What changed in this filing

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Item 1. Financial Statements

2025-11-07 compared with 2025-08-18 · 324 added, 290 removed, 1419 unchanged (30% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Cash and cash equivalents $ 17,361,610 $ 8,578,456

2 unchanged sentences

Available-for-sale debt securities 1,451,104 963,178

Real estate assets held for sale 27,037,500 —

Loans held for investment, net of allowance for credit losses of $ 52,045,033 and $ 45,381,465

29 unchanged sentences

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

issued, as of both June 30, 2025 and December 31, 2024

issued, as of both September 30, 2025 and December 31, 2024

Class B Common Stock, $ 0.01 par value, 450,000,000 shares authorized and 24,339,383

and 24,337,952 shares issued and outstanding as of June 30, 2025 and

and 24,337,952 shares issued and outstanding as of September 30, 2025 and

December 31, 2024, respectively

8 unchanged sentences

Consolidated Statements of Operations and Comprehensive Income (Loss)

Three Months Ended June 30, Six Months Ended June 30,

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

2025 2024 2025 2024

7 unchanged sentences

Asset servicing fee 281,735 360,606 920,900 1,162,126

Provision for credit losses 1,374,181 2,576,325 3,493,917 4,449,436

Provision for (reversal of provision for) credit losses 2,425,296 ( 687,598 ) 5,919,213 3,761,838

Real estate operating expenses 201,980 586,293 2,739,007 2,059,570

5 unchanged sentences

6,804,459 5,598,723 26,228,817 26,283,169

Operating (loss) income ( 2,441,710 ) 701,834 1,642,502 5,498,419

Operating income 490,780 6,607,576 2,133,282 12,105,995

Other income and expenses

2 unchanged sentences

Interest expense on obligations under participation agreements ( 950,836 ) ( 779,793 ) ( 2,780,479 ) ( 2,168,936 )

Unrealized gain (loss) on investments, net — 201,501 ( 75 ) 178,570

Unrealized (loss) gain on investments, net — ( 74,849 ) ( 75 ) 103,721

Income from equity interest in unconsolidated investments 795,029 1,025,176 5,620,736 2,223,759

Loss on sale of real estate, net ( 823,995 ) — ( 2,880,545 ) —

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

Realized loss on investments, net — — — ( 446,009 )

38 unchanged sentences

— — — 24,338,919 243,389 444,488,215 ( 276,248,168 ) 42,646 168,526,082

Shares issued from reinvestment of shareholder

distributions — — — 464 5 4,051 — — 4,056

Distributions declared on common shares ($ 0.09 per share)

— — — — — — ( 2,329,249 ) — ( 2,329,249 )

Net loss — — — — — — ( 6,738,859 ) — ( 6,738,859 )

Other comprehensive income:

Unrealized gain on available-for-sale debt securities — — — — — — — 259,805 259,805

Balance at September 30, 2025

$ — — $ — 24,339,383 $ 243,394 $ 444,492,266 $ ( 285,316,276 ) $ 302,451 $ 159,721,835

See notes to unaudited consolidated financial statements .

Terra Property Trust, Inc.

Consolidated Statements of Changes in Equity (Continued)

Preferred Stock Class A Common Stock Class B Common Stock Additional

21 unchanged sentences

— — — 24,336,871 243,369 444,467,721 ( 226,072,396 ) ( 19,390 ) 218,619,304

Shares issued from reinvestment of shareholder

distributions — — — 500 5 5,368 — — 5,373

Distributions declared on common shares ($ 0.19 per share)

— — — — — — ( 4,650,804 ) — ( 4,650,804 )

Net loss — — — — — — ( 7,803,936 ) — ( 7,803,936 )

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 .

1 unchanged sentence

Consolidated Statements of Cash Flows

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

5 unchanged sentences

Loss on sale of real estate, net 2,880,545 —

Loss on repayment of loan — 5,629,510

Amortization of net purchase premiums on loans 6,913 177,180

17 unchanged sentences

Other liabilities ( 209,312 ) ( 43,599 )

Net cash provided by (used) in operating activities 2,013,137 ( 7,312,427 )

Net cash used in operating activities ( 2,241,861 ) ( 5,571,455 )

Cash flows from investing activities:

13 unchanged sentences

Consolidated Statements of Cash Flows (Continued)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from financing activities:

2 unchanged sentences

Proceeds from obligations under participation agreements 2,591,102 15,000,000

Repayments on obligations under participation agreements ( 2,591,102 ) —

Distributions paid ( 9,296,138 ) ( 13,937,261 )

6 unchanged sentences

$ 22,015,039 $ 33,175,269

Six Months Ended June 30,

Nine Months Ended September 30,

Supplemental disclosure of cash flow information:

5 unchanged sentences

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2025

September 30, 2025

Terra Property Trust, Inc.

11 unchanged sentences

The Company also operates its business in a manner that permits it to maintain its exemption from registration as an “investment company” under the Investment Company Act of 1940, as amended (the “1940 Act”).

The Company’s investment activities are externally managed by Terra REIT Advisors, LLC (the “Manager”), a subsidiary of the Company’s sponsor, Terra Capital Partners, LLC (“Terra Capital Partners”), pursuant to a management agreement (the “Management Agreement”), under the oversight of the Company’s board of directors (the “Board”) ( Note 7 ).

The Company’s investment activities are externally managed by Terra REIT Advisors, LLC (the “Manager”), a subsidiary of the Company’s sponsor, Terra Capital Partners, LLC (“Terra Capital Partners”), pursuant to a management agreement (as amended, the “Management Agreement”), under the oversight of the Company’s board of directors (the “Board”) ( Note 7 ).

The Company does not currently have any employees and does not expect to have any employees.

7 unchanged sentences

Notes to Unaudited Consolidated Financial Statements

As of June 30, 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.

As of September 30, 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

63 unchanged sentences

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

In June 2025, this loan was repaid in full and had a balance of zero as of June 30, 2025.

In June 2025, this loan was repaid in full and had a balance of zero as of September 30, 2025.

Equity Interest in Unconsolidated Investments

11 unchanged sentences

Available-For-Sale Debt Securities

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

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

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

15 unchanged sentences

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

Real Estate Assets Held for Sale

The Company classifies real estate and related intangibles as held for sale when the six criteria under ASC 360-10-45-9 are met.

Once an asset is held for sale, the Company suspends depreciation and amortization.

Assets held for sale are reported at the lower of their carrying value or fair value less cost to sell beginning in the period the held for sale criteria is met.

The carrying amount of assets held for sale are adjusted each reporting period for subsequent changes in fair value less cost to sell, with losses recognized for any subsequent write-down to fair value less cost to sell, and gains recognized for any subsequent increase in fair value less cost to sell, but not in excess of the cumulative loss previously recognized.

When properties are considered held for sale, but do not qualify as a discontinued operation, the Company presents qualifying assets and liabilities as held for sale on the consolidated balance sheet in all periods that the qualifying assets and liabilities meet the held for sale criteria.

The components of the held for sale asset’s net income (loss) is recorded within the consolidated statement of operations and comprehensive income.

Revenue Recognition

19 unchanged sentences

All other income is recognized when earned.

Notes to Unaudited Consolidated Financial Statements

Cash, Cash Equivalents and Restricted Cash

8 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 $ 17,361,610 $ 21,192,776

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, secured borrowing and a term loan.

The Company ’ s secured financing agreements include non-recourse property mortgages, note-on-note financing arrangements, secured borrowings and a term loan.

The Company ’ s secured financing agreements as of December 31, 2024 also included a repurchase agreement and a revolving line of credit which were repaid in full and terminated in June 2025 and July 2025, respectively.

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.

8 unchanged sentences

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

Notes to Unaudited Consolidated Financial Statements

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.

4 unchanged sentences

federal and state income taxes at regular corporate rates (including any applicable alternative minimum tax) beginning with the year in which it fails to qualify and may be precluded from being able to elect to be treated as a REIT for the Company’s four subsequent taxable years.

Any gains from the sale of foreclosed properties within two years are subject to U.S.

Any gains from the sale of foreclosed

Notes to Unaudited Consolidated Financial Statements

properties within two years are subject to U.S.

federal and state income taxes at regular corporate rates.

As of June 30, 2025, the Company had satisfied all the requirements for a REIT.

