 31, 2025 and December 31, 2024, exclusive of any extension available.

Real Estate Ownership

In addition to our net loan portfolio, we own eight industrial buildings.

As of September 30, 2024 and December 31, 2023, the real estate and related lease intangible assets and liabilities had a net carrying value of $126.4 million and $129.8 million, respectively, and the mortgage loans payable encumbering the real estate properties had an outstanding principal amount of $74.4 million and $73.5 million, respectively.

Equity Investments

As of both September 30, 2024 and December 31, 2023, we owned 14.9% of equity interest in a limited partnership that invests primarily in performing and non-performing mortgages, loans, mezzanines and other credit instruments supported by underlying commercial real estate assets.

As of March 31, 2025 and December 31, 2024, the real estate and related lease intangible assets and liabilities had a net carrying value of $124.4 million and $125.3 million, respectively, and the mortgage loans payable encumbering the real estate properties had an outstanding principal amount of $74.4 million and $74.4 million, respectively.

Equity Interest in Unconsolidated Investments

As of both March 31, 2025 and December 31, 2024, we owned 14.9% of equity interest in a limited partnership that invests primarily in performing and non-performing mortgages, loans, mezzanines and other credit instruments supported by underlying commercial real estate assets.

We also beneficially own equity interests in joint ventures that invest in real estate properties, opportunistic debt and equity securities and, indirectly, together with other non-affiliated entities, non-real estate operating companies, as well as a preferred equity investment with residual profit sharing from sale of the underlying property.

These investments are accounted for using the equity method of accounting.

As of September 30, 2024 and December 31, 2023, these equity investments had total carrying value of $80.8 million and $37.2 million, respectively.

As of March 31, 2025 and December 31, 2024, these equity interests had total carrying value of $108.1 million and $106.8 million, respectively.

Book Value Per Share

We calculate our book value per share by dividing our net equity by the number of outstanding shares of our common stock, unless otherwise determined by our Board.

Our book value per share of Class B Stock Common Stock as of September 30, 2024 and December 31, 2023 was $8.47 and $9.93, respectively.

Our book value per share of Class B Stock Common Stock as of March 31, 2025 and December 31, 2024 was $7.39 and $7.63, respectively.

Portfolio Investment Activity

Net Loan Portfolio

For the three months ended September 30, 2024 and 2023, we invested $15.3 million and $3.9 million in new and add-on investments and had $21.7 million and $16.5 million of repayments, resulting in net repayments of $6.4 million and $12.6 million, respectively.

Amounts are net of obligations under participation agreements and secured financing agreements.

For the nine months ended September 30, 2024 and 2023, we invested $73.1 million and $37.1 million in new and add-on investments and had $103.8 million and $29.8 million of repayments, resulting in net repayments of $30.8 million and net investments of $7.3 million, respectively.

For the three months ended March 31, 2025 and 2024, we invested $29.0 million and $11.4 million in new and add-on investments and had $23.7 million and $27.5 million of repayments, resulting in net repayments of $5.3 million and $16.1 million, respectively.

Amounts are net of obligations under participation agreements and secured financing agreements.

1 unchanged sentence

The tables below set forth the types of loans in our loan portfolio, as well as the property type and geographic location of the properties securing these loans, on a net loan basis, which represents our proportionate share of the loans, based on our economic ownership of these loans as of:

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Loan Structure Principal Balance Carrying

5 unchanged sentences

Total $ 252,511,559 $ 206,599,908 100.0 % $ 299,255,023 $ 256,472,038 100.0 %

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Property Type Principal Balance Carrying

1 unchanged sentence

Value % of Total

Office $ 116,221,158 $ 84,604,062 31.6 % $ 144,812,619 $ 106,462,535 23.3 %

Infill land 54,870,512 56,197,733 21.0 % 52,839,509 54,024,545 11.8 %

Multifamily $ 66,461,136 $ 66,128,293 32.0 % $ 60,969,051 $ 60,662,514 23.7 %

Infill land 55,816,006 56,634,067 27.4 % 56,307,815 57,050,952 22.2 %

Office 100,819,571 54,785,090 26.5 % 116,539,650 72,991,791 28.4 %

Mixed-use 22,414,846 22,073,770 10.7 % 30,438,507 29,890,548 11.7 %

Student housing 31,000,000 31,859,506 11.9 % 31,000,000 31,758,493 7.0 %

Industrial 7,000,000 6,978,688 3.4 % 7,000,000 6,966,233 2.7 %

Hotel - full/select service — — — % 43,222,382 43,460,206 9.5 %

Infrastructure — — — % 21,250,000 21,443,089 4.7 %

Student housing — — — % 28,000,000 28,910,000 11.3 %

Total $ 252,511,559 $ 206,599,908 100.0 % $ 299,255,023 $ 256,472,038 100.0 %

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Geographic Location Principal Balance Carrying

