Terra Property Trust, Inc. 10-K

Item 9A. Controls and Procedures. Evaluation of Disclosure Controls and Procedures As required by Rule 13a-15(b) under the Exchange Act, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2025. Based on that evaluation, our management concluded that our disclosure controls and procedures were effective to provide reasonable assurance that we would meet our disclosure obligations. Notwithstanding the foregoing, a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that it will detect or uncover failures within the Company to disclose material information otherwise required to be set forth in our periodic reports. Evaluation of Internal Controls over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our consolidated financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets, (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with U.S. generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our Manager, and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the consolidated financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements in our consolidated financial statements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Under the supervision and with the participation of our management, including both our Chief Executive Officer and Chief Investment Officer and our Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013). Based on its evaluation, our management concluded that our internal control over financial reporting was effective as of the end of the fiscal year covered by this Annual Report on Form 10-K. This Annual Report on Form 10-K does not include an attestation report of our independent registered accounting firm due to a transition period established by the rules of the SEC for “emerging growth companies.” 55 Changes in Internal Control Over Financial Reporting During the most recent fiscal quarter, there was no change in our internal controls over financial reporting, as defined under Rule 13a-15(f) under the Exchange Act, that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting. Item 9B. Other Information. None . Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. PART III Item 10. Directors, Executive Officers and Corporate Governance. We have adopted an Insider Trading Policy that applies to all of our directors, officers, employees, associates and independent contractors as well as the officers, employees and affiliates of our Manager. The information regarding our executive officers required by Item 401 of Regulation S-K is located under Part I, Item 1 within the caption “Information About our Executive Officers” of this annual report on Form 10-K. The information regarding our directors and certain other matters required by Item 401 of Regulation S-K is incorporated herein by reference to our definitive proxy statement relating to our 2026 annual meeting of stockholders (the “Proxy Statement”), to be filed with the SEC within 120 days after December 31, 2025. The information regarding compliance with Section 16(a) of the Exchange Act required by Item 405 of Regulation S-K is incorporated herein by reference to the Proxy Statement to be filed with the SEC within 120 days after December 31, 2025. The information regarding our Code of Business Conduct and Ethics required by Item 406 of Regulation S-K is incorporated herein by reference to the Proxy Statement to be filed with the SEC within 120 days after December 31, 2025. The information regarding certain matters pertaining to our corporate governance required by Items 407(c)(3), (d)(4) and (d)(5) of Regulation S-K is incorporated by reference to the Proxy Statement to be filed with the SEC within 120 days after December 31, 2025. Item 11. Executive Compensation. The information regarding executive compensation and other compensation related matters required by Items 402 and 407(e)(4) and(e)(5) of Regulation S-K is incorporated herein by reference to the Proxy Statement to be filed with the SEC within 120 days after December 31, 2025. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The tables on our equity compensation plan information and beneficial ownership required by Items 201(d) and 403 of Regulation S-K are incorporated herein by reference to the Proxy Statement to be filed with the SEC within 120 days after December 31, 2025. Item 13. Certain Relationships and Related Transactions, and Director Independence. The information regarding transactions with related persons, promoters and certain control persons and director independence required by Items 404 and 407(a) of Regulation S-K is incorporated herein by reference to the Proxy Statement to be filed with the SEC within 120 days after December 31, 2025. 56 Item 14. Principal Accounting Fees and Services. The information concerning principal accounting fees and services and the Audit Committee’s pre-approval policies and procedures required by Item 14 is incorporated herein by reference to the Proxy Statement to be filed with the SEC within 120 days after December 31, 2025. PART IV Item 15. Exhibits and Financial Statement Schedules. The following exhibits are included, or incorporated by reference, in this Annual Report on Form 10-K: (1) Financial Statements The index to our financial statements is on page F-1 of this Annual Report on Form 10-K. (2) Financial Statement Schedule The index to our financial schedules is on page F-1 of this Annual Report on Form 10-K. (3) Exhibits The following exhibits are filed with this report. Documents other than those designated as being filed herewith are incorporated herein by reference. Exhibit No. Description and Method of Filing 3.1 Amended and Restated Bylaws of Terra Property Trust, Inc. (incorporated by reference to Exhibit 3.1 to the Registration Statement on Amendment No.1 to Form 10 (File No. 000-56117) filed with the SEC on December 16, 2019). 3.2 Second Articles of Amendment and Restatement of Terra Property Trust, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on December 5, 2023). 3.3 Articles of Supplementary of Terra Property Trust, Inc. Designating 12.5% Series A Redeemable Cumulative Preferred Stock (incorporated by reference to Exhibit 3.3 to the Registration Statement on Amendment No.1 to Form 10 (File No. 000-56117) filed with the SEC on December 16, 2019). 4.1 Description of Securities Registered Under Section 12 of the Securities Exchange Act of 1934 (incorporated by reference to Exhibit 4.1 to the Annual Report on Form 10-K filed with the SEC on March 15, 2024). 4.2 Indenture, dated June 10, 2021, by and between Terra Property Trust, Inc. and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form 8-A (File No. 001-40496) filed with the SEC on June 14, 2021). 4.3 First Supplemental Indenture, dated June 10, 2021, by and between Terra Property Trust, Inc. and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form 8-A (File No. 001-40496) filed with the SEC on June 14, 2021). 4.4 Form of Global Note representing the notes (included in Exhibit 4.2). 4.5 Indenture, dated February 10, 2021, by and between Terra Income Fund 6, Inc. and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC on February 10, 2021.) 4.6 First Supplemental Indenture, dated February 10, 2021, by and between Terra Income Fund 6, Inc. and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.2 of Terra Income Fund 6, Inc.’s Current Report on Form 8-K filed with the SEC on February 10, 2021). 4.7 Second Supplemental Indenture, dated October 1, 2022, by and among Terra Income Fund 6, Inc., Terra Merger Sub, LLC and U.S. Bank National Association, as trustee (incorporated by reference to exhibit 4.4 of Terra Income Fund 6, LLC’s Current Report on Form 8-K filed with the SEC on October 3, 2022). 10.1 Amended and Restated Management Agreement between Terra Property Trust, Inc., and Terra REIT Advisors, LLC, dated February 8, 2018 (incorporated by reference to Exhibit 10.1 to the Registration Statement on Form 10 (File No. 000-56117) filed with the SEC on November 6, 2019). 