As of September 30, 2025, the Company had satisfied all the requirements for a REIT.

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 six months ended June 30, 2025 and 2024, the Company did not incur any interest or penalties.

For the three and nine months ended September 30, 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.

17 unchanged sentences

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

Notes to Unaudited Consolidated Financial Statements

its to finance them.

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.

6 unchanged sentences

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.

Notes to Unaudited Consolidated Financial Statements

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

The Company adopted this ASU on December 31, 2024.

7 unchanged sentences

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

As of June 30, 2025 and December 31, 2024, accrued interest receivable of $ 6.8 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.

As of September 30, 2025 and December 31, 2024, accrued interest receivable of $ 7.7 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

1 unchanged sentence

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

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Fixed Rate Floating

13 unchanged sentences

(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 4.32 % and Term SOFR of 4.32 % as of June 30, 2025 and average SOFR of 4.53 % and Term SOFR of 4.33 % as of December 31, 2024.

(2) As of June 30, 2025 and December 31, 2024, amount included $ 119.3 million and $ 208.0 million of senior mortgages used as collateral for $ 58.7 million and $ 123.2 million of borrowings under secured financing agreements, respectively ( Note 8 ).

(3) As of June 30, 2025 and December 31, 2024, six and ten loans, respectively, were subject to a SOFR or Term SOFR floor, as applicable.

Coupon rates shown were determined using the average SOFR of 4.31 % and Term SOFR of 4.13 % as of September 30, 2025 and average SOFR of 4.53 % and Term SOFR of 4.33 % as of December 31, 2024.

(2) As of September 30, 2025 and December 31, 2024, amount included $ 123.7 million and $ 208.0 million of senior mortgages used as collateral for $ 60.2 million and $ 123.2 million of borrowings under secured financing agreements, respectively ( Note 8 ).

(3) As of September 30, 2025 and December 31, 2024, six and ten 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 June 30, 2025 and December 31, 2024, exclusive of any extension available.

(5) Excludes loans that are in maturity default and represents current effective maturity as of September 30, 2025 and December 31, 2024, exclusive of any extension available.

Notes to Unaudited Consolidated Financial Statements

10 unchanged sentences

(Provision for) reversal of provision for credit losses ( 6,663,569 ) 626,083 ( 6,037,486 )

Balance, June 30, 2025

Balance, September 30, 2025

$ 178,209,858 $ 25,282,191 $ 203,492,049

3 unchanged sentences

Origination, purchase and funding of loans 48,833,299 970,512 49,803,811

Loss on repayment of loan (1)

( 5,629,510 ) — ( 5,629,510 )

Net amortization of premiums on loans ( 177,180 ) — ( 177,180 )

1 unchanged sentence

net ( 388,655 ) 18,907 ( 369,748 )

Provision for credit losses ( 4,141,777 ) ( 25,195 ) ( 4,166,972 )

Balance, June 30, 2024 $ 345,816,691 $ 38,535,503 $ 384,352,194

(Provision for) reversal of provision for credit losses ( 3,911,264 ) 60,650 ( 3,850,614 )

Balance, September 30, 2024 $ 243,502,933 $ 39,608,554 $ 283,111,487

_______________

(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.

Portfolio Information

1 unchanged sentence

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

June 30, 2025 December 31, 2024

Percentages of total represented below are calculated as a percentage of the total carrying value.

September 30, 2025 December 31, 2024

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

4 unchanged sentences

Notes to Unaudited Consolidated Financial Statements

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

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

Office $ 101,121,778 $ 52,716,178 26.6 % $ 116,539,650 $ 72,991,791 26.6 %

Multifamily $ 75,396,135 $ 75,100,897 36.9 % $ 60,969,051 $ 60,662,514 22.1 %

Office 101,445,260 50,616,476 24.9 % 116,539,650 72,991,791 26.6 %

Infill land 47,206,938 48,399,963 23.8 % 56,307,815 57,050,952 20.8 %

1 unchanged sentence

Industrial 7,000,000 6,992,009 3.4 % 7,000,000 6,966,233 2.5 %

Retail 935,134 933,622 0.5 % — — — %

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

Total $ 253,223,527 $ 203,492,049 100.0 % $ 317,255,023 $ 274,649,145 100.0 %

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

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

United States

New York $ 75,887,463 $ 26,680,637 13.5 % $ 75,657,255 $ 31,536,808 11.5 %

California $ 51,954,655 $ 52,467,271 25.7 % $ 71,006,023 $ 71,273,115 26.0 %

2 unchanged sentences

Arizona 24,300,848 24,348,569 12.0 % 33,407,815 33,005,952 12.0 %

New York 76,004,510 24,209,071 11.9 % 75,657,255 31,536,808 11.5 %

New Jersey 22,906,090 24,051,394 11.8 % 22,900,000 24,045,000 8.8 %

Massachusetts 7,000,000 6,992,009 3.4 % 7,000,000 6,966,233 2.5 %

Illinois 935,134 933,622 0.5 % — — — %

North Carolina — — — % 21,826,479 21,418,430 7.8 %

4 unchanged sentences

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 $ 9.4 million and $ 18.7 million as of June 30, 2025 and December 31, 2024, respectively.

These unfunded commitments amounted to approximately $ 5.6 million and $ 18.7 million as of September 30, 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 model-based approach and analyzes them separately for recoverability.

As of June 30, 2025 and December 31, 2024, the Company had five and four non-performing loans with total amortized cost of $ 150.4 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 $ 49.2 million and $ 44.1 million as of June 30, 2025 and December 31, 2024, respectively.

As of September 30, 2025 and December 31, 2024, the Company had five and four non-performing loans with total amortized cost of $ 152.5 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 $ 51.8 million and $ 44.1 million as of September 30, 2025 and December 31, 2024, respectively.

Please see “Note 6.

Fair Value Measurements – Valuation Process for Fair Value Measurement” for information on how the fair values of these loans were determined.

Notes to Unaudited Consolidated Financial Statements

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

Six Months Ended June 30, 2025

Nine Months Ended September 30, 2025

Allowance on Non-Performing Loans Allowance on Performing Loans Total

3 unchanged sentences

Allowance for credit losses, end of period $ 51,795,439 $ 383,502 $ 31,751 $ 52,210,692

Notes to Unaudited Consolidated Financial Statements

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Allowance on Non-Performing Loans Allowance on Performing Loans Total

7 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 three and six months ended June 30, 2025, the Company did no t reverse any interest income accrual because all accrued interest income was deemed collectible.

For the three and six months ended June 30, 2024, the Company reversed $ 0.7 million of accrued interest income because such income was deemed uncollectible.

For the three months ended June 30, 2025 and 2024, the Company suspended interest income accrual of $ 3.5 million and $ 6.8 million on two and five loans, respectively, because recovery of such income was not probable.

For the six months ended June 30, 2025 and 2024, the Company suspended interest income accrual of $ 6.9 million and $ 12.6 million on two and five loans, respectively, because recovery of such income was not probable.

As of both June 30, 2025 and December 31, 2024, there was no interest receivable recognized on these loans.

For the three and nine months ended September 30, 2025 and the three months ended September 30, 2024, the Company did no t reverse any interest income accrual because all accrued interest income was deemed collectible.

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, 2025 and 2024, the Company suspended interest income accrual of $ 3.8 million and $ 5.3 million on two and five loans, respectively, because recovery of such income was not probable.

For the nine months ended September 30, 2025 and 2024, the Company suspended interest income accrual of $ 10.7 million and $ 17.8 million on two and five loans, respectively, because recovery of such income was not probable.

As of both September 30, 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:

June 30, 2025

September 30, 2025

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

11 unchanged sentences

_______________

Notes to Unaudited Consolidated Financial Statements

(1) Amount includes three loans that are in maturity default with total amortized costs of $ 76.5 million.