2 unchanged sentences

United States

California $ 57,976,512 $ 58,043,423 21.6 % $ 119,093,246 $ 117,955,109 25.9 %

New York 75,517,822 43,916,695 16.4 % 90,483,672 49,041,668 10.7 %

Arizona $ 32,909,916 $ 32,582,673 15.8 % $ 33,407,815 $ 33,005,952 12.9 %

Washington 31,638,858 31,744,601 15.4 % 26,894,593 26,907,157 10.5 %

Georgia 30,842,779 30,934,415 15.0 % 30,562,858 30,586,450 11.9 %

Utah 28,000,000 28,910,000 10.8 % 49,250,000 50,293,850 11.0 %

California 29,586,767 29,823,877 14.4 % 53,006,023 53,096,008 20.6 %

New York 75,800,670 29,004,553 14.0 % 75,657,255 31,536,808 12.3 %

New Jersey 22,906,090 24,051,394 11.6 % 22,900,000 24,045,000 9.4 %

Washington 22,459,274 22,360,105 8.3 % 34,052,223 33,908,737 7.4 %

North Carolina 21,826,479 21,479,707 10.4 % 21,826,479 21,418,430 8.4 %

Massachusetts 7,000,000 6,978,688 3.4 % 7,000,000 6,966,233 2.7 %

Utah — — — % 28,000,000 28,910,000 11.3 %

Total $ 252,511,559 $ 206,599,908 100.0 % $ 299,255,023 $ 256,472,038 100.0 %

4 unchanged sentences

Our loans and investments are subject to credit risk.

The performance and value of our loans and investments depend upon the owners’ ability to operate the properties that serve as our collateral so that they produce cash flows adequate to pay interest and principal due to us.

and principal due to us.

To monitor this risk, our asset management team reviews our investment portfolios and is in regular contact with our borrowers, monitoring performance of the collateral and enforcing our rights as necessary.

46 unchanged sentences

The following table presents the comparative results of our operations:

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 Change 2024 2023 Change

Three Months Ended March 31,

2025 2024 Change

Interest income $ 10,205,897 $ 12,148,735 $ (1,942,838)

3 unchanged sentences

Operating expenses

Operating expenses reimbursed

to Manager 1,341,587 2,407,757 (1,066,170) 5,852,522 6,704,790 (852,268)

Operating expenses reimbursed to Manager 1,429,953 2,178,164 (748,211)

Asset management fee 1,367,789 1,715,042 (347,253)

Asset servicing fee 329,600 406,525 (76,925)

(Reversal of) provision for credit losses (687,598) 27,096,841 (27,784,439) 3,761,838 30,899,434 (27,137,596)

Provision for credit losses 2,119,736 1,873,111 246,625

Real estate operating expenses 975,228 691,006 284,222

3 unchanged sentences

Other 202,190 262,911 (60,721)

Impairment charge — — — — 11,765,540 (11,765,540)

8,372,537 10,212,760 (1,840,223)

Operating income (loss) 6,607,576 (20,653,463) 27,261,039 12,105,995 (17,667,390) 29,773,385

Operating income 4,084,212 4,796,585 (712,373)

Other income and expenses

Interest expense on secured

financing (6,487,146) (7,244,798) 757,652 (20,357,898) (20,847,813) 489,915

Interest expense on unsecured

notes payable (2,465,390) (2,416,518) (48,872) (7,358,342) (7,216,091) (142,251)

Interest expense on obligations

under participation

agreements (779,793) (243,945) (535,848) (2,168,936) (1,353,006) (815,930)

Unrealized (loss) gain on

investments, net (74,849) (1,040,192) 965,343 103,721 (982,384) 1,086,105

Income (loss) from equity

investment in unconsolidated

investments 1,025,176 41,839 983,337 2,223,759 (2,154,955) 4,378,714

Loss on repayment of loan (5,629,510) — (5,629,510) (5,629,510) — (5,629,510)

Gain on extinguishment of

debt — 14,079,379 (14,079,379) — 14,079,379 (14,079,379)

Realized loss on investments,

net — — — (446,009) (25,024) (420,985)

Interest expense on secured financing (4,548,870) (7,289,912) 2,741,042

Interest expense on unsecured notes payable (2,491,537) (2,440,375) (51,162)

Interest expense on obligations under participation agreements (888,904) (618,495) (270,409)

Unrealized loss on investments, net (75) (22,931) 22,856

Income (loss) from equity interest in unconsolidated investments 2,560,110 (473,387) 3,033,497

Realized loss on investments, net — (135,459) 135,459

(5,369,276) (10,980,559) 5,611,283

1 unchanged sentence

Net Loan Portfolio

In assessing the performance of our loans, we believe it is appropriate to evaluate the loans on an economic basis, that is, gross loans net of obligations under participation agreements, promissory notes payable, revolving credit facility and repurchase agreements payable.

The following table presents a reconciliation of our loan portfolio on a weighted average basis from gross to net :

Three Months Ended September 30, 2024 Three Months Ended September 30, 2023

Weighted Average Principal Amount (1)

Weighted Average Coupon Rate (2)

Weighted Average Principal Amount (1)

Weighted Average Coupon Rate (2)

Total portfolio

Gross loans $ 394,158,779 12.7 % $ 523,306,837 13.1 %

Obligations under participation agreements (15,000,000) 20.2 % (13,690,945) 17.3 %

Promissory notes payable (52,264,913) 10.1 % (3,700,000) 10.9 %

Repurchase agreements payable (75,061,487) 8.6 % (117,134,447) 7.4 %

Revolving line of credit payable (34,761,111) 8.2 % (86,269,481) 8.7 %

Net loans (3)