57 Exhibit No. Description and Method of Filing 10.2 Amendment to Amended and Restated Management Agreement, dated March 11, 2024, between Terra Property Trust, Inc., and Terra REIT Advisors, LLC (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed with the SEC on May 13, 2024). 10.3 Second Amendment to Amended and Restated Management Agreement, dated May 8, 2025, between Terra Property Trust, Inc. and Terra REIT Advisors, LLC (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed with the SEC on August 18, 2025). 10.4 Amended and Restated Voting Agreement by and among Terra Property Trust, Inc., Terra Secured Income Fund 5, LLC, Terra JV, LLC and Terra REIT Advisors, LLC, dated March 2, 2020 (incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q filed with the SEC on May 15, 2020). 10.5 Contribution Agreement by and among Terra Property Trust, Terra International Fund 3 REIT, LLC and Terra Income Fund International, dated March 2, 2020 (incorporated by reference to Exhibit 10.3 to Quarterly Report on Form 10-Q (File No. 000-56117) filed with the SEC on May 15, 2020). 10.6 Contribution Agreement by and among Terra Property Trust, Terra International Fund 3 REIT, LLC and Terra Secured Income Fund 5 International, dated March 2, 2020 (incorporated by reference to Exhibit 10.4 to Quarterly Report on Form 10-Q (File No. 000-56117) filed with the SEC on May 15, 2020). 10.7 Uncommitted Master Repurchase Agreement dated as of November 8, 2021, by and between Terra Mortgage Capital III, LLC, as Seller, UBS AG, as Buyer (incorporated by reference to Exhibit 10.11 to the Annual Report on Form 10-K filed with the SEC on March 11, 2022). 10.8 Amendment No. 1 to Uncommitted Master Repurchase Agreement, dated as of May 24, 2022, between Terra Mortgage Capital III, LLC, as Seller, and UBS AG, as Buyer (incorporated by reference to Exhibit 10.11 to the Annual Report on Form 10-K filed with the SEC on March 15, 2024). 10.9 Guarantee Agreement dated as of November 8, 2021, by and between Terra Property Trust, Inc., as Guarantor, in favor of UBS AG, as Buyer (incorporated by reference to Exhibit 10.12 to the Annual Report on Form 10-K filed with the SEC on March 11, 2022). 10.10 Amendment No. 1 to Guarantee Agreement, dated as of March 10, 2022, between Terra Property Trust, Inc., as Guarantor, and UBS AG, as Buyer (incorporated by reference to Exhibit 10.11 to the Annual Report on Form 10-K filed with the SEC on March 15, 2024). 10.11 Amendment No. 2 to Guarantee Agreement, dated as of November 14, 2023, between Terra Property Trust, Inc., as Guarantor, and UBS AG, as Buyer (incorporated by reference to Exhibit 10.11 to the Annual Report on Form 10-K filed with the SEC on March 15, 2024). 10.12 Amendment No. 1 to Pricing Letter, dated as of March 7, 2024, between Terra Mortgage Capital III, LLC, as Seller, and UBS AG, as Buyer (incorporated by reference to Exhibit 10.5 to the Quarterly Report on Form 10-Q filed with the SEC on May 13, 2024). 10.13 Waiver Letter, dated as of March 7, 2024, from UBS AG, as Buyer, to Terra Mortgage Capital III, LLC, as Seller, and Terra Property Trust, Inc., as Guarantor (incorporated by reference to Exhibit 10.6 to the Quarterly Report on Form 10-Q filed with the SEC on May 13, 2024). 10.14 Form of Indemnification Agreement (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K (File No. 001-40496) filed with the SEC on October 3, 2022). 14* Code of Business Conduct and Ethics. 19.1 Terra Property Trust, Inc. Insider Trading Policy (incorporated by reference to Exhibit 19 to the Annual Report on Form 10-K filed with the SEC on March 14, 2025). 21.1 * Subsidiaries 58 Exhibit No. Description and Method of Filing 31.1* Certification of Chief Executive Officer pursuant to Rule 13a-14 under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2* Certification of Chief Financial Officer pursuant to Rule 13a-14 under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32** Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 101.INS** Inline XBRL Instance Document - t he instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document 101.SCH** Inline XBRL Taxonomy Extension Schema Document 101.CAL** Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.LAB** Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE** Inline XBRL Taxonomy Extension Presentation Linkbase Document 101.DEF** Inline XBRL Taxonomy Extension Definition Linkbase Document 104 Cover Page Interactive Data File Included as Exhibit 101 (embedded within the Inline XBRL document) ______________ * Filed herewith. ** Furnished herewith. Item 16. Form 10-K Summary. None. 59 Terra Property Trust, Inc. Index to Consolidated Financial Statements Page Report of Independent Registered Public Accounting Firm KPMG LLP New York, NY PCAOB ID: 185 F- 2 Consolidated Financial Statements: Consolidated Balance Sheets as of December 31, 2025 and 2024 F- 3 Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2025 and 2024 F- 4 Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024 F- 5 Consolidated Statements of Changes in Equity for the years ended December 31, 2025 and 2024 F- 6 Notes to Consolidated Financial Statements F- 8 Schedule III — Real Estate and Accumulated Depreciation as of December 31, 2025 F- 40 Schedule IV — Mortgage Loans on Real Estate as of December 31, 2025 F- 41 Schedules other than those listed are omitted as they are not applicable for the required or equivalent information has been included in the consolidated financial statements or notes thereto. F-1 Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors Terra Property Trust, Inc.: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Terra Property Trust, Inc. and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive loss, changes in equity, and cash flows for the years then ended, and the related notes and financial statement schedules III and IV (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ KPMG LLP We have served as the Company’s auditor since 2016. New York, New York March 19, 2026 F-2 Terra Property Trust, Inc. Consolidated Balance Sheets December 31, 2025 2024 Assets Cash and cash equivalents $ 33,172,814 $ 8,578,456 Restricted cash 1,202,134 2,937,959 Cash held in escrow 3,519,393 7,448,611 Available-for-sale debt securities — 963,178 Loans held for investment, net of allowance for credit losses of $ 58,950,552 and $ 45,381,465 134,644,098 233,571,416 Loans held for investment acquired through participation, net of allowance for credit losses of $ 72,544 and $ 759,991 18,743,315 41,077,729 Equity interest in unconsolidated investments 94,218,842 106,816,146 Real estate owned, net ( Note 5 ) Land, building and building improvements, net 47,062,934 123,597,789 Lease intangible assets, net 1,850,543 5,641,030 Interest receivable 8,252,234 5,440,620 Due from related parties 1,743,577 859,267 Other assets 7,130,874 5,886,858 Total assets $ 351,540,758 $ 542,819,059 Liabilities and Equity Liabilities: Unsecured notes payable, net $ 117,949,074 $ 120,424,100 Secured financing agreements, net 60,908,096 205,718,782 Obligations under participation agreements ( Note 8 ) 18,197,981 18,177,106 Interest reserve and other deposits held on investments 1,202,134 2,937,959 Lease intangible liabilities, net ( Note 5 ) 1,553,716 3,902,416 Due to Manager ( Note 7 ) 728,212 1,597,552 Interest payable 654,465 1,350,384 Accounts payable and accrued expenses 2,964,488 2,189,486 Unearned income 151,622 127,485 Other liabilities 766,742 667,723 Total liabilities 205,076,530 357,092,993 Commitments and contingencies ( Note 9 ) Equity: Preferred stock, $ 0.01 par value, 50,000,000 shares authorized and none issued — — Class A Common Stock, $ 0.01 par value, 450,000,000 shares authorized and no shares issued, as of both December 31, 2025 and 2024 — — Class B Common Stock, $ 0.01 par value, 450,000,000 shares authorized and 24,339,891 and 24,337,952 shares issued and outstanding as of December 31, 2025 and 2024, respectively 243,399 243,380 Additional paid-in capital 444,496,228 444,478,936 Accumulated deficit ( 298,275,399 ) ( 258,810,775 ) Accumulated other comprehensive income (loss) — ( 185,475 ) Total