22 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’s equity interest in RESOF:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

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

Equity interest in RESOF 14.9 % $ 49,116,475 $ 11,333,135 14.9 % $ 48,171,168 $ 10,065,613

Three Months Ended June 30, Six Months Ended June 30,

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

2025 2024 2025 2024

1 unchanged sentence

Distributions received from RESOF $ 2,073,861 $ 1,233,430 $ 6,809,231 $ 2,918,307

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:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Investments at fair value (cost of $ 467,912,051 and $ 465,401,329 , respectively)

9 unchanged sentences

Partners’ capital $ 322,205,696 $ 315,812,248

Three Months Ended June 30, Six Months Ended June 30,

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

2025 2024 2025 2024

2 unchanged sentences

Net investment income 10,442,222 12,434,160 38,144,009 27,726,087

Net change in unrealized appreciation (depreciation) on investments 2,054,615 2,576,304 3,092,726 2,048,392

Net increase in partners’ capital resulting from operations $ 17,426,016 $ 11,217,413 $ 30,794,513 $ 17,340,319

Net change in unrealized appreciation

(depreciation) on investments 6,167,963 ( 625,086 ) 9,260,689 1,423,306

Net increase in partners’ capital resulting

from operations $ 16,610,185 $ 11,809,074 $ 47,404,698 $ 29,149,393

Equity Interest in Joint Ventures

3 unchanged sentences

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 interest in the joint ventures:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

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

15 unchanged sentences

This entity is jointly owned with two related parties managed by the Manager.

Notes to Unaudited Consolidated Financial Statements

(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.

7 unchanged sentences

This entity is jointly owned with a related party managed by the Manager.

Three Months Ended June 30, Six Months Ended June 30,

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

2025 2024 2025 2024

Loss from equity interest in the joint ventures (1)

$ ( 2,608,870 ) $ ( 1,488,677 ) $ ( 4,036,327 ) $ ( 3,140,340 )

Distributions received from the joint ventures $ 245,171 $ 207,771 $ 726,468 $ 2,835,270

_______________

(1) For the three and nine months ended September 30, 2025 as compared to the three and nine months ended September 30, 2024, equity loss from the joint ventures increased primarily due to a loss recognized by a joint venture in connection with a loss incurred on a portfolio investment.

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.

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Net investments in real estate $ 195,029,020 $ 196,206,089

5 unchanged sentences

Members’ capital $ 108,785,796 $ 77,237,953

Three Months Ended June 30, Six Months Ended June 30,

Notes to Unaudited Consolidated Financial Statements

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

2025 2024 2025 2024

5 unchanged sentences

Unrealized gain (loss) 8,819,588 ( 230,430 ) 11,138,089 ( 1,814,507 )

Net loss (income) $ ( 1,823,528 ) $ 253,391 $ ( 4,261,510 ) $ ( 3,926,594 )

Net income (loss) $ 1,578,540 $ ( 4,441,530 ) $ ( 2,494,878 ) $ ( 8,368,124 )

Other Equity Investments

3 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 June 30, 2025 and December 31, 2024, the Company's investment had a carrying value of $ 17.0 million and $ 15.9 million, respectively.

Notes to Unaudited Consolidated Financial Statements

As of September 30, 2025 and December 31, 2024, the Company's investment had a carrying value of $ 18.0 million and $ 15.9 million, respectively.

The following table presents a summary of the Company’s equity interest in TCC Boundary Partners LLC:.

The Company did not receive any distributions for both the three and six months ended June 30, 2025 and 2024.

Three Months Ended June 30, Six Months Ended June 30,

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

2025 2024 2025 2024

Income from other equity investment $ 668,900 $ 581,229 $ 1,902,525 $ 657,207

Real Estate Owned, Net and Real Estate Assets Held for Sale

Distributions received from other equity

investment 75,000 — 175,000 —

Real Estate Owned, Net

Real Estate Owned Activities

2025 — In June 2025, the Company sold an industrial building for net proceeds of $ 13.8 million and recognized a net loss on sale of $ 2.1 million.

2025 — During the quarter ended June 30, 2025, the Company sold an industrial building for net proceeds of $ 13.8 million and recognized a net loss on sale of $ 2.1 million.

In connection with the sale, the Company used the full net proceeds to partially repay a related mortgage loan payable.

Additionally, during the quarter ended June 30, 2025, the Company entered into purchase and sale agreements to sell two industrial buildings for a total purchase price of $ 28.5 million.

In connection with the pending sales, the Company recorded an impairment charge of $ 3.4 million to reduce the carrying value of the industrial buildings to their estimated selling price less the cost of the sale.

The Company expected the sales to be completed within the next twelve months, and therefore, these two properties were presented as Real estate assets held for sale on the consolidated balance sheets as of June 30, 2025.

During the quarter ended September 30, 2025, the Company sold the two industrial buildings held for sale as well as one additional industrial building for total net proceeds of $ 55.3 million and recognized a net loss on sale of $ 0.8 million, excluding the impairment charge noted above.

A portion of the cash proceeds were used to repay the related mortgage loans ( Note 8 ).

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.

1 unchanged sentence

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

Notes to Unaudited Consolidated Financial Statements

Operating Real Estate Owned, Net

Real estate owned is comprised of five industrial buildings located in Texas with lease intangible assets and liabilities.

Real estate owned is comprised of four industrial buildings located in Texas with lease intangible assets and liabilities.

The following table presents the components, net as of:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

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

11 unchanged sentences

Total operating real estate $ 52,031,297 $ ( 4,390,360 ) $ 47,640,937 $ 132,150,992 $ ( 6,814,589 ) $ 125,336,403

Real Estate Assets Held for Sale

During the three months ended June 30, 2025, the Company entered into purchase and sale agreements to sell two industrial buildings for a total purchase price of $ 28.5 million.

The Company expects the sales to be completed within the next twelve months, and therefore, these two properties are presented as Real estate assets held for sale on the consolidated balance sheets as of June 30, 2025.

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 June 30, Six Months Ended June 30,

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

2025 2024 2025 2024

11 unchanged sentences

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

Three Months Ended June 30, Six Months Ended June 30,

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

2025 2024 2025 2024

6 unchanged sentences

(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.

Notes to Unaudited Consolidated Financial Statements

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

8 unchanged sentences

Level 2 — Pricing inputs are other than quoted prices in active markets, including, but not limited to, quoted prices for similar assets and liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, rate of prepayment, loss severities, credit risks and default rates) or other market corroborated inputs.

Level 3 — Significant unobservable inputs are based on the best information available in the circumstances, to the extent observable inputs are not available, including the Company’s own assumptions used in determining the fair value of

Notes to Unaudited Consolidated Financial Statements

Fair value for these investments is determined using valuation methodologies that consider a range of factors, including but not limited to the price at which the investment was acquired, the nature of the investment, local market conditions, trading values on public exchanges for comparable securities, current and projected operating performance, and financing transactions subsequent to the acquisition of the investment.

3 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 June 30, 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.

As of September 30, 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.

12 unchanged sentences

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 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.

As such, the interest rate cap is

Notes to Unaudited Consolidated Financial Statements

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:

June 30, 2025

September 30, 2025

Fair Value Measurements

3 unchanged sentences

Available-for-sale debt securities 1,451,104 — — 1,451,104

Derivative - interest rate cap (2)

Total $ 3,886,413 $ — $ — $ 3,886,413

11 unchanged sentences

The interest rate cap matured in May 2025.

Notes to Unaudited Consolidated Financial Statements

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

Six Months Ended June 30,

Nine Months Ended September 30,

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

5 unchanged sentences

Ending balance $ 1,451,104 $ — $ 1,134,314 $ — $ 3,647

Notes to Unaudited Consolidated Financial Statements

Financial Instruments Not Carried at Fair Value

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:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

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

15 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 June 30, 2025 and 2024 due to their short-term nature.

Notes to Unaudited Consolidated Financial Statements

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, 2025 and 2024 due to their short-term nature.

Other Items Measured at Fair Value (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 was no impairment charge for the three and six months ended June 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 three and six months ended June 30, 2025:

Three Months Ended June 30, 2025 Six Months Ended June 30, 2025

Level Fair Value Impairment Charge Fair Value Impairment Charge

There was no impairment charge for the three months ended September 30, 2025 and the three and 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, 2025:

Nine Months Ended September 30, 2025

Level Fair Value Impairment Charge

Real estate assets held for sale

Real estate and intangibles 3 $ 27,037,500 $ 3,399,684

$ 3,399,684 $ 3,399,684

During the three and six months ended June 30, 2025, the Company recorded an impairment charge of $ 3.4 million to reduce the carrying value of the industrial buildings to their estimated selling price less the cost of the sale.

The fair value measurement was determined by the purchase price.