$ 217,071,268 15.0 % $ 302,511,964 16.4 %

Gross loans $ 301,309,122 12.7 % $ 396,644,512 12.6 %

Obligations under participation agreements — — % (13,690,945) 17.3 %

Promissory notes payable (52,264,913) 10.1 % (3,700,000) 10.9 %

Repurchase agreements payable (75,061,487) 8.6 % (117,134,447) 7.4 %

Revolving line of credit payable (34,761,111) 8.2 % (86,269,481) 8.7 %

Net loans (3)

$ 139,221,611 17.0 % $ 175,849,639 17.7 %

Subordinated loans (4)

Gross loans $ 92,849,657 12.9 % $ 126,662,325 14.5 %

Obligations under participation agreements (15,000,000) 20.2 % — — %

Net loans (3)

$ 77,849,657 11.5 % $ 126,662,325 13.1 %

Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023

Three Months Ended March 31, 2025 Three Months Ended March 31, 2024

Weighted Average Principal Amount (1)

5 unchanged sentences

Obligations under participation agreements (18,349,524) 19.3 % (12,032,967) 20.3 %

Secured borrowing (16,363,889) 9.9 % — — %

Promissory notes payable (23,753,749) 9.4 % (65,985,924) 10.9 %

5 unchanged sentences

Obligations under participation agreements — — % — — %

Secured borrowing (16,363,889) 9.9 % — — %

Promissory notes payable (23,753,749) 9.4 % (65,985,924) 10.9 %

14 unchanged sentences

Interest Income

For the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, interest income decreased by $3.3 million, primarily due to a decrease in contractual interest income as a result of a decrease in the weighted average principal balance of performing loans as well as a decrease in the weighted average coupon rate due to decreases in the underlying index rates.

For the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, interest income decreased by $14.2 million, primarily due to a decrease in contractual interest income as a result of a decrease in the weighted average principal balance of performing loans as well as an increase in suspended interest income accrual on non-performing loans of $5.3 million, partially offset by an increase in the weighted average coupon rate due to increases in the underlying index rates.

For the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, interest income decreased by $1.9 million, primarily due to a decrease in contractual interest income as a result of a decrease in the weighted average principal balance of performing loans.

Real Estate Operating Revenue

For the three and nine months ended September 30, 2024 as compared to the three and nine months ended September 30, 2023, real estate operating revenue decreased by $1.4 million and $0.1 million, respectively, primarily due to a reduction in lease revenue resulting from the disposal of the office building in October 2023, partially offset by an increase in lease revenue contributed by the five industrial buildings acquired in May 2023.

For the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, real estate operating revenue decreased by $0.5 million, primarily due to the write off of the unamortized below-market rent intangible in connection with a least termination in January 2024.

Other Operating Income

For both the three and nine months ended September 30, 2024 as compared to the three and nine months ended September 30, 2023, other operating income decreased by $0.2 million, primarily due to a decline in dividend income earned on our marketable securities.

For the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, other operating income decreased by $0.1 million, primarily due to dividend income earned on our trading equity securities in 2024 (there was no such dividend income earned in 2025).

Operating Expenses Reimbursed to Manager

Under the terms of a management agreement (the “Management Agreement”) with our Manager, we reimburse our Manager for operating expenses incurred in connection with services provided to us, including our allowable share of our Manager’s overhead, such as rent, employee costs, utilities and technology costs.

For the three and nine months ended September 30, 2024 as compared to the three and nine months ended September 30, 2023, operating expenses reimbursed to our Manager decreased by $1.1 million and $0.9 million, respectively, primarily due to a decrease in our Manager’s overhead costs as well as a decrease in the allocation ratio.

For the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, operating expenses reimbursed to our Manager decreased by $0.7 million, primarily due to a decrease in the allocation ratio as a result of a decrease in our total funds under management.

Asset Management Fee

Under the terms of the Management Agreement with our Manager, we paid our Manager a monthly asset management fee at an annual rate of 1% of the aggregate funds under management, which included the aggregate gross acquisition price, net of participation interest sold to affiliates, for each real estate-related investment and cash held by us.

For the three and nine months ended September 30, 2024 as compared to the three and nine months ended September 30, 2023, asset management fees decreased by $0.5 million and $1.3 million, respectively, primarily due to a decrease in total assets under management primarily resulting from repayment of loans.

For the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, asset management fees decreased by $0.3 million, primarily due to a decrease in total assets under management resulting from repayment of loans.

Asset Servicing Fee

Under the terms of the Management Agreement with our Manager, we paid our Manager a monthly servicing fee at an annual rate of 0.25% of the aggregate gross origination price or acquisition price for each real estate-related loan held by us.

For the three and nine months ended September 30, 2024 as compared to the three and nine months ended September 30, 2023, asset servicing fees decreased by $0.1 million and $0.3 million, respectively, primarily due to a decrease in total assets under management resulting from the repayment of loans.

(Reversal of) Provision for Credit Losses

On January 1, 2023, we adopted the provisions of Accounting Standards Update (“ASU”) 2016-13, Financial Instruments — Credit Losses (Topic 326):

For the three months ended September 30, 2024, we recorded a reversal of provision for credit losses of $(0.7) million, primarily related to an increase in modeled economic forecasts for commercial real estate and the overall shortening duration of loans in the portfolio, partially offset by a decline in our estimated recoverable amount on a non-performing subordinated loan due to an increase in funding on the senior loan.