equity 146,464,228 185,726,066 Total liabilities and equity $ 351,540,758 $ 542,819,059 See notes to consolidated financial statements . F-3 Terra Property Trust, Inc. Consolidated Statements of Operations and Comprehensive Loss Years Ended December 31, 2025 2024 Revenues Interest income $ 28,296,872 $ 38,250,784 Real estate operating revenue 6,802,853 10,740,170 Prepayment fee income — 435,677 Other operating income 339,295 262,863 35,439,020 49,689,494 Operating expenses Operating expenses reimbursed to Manager 4,035,222 7,468,132 Asset management fee 4,786,640 6,207,231 Asset servicing fee 1,143,783 1,489,674 Provision for credit losses 12,767,592 16,627,739 Real estate operating expenses 3,113,673 2,673,913 Depreciation and amortization 3,841,661 7,357,295 Professional fees 2,812,876 3,012,046 Impairment charge on real estate assets 3,399,684 — Directors’ fees 303,022 356,886 Other 551,713 558,638 36,755,866 45,751,554 Operating (loss) income ( 1,316,846 ) 3,937,940 Other income and expenses Interest expense on secured financing ( 13,505,701 ) ( 25,052,058 ) Interest expense on unsecured notes payable ( 9,913,012 ) ( 9,836,953 ) Interest expense on obligations under participation agreements ( 3,648,329 ) ( 2,971,924 ) Income from equity interest in unconsolidated investments 3,283,274 2,738,410 Gain on extinguishment of debt 548,625 — Loss on sale of real estate, net ( 2,880,545 ) — Unrealized gain on investments, net 39,290 100,149 Loss on repayment of loan — ( 5,629,510 ) Realized loss on investments, net — ( 446,009 ) ( 26,076,398 ) ( 41,097,895 ) Net loss before income taxes ( 27,393,244 ) ( 37,159,955 ) Provision for income tax ( 432,602 ) — Net loss $ ( 27,825,846 ) $ ( 37,159,955 ) Other comprehensive income (loss) Unrealized gain (loss) on available-for-sale debt securities 185,475 ( 185,475 ) 185,475 ( 185,475 ) Comprehensive loss $ ( 27,640,371 ) $ ( 37,345,430 ) Per share data Loss per share — basic and diluted $ ( 1.14 ) $ ( 1.53 ) Weighted-average shares — basic and diluted 24,338,825 24,336,834 Distributions declared per common share $ 0.48 $ 0.76 See notes to consolidated financial statements . F-4 Terra Property Trust, Inc. Consolidated Statements of Changes in Equity Preferred Stock Class A Common Stock Class B Common Stock Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) $ 0.01 Par Value $ 0.01 Par Value Shares Amount Shares Amount Total Equity Balance at January 1, 2025 $ — — $ — 24,337,952 $ 243,380 $ 444,478,936 $ ( 258,810,775 ) $ ( 185,475 ) $ 185,726,066 Shares issued from reinvestment of shareholder distributions — — — 1,939 19 17,292 — — 17,311 Distributions declared on common shares ($ 0.48 per share) — — — — — — ( 11,638,778 ) — ( 11,638,778 ) Net loss — — — — — — ( 27,825,846 ) — ( 27,825,846 ) Other comprehensive loss: Unrealized gain on available-for-sale debt securities — — — — — — — 185,475 185,475 Balance at December 31, 2025 $ — — $ — 24,339,891 $ 243,399 $ 444,496,228 $ ( 298,275,399 ) $ — $ 146,464,228 Preferred Stock Class A Common Stock Class B Common Stock Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) $ 0.01 Par Value $ 0.01 Par Value Shares Amount Shares Amount Total Equity Balance at January 1, 2024 $ — — $ — 24,336,033 $ 243,360 $ 444,458,206 $ ( 203,047,758 ) $ — $ 241,653,808 Shares issued from reinvestment of shareholder distributions — — — 1,919 20 20,730 — — 20,750 Distributions declared on common shares ($ 0.76 per share) — — — — — — ( 18,603,062 ) — ( 18,603,062 ) Net loss — — — — — — ( 37,159,955 ) — ( 37,159,955 ) Other comprehensive loss: Unrealized loss on available-for-sale debt securities — — — — — — — ( 185,475 ) ( 185,475 ) Balance at December 31, 2024 $ — — $ — 24,337,952 $ 243,380 $ 444,478,936 $ ( 258,810,775 ) $ ( 185,475 ) $ 185,726,066 See notes to consolidated financial statements . F-5 Terra Property Trust, Inc. Consolidated Statements of Cash Flows Years Ended December 31, 2025 2024 Cash flows from operating activities: Net loss $ ( 27,825,846 ) $ ( 37,159,955 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 3,841,661 7,357,295 Provision for credit losses 12,767,592 16,627,739 Impairment charge on real estate assets held for sale 3,399,684 — Loss on sale of real estate, net 2,880,545 — Loss on repayment of loan — 5,629,510 Gain on extinguishment of debt ( 548,625 ) — Amortization of net purchase premiums on loans 6,913 155,727 Straight-line rent adjustments ( 81,819 ) ( 200,926 ) Amortization of deferred financing costs 1,641,761 2,649,091 Amortization of discount on unsecured notes payable 2,052,078 1,850,642 Amortization of above- and below-market rent intangibles ( 1,150,390 ) ( 2,936,459 ) Amortization and accretion of investment-related fees, net 532,517 ( 578,756 ) Realized loss on investments, net — 446,009 Unrealized gain on investments, net ( 39,290 ) ( 100,149 ) Distributions received from equity interest in unconsolidated investments 12,291,711 5,633,878 Income from equity interest in unconsolidated investments ( 3,283,274 ) ( 2,738,410 ) Changes in operating assets and liabilities: Interest receivable ( 2,811,614 ) 1,096,748 Due from related parties ( 884,310 ) ( 204,004 ) Other assets ( 1,157,017 ) 1,379,815 Due to Manager ( 34,771 ) ( 1,474,903 ) Unearned income 24,137 ( 186,775 ) Interest payable ( 695,919 ) ( 225,079 ) Accounts payable and accrued expenses 775,002 ( 216,263 ) Other liabilities 213,073 ( 62,894 ) Net cash provided by (used in) operating activities 1,913,799 ( 3,258,119 ) Cash flows from investing activities: Proceeds from repayments of loans 136,445,087 215,137,530 Origination, purchase and funding of loans ( 29,632,403 ) ( 57,163,870 ) Proceeds from sale of real estate 69,123,333 — Real estate capital expenditures ( 118,189 ) — Capital contributions to and purchase of equity interests in unconsolidated investments ( 1,914,977 ) ( 65,617,196 ) Distributions in excess of income 5,503,845 3,076,908 Repayments of promissory note receivable 1,182,759 9,624,408 Funding for promissory note receivable — ( 4,962,369 ) Purchase of equity securities — ( 2,002,353 ) Proceeds from sale of trading equity securities — 3,551,098 Net cash provided by investing activities 180,589,455 101,644,156 See notes to consolidated financial statements . F-6 Terra Property Trust, Inc. Consolidated Statements of Cash Flows (Continued) Years Ended December 31, 2025 2024 Cash flows from financing activities: Repayments on secured financing ( 170,854,544 ) ( 177,525,167 ) Proceeds from secured financing 24,805,321 81,284,441 Proceeds from obligations under participation agreements 2,611,678 18,000,000 Repayments on obligations under participation agreements ( 2,591,102 ) — Repayments on unsecured notes payable ( 4,188,000 ) — Distributions paid ( 11,621,467 ) ( 18,582,312 ) Payment of financing costs — ( 1,117,723 ) Change in interest reserve and other deposits held on investments ( 1,735,825 ) ( 1,017,027 ) Net cash used in financing activities ( 163,573,939 ) ( 98,957,788 ) Net increase (decrease) in cash, cash equivalents and restricted cash 18,929,315 ( 571,751 ) Cash, cash equivalents and restricted cash at beginning of period 18,965,026 19,536,777 Cash, cash equivalents and restricted cash at end of period ( Note 2 ) $ 37,894,341 $ 18,965,026 Years Ended December 31, 2025 2024 Supplemental disclosure of cash flow information: Cash paid for interest $ 24,069,122 $ 33,610,601 Supplemental non-cash information: Reinvestment of shareholder distributions $ 17,311 $ 20,750 Supplemental non-cash investing and financing information: 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 equity investment in exchange for the satisfaction of the remaining funding commitment ( Note 4 , Note 8 ). See notes to consolidated financial statements . F-7 Terra Property Trust, Inc. Notes to Consolidated Financial Statements December 31, 2025 Note 1. Business Terra Property Trust, Inc. ( “Terra Property Trust”) ( and, together with its consolidated subsidiaries, the “Company” is a real estate investment trust (“REIT”) that originates, invests in and manages a diverse portfolio of real estate and