During the nine months ended September 30, 2025, the Company recorded an impairment charge of $ 3.4 million to reduce the carrying value of the industrial buildings to their estimated fair value, which was determined to be the selling price less the cost of the sale.

Valuation Process for Fair Value Measurement

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.

Notes to Unaudited Consolidated Financial Statements

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.

In following this methodology, investments are evaluated individually, and management takes into account, in determining the risk-adjusted discount rate for each of the Company’s investments, relevant factors, which may include available current market data on applicable yields of comparable debt/preferred equity instruments;

11 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 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.

Notes to Unaudited Consolidated Financial Statements

The following tables summarize the valuation techniques and significant unobservable inputs used by the Company to value the Level 3 loans as of June 30, 2025 and December 31, 2024.

The fair values of the Company’s secured financing agreements, which include mortgage loans payable, promissory notes payable, secured borrowings and a term loan, 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, 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 June 30, 2025

Primary Valuation Technique Unobservable Inputs June 30, 2025

Fair Value at September 30, 2025

Primary Valuation Technique Unobservable Inputs September 30, 2025

Asset Category Minimum Maximum Weighted Average

9 unchanged sentences

Total Level 3 Liabilities $ 109,083,712

Notes to Unaudited Consolidated Financial Statements

Fair Value at December 31, 2024

17 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 June 30, Six Months Ended June 30,

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

2025 2024 2025 2024

10 unchanged sentences

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

(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 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 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

Notes to Unaudited Consolidated Financial Statements

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.

Origination and Extension Fee Expense

8 unchanged sentences

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 June 30, 2025 and December 31, 2024, the Company had not received any breakup fees.

As of September 30, 2025 and December 31, 2024, the Company had not received any breakup fees.

Operating Expenses

The Company reimburses the Manager for operating expenses incurred in connection with services provided to the operations of the Company, including the Company’s allocable share of the Manager’s overhead, such as rent, employee costs, utilities, and technology costs.

Notes to Unaudited Consolidated Financial Statements

Disposition Fee

1 unchanged sentence

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.

Notes to Unaudited Consolidated Financial Statements

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.

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

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

On December 1, 2022, the Company entered into a revolving promissory note receivable with Mavik Special Opps Co-Investments, LP, an affiliate of the Company.

The promissory note receivable bears interest at the 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.

The outstanding balance of the promissory note receivable was repaid in full in July 2024 and had a balance of zero as of September 30, 2025 and December 31, 2024.

The promissory note receivable bore interest at the 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.

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 six months ended June 30, 2024, the Company provided funding under the promissory note receivable of $ 5.0 million and received repayments of $ 8.5 million.

In July 2024, the promissory note receivable was repaid in full, and had a balance of zero as of both June 30, 2025 and December 31, 2024.

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

Due from Related Parties

As of June 30, 2025 and December 31, 2024, amount due from related parties was $ 1.2 million and $ 0.9 million, primarily related to operational cash requirements the Company paid on behalf of its affiliates.

As of September 30, 2025 and December 31, 2024, amount due from related parties was $ 1.6 million and $ 0.9 million, primarily related to operational cash requirements the Company paid on behalf of its affiliates.

Promissory Note Payable

2 unchanged sentences

The promissory note matures on March 31, 2027.

Notes to Unaudited Consolidated Financial Statements

of June 30, 2025 and December 31, 2024, amount outstanding under this promissory note payable was $ 47.2 million and $ 45.1 million, respectively.

As of September 30, 2025 and December 31, 2024, amount outstanding under this promissory note payable was $ 38.1 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.

3 unchanged sentences

Distributions Paid

For the three months ended June 30, 2025 and 2024, the Company made distributions to investors totaling $ 2.3 million and $ 4.7 million respectively, all of which were returns of capital.

For the six months ended June 30, 2025 and 2024, the Company made distributions to investors totaling $ 7.0 million and $ 9.3 million, respectively, all of which were returns of capital ( Note 10 ).

For the three months ended September 30, 2025 and 2024, the Company made distributions to investors totaling $ 2.3 million and $ 4.7 million respectively, all of which were returns of capital.

For the nine months ended September 30, 2025 and 2024, the Company made distributions to investors totaling $ 9.3 million and $ 14.0 million, respectively, all of which were returns of capital ( Note 10 ).

Due to Manager

As of June 30, 2025 and December 31, 2024, approximately $ 1.1 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.

As of September 30, 2025 and December 31, 2024, approximately $ 1.1 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.

Notes to Unaudited Consolidated Financial Statements

Mavik Real Estate Special Opportunities Fund, LP

12 unchanged sentences

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

June 30, 2025

September 30, 2025

Participating Interests Principal Balance Carrying Value

1 unchanged sentence

12.50 % 935,134 933,622

Notes to Unaudited Consolidated Financial Statements

$ 25,235,982 $ 25,282,191

December 31, 2024

1 unchanged sentence

38.27 % $ 33,407,815 $ 33,005,953

Loan B (1)(2)

Loan C (1)(3)

40.80 % 8,044,732 8,071,776

2 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.

(2) The loan is held in the name of Mavik Real Estate Special Opportunities VS2 REIT, LLC, a related-party REIT managed by the Manager.

(3) This loan was repaid in January 2025.

Notes to Unaudited Consolidated Financial Statements

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:

June 30, 2025

September 30, 2025

Transfers treated as

13 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 June 30, 2025 December 31, 2024

Maturity Date September 30, 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 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

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 7.00 % Senior Notes Due 2026

4 unchanged sentences

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

As of June 30, 2025, the Company was in compliance with such covenants.

As of September 30, 2025, the Company was in compliance with such covenants.

Notes Maturities

The Company’s 6.00 % Senior Notes Due 2026 mature on June 30, 2026 and Terra LLC’s 7.00 % Senior Notes Due 2026 mature on March 31, 2026.

The Company intends to repay the 6.00 % Senior Notes Due 2026, and cause Terra LLC to repay the 7.00 % Senior Notes Due 2026, through ordinary course loan repayments, asset sales and distributions, and may also use debt or equity capital sources or facilities.

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:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Current Maturity Extended Maturity Weighted Average Interest Rate (1)

6 unchanged sentences

Promissory notes payable (3)(4)

September 2025 - March 2026 March 2026 - March 2027 9.33 % 59,610,514 N/A 27,482,928 40,694,390

March 2026 March 2026 - March 2027 9.26 % 62,886,384 N/A 28,904,992 40,694,390

Property mortgages - fixed rate June 2028 June 2028 6.25 % 47,640,937 N/A 20,700,000 40,250,000

Property mortgages - variable rate (5)

April 2027 April 2028 7.82 % 27,037,500 N/A 20,268,972 34,100,000

(5) (5) (5) — N/A — 34,100,000

Total 110,527,321 49,604,992 115,044,390

1 unchanged sentence

Revolving line of credit (6)

June 2025 June 2025 7.67 % 23,116,267 11,071,390 11,071,390 16,361,111

(6) (6) (6) — — — 16,361,111

Term loan (7)

December 2027 December 2028 9.00 % 49,116,475 10,000,000 10,000,000 10,000,000

Secured borrowing (2)(8)

Secured borrowings (3)(8)

Nov 2026 - Jun 2027 Nov 2026 - Jun 2027 9.54 % 62,673,312 31,250,000 31,250,000 18,000,000

4 unchanged sentences

_______________

(1) Amount is calculated using the applicable index rate as of June 30, 2025.

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

(1) Amount is calculated using the applicable index rate as of September 30, 2025.

(2) In June 2025, the outstanding balance was repaid in full and the facility was terminated.

(4) 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 %.

(5) Interest rate is based on Term SOFR plus a spread of 3.5 % with a Term SOFR floor of 3.75 %.

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

(3) These facilities are used to finance the Company’s senior loan investments.

Notes to Unaudited Consolidated Financial Statements

(4) Interest rates are 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 %.

(5) In August 2025, the pledged asset was sold and the outstanding balance was repaid in full ( Note 5 ).

(6) On July 1, 2025, the outstanding balance was repaid in full and the facility was terminated.

(7) 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.

1 unchanged sentence

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.

(8) Interest rate is based on Term SOFR plus a spread of 5.0 % with a combined floor rate ranging from 9.32 % to 9.85 %.

(8) Interest rates are based on Term SOFR plus a spread of 5.0 % with a combined floor rate ranging from 9.32 % to 9.85 %.

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.