For the nine months ended September 30, 2024, provision for credit losses was $3.8 million, primarily related to a decline in our estimated recoverable amount on a non-performing subordinated loan due to an increase in senior funding as well as a decline in modeled macroeconomic forecasts for commercial real estate.

For the three and nine months ended September 30, 2023, provision for credit losses was $27.1 million and $30.9 million, respectively, primarily due to a decline in the fair value of the collateral on a loan.

For the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, asset servicing fees decreased by $0.1 million, primarily due to a decrease in total assets under management resulting from the repayment of loans.

Provision for Credit Losses

We follow the provisions of Accounting Standards Codification (“ASC”) 326, Financial Instruments – Credit Losses , which requires entities to recognize credit losses on financial instruments based on an estimate of current expected credit losses.

For the three months ended March 31, 2025 and 2024, provision for credit losses was $2.1 million and $1.9 million, respectively , primarily related to a decline in our estimated recoverable amount on a non-performing subordinated loan due to an increase in senior funding.

Real Estate Operating Expenses

For the three and nine months ended September 30, 2024 as compared to the three and nine months ended September 30, 2023, real estate operating expenses decreased by $1.3 million and $2.9 million, respectively, primarily due the disposal of the office building in October 2023.

For the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, real estate operating expenses increased by $0.3 million, primarily due to an increase in repairs and maintenance as well as other expenses, partially offset by a decrease in real estate taxes.

Depreciation and Amortization

For the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, depreciation and amortization decreased by $0.8 million, primarily due to the disposal of the office building in October 2023, partially offset by an increase in depreciation and amortization related to 5 industrial buildings that we acquired in May 2023.

For the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, depreciation and amortization increased by $0.6 million, primarily due to the industrial buildings that we acquired in 2023, partially offset by a reduction in depreciation and amortization related to the disposal of the office building in October 2023.

For the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, depreciation and amortization decreased by $0.8 million, primarily due to a decrease in amortization of in-place lease intangibles related to the termination of a lease for a space in one of the industrial properties in January 2024, resulting in a write off of the related unamortized in-place lease.

Professional Fees

For the three and nine months ended September 30, 2024 as compared to the three and nine months ended September 30, 2023, professional fees decreased by $0.5 million and $0.6 million, respectively, primarily due to legal fees incurred in connection with a review of strategic alternatives for our company in 2023.

Impairment Charge

For the nine months ended September 30, 2023, we recognized an impairment charge of $11.8 million on the multi-tenant office building located in California in order to reduce the carrying value of the building to its estimated fair value.

There was no impairment charge for the three and nine months ended September 30, 2024 and the three months ended September 30, 2023.

For the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, professional fees decreased by $0.4 million, primarily due to legal fees incurred in connection with a review of strategic alternatives for our company in 2024.

Interest Expense on Secured Financing

Our secured financing consists of repurchase agreements, revolving line of credit, term loan, promissory notes and property mortgages.

For the three and nine months ended September 30, 2024 as compared to the three and nine months ended September 30, 2023, interest expense on secured financing decreased by $0.8 million and $0.5 million, respectively, as a result of a decrease in

the weighted average principal amount outstanding, partially offset by an increase in the index rate on secured financing agreements.

For the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, interest expense on secured financing decreased by $2.7 million, as a result of a decrease in the weighted average principal amount outstanding.

Interest Expense on Unsecured Notes Payable

1 unchanged sentence

In connection with the BDC Merger, we assumed $38.4 million in aggregate principal amount of 7.00% notes due in 2026.

For the three and nine months ended September 30, 2024 as compared to the three and nine months ended September 30, 2023, interest expense on unsecured notes payable remained substantially the same.

For the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, interest expense on unsecured notes payable increased by $0.1 million, primarily due to an increase in the amortization of financing costs using the effective interest rate method.

Interest from Obligations under Participation Agreements

For the three and nine months ended September 30, 2024 as compared to the three and nine months ended September 30, 2023, interest expense from obligations under participation agreements increased by $0.5 million and $0.8 million, respectively, primarily as a result of an increase in the weighted average interest rate on the outstanding obligations under participation agreements as well as an increase in the weighted average principal amount outstanding.

Unrealized (Loss) Gain on Investments, Net

For the three and nine months ended September 30, 2024 as compared to the three and nine months ended September 30, 2023, unrealized loss on investments, net decreased by $1.0 million and $1.1 million, respectively, primarily due to an increase in the fair value of our marketable securities at period end.

Income (Loss) from Equity Investment in Unconsolidated Investments

As of both September 30, 2024 and December 31, 2023, we owned a 14.9% equity interest in RESOF, a limited partnership that invests primarily in performing and non-performing mortgages, loans, mezzanines and other credit instruments supported by underlying commercial real estate assets.

For the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, interest expense from obligations under participation agreements increased by $0.3 million, primarily as a result of an increase in the weighted average principal amount outstanding, partially offset by a decrease in the weighted average interest rate on the obligations under participation agreements.