real estate-related assets. The Company was incorporated under the Maryland General Corporation Law on December 31, 2015. The Company focuses primarily on commercial real estate credit investments, including first mortgage loans, subordinated loans (including B-notes, mezzanine and preferred equity) and credit facilities throughout the United States. The Company’s loans finance the acquisition, development or recapitalization of high-quality commercial real estate in the United States . The Company focuses on middle market loans in the approximately $ 10 million to $ 50 million range, which in the Company’s experience have been subject to less competition, offer higher risk-adjusted returns than larger loans with similar risk metrics and facilitate portfolio diversification . The Company may also make strategic real estate equity and non-real estate-related investments that align with its investment objectives and criteria . On January 1, 2016, Terra Secured Income Fund 5, LLC (“Terra Fund 5”), the Company’s then parent, contributed its consolidated portfolio of net assets to the Company pursuant to a contribution agreement in exchange for shares of the Company’s common stock. Upon receipt of the contribution of the consolidated portfolio of net assets from Terra Fund 5, the Company commenced its operations on January 1, 2016. On March 2, 2020, the Company engaged in a series of transactions pursuant to which the Company issued an aggregate of 4,574,470.35 shares of its common stock in exchange for the settlement of an aggregate of $ 49.8 million of participation interests in loans held by the Company, cash of $ 25.5 million and other working capital. The Company has elected to be taxed, and to qualify annually thereafter, as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), commencing with the taxable year ended December 31, 2016. As a REIT, the Company is not subject to federal income taxes on income and gains distributed to the stockholders as long as certain requirements are satisfied, principally relating to the nature of income and the level of distributions, as well as other factors. 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 (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. Services necessary for the Company’s business are provided by individuals who are employees of the Manager or by individuals who were contracted by the Company or by the Manager to work on behalf of the Company pursuant to the terms of the Management Agreement. On October 1, 2022, pursuant to that certain Agreement and Plan of Merger, dated as of May 2, 2022 (the “Merger Agreement”), Terra Income Fund 6, Inc. (“Terra BDC”), merged with and into Terra Income Fund 6, LLC (“Terra LLC”), a wholly owned subsidiary of the Company, with Terra LLC continuing as the surviving entity of the merger (the “BDC Merger”) and as a wholly owned subsidiary of the Company. Pursuant to the terms of the transactions described in the Merger Agreement, 4,847,910 shares of the Company’s 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. On December 20, 2023, Terra Fund 5 announced that effective December 29, 2023 (the “Distribution Date”), Terra Fund 5 would distribute all of its shares of the Company’s Class B Common Stock to its members as part of the winding up of Terra Fund 5. On the Distribution Date, each member of Terra Fund 5 received 2,252.02 shares of the Company’s Class B Common Stock for each unit of membership interest in Terra Fund 5 held by such member. Because Terra Fund 5 previously owned its interests in the shares of Class B Common Stock indirectly through its ownership of interests in Terra JV, LLC (“Terra JV”), prior to the Distribution Date, Terra JV first distributed the shares of Class B Common Stock to Terra Fund 5 and Terra Secured Income Fund 7, LLC (“Terra Fund 7”), and Terra Fund 5 then distributed those shares to its members on the Distribution Date and Terra Fund 7 became a direct stockholder of the Company’s Class B Common Stock. F-8 Notes to Consolidated Financial Statements As of December 31, 2025, Terra Fund 7 and Terra Offshore Funds REIT, LLC (“Terra Offshore REIT”) held 8.7 % and 10.1 %, respectively, of the issued and outstanding shares of the Company’s common stock. Note 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and include the accounts of the Company and its consolidated subsidiaries. The accompanying consolidated financial statements of the Company and related financial information have been prepared pursuant to the requirements for reporting on Form 10-K and Articles 6 or 10 of Regulation S-X. Certain prior period amounts have been reclassified to conform to the current period presentation. Liquidity These consolidated financial statements have been prepared in accordance with U.S. GAAP assuming the Company will continue as a going concern. The Company has significant debt obligations of approximately $ 118.8 million coming due, including $ 38.4 million of 7.00 % unsecured senior notes maturing on March 31, 2026 issued by Terra LLC and $ 80.4 million of 6.00 % unsecured senior notes maturing on June 30, 2026 issued by Terra Property Trust ( Note 8 ). As of December 31, 2025, the Company had cash and cash equivalents of $ 33.2 million. As of the date of issuance, the Company does not have sufficient liquidity to satisfy these obligations. The Company intends to refinance or repay, or cause Terra LLC to refinance or repay, the unsecured senior notes through ordinary course loan repayments, real estate owned and loan sales, receipt of distributions from equity interests in unconsolidated investments, the deferral of asset management fee payments and operating expenses reimbursed to the Manager and may also use debt or equity capital sources or facilities, including exchange offers. Consolidation The Company consolidates entities in which it has a controlling financial interest based on either the variable interest entity (“VIE”) or voting interest model. The Company is required to first apply the VIE model to determine whether it holds a variable interest in an entity, and if so, whether the entity is a VIE. If the Company determines it does not hold a variable interest in a VIE, it then applies the voting interest model. Under the voting interest model, the Company consolidates an entity when it holds a majority voting interest in an entity. The Company accounts for investments in which it has significant influence but not a controlling financial interest using the equity method of accounting (see Note 4 ). VIE Model An entity is considered to be a VIE if any of the following conditions exist: (a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support, (b) the holders of the equity investment at risk, as a group, lack either the direct or indirect ability through voting rights or similar rights to make decisions that have a significant effect on the success of the entity or the obligation to absorb the entity’s expected losses or right to receive the entity’s expected residual returns, or (c) the voting rights of some equity investors are disproportionate to their obligation to absorb losses of the entity, their rights to receive returns from an entity, or both and substantially all of the entity’s activities either involve or are conducted on behalf of an investor with disproportionately few voting rights. Under the VIE model, limited partnerships are considered VIEs unless a limited partner holds substantive kick-out or participating rights over a general partner. The Company consolidates entities that are VIEs when the Company determines it is the primary beneficiary. Generally, the primary beneficiary of a VIE is a reporting entity that has (a) the power to direct the activities that most significantly affect the VIE’s economic performance, and (b) the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE. Loans Held for Investment The Company originates, acquires, and structures, or acquires through participations, real estate-related loans generally to be held to maturity (collectively the “loans”). Loans held for investment