Notes to Unaudited Consolidated Financial Statements

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

Three Months Ended June 30, Six Months Ended June 30,

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

2025 2024 2025 2024

2 unchanged sentences

Proceeds from secured financing $ 24,805,321 $ 60,663,166

Repayments of secured financing $ ( 91,059,190 ) $ ( 84,780,619 )

Repurchase Agreements

The Company seeks to mitigate risks associated with its repurchase agreements by managing risk related to the credit quality of its assets, interest rates, liquidity, the rate of prepayment and market value.

The margin call provisions under the repurchase facilities provide the lender with certain rights in the event of a decline in the credit of the underlying assets purchased.

To monitor credit risk associated with the performance and value of its loans and investments, the Company’s asset management team regularly reviews its investment portfolios and is in regular contact with its borrowers, monitoring performance of the collateral and enforcing its rights as necessary.

The Company further seeks to manage risks associated with the repurchase agreements by matching the maturities and interest rate characteristics of its loans with the related repurchase agreement.

Principal repayments on secured

financing $ ( 141,949,552 ) $ ( 159,125,167 )

Covenant Compliance

1 unchanged sentence

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 June 30, 2025, the Company was in compliance with all such covenants, as amended or waived.

As of September 30, 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 June 30, 2025 are as follows:

Scheduled debt principal payments for each of the five calendar years following September 30, 2025 are as follows:

Years Ending December 31, Total

2025 (July 1 through December 31) $ 14,321,390

2025 (October 1 through December 31) $ —

2026 165,654,992

7 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 June 30, 2025 and December 31, 2024, obligations under participation agreements were $ 19.8 million and $ 18.2 million, respectively.

As of September 30, 2025 and December 31, 2024, obligations under participation agreements were $ 18.2 million and $ 18.2 million, respectively.

(see “Participation Agreements” in Note 7 ).

The interest rate on the obligations under participation agreements was 19.31 % and 19.53 %, respectively.

Notes to Unaudited Consolidated Financial Statements

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 $ 9.4 million and $ 18.7 million as of June 30, 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.

These fundings amounted to approximately $ 5.6 million and $ 18.7 million as of September 30, 2025 and December 31, 2024, 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.

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 June 30, 2025 and December 31, 2024, the unfunded investment commitment was $ 11.3 million and $ 10.1 million, respectively.

As of September 30, 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.

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The following table presents earnings per share:

Three Months Ended June 30, Six Months Ended June 30,

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

2025 2024 2025 2024

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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 June 30, 2025 and December 31, 2024, there were no shares of Preferred Stock issued or outstanding.

As of September 30, 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 June 30, 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.

As of September 30, 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.

Notes to Unaudited Consolidated Financial Statements

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.

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.

In connection with a listing of shares of Class A Common Stock on a national securities exchange, the outstanding

Notes to Unaudited Consolidated Financial Statements

shares of Class B Common Stock will be convertible on a one -for-one basis into listed shares of Class A Common Stock, subject to certain conversion terms and holding periods.

In connection with a listing of shares of Class A Common Stock on a national securities exchange, the outstanding shares of Class B Common Stock will be convertible on a one -for-one basis into listed shares of Class A Common Stock, subject to certain conversion terms and holding periods.

Currently, there are no outstanding shares of Class A Common Stock.

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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 the three months ended June 30, 2025 and 2024, the Company made distributions to investors totaling $ 2.3 million and $ 4.7 million respectively, all of which were returns of capital.

For the six months ended June 30, 2025 and 2024, the Company made distributions to investors totaling $ 7.0 million and $ 9.3 million respectively, all of which were returns of capital.

For the three months ended September 30, 2025 and 2024, the Company made distributions to investors totaling $ 2.3 million and $ 4.7 million respectively, all of which were returns of capital.

For the nine months ended September 30, 2025 and 2024, the Company made distributions to investors totaling $ 9.3 million and $ 14.0 million respectively, all of which 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 six months ended June 30, 2025 and 2024, the Company issued 967 and 838 shares of Class B Common Stock for a total of $ 9,288 and $ 9,524 pursuant to the Plan, respectively.

For the nine months ended September 30, 2025 and 2024, the Company issued 1,431 and 1,338 shares of Class B Common Stock for a total of $ 13,344 and $ 14,897 pursuant to the Plan, respectively.

Subsequent Events

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• our expected financial performance, operating results and our ability to make distributions to our stockholders in the future;

• our ability to achieve the expected synergies, cost savings and other benefits from the BDC Merger (as defined below);

• risks associated with achieving expected synergies, cost savings and other benefits from our increased scale;

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

• our ability to fund our liquidity needs and upcoming debt maturities through ordinary course loan repayments, asset sales and distributions and debt or equity capital sources or facilities, including exchange offers;

• the performance and financial condition of our borrowers;

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• our dependence on our Manager or its affiliates and the availability of its senior management team and other personnel;

• liquidity transactions that may be available to us in the future, including a liquidation of our assets, a sale of our company, a listing of our shares of common stock on a national securities exchange, an amendment of our charter to incorporate certain provisions generally required by state securities regulators to allow us to publicly sell unlisted shares (provided that such provisions would only take effect when a registration statement related to the publicly offered unlisted shares is declared effective), an adoption of a share repurchase plan or a strategic business

combination, in each case, which may include the distribution of our common stock indirectly owned by certain of our affiliate funds (the “Terra Funds”) to the ultimate investors in the Terra Funds, and the timing of any such transactions;

offered unlisted shares is declared effective), an adoption of a share repurchase plan or a strategic business combination, in each case, which may include the distribution of our common stock indirectly owned by certain of our affiliate funds (the “Terra Funds”) to the ultimate investors in the Terra Funds, and the timing of any such transactions;

• actions and initiatives of the U.S.

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

As of June 30, 2025, we held a net loan portfolio (gross loans less obligations under participation agreements and secured borrowing) comprised of nine loans in seven states with an aggregate net principal balance of $225.9 million, a weighted average coupon rate of 13.1% and a weighted average remaining term to maturity of 1.5 years.

As of September 30, 2025, we held a net loan portfolio (gross loans less obligations under participation agreements and secured borrowing) comprised of ten loans in eight states with an aggregate net principal balance of $235.2 million, a weighted average coupon rate of 13.2% 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 June 30, 2025, our portfolio included underlying properties located in nine markets, across seven 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.

As of September 30, 2025, our portfolio included underlying properties located in ten markets, across eight states and includes property types such as multifamily housing, student housing, commercial offices, medical offices, retail, mixed-use and infill properties.

The profile of these properties ranges from

stabilized and value-added properties to pre-development and construction.

Our loans are structured across mezzanine debt, first mortgages, preferred equity investments and credit facilities.

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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 June 30, 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 of September 30, 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.

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

June 30, 2025

September 30, 2025

Fixed Rate Floating

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(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 4.32% and Term SOFR of 4.32% as of June 30, 2025 and average SOFR of 4.53% and Term SOFR of 4.33% as of December 31, 2024.

(2) As of June 30, 2025 and December 31, 2024, amount included $119.3 million and $208.0 million of senior mortgages used as collateral for $58.7 million and $123.2 million of borrowings under secured financing agreements, respectively ( Note 8 ).

(3) As of June 30, 2025 and December 31, 2024, six and ten loans, respectively, were subject to a SOFR or Term SOFR floor, as applicable.

Coupon rates shown were determined using the average SOFR of 4.31% and Term SOFR of 4.13% as of September 30, 2025 and average SOFR of 4.53% and Term SOFR of 4.33% as of December 31, 2024.

(2) As of September 30, 2025 and December 31, 2024, amount included $123.7 million and $208.0 million of senior mortgages used as collateral for $60.2 million and $123.2 million of borrowings under secured financing agreements, respectively ( Note 8 ).

(3) As of September 30, 2025 and December 31, 2024, six and ten 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 June 30, 2025 and December 31, 2024, exclusive of any extension available.

Real Estate Owned and Real Estate Assets Held for Sale

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

As of June 30, 2025 and December 31, 2024, the real estate and related lease intangible assets and liabilities had a net carrying value of $77.2 million and $125.3 million, respectively, and the mortgage loans payable encumbering the real estate properties had an outstanding principal amount of $40.3 million and $74.4 million, respectively.