Income (Loss) from Equity Interest in Unconsolidated Investments

As of both March 31, 2025 and December 31, 2024, we owned a 14.9% equity interest in RESOF, an affiliated limited partnership that invests primarily in performing and non-performing mortgages, loans, mezzanines and other credit instruments supported by underlying commercial real estate assets.

W e also beneficially owned equity interests in joint ventures that invest in real estate properties, opportunistic debt and equity securities and, indirectly, together with other non-affiliated entities, non-real estate operating companies, and a preferred equity investment with residual profit-sharing.

Our income (loss) from equity investment in unconsolidated investments are as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Income (loss) from equity investment in RESOF $ 1,932,624 $ 902,412 $ 4,706,892 $ 46,624

Loss from equity investment in the joint ventures (1,488,677) (860,573) (3,140,340) (2,201,579)

Income from other equity investments 581,229 — 657,207 —

Our income (loss) from equity interest in unconsolidated investments are as follows:

Three Months Ended March 31,

Income from equity interest in RESOF $ 2,206,934 $ 998,339

Loss from equity interest in the joint ventures (250,393) (1,471,726)

Income from other equity investment 603,569 —

$ 2,560,110 $ (473,387)

For the three and nine months ended September 30, 2024 as compared to the three and nine months ended September 30, 2023, equity income from RESOF increased as a result of increased income associated with increased investment.

For the three and nine months ended September 30, 2024 as compared to the three and nine months ended September 30, 2023, equity loss from the joint ventures increased primarily due to an increase in depreciation, amortization and interest expense recognized by the joint ventures.

Loss on Repayment of Loan

In August 2024, a $65.0 million senior loan was repaid, resulting in a loss on repayment of $5.6 million for the three and nine months ended September 30, 2024, which included the write-off of interest receivable of $4.8 million.

There was no such loss for the three and nine months ended September 30, 2023.

Gain on Extinguishment of Debt

In September 2023, an unrelated counterparty to a participation agreement conveyed its interest in the obligation under participation agreement to us and we recognized a gain on debt extinguishment of $14.1 million.

There was no such gain for the three and nine months ended September 30, 2024.

For the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, equity income from RESOF increased as a result of an increase in RESOF’s net income associated with increased investments.

For the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, equity loss from the joint ventures decreased primarily due to equity income recognized from our new investments in non-real estate operating companies as well as a decrease in the net loss of the real estate joint ventures resulting from the sale of a property in 2024.

Other equity investment relates to a preferred equity agreement in which we also share residual profit from the sale of underlying property with the borrower.

There was no such investment during the three months ended March 31, 2024.

Realized Loss On Investments, Net

For the nine months ended September 30, 2024, we sold a portion of our investments in marketable equity securities and recognized a net loss on sale of $0.4 million.

There was no such realized loss on investments for the three months ended September 30, 2024.

For the nine months ended September 30, 2023, our held-to-maturity debt securities that we purchased at a premium was redeemed at par and we recognized a net loss investment of $0.03 million.

There was no such realized loss on investments for the three months ended September 30, 2023.

For the three and nine months ended September 30, 2024 as compared to the three and nine months ended September 30, 2023, the resulting net loss decreased by $9.7 million and $14.6 million, respectively.

For the three months ended March 31, 2024, we sold a portion of our investments in trading securities and recognized a net loss on sale of $0.1 million.

There was no such realized loss for the three months ended March 31, 2025.

For the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, the resulting net loss decreased by $4.9 million.

Financial Condition, Liquidity and Capital Resources

10 unchanged sentences

These distribution requirements limit our ability to retain earnings and thereby replenish or increase capital for our business.

We expect to fund approximately $19.8 million of the unfunded commitments to borrowers as well as $15.0 million of the unfunded commitment on a subscription agreement during the next twelve months.

We expect to fund approximately $11.2 million of the unfunded commitments to borrowers during the next twelve months.

We expect to maintain sufficient liquidity to fund such commitments through matching these commitments with principal repayments on outstanding loans or draw downs on our credit facilities.

Obligation under participation agreement of $15.0 million will mature in the next twelve months.

We use the proceeds from the repayment of the corresponding investment to repay the participation obligation.

Our revolving line of credit with outstanding principal balance of $34.8 million is to come due on December 31, 2024 and our Goldman Sachs Bank repurchase agreement with outstanding principal balance of $48.2 million is to come due on February 18, 2025.

We expect to either extend the term of the facilities or convert the facilities to a term loan with maturity co-terminus with the underlying loans and use the proceeds from the repayment of the underlying loans to repay the term loans, or refinance with another lender.

Additionally, two promissory notes payable with a total outstanding principal balance of $22.3 million that is collateralized by senior loans with aggregate principal balance of $50.9 million will mature within the next twelve months.

Obligations under participation agreements of $18.7 million will mature in the next twelve months.

We will use the proceeds from the repayment of the corresponding investment to repay the participation obligations.

Our revolving line of credit with outstanding principal balance of $12.6 million is scheduled to mature on June 30, 2025.

We expect to use proceeds from repayment of the underlying loan to repay the outstanding principal or refinance with another lender.

Additionally, two promissory notes payable with a total outstanding principal balance of $24.9 million that are collateralized by senior loans with an aggregate principal balance of $54.5 million will mature within the next twelve months.

We expect to use proceeds from the repayment of the underlying loans to repay the promissory notes payable.