are carried at the principal amount outstanding, adjusted for the accretion of discounts on investments and exit fees, and the amortization of premiums on investments and origination fees. The Company’s preferred equity investments, which are economically similar to mezzanine loans and F-9 Notes to Consolidated Financial Statements subordinate to any loans but are senior to common equity, are accounted for as loans held for investment. Loans are carried at amortized cost less allowance for credit losses. Amortized cost is the amount at which a financing receivable or a loan is originated or acquired, adjusted for accretion, or amortization of premium, discount, and net deferred fees or costs, collection of cash and write-offs. Allowance for Credit Losses The Company follows the provisions of Accounting Standards Codification (“ASC”) 326, Financial Instruments – Credit Losses to estimate potential credit losses related to its loans . ASC 326 mandates the use of a current expected credit loss (“CECL”) methodology for estimating future credit losses of certain financial instruments measured at amortized cost, instead of the “incurred loss” methodology previously required under U.S. GAAP. The CECL methodology requires the consideration of possible credit losses over the life of an instrument as opposed to estimating credit losses upon the occurrence of an actual loss event under the previous “incurred loss” methodology. As permitted by ASC 326, the Company elected not to measure an allowance for credit losses on accrued interest receivable (which is presented separately on the consolidated balance sheets), but rather write off in a timely manner by reversing interest income that would likely be uncollectible. Performing Loans The Company uses a model-based approach for estimating the allowance for credit losses on performing loans on a collective basis, including future funding commitments for which the Company does not have the unconditional right to cancel, as these loans share similar risk characteristics. The Company utilizes information obtained from internal and external sources relating to past events, current economic conditions and reasonable and supportable forecasts about the future to determine the expected credit losses for its loan portfolio. The Company utilizes a commercial mortgage-based, third-party loan loss model and because the Company does not have a meaningful history of realized credit losses on its loan portfolio, it subscribes to a database service to provide historical proxy loan loss information. The Company employs logistic regression to forecast expected losses at the loan level based on a commercial real estate loan securitization database that contains activity dating back to 1998. The Company has chosen to incorporate a weighted average macroeconomic forecast that encompasses baseline, upside and downside scenarios, into its allowance for credit losses on performing loans estimate during the reasonable and supportable forecast period which is currently eight quarters. The Company selects certain economic variables from a group of independent variables such as Commercial Real Estate Price Index, unemployment and interest rate which are included in the model as part of macroeconomic forecast and updated regularly based on current economic trends. The specific loan level information input into the model includes loan-to-value and debt service coverage ratio metrics, as well as principal balances, property type, location, coupon rate, coupon rate type, original or remaining term, expected repayment dates and contractual future funding commitments. Based on the inputs, the loan loss model determines a loan loss rate through the generation of a probability of default (PD) and loss given default (LGD) for each loan. The allowance for credit losses on performing loans is then calculated by applying the loan loss rate to the total outstanding loan balance of each loan. A significant amount of judgment is applied in selecting inputs and analyzing results produced by the models to determine the allowance for credit losses on performing loans. Changes in such estimates can significantly affect the expected credit losses. Beyond the Company’s reasonable and supportable forecast period, the Company reverts to historical loss information on a straight-line basis over the remaining contractual loan term, taken from a period that most accurately reflects the expectation of conditions expected to exist during the period of reversion. The Company may adjust historical loss information for differences in risk that may not reflect the characteristics of its current portfolio, including but not limited to, loan-to-value and debt service coverage ratios, among other relevant factors. The method of reversion selected represents the best estimate of the collectability of the investments and is reevaluated each reporting period. The determination of the performing loans credit loss estimate considers historical loss information and current economic conditions for each loan, reversion period and reasonable and supportable forecasts about the future. The reasonable and supportable forecast period is determined based on the Company’s assessment of the most likely scenario of assumptions and plausible outcomes for the U.S. economy. The Company regularly evaluates the reasonable and supportable forecast period to determine if a change is needed. The Company also performs a qualitative assessment and applies qualitative adjustments as necessary, usually due to limitations of the loan loss model. The Company’s qualitative analysis includes a review of data that may directly impact its estimates including internal and external information about the loan or property including current market conditions, asset specific conditions, property operations or borrower/sponsor details (i.e., refinance, sale, bankruptcy) which allows the Company to determine the amount of the expected loss more accurately and reasonably for these investments. The Company also evaluates the contractual life of its loans to determine if changes are needed for certain contractual extension options, renewals, modifications, and prepayments. F-10 Notes to Consolidated Financial Statements Unfunded Commitments Some of the Company’s performing loans include commitments to fund incremental proceeds to the borrowers over the life of the loan and these unfunded commitments are also subject to the CECL methodology because the Company does not have an unconditional right to cancel such commitments. The allowance for credit losses related to unfunded commitments is recorded as a component of other liabilities on the Company’s consolidated balance sheets. This allowance for credit losses is estimated using the same method outlined above for the Company’s outstanding performing loan balances and increases or decreases are also recorded in earnings on the consolidated statements of operations. Non-Performing Loans During the loan review process, all non-performing loans are evaluated for collectability, which includes both loans in default and loans where we do not expect to collect all amounts due for both principal and interest according to the contractual terms of the loan. The Company removes these loans from the model-based approach described above and analyzes them separately. The credit loss reserve for these loans is calculated as any excess of the amortized cost of the loan over (i) the present value of expected future cash flows discounted at the appropriate discount rate or (ii) the fair value of collateral, if repayment is expected solely from the collateral. Loans Not Secured by Real Estate As of December 31, 2024, the Company had one loan that was not secured by real estate. This loan, which was included in other assets on the consolidated balance sheets, was recorded at amortized cost. The Company performed a separate analysis based on recoverability to determine the allowance for credit losses on this loan. 