Additionally, as of June 30, 2025, we own two industrial buildings that are classified as held for sale with a net carrying value of $27.0 million, and a mortgage loan payable encumburing the real estate properties with an outstanding principal amount of $20.3 million.

(5) Excludes loans that are in maturity default and represents current effective maturity as of September 30, 2025 and December 31, 2024, exclusive of any extension available.

Real Estate Owned

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

As of September 30, 2025 and December 31, 2024, the real estate and related lease intangible assets and liabilities had a net carrying value of $47.6 million and $125.3 million, respectively, and the mortgage loans payable encumbering the real estate properties had an outstanding principal amount of $20.7 million and $74.4 million, respectively.

Equity Interest in Unconsolidated Investments

As of both June 30, 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.

As of both September 30, 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.

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 June 30, 2025 and December 31, 2024, these equity interests had total carrying value of $107.2 million and $106.8 million, respectively.

As of September 30, 2025 and December 31, 2024, these equity interests had total carrying value of $106.5 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 Common Stock as of June 30, 2025 and December 31, 2024 was $6.92 and $7.63, respectively.

Our book value per share of Class B Common Stock as of September 30, 2025 and December 31, 2024 was $6.56 and $7.63, respectively.

Portfolio Investment Activity

Net Loan Portfolio

For the three months ended June 30, 2025 and 2024, we invested $5.4 million and $46.3 million in new and add-on investments and had $19.7 million and $54.6 million of repayments, resulting in net repayments of $14.4 million and $8.3 million, respectively.

For the three months ended September 30, 2025 and 2024, we invested $7.4 million and $15.3 million in new and add-on investments and had $5.4 million and $21.7 million of repayments, resulting in net investment of $2.0 million and net repayments of $6.4 million, respectively.

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

For the six months ended June 30, 2025 and 2024, we invested $10.2 million and $57.7 million in new and add-on investments and had $33.5 million and $82.2 million of repayments, resulting in net repayments of $23.3 million and $24.5 million, respectively.

For the nine months ended September 30, 2025 and 2024, we invested $17.6 million and $73.1 million in new and add-on investments and had $38.9 million and $103.8 million of repayments, resulting in net repayments of $21.2 million and $30.8 million, respectively.

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

Net Loan Portfolio Information

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:

June 30, 2025 December 31, 2024

Percentages of total represented below are calculated as a percentage of the total carrying value.

September 30, 2025 December 31, 2024

Loan Structure Principal Balance Carrying

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Total $ 235,223,527 $ 185,314,912 100.0 % $ 299,255,023 $ 256,472,038 100.0 %

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Property Type Principal Balance Carrying

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Value % of Total

Office $ 101,121,778 $ 52,716,178 29.6 % $ 116,539,650 $ 72,991,791 28.4 %

Multifamily $ 75,396,135 $ 75,100,897 40.5 % $ 60,969,051 $ 60,662,514 23.7 %

Office 101,445,260 50,616,476 27.3 % 116,539,650 72,991,791 28.4 %

Infill land 47,206,938 48,399,963 26.1 % 56,307,815 57,050,952 22.2 %

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Mixed-use 3,240,060 3,271,945 1.8 % 30,438,507 29,890,548 11.7 %

Retail 935,134 933,622 0.5 % — — — %

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

Total $ 235,223,527 $ 185,314,912 100.0 % $ 299,255,023 $ 256,472,038 100.0 %

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Geographic Location Principal Balance Carrying

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United States

New York $ 75,887,463 $ 26,680,637 15.0 % $ 75,657,255 $ 31,536,808 12.3 %

Washington $ 38,653,822 $ 38,834,990 21.0 % $ 26,894,593 $ 26,907,157 10.5 %

Georgia 31,144,986 31,276,212 17.5 % 30,562,858 30,586,450 11.9 %

California 33,954,655 34,290,134 18.4 % 53,006,023 53,096,008 20.6 %

Georgia 31,468,468 31,655,123 17.1 % 30,562,858 30,586,450 11.9 %

New York 76,004,510 24,209,071 13.1 % 75,657,255 31,536,808 12.3 %

Arizona 24,300,848 24,348,569 13.1 % 33,407,815 33,005,952 12.9 %

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Massachusetts 7,000,000 6,992,009 3.8 % 7,000,000 6,966,233 2.7 %

Illinois 935,134 933,622 0.5 % — — — %

North Carolina — — — % 21,826,479 21,418,430 8.4 %

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Real Estate Risk

The market values of commercial and residential mortgage assets are subject to volatility and may be affected adversely by a number of factors, including, but not limited to, national, regional and local economic conditions (which may be adversely

affected by industry slowdowns and other factors);

local real estate conditions;

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The following table presents the comparative results of our operations:

Three Months Ended June 30, Six Months Ended June 30,

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

2025 2024 Change 2025 2024 Change

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Asset servicing fee 281,735 360,606 (78,871) 920,900 1,162,126 (241,226)

Provision for credit losses 1,374,181 2,576,325 (1,202,144) 3,493,917 4,449,436 (955,519)

Provision for (reversal of provision for) credit losses 2,425,296 (687,598) 3,112,894 5,919,213 3,761,838 2,157,375

Real estate operating expenses 201,980 586,293 (384,313) 2,739,007 2,059,570 679,437

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under participation agreements (950,836) (779,793) (171,043) (2,780,479) (2,168,936) (611,543)

Unrealized gain (loss) on

Unrealized (loss) gain on

investments, net — (74,849) 74,849 (75) 103,721 (103,796)

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Loss on sale of real estate, net (823,995) — (823,995) (2,880,545) — (2,880,545)

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

Realized loss on investments, net — — — — (446,009) 446,009

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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, secured borrowing 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 June 30, 2025 Three Months Ended June 30, 2024

Three Months Ended September 30, 2025 Three Months Ended September 30, 2024

Weighted Average Principal Amount (1)

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$ 63,479,423 9.9 % $ 77,849,657 13.0 %

Six Months Ended June 30, 2025 Six Months Ended June 30, 2024

Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024

Weighted Average Principal Amount (1)

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Interest Income

For the three and six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024, interest income decreased by $1.9 million and $3.8 million, respectively, primarily due to a decrease in contractual interest income as a result of a decrease in the weighted average principal balance of performing loans.

For the three and nine months ended September 30, 2025 as compared to the three and nine months ended September 30, 2024, interest income decreased by $3.8 million and $7.6 million, respectively, 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 months ended June 30, 2025 as compared to the three months ended June 30, 2024, real estate operating revenue decreased by $0.8 million, primarily due to the sale of an industrial building in June 2025 as well as the expiration of a lease in December 2024.

For the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, real estate operating revenue decreased by $1.3 million, primarily due to the sale of an industrial building in June 2025, the expiration of a lease in December 2025, and the write off of an unamortized below-market rent intangible in January 2024 in connection with a lease termination.

For the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, real estate operating revenue decreased by $1.1 million, primarily due to the sale of four industrial buildings in 2025, as well as the expiration of a lease in December 2024.

For the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, real estate operating revenue decreased by $2.4 million, primarily due to the sale of four industrial buildings in 2025, the expiration of a lease in December 2024, and the write off of an unamortized below-market rent intangible in January 2024 in connection with a lease termination.

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 six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024, operating expenses reimbursed to our Manager decreased by $1.4 million and $2.1 million, respectively, primarily due to a decrease in the allocation ratio as a result of a decrease in our total funds under management.

Under the terms of a management agreement (as amended, 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, 2025 as compared to the three and nine months ended September 30, 2024, operating expenses reimbursed to our Manager decreased by $0.5 million and $2.6 million, respectively, 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 investment and cash held by us.

For the three and six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024, asset management fees decreased by $0.3 million and $0.7 million, respectively, primarily due to a decrease in total assets under management resulting from repayment of loans.

For the three and nine months ended September 30, 2025 as compared to the three and nine months ended September 30, 2024, asset management fees decreased by $0.3 million and $1.0 million, respectively, primarily due to a decrease in total assets under management resulting from repayment of loans as well as the sale of four industrial buildings in 2025.

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 investment held by us.

For the three and six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024, asset servicing fees decreased by $0.1 million and $0.2 million, respectively, primarily due to a decrease in total assets under management resulting from the repayment of loans.