Finally, our 7.00% Senior Notes Due 2026 with an outstanding principal balance of $38.4 million are scheduled to mature on March 31, 2026.

We intend to refinance or repay the 7.00% Senior Notes Due 2026 through debt or equity capital sources or facilities.

No assurance can be given about the availability of such financings on acceptable terms or at all.

Summary of Financing

The table below summarizes our debt financing as of September 30, 2024:

The table below summarizes our debt financing as of March 31, 2025:

Type of Financing Maximum Amount Available Outstanding Balance Amount Remaining Available Interest Rate Maturity Date

2 unchanged sentences

Property mortgages N/A 40,250,000 N/A 6.25% June 2028

Term loan payable N/A 10,000,000 N/A Interest free until 6/30/2025, after that 9.00% December 2027

$ 173,750,000

Variable Rate:

Property mortgages N/A $ 34,100,000 N/A Term SOFR +3.5% (Term SOFR

Floor of 3.75%) April 2027

Promissory notes payable N/A 37,652,205 N/A Term SOFR plus a spread ranging from 4.75% to 5.98% with a combined floor rate ranging from 9.0% to 11.28% March 2025 - March 2026

Property mortgages N/A $ 34,100,000 N/A Term SOFR +3.5% (Term SOFR Floor of 3.75%) April 2027

Promissory notes payable N/A 24,948,481 N/A Term SOFR plus a spread ranging from 4.75% to 5.98% with a combined floor rate ranging from 9.0% to 11.28% September 2025 - March 2026

Secured borrowing N/A 13,250,000 N/A Term SOFR + 5%, (combined floor rate of 9.85% November 2026

Revolving line of

credit $ 34,761,111 34,761,111 $ — Term SOFR + 3.5% (combined floor rate of 7.0%) December 2024

credit 12,571,390 12,571,390 — Term SOFR + 3.5% (combined floor rate of 7.0%) June 2025

Goldman Sachs Bank

repurchase agreement

200,000,000 48,188,441 151,811,559 Term SOFR (subject to underlying loan floors on a case-by-case basis) plus a spread ranging from 2.0% to 5.00%)

repurchase agreement 32,027,813 32,027,813 — Term SOFR (subject to underlying loan floors on a case-by-case basis) plus a spread ranging from 4.25% to 5.25%)

February 2027

$ 44,599,203 $ 116,897,684 $ —

Cash Flows (Used in) Provided by Operating Activities

For the nine months ended September 30, 2024, cash flows used in operating activities was $5.6 million, compared to cash flow from operating activities of $6.0 million for the nine months ended September 30, 2023.

The decrease in operating cash flows was primarily due to a decrease in net contractual interest income.

Cash Flows Provided by (Used in) Operating Activities

For the three months ended March 31, 2025, cash flow provided by operating activities was $0.9 million, compared to cash flow used in operating activities of $4.2 million for the three months ended March 31, 2024.

The increase in operating cash flows was primarily due to a decrease in interest expense on secured financing resulting from a decrease in the weighted average principal amount outstanding, a decrease in asset management fees resulting from the repayment of loans, as well as an increase in equity income distributions from RESOF resulting from an increase in income associated with increased investments.

Cash Flows Provided by Investing Activities

For the nine months ended September 30, 2024, cash flows provided by investing activities were $117.9 million, primarily related to proceeds from repayment of loans of $206.0 million and promissory note receivable of $9.5 million, partially offset by origination and purchase of loans of $49.8 million and purchase of equity interests in unconsolidated investments of $47.2 million.

For the nine months ended September 30, 2023, cash flows provided by investing activities were $0.6 million, primarily related to proceeds from repayments of loans of $123.4 million, proceeds from sale of debt securities of $20.0 million and return of capital on unconsolidated investments of $11.3 million, partially offset by origination and purchase of loans of $73.1 million, purchase of real estate properties of $52.5 million, and purchase of debt securities of $20.0 million and purchase of marketable securities of $7.9 million.

For the three months ended March 31, 2025, cash flows provided by investing activities were $46.2 million, primarily related to proceeds from repayment of loans of $54.0 million, partially offset by origination.

purchase and funding of loans of $7.9 million.

For the three months ended March 31, 2024, cash flows provided by investing activities were $33.4 million, primarily related to proceeds from repayment of loans of $47.0 million, partially offset by origination, purchase and funding of loans of $7.2 million and purchase of equity interests in unconsolidated investments of $6.5 million.

Cash Flows Used in Financing Activities

For the nine months ended September 30, 2024, cash flows used in financing activities were $98.7 million, primarily related to principal repayments on secured financing of $159.1 million, distributions paid of $13.9 million and payment for financing costs of $1.1 million, partially offset by proceeds from secured financing of $60.7 million and proceeds from obligations under participation agreements of $15.0 million.

For the nine months ended September 30, 2023, cash flows used in financing activities were $13.5 million, primarily due to repayment of borrowing under the repurchase agreements of $72.2 million, repayment of borrowing under the revolving line of credit of $96.8 million, distributions paid of $14.0 million and repayment of borrowing under the term loan of $10.0 million, partially offset by proceeds from mortgage loan payable of $73.2 million, proceeds from borrowing under the revolving line of credit of $57.0 million, proceeds from borrowing under a note payable of $36.6 million, proceeds from borrowing under the repurchase agreements of $14.2 million and proceeds from obligations under participation agreements of $1.5 million.