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 December 31, 2025. Equity Interest in Unconsolidated Investments The Company accounts for its equity interests in unconsolidated investments under the equity method of accounting, i.e., at cost, increased or decreased by its share of earnings or losses, less distributions, plus contributions and other adjustments required by equity method accounting. The Company classifies distributions received from equity method investments using the cumulative earnings approach. Distributions received are considered returns on the investment and classified as cash inflows from operating activities. If, however, the investor’s cumulative distributions received, less distributions received in prior periods determined to be returns of investment, exceed cumulative equity in earnings recognized, the excess is considered a return of investment and is classified as cash inflows from investing activities. The Company evaluates its equity interest in unconsolidated investments on a periodic basis to determine if there are any indicators that the value of its equity investments may be impaired and whether or not that impairment is other-than-temporary. To the extent an impairment has occurred and is determined to be other-than-temporary, the Company measures the charge as the excess of the carrying value of its investment over its estimated fair value, which is determined by calculating its share of the estimated fair market value of the underlying net assets based on the terms of the applicable partnership or joint venture agreements. Equity Securities Without Readily Determinable Fair Value The Company accounts for its equity securities without readily determinable fair value at cost, which is included in other assets on the consolidated balance sheets. The Company has elected the measurement alternative and therefore will evaluate whether the security continues to qualify for the alternative at each reporting period. The Company evaluates its equity security without readily determinable fair value on a periodic basis to determine if there is an observable price change in an orderly transaction for similar investments or if there are any indicators that the value of its equity security may be impaired. The Company will make fair value adjustments, if any, or reductions for any impairment to derive the carrying value of the investment. F-11 Notes to Consolidated Financial Statements Available-For-Sale 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. Changes in the fair value of the available-for-sale debt securities are reported in other comprehensive income or loss until a gain or loss on the securities is realized. Real Estate Owned, Net Real estate acquired is recorded at its estimated fair value at acquisition and is shown net of accumulated depreciation and impairment charges. Acquisition of properties generally are accounted for as asset acquisitions. Under asset acquisition accounting, the costs to acquire real estate, including transaction costs, are accumulated and then allocated to individual assets and liabilities acquired based upon their relative fair value. The Company allocates the purchase price of its real estate acquisitions to land, building, tenant improvements, acquired in-place leases, intangibles for the value of any above or below market leases at fair value and to any other identified intangible assets or liabilities. The Company amortizes the value allocated to in-place leases over the remaining lease term, which is reported in depreciation and amortization expense on its consolidated statements of operations. The value allocated to above or below market leases are amortized over the remaining lease term as an adjustment to rental income. Real estate assets are depreciated using the straight-line method over their estimated useful lives: buildings and improvements - not to exceed 40 years, and tenant improvements - shorter of the lease term or life of the asset. Ordinary repairs and maintenance which are not reimbursed by the tenants are expensed as incurred. Major replacements and betterments which improve or extend the life of the asset are capitalized and depreciated over their estimated useful life. Management reviews the Company’s real estate for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The review of recoverability is based on estimated future cash flows and the estimated liquidation value of such real estate assets, and provides for impairment if such undiscounted cash flows are insufficient to recover the carrying amount of the real estate assets. If impaired, the real estate asset will be written down to its estimated fair value. Revenue Recognition Revenue is recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Interest Income: Interest income is accrued based upon the outstanding principal amount and contractual terms of the loans and preferred equity investments that the Company expects to collect, and it is accrued and recorded on a daily basis. Discounts and premiums on investments purchased are accreted or amortized over the expected life of the respective loan using the effective yield method, and are included in interest income in the consolidated statements of operations. Loan origination fees and exit fees, net of portions attributable to obligations under participation agreements, are capitalized and amortized or accreted to interest income over the life of the investment using the effective yield method. Outstanding interest receivable is assessed for recoverability. The Company generally reverses the accrued and unpaid interest against interest income and no longer accrues for the interest when, in the opinion of the Manager, recovery of interest and principal becomes not probable. Interest is then recorded on the basis of cash received until accrual is resumed when the loan becomes contractually current and performance is demonstrated. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. The Company holds loans in its portfolio that may contain paid-in-kind (“PIK”) interest provisions. The PIK interest, which represents contractually deferred interest that is added to the principal balance that is due at maturity, is recorded on the accrual basis. Real Estate Operating Revenues: Real estate operating revenue is derived from leasing of space to various types of tenants. The leases are for fixed terms of varying length and generally provide for annual rent increases and expense reimbursements to be paid in monthly installments. Lease revenue, or rental income from leases, is recognized on a straight-line basis over the term of the respective leases. Additionally, the Company recorded above- and below-market lease intangibles, which are included in real estate owned, net, in connection with the acquisition of the real estate properties. These intangible assets and liabilities are amortized to lease revenue over the remaining contractual lease term. F-12 Notes to Consolidated Financial Statements Other Revenues: Prepayment fee income is recognized as prepayments occur. All other income is recognized when earned. Cash, Cash Equivalents and Restricted Cash The Company considers all highly liquid investments, with original maturities of ninety days or less when purchased, as cash equivalents. Cash and cash equivalents are exposed to concentrations of credit risk. The Company maintains all of its cash at financial institutions which, at times, may exceed the amount insured by the Federal Deposit Insurance Corporation. Restricted cash represents cash held as additional collateral by the Company on behalf of the borrowers related to the investments in loans or preferred equity instruments for the purpose of such borrowers making interest and property-related operating payments. Restricted cash is not available for general corporate purposes. The related liability is recorded in “ Interest reserve and other deposits held on investments ” on the consolidated balance sheets. Cash held in escrow represents amounts funded to an escrow account for debt services and tenant improvements. From time to time, it may also include proceeds from the repayment of loans that are held by the title company due to timing. Cash held in escrow is restricted and is not available for general corporate purposes. 