Provision for Credit Losses

For the three and nine months ended September 30, 2025 as compared to the three and nine months ended September 30, 2024, asset servicing fees decreased by $0.1 million and $0.2 million, respectively, primarily due to a decrease in total assets under management resulting from the repayment of loans as well as the sale of four industrial buildings in 2025.

Provision for (Reversal of 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 and six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024, provision for credit losses decreased by $1.2 million and $1.0 million, respectively, primarily due to the repayment of loans as well as loans approaching maturity, which decreased the allowance for credit losses, partially offset by a decline in our estimated recoverable amount on a non-performing subordinated loan due to an increase in senior funding.

For the three and nine months ended September 30, 2025, provision for credit losses was $2.4 million and $5.9 million, respectively, primarily due to 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 three months ended September 30, 2024, we recorded a reversal of provision for credit losses of $0.7 million, primarily due 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 due to a decline in our estimated recoverable amount on a non-performing subordinated loan due to an increase in funding on the senior loan as well as a decline in modeled macroeconomic forecasts for commercial real estate.

Real Estate Operating Expenses

For the three and six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024, real estate operating expenses increased by $0.8 million and $1.1 million, respectively, primarily due to an increase in real estate taxes.

The real estate operating expenses for the six-month period also increased due to an increase in repairs and maintenance.

For the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, real estate operating expenses decreased by $0.4 million, primarily due to the sale of three industrial buildings.

For the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, real estate operating expenses increased by $0.7 million, primarily due to an increase in real estate taxes as well as an increase in repairs and maintenance, partially offset by a reduction in operating expenses driven by the sale of four industrial buildings in 2025.

Depreciation and Amortization

For the three and six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024, depreciation and amortization decreased by $0.5 million and $1.3 million, respectively, primarily due to the sale of an industrial building in June 2025 as well as the write off of the unamortized in-place lease intangibles in January 2024 in connection with a lease termination.

For the three and nine months ended September 30, 2025 as compared to the three and nine months ended September 30, 2024, depreciation and amortization decreased by $1.1 million and $2.4 million, respectively, primarily due to the sale of four industrial buildings in 2025, as well as the write off of the unamortized in-place lease intangibles in January 2024 in connection with a lease termination.

Professional Fees

For the three and six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024, professional fees decreased by $0.1 million and $0.4 million, respectively, primarily due to legal fees incurred in connection with a review of strategic alternatives for our company in 2024.

For the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, professional fees increased by $0.4 million, primarily due to legal fees incurred in connection with a review of strategic financings and alternatives for our company in 2025.

For the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, professional fees remained substantially the same.

Impairment Charge

For both the three and six months ended June 30, 2025, in connection with the pending sale of two industrial buildings, we recorded an impairment charge of $3.4 million to reduce the carrying value of these industrial buildings to their estimated selling price less the costs to sell.

There was no such impairment charge for the three and six months ended June 30, 2024.

For the nine months ended September 30, 2025, in connection with the pending sale of two industrial buildings, we recorded an impairment charge of $3.4 million to reduce the carrying value of these industrial buildings to their estimated selling price less the costs to sell.

There was no such impairment charge for the three months ended September 30, 2025 or for the three and nine months ended September 30, 2024.

Interest Expense on Secured Financing

Our secured financing consisted of repurchase agreements, revolving line of credit, term loan, promissory notes and property mortgages.

For the three and six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024, interest expense on secured financing decreased by $3.1 million and $5.8 million, respectively, as a result of a decrease in the weighted average principal amount outstanding.

Our secured financing agreements consisted of two repurchase agreements, revolving line of credit, term loan, promissory notes, secured borrowings and property mortgages.

The outstanding amounts under the two repurchase agreements and the revolving line of credit were repaid in full and the facilities were terminated in February 2024, June 2025 and July 2025, respectively.

For the three and nine months ended September 30, 2025 as compared to the three and nine months ended September 30, 2024, interest expense on secured financing decreased by $2.8 million and $8.6 million, respectively, as a result of a decrease in the weighted average principal amount outstanding.

Interest Expense on Unsecured Notes Payable

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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 six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024, interest expense on unsecured notes payable increased by $0.05 million and $0.1 million, respectively, primarily due to an increase in the amortization of financing costs using the effective interest rate method.

For the three and nine months ended September 30, 2025 as compared to the three and nine months ended September 30, 2024, interest expense on unsecured notes payable increased by $0.1 million and $0.2 million, respectively, 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 six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024, interest expense from obligations under participation agreements increased by $0.2 million and $0.4 million, respectively, 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.

Unrealized Gain (Loss) on Investments, Net

For both the three and six months ended June 30, 2024, we recorded an unrealized gain on investments of $0.2 million, primarily due to an increase in the fair value of our marketable securities at the period end.

There was no such unrealized gain or loss for the three and six months ended June 30, 2025.

For the three and nine months ended September 30, 2025 as compared to the three and nine months ended September 30, 2024, interest expense from obligations under participation agreements increased by $0.2 million and $0.6 million, respectively, primarily as a result of an increase in the weighted average principal amount outstanding.

Unrealized (Loss) Gain on Investments, Net

For the three months ended September 30, 2024, we recorded an unrealized loss on investments of $0.1 million, primarily due to a decrease in the fair value of our marketable securities during the period.

For the nine months ended September 30, 2024, we recorded an unrealized gain on investments of $0.1 million, primarily due to an increase in the fair value of our marketable securities during the period.

There was no such unrealized gain or loss for the three and nine months ended September 30, 2025.

Income (Loss) from Equity Interest in Unconsolidated Investments

As of both June 30, 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.

As of both September 30, 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 interest in unconsolidated investments are as follows:

Three Months Ended June 30, Six Months Ended June 30,

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

2025 2024 2025 2024

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Loss from equity interest in the joint ventures (1)

(2,608,870) (1,488,677) (4,036,327) (3,140,340)

Income from other equity investment 668,900 581,229 1,902,525 657,207

$ 795,029 $ 1,025,176 $ 5,620,736 $ 2,223,759

For the three and six months ended June 30, 2025 as compared to the three and six months ended June 30, 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 June 30, 2025 as compared to the three months ended June 30, 2024, equity loss from the joint ventures increased primarily due to a gain recognized by a joint venture in connection with a sale of a property in 2024.

For the six months ended June 30, 2025 as compared to the six months ended June 30, 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, partially offset by a gain recognized by the joint venture in connection with the sale of the property in 2024.

For the three and nine months ended September 30, 2025 as compared to the three and nine months ended September 30, 2024, equity income from RESOF increased as a result of an increase in RESOF’s net income generated by an increase in the amount of invested capital.

For the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, equity loss from the joint ventures increased primarily due to a loss recognized by a joint venture in connection with a loss incurred on a portfolio investment.

For the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, equity loss from the joint ventures increased primarily due to a loss recognized by a joint venture in connection with a loss incurred on a portfolio investment, partially offset by a gain recognized by a joint venture in connection with the sale of property in 2024.

Other equity investment relates to a preferred equity agreement we acquired in June 2024 in which we also share residual profit from the sale of underlying property with the borrower.

The increase in income from other equity investment is due to holding the investment for a longer period of time in the current period.

For the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, equity income from the other equity investment increased primarily due to an increase in interest income resulting from increased outstanding principal balance.

For the nine months ended September 30,

2025 as compared to the nine months ended September 30, 2024, the increase in income from other equity investment is due to holding the investment for a longer period of time in the current period.

Loss on Sale of Real Estate, Net

In June 2025, we sold an industrial building and recognized a net loss on sale of $2.1 million for both the three and six months ended June 30, 2025.

There was no such loss for the three and six months ended June 30, 2024.

For the three and nine months ended September 30, 2025, we sold three and four industrial buildings, respectively, and recognized a net loss on sale of $0.8 million and $2.9 million, respectively.

There was no such loss for the three and nine months ended September 30, 2024.

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, 2025.

Realized Loss On Investments, Net

For the three and six months ended June 30, 2024, we sold a portion of our investments in trading securities and recognized a net loss on sale of $0.3 million and $0.4 million, respectively.

There was no such realized loss for the six months ended June 30, 2025.

For the three and six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024, the resulting net loss increased by $1.6 million and decreased by $3.3 million.

For the nine months ended September 30, 2024, we sold a portion of our investments in trading securities and recognized a net loss on sale of $0.4 million.

There was no such realized loss for the three months ended September 30, 2024 and three and nine months ended September 30, 2025.