For the three months ended March 31, 2025, cash flows used in financing activities were $45.9 million, primarily related to principal repayments on secured financing of $43.7 million, distributions paid of $4.6 million and a decrease in interest reserve and other deposits held on investments of $1.4 million, partially offset by proceeds from secured financing of $3.3 million and proceeds from obligations under participation agreements of $0.7 million.

For the three months ended March 31, 2024, cash flows used in financing activities were $22.2 million, primarily related to principal repayments on secured financing of $84.8 million, distributions paid of $4.6 million and payment for financing costs of $0.9 million, partially offset by proceeds from secured financing of $53.0 million and proceeds from obligations under participation agreements of $15.0 million.

Distribution Reinvestment Plan

9 unchanged sentences

Allowance for Credit Losses

On January 1, 2023, we adopted the provisions of ASU 2016-13, which requires entities to recognize credit losses on financial instruments based on an estimate of current expected credit losses (“CECL”).

We follow the provisions of ASC 326, which requires entities to recognize credit losses on financial instruments based on an estimate of current expected credit losses (“CECL”).

The CECL model requires the consideration of possible credit losses over the life of an instrument as opposed to estimating credit losses upon the occurrence of an actual loss event under the previous “incurred loss” methodology.

13 unchanged sentences

Origination and Extension Fee .

An origination fee in the amount of 1.0% of the amount used to originate, acquire, fund or structure real estate-related investments, including any third-party expenses related to such loan.

In the event that the term of any real estate-related loan is extended, our Manager also receives an origination fee equal to the lesser of (i) 1.0% of the principal amount of the loan being extended or (ii) the amount of fee paid by the borrower in connection with such extension.

An origination fee in the amount of 1.0% of the amount used to originate, acquire, fund or structure investments, including any third-party expenses related to such investments.

In the event that the term of any loan is extended, our Manager also receives an origination fee equal to the lesser of (i) 1.0% of the principal amount of the loan being extended or (ii) the amount of fee paid by the borrower in connection with such extension.

Asset Management Fee .

A monthly asset management fee at an annual rate equal to 1.0% of the aggregate funds under management, which includes the loan origination amount or aggregate gross acquisition cost, as applicable, for each real estate-related loan and cash held by us.

Asset Servicing Fee .

A monthly asset servicing fee at an annual rate equal to 0.25% of the aggregate gross origination price or aggregate gross acquisition price for each real estate related loan then held by us (inclusive of closing costs and expenses).

A monthly asset servicing fee at an annual rate equal to 0.25% of the aggregate gross origination price or aggregate gross acquisition price for each investment then held by us (inclusive of closing costs and expenses).

Disposition Fee .

A disposition fee in the amount of 1.0% of the gross sale price received by our company from the disposition of each loan, but not upon the maturity, prepayment, workout, modification or extension of a loan unless there is a corresponding fee paid by the borrower, in which case the disposition fee will be the lesser of (i) 1.0% of the principal amount of the loan and (ii) the amount of the fee paid by the borrower in connection with such transaction.

A disposition fee in the amount of 1.0% of the gross sale price received by our company from the disposition of an investment, but not upon the maturity, prepayment, workout, modification or extension of a loan unless there is a corresponding fee paid by the borrower, in which case the disposition fee will be the lesser of (i) 1.0% of the principal amount of the loan and (ii) the amount of the fee paid by the borrower in connection with such transaction.

If we take ownership of a property as a result of a workout or foreclosure of a loan, we will pay a disposition fee upon the sale of such property equal to 1.0% of the sales price.

Transaction Breakup Fee .

In the event that we receive any “breakup fees,” “busted-deal fees,” termination fees, or similar fees or liquidated damages from a third-party in connection with the termination or non-consummation of any loan or disposition transaction, our Manager will be entitled to receive one-half of such amounts, in addition to the reimbursement of all out-of-pocket fees and expenses incurred by our Manager with respect to its evaluation and pursuit of such transactions.

In the event that we receive any “breakup fees,” “busted-deal fees,” termination fees, or similar fees or liquidated damages from a third-party in connection with the termination or non-consummation of any investment or disposition transaction, our Manager will be entitled to receive one-half of such amounts, in addition to the reimbursement of all out-of-pocket fees and expenses incurred by our Manager with respect to its evaluation and pursuit of such transactions.

In addition to the fees described above, we reimburse our Manager for operating expenses incurred in connection with services provided to the operations of our company, including our allocable share of our Manager’s overhead, such as rent, employee costs, utilities, and technology costs.

The following table presents a summary of fees paid and costs reimbursed to our Manager in connection with providing services to us:

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Origination and extension fee expense (1)

10 unchanged sentences

(2) Disposition fee is generally offset with exit fee income and included in interest income on the consolidated statements of operations.

The term of the Management Agreement will expire on December 31, 2027 (the “Initial Term”) and will automatically renew for an unlimited number of additional one-year terms upon each anniversary date of the last day of the Initial Term (each, a “Renewal Term”), unless terminated by us or the Manager during the Initial Term or a Renewal Term in accordance with the terms of the Management Agreement (as described below).