For the three and nine months ended September 30, 2025 as compared to the three and nine months ended September 30, 2024, the resulting net loss decreased by $1.1 million and by $4.3 million, respectively.

Financial Condition, Liquidity and Capital Resources

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Our primary sources of cash generally consist of payments of principal and interest we receive on our portfolio of investments, cash generated from our operating results and unused borrowing capacity under our financing sources.

We deploy moderate amounts of leverage as part of our operating strategy and use a number of sources to finance our target assets, including our senior notes, term loan, repurchase agreement and revolving line of credit.

We deploy moderate amounts of leverage as part of our operating strategy and use a number of sources to finance our target assets, including our senior notes and term loan.

We may use other sources to finance our target assets, including bank financing and arranged financing facilities with domestic or international financing providers.

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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 $11.1 million matured on June 30, 2025.

The outstanding balance was repaid in full on July 1, 2025.

Additionally, two promissory notes payable with a total outstanding principal balance of $28.9 million that are collateralized by senior loans with an aggregate principal balance of $61.6 million will mature within the next twelve months.

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Finally, Terra LLC’s 7.00% unsecured senior notes due 2026 (the “7.00% Senior Notes Due 2026”) and our 6.00% unsecured senior notes due 2026 (the “6.00% Senior Notes Due 2026”) with an outstanding principal balance of $38.4 million and $85.1 million, respectively, are scheduled to mature on March 31, 2026 and June 30, 2026, respectively.

We intend to repay the 6.00% Senior Notes Due 2026, and intend to cause Terra LLC, our wholly owned subsidiary, to repay the 7.00% Senior Notes Due 2026, through ordinary course loan repayments, asset sales and distributions and may also use debt or equity capital sources or facilities.

sources or facilities, including exchange offers.

However, no assurance can be given that we will be able to obtain additional liquidity when needed or under acceptable terms, if at all.

As previously disclosed, we may repurchase certain of our 6.00% Senior Notes Due 2026 and the 7.00% Senior Notes Due 2026.

The repurchases may be made directly by us or made indirectly through an affiliated purchaser entity managed by our Manager and co-owned by us and other vehicles managed by our Manager or its affiliates.

Such affiliate purchaser entity may also purchase third-party marketable securities.

The timing and amount of any transactions will be determined by our Manager based on its evaluation of market conditions, prices, legal requirements and other factors, and may be made from time to time on the open market, in privately negotiated transactions or otherwise, in each case subject to compliance with all SEC rules and other legal requirements.

Summary of Financing

The table below summarizes our debt financing as of June 30, 2025:

The table below summarizes our debt financing as of September 30, 2025:

Type of Financing Maximum Amount Available Outstanding Balance Amount Remaining Available Interest Rate Maturity Date

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Property mortgages N/A 20,700,000 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

Term loan payable N/A 10,000,000 N/A 9.00% December 2027

$ 154,200,000

Variable Rate:

Property mortgages N/A $ 20,268,972 N/A Term SOFR +3.5% (Term SOFR Floor of 3.75%) April 2027

Promissory notes payable N/A 27,482,928 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

Promissory notes payable N/A 28,904,992 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 2026

Secured borrowing N/A 31,250,000 N/A Term SOFR + 5%, (combined floor rate ranging from 9.32% to 9.85%) Nov 2026 - Jun 2027

Revolving line of

11,071,390 11,071,390 — Term SOFR + 3.5% (combined floor rate of 7.0%) June 2025

$ 11,071,390 $ 90,073,290

_______________

(1) The outstanding balance was repaid on July 1, 2025.

Cash Flows Provided by (Used in) Operating Activities

For the six months ended June 30, 2025, cash flows provided by operating activities were $2.0 million, compared to cash flows used in operating activities of $7.3 million for the six months ended June 30, 2024.

The increase in operating cash flow was primarily due to a decrease in contractual interest expense, partially offset by a decrease in contractual interest income.

N/A $ 60,154,992

Cash Flows Used in Operating Activities

For the nine months ended September 30, 2025, cash flows used in operating activities were $2.2 million compared to $5.6 million for the nine months ended September 30, 2024.

The decrease in cash flows used in operating activities was primarily due to a decrease in contractual interest expense, partially offset by a decrease in contractual interest income.

Cash Flows Provided by Investing Activities

For the six months ended June 30, 2025, cash flows provided by investing activities were $86.5 million, primarily related to proceeds from repayment of loans of $87.0 million and proceeds from sale of real estate of $13.8 million, partially offset by origination, purchase and funding of loans of $15.3 million and capital contributions to and purchase of equity interests in unconsolidated investments of $0.7 million.

For the six months ended June 30, 2024, cash flows provided by investing activities were $39.4 million, primarily related to proceeds from repayment of loans of $110.4 million and promissory note receivable of $9.0 million, partially offset by origination and funding of loans of $42.6 million and capital contributions to and purchase of equity interests in unconsolidated investments of $36.6 million.

For the nine months ended September 30, 2025, cash flows provided by investing activities were $133.5 million, primarily related to proceeds from repayment of loans of $89.7 million and proceeds from sale of real estate of $69.1 million, partially offset by origination, purchase and funding of loans of $25.7 million and capital contributions to and purchase of equity interests in unconsolidated investments of $1.8 million.

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, purchase and funding of loans of $49.8 million and capital contributions to and purchase of equity interests in unconsolidated investments of $47.2 million.

Cash Flows Used in Financing Activities

For the six months ended June 30, 2025, cash flows used in financing activities were $74.7 million, primarily related to principal repayments on secured financing of $91.1 million, distributions paid of $7.0 million and a decrease in interest reserve and other deposits held on investments of $1.7 million, partially offset by proceeds from secured financing of $23.4 million and proceeds from obligations under participation agreements of $1.6 million.

For the six months ended June 30, 2024, cash flows used in financing activities were $21.2 million, primarily related to principal repayments on secured financing of $84.8 million, distributions paid of $9.3 million and payment for financing costs of $1.1 million, partially offset by proceeds from secured financing of $58.2 million and proceeds from obligations under participation agreements of $15.0 million.

For the nine months ended September 30, 2025, cash flows used in financing activities were $128.2 million, primarily related to principal repayments on secured financing of $141.9 million, distributions paid of $9.3 million, repayments on obligations under participation agreements of $2.6 million and a decrease in interest reserve and other deposits held on investments of $1.7 million, partially offset by proceeds from secured financing of $24.8 million and proceeds from obligations under participation agreements of $2.6 million.

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.

Distribution Reinvestment Plan

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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 June 30, Six Months Ended June 30,

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

2025 2024 2025 2024

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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 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;

of our common stock (other than those shares held by members of 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.

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 month prior to the date of such termination.

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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

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The promissory note matures on March 31, 2027.

As of June 30, 2025 and December 31, 2024, amount outstanding under the promissory note payable was $47.2 million and $45.1 million, respectively.

As of September 30, 2025 and December 31, 2024, amount outstanding under the promissory note payable was $38.1 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.

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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 June 30, 2025, the principal balance of our participation obligation was $19.6 million, which was a participation obligation to a related-party managed by the Manager.

As of September 30, 2025, the principal balance of our participation obligation was $18.0 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.

We do not have direct liability to a participant with respect to the underlying loan and the participants’ share of the investments is repayable only from the proceeds received from the related borrower/issuer of the investments and, therefore, the participants also are subject to credit risk (i.e., risk of default by the underlying borrower/issuer).

We do not have

direct liability to a participant with respect to the underlying loan and the participants’ share of the investments is repayable only from the proceeds received from the related borrower/issuer of the investments and, therefore, the participants also are subject to credit risk (i.e., risk of default by the underlying borrower/issuer).

Pursuant to the participation agreement with these entities, we receive and allocate the interest income and other related investment income to the participants based on their respective pro rata participation interest.

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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 six months ended June 30, 2025 and 2024, the weighted average outstanding principal balance on obligations under participation agreements was approximately $18.7 million and $13.5 million, respectively, and the weighted average interest rate was approximately 18.7% and 18.3%, respectively.

For the nine months ended September 30, 2025 and 2024, the weighted average outstanding principal balance on obligations under participation agreements was approximately $19.2 million and $14.0 million, respectively, and the weighted average interest rate was approximately 18.9% and 18.8%, 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