The Management Agreement may be terminated by us during the Initial Term or any Renewal Term upon a finding by either (i) at least two-thirds of the independent directors on our Board or (ii) the holders of a majority of the outstanding shares of our common stock (other than those shares held by members of the our senior management team or affiliates of our Manager) that either (a) there has been unsatisfactory performance by our Manager that is materially detrimental to us, or (b) the compensation payable to our Manager pursuant to the Management Agreement is unfair;

provided, however, that we will not have the right to terminate the Management Agreement on the basis of unfair compensation to our Manager if our Manager agrees to continue to provide its services under the Management Agreement in exchange for reduced fees that at least two-thirds of the independent directors on our Board determine to be fair pursuant to the procedures set forth in the Management Agreement.

We must deliver prior written notice of any such termination to our Manager at least 180 days prior to the last

calendar day of the Initial Term or the then-current Renewal Term, as applicable, and the Management Agreement will terminate effective as of the last calendar day of the Initial Term or the then-current Renewal Term, as applicable.

Upon any termination of the Management Agreement by us as discussed above, we will pay our Manager, on the date on which such termination is effective, a termination fee in an amount equal to three times the average annual fees of all types and expense reimbursements received by or owed to our Manager pursuant to the Management Agreement during the 24-month period immediately preceding such termination (the “Termination Fee”), calculated as of the end of the most recently completed monthly prior to the date of such termination.

We may also terminate the Management Agreement, effective upon 30 calendar days’ prior written notice from our Board to our Manager, without payment of any Termination Fees or other penalties, upon (i) the material breach of the Management Agreement by our Manager or its affiliates that continues for 30 days after written notice thereof to our Manager (or 45 days after delivery of written notice thereof if our Manager takes diligent steps to cure such breach within 30 days of delivery of the written notice), (ii) any fraud or other criminal conduct, gross negligence or breach of fiduciary duty by our Manager or its affiliates in connection with the Management Agreement, as determined by a final, non-appealable judgment of a court of competent jurisdiction, (iii) our Manager’s bankruptcy, insolvency or dissolution, or (iv) an Internalization Event (as defined in the Management Agreement).

No Termination Fee or other penalty is payable upon such a termination by us.

Our Manager may terminate the Management Agreement, effective upon 60 days’ prior written from our Manager to us, if we breach the Management Agreement and such breach continues for 30 days after written notice thereof.

We will pay our Manager the Termination Fee upon such termination by our Manager.

Management Agreement Amendment

As discussed herein, we may make real estate and non-real estate related investments of any type that align with our investment objectives and criteria.

Accordingly, on May 8, 2025, we and our Manager entered into an amendment to the Management Agreement, effective as of January 1, 2025 (the “Amendment”), in order to clarify that the origination, asset management, asset servicing, disposition and breakup fees we pay to our Manager pursuant to the Management Agreement are payable with respect to all real estate and non-real estate investments of any type that we originate or acquire.

Unless otherwise specifically noted, all references herein to the “Management Agreement” refer to the Management Agreement as modified by the Amendment.

Promissory Note Payable with Terra LLC

2 unchanged sentences

The promissory note matures on March 31, 2027.

As of September 30, 2024, amount outstanding under the promissory note payable was $35.1 million.

As of March 31, 2025 and December 31, 2024, amount outstanding under the promissory note payable was $43.6 million and $45.1 million, respectively.

The activity associated with this agreement is eliminated in consolidation and therefore has no impact on our consolidated financial statements.

4 unchanged sentences

We have further diversified our exposure to loans and borrowers by entering into participation agreements whereby we transferred a portion of certain of our loans on a pari passu basis to related parties, primarily other affiliated funds managed by our Manager or its affiliates, and to a lesser extent, unrelated parties.

As of September 30, 2024, the principal balance of our participation obligation was $15.0 million, which was a participation obligation to a related-party managed by the Manager.

As of March 31, 2025, the principal balance of our participation obligation was $18.7 million, which was a participation obligation to a related-party managed by the Manager.

The loans that are subject to participation agreements are held in our name, but each of the participant’s rights and obligations, including with respect to interest income and other income (e.g., exit fee, prepayment income) and related fees/expenses (e.g., disposition fees, asset management and asset servicing fees), are based upon their respective pro rata participation interest in such participated investments, as specified in the respective participation agreements.

6 unchanged sentences

Similarly, interest earned on the entire loan balance is recorded within “Interest income” and the interest related to the participation interest is recorded within “Interest expense from obligations under participation agreements” in the consolidated statements of operations.

For the three and nine months ended September 30, 2024, the weighted average outstanding principal balance on obligations under participation agreements was approximately $15.0 million and $14.0 million, respectively, and the weighted average interest rate was approximately 20.2% and 18.8%, respectively.

For the three and nine months ended September 30, 2023, the weighted average outstanding principal balance on obligations under participation agreements of approximately $13.7 million and $13.4 million, respectively, and the weighted average interest rate was approximately 17.3% and 17.3%, respectively.

For the three months ended March 31, 2025 and 2024, the weighted average outstanding principal balance on obligations under participation agreements was approximately $18.3 million and $12.0 million, respectively, and the weighted average interest rate was approximately 19.3% and 20.3%, respectively.

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