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: December 31, 2025 2024 Cash and cash equivalents $ 33,172,814 $ 8,578,456 Restricted cash 1,202,134 2,937,959 Cash held in escrow 3,519,393 7,448,611 Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows $ 37,894,341 $ 18,965,026 Participation Interests 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. For the investments for which participation has been granted, the 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. Interest expense from obligations under participation agreement is reversed when recovery of interest income on the related loan becomes not probable. See “ Obligations Under Participation Agreements ” in Note 8 for additional information. Secured Financing Agreements, Net 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. See “ Secured Financing Arrangements ” in Note 8 for additional information. Repurchase of Unsecured Notes Payable From time to time, the Company may repurchase certain of its 6.00 % Senior Notes Due 2026 and 7.00 % Senior Notes Due 2026. These purchases are recorded as a reduction to unsecured notes payable on the consolidated balance sheets, and the difference between the purchase price and the par value is reported as gain or loss on extinguishment of debt. Fair Value Measurements U.S. GAAP establishes market-based or observable inputs as the preferred source of values, followed by valuation models using management assumptions in the absence of market inputs. The Company has not elected the fair value option for its F-13 Notes to Consolidated Financial Statements financial instruments, including loans held for investment, loans held for investment acquired through participation, obligations under participation agreements, secured borrowings, unsecured notes, mortgage loan payable, and term loan payable. Such financial instruments are carried at amortized cost, less impairment, where applicable. Available-for-sale securities are financial instruments that are reported at fair value. Deferred Financing Costs Deferred financing costs represent fees and expenses incurred in connection with obtaining financing for investments. These costs are presented on the consolidated balance sheets as a direct deduction of the debt liability to which the costs pertain. These costs are amortized using the effective interest method and are included in interest expense on the applicable borrowings in the consolidated statements of operations over the life of the borrowings. Income Taxes The Company has elected to be taxed as a REIT under the Internal Revenue Code commencing with the taxable year ended December 31, 2016. In order to qualify as a REIT, the Company is required, among other things, to distribute dividends equal to at least 90% of its REIT net taxable income to the stockholders and meet certain tests regarding the nature of its income and assets. As a REIT, the Company is not subject to federal income taxes on income and gains distributed to the stockholders as long as certain requirements are satisfied, principally relating to the nature of income and the level of distributions, as well as other factors. If the Company fails to continue to qualify as a REIT in any taxable year and does not qualify for certain statutory relief provisions, the Company will be subject to U.S. 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. federal and state income taxes at regular corporate rates. As of December 31, 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 years ended December 31, 2025 and 2024, the Company did not incur any interest or penalties. Although the Company files federal and state tax returns, its major tax jurisdiction is federal. The Company’s 2022-2025 federal tax returns remain subject to examination by the Internal Revenue Service. The Company may hold certain investments through a consolidated taxable REIT subsidiary (“TRS”). Such TRS may be subject to U.S. federal and state corporate- level income taxes. The TRS recognizes deferred tax assets and liabilities for the estimated future tax effects attributable to temporary differences between the tax basis of certain assets and liabilities and the reported amounts are included in the accompanying consolidated statement of assets and liabilities using the applicable statutory tax rates in effect for the year in which any such temporary differences are expected to reverse. On December 31, 2025, the Company elected the TRS status for a wholly own subsidiary that holds a non-real estate-related investment. In connection with this election, the Company recorded a deferred income tax expense and deferred income tax liability of $ 0.4 million related to an unrealized gain on the investment. Deferred tax liabilities are included in Other liabilities on the Company’s consolidated balance sheets as of December 31, 2025. Earnings Per Share The Company has a simple equity capital structure with only common stock outstanding. As a result, earnings per share, as presented, represents both basic and dilutive per-share amounts for the periods presented in the consolidated financial statements. Income per basic share of common stock is calculated by dividing net income allocable to common stock by the weighted-average number of shares of common stock issued and outstanding during such period. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may ultimately differ from those estimates, and those differences could be material. F-14 Notes to Consolidated Financial Statements Segment Information The Company’s primary business is originating, acquiring and structuring real estate-related loans related to high quality commercial real estate. From time to time, the Company may assume control of properties acquired in connection with foreclosures or deed in lieu of foreclosure, or it may acquire operating real estate properties that meet its investment criteria. The Company operates as one segment, which is also its sole reportable segment, focused on mezzanine loans, senior loans and preferred equity investments, and to a lesser extent, owning and managing real estate. The Company’s chief operating decision maker (“CODM”) is its senior management team, comprised of its chief executive officer who is also the chief investment officer, chief operating officer, chief financial officer, chief originations officer and the head of asset management of the Manager. The Company generates its revenue primarily from originating, acquiring, investing in, and managing real estate-related debt investments. The CODM evaluates the performance of any real estate owned assets with that of its real estate-related debt investments. Additionally, the Company seeks to enhance its returns on equity by utilizing leverage, and generally finance its real estate-related investments with leverage obtained through a variety of sources, including secured and unsecured debt instruments. The CODM evaluates performance and allocates resources based on consolidated net income (loss), which is also reported as consolidated net income (loss) on the Company’s consolidated statement of operations. The Company’s consolidated net income (loss) is primarily derived through the difference between the interest income earned on its loans and the cost at which its to finance them. Accordingly, interest expense, as reported on its consolidated statement of operations, is its most significant segment expense. Additionally, the measure of segment assets is reflected on the balance sheet as total consolidated assets. The CODM uses consolidated net income (loss) to make key operating decisions, such as identifying attractive investment opportunities, evaluating underwriting standards, determining the appropriate level of leverage to enhance returns on equity and deciding on the sources of financing. Recent Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”). ASU 2023-07 intends to improve reportable segment disclosure requirements, enhance interim disclosure requirements and provide new segment disclosure requirements for entities with a single reportable segment. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. ASU 2023-07 is to be adopted retrospectively to all prior periods presented. The Company adopted this ASU on December 31, 2024. The adoption of the standard has not impacted the Company ’ s financial statements but has resulted in incremental disclosures, which are included within “Segment Information” above. In December 2023, the FASB issued ASU 2023-09 “Improvements to Income Tax Disclosures” (“ASU 2023-09”). ASU 2023-09 intends to improve the transparency of income tax disclosures. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 and is to be adopted on a prospective basis with the option to apply retrospectively. The Company adopted this ASU on December 31, 2025. The adoption of this standard did not have a material impact to its consolidated financial statements. Note 3. Loans Held for Investment The Company elected the practical expedient under ASC 326 to exclude accrued interest from amortized cost. As of December 31, 2025 and December 31, 2024, accrued interest receivable of $ 8.3 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. F-15 Notes to Consolidated Financial Statements Portfolio Summary The table below provides a summary of the Company’s loan portfolio. Carrying value represents the amortized cost of loan, net of applicable allowance for credit losses. December 31, 2025 December 31, 2024 Fixed Rate Floating Rate (1)(2)(3) Total Fixed Rate Floating Rate (1)(2)(3) Total Number of loans 3 6 9 2 11 13 Principal balance $ 14,012,427 $ 196,429,911 $ 210,442,338 $ 12,680,463 $ 304,574,560 $ 317,255,023 Carrying value $ 13,226,342 $ 140,161,071 $ 153,387,413 $ 12,106,695 $ 262,542,450 $ 274,649,145 Fair value $ 13,133,944 $ 139,806,938 $ 152,940,882 $ 11,740,671 $ 264,796,547 $ 276,537,218 Weighted-average coupon rate (4) 9.42 % 14.46 % 14.16 % 8.50 % 13.18 % 13.04 % Weighted-average remaining term (years) (5) 1.48 0.59 0.71 2.68 0.84 0.91 _______________ (1) These loans pay a coupon rate of Secured Overnight Financing Rate (“SOFR”) or forward-looking term rate based on SOFR (“Term SOFR”), as applicable, plus a fixed spread. Coupon rates shown were determined using the average SOFR of 3.79 % and Term SOFR of 3.69 % as of December 31, 2025 and average SOFR of 4.53 % and Term SOFR of 4.33 % as of December 31, 2024. (2) As of December 31, 2025 and 2024, amount included $ 63.6 million and $ 208.0 million of senior mortgages used as collateral for $ 31.3 million and $ 123.2 million of borrowings under secured financing agreements, respectively ( Note 8 ). (3) As of December 31, 2025 and 2024, five 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 December 31, 2025 and 2024, exclusive of any extension available. Lending Activities The following tables present the activities of the Company’s loan portfolio: Loans Held for Investment, Net Loans Held for Investment through Participation Interests, Net Total Balance, January 1, 2025 $ 233,571,416 $ 41,077,729 $ 274,649,145 Principal repayments received ( 107,574,347 ) ( 28,870,740 ) ( 136,445,087 ) Origination, purchase and funding of loans 23,537,271 6,095,132 29,632,403 Net amortization of premiums on loans ( 6,913 ) — ( 6,913 ) Accrual, payment and accretion of investment-related fees and other, net ( 1,314,241 ) ( 246,253 ) ( 1,560,494 ) (Provision for) reversal of provision for credit losses ( 13,569,088 ) 687,447 ( 12,881,641 ) Balance, December 31, 2025 $ 134,644,098 $ 18,743,315 $ 153,387,413 F-16 Notes to Consolidated Financial Statements Loans Held for Investment, Net Loans Held for Investment through Participation Interests, Net Total Balance, January 1, 2024 $ 417,913,773 $ 38,558,485 $ 456,472,258 Principal repayments received ( 216,137,530 ) — ( 216,137,530 ) Origination, purchase and funding of loans 54,155,680 3,008,190 57,163,870 Loss on repayment of loan (1) ( 5,629,510 ) — ( 5,629,510 ) Net amortization of premiums on loans ( 155,727 ) — ( 155,727 ) Accrual, payment and accretion of investment-related fees and other, net ( 304,112 ) 44,518 ( 259,594 ) (Provision for) reversal of provision for credit losses ( 16,271,158 ) ( 533,464 ) ( 16,804,622 ) Balance, December 31, 2024 $ 233,571,416 $ 41,077,729 $ 274,649,145 _______________ (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 The tables below detail the types of loans in the Company’s loan portfolio, as well as the property type and geographic location of the properties securing these loans. Carrying value represents the amortized cost of loans, net of applicable allowance for credit losses. Percentages of total represented below are calculated as a percentage of the total carrying value. December 31, 2025 December 31, 2024 Loan Structure Principal Balance Carrying Value % of Total Principal Balance Carrying Value % of Total First mortgages $ 86,456,898 $ 88,060,452 57.5 % $ 207,985,740 $ 209,496,879 76.3 % Preferred equity investments 99,281,969 40,563,196 26.4 % 94,224,551 50,114,256 18.2 % Mezzanine loans 24,703,471 24,763,765 16.1 % 15,044,732 15,038,010 5.5 % Total $ 210,442,338 $ 153,387,413 100.0 % $ 317,255,023 $ 274,649,145 100.0 % December 31, 2025 December 31, 2024 Property Type Principal Balance Carrying Value % of Total Principal Balance Carrying Value % of Total Office $ 101,711,046 $ 43,696,575 28.4 % $ 116,539,650 $ 72,991,791 26.6 % Infill land 40,609,561 41,821,242 27.3 % 56,307,815 57,050,952 20.8 % Multifamily 37,855,514 37,389,999 24.4 % 60,969,051 60,662,514 22.1 % Mixed-use 22,292,750 22,512,213 14.7 % 48,438,507 48,067,655 17.5 % Industrial 7,000,000 6,993,917 4.6 % 7,000,000 6,966,233 2.5 % Retail 973,467 973,467 0.6 % — — — % Student housing — — — % 28,000,000 28,910,000 10.5 % Total $ 210,442,338 $ 153,387,413 100.0 % $ 317,255,023 $ 274,649,145 100.0 % F-17 Notes to Consolidated Financial Statements December 31, 2025 December 31, 2024 Geographic Location Principal Balance Carrying Value % of Total Principal Balance Carrying Value % of Total United States California $ 54,109,304 $ 54,643,252 35.6 % $ 71,006,023 $ 71,273,115 26.0 % Georgia 31,734,254 31,878,019 20.8 % 30,562,858 30,586,450 11.1 % New Jersey 22,906,090 24,051,394 15.7 % 22,900,000 24,045,000 8.8 % Arizona 17,703,471 17,769,848 11.6 % 33,407,815 33,005,952 12.0 % New York 76,015,752 17,077,516 11.1 % 75,657,255 31,536,808 11.5 % Massachusetts 7,000,000 6,993,917 4.6 % 7,000,000 6,966,233 2.5 % Illinois 973,467 973,467 0.6 % — — — % Washington — — — % 26,894,593 26,907,157 9.8 % North Carolina — — — % 21,826,479 21,418,430 7.8 % Utah — — — % 28,000,000 28,910,000 10.5 % Total $ 210,442,338 $ 153,387,413 100.0 % $ 317,255,023 $ 274,649,145 100.0 % Allowance for Credit Losses As described in Note 2 , the Company follows the provisions of ASC 326, which requires entities to recognize credit losses on financial instruments based on an estimate of current expected credit losses. Certain of the Company’s performing loans contain provisions for future funding commitments, which are subject to the borrower meeting certain performance-related metrics that are monitored by the Company. These unfunded commitments amounted to $ 8.8 million and $ 18.7 million as of December 31, 2025 and 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 December 31, 2025 and 2024, the Company had five and four non-performing loans with total amortized cost of $ 154.7 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 $ 58.9 million and $ 44.1 million as of December 31, 2025 and 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. The following table presents the activity in allowance for credit losses: Year Ended December 31, 2025 Allowance on Non-Performing Loans Allowance on Performing Loans Total Funded Unfunded Allowance for credit losses, beginning of period $ 44,120,447 $ 2,021,008 $ 150,024 $ 46,291,479 Provision for (reversal of provision for) credit losses 14,817,787 ( 1,936,146 ) ( 114,049 ) 12,767,592 Allowance for credit losses, end of period $ 58,938,234 $ 84,862 $ 35,975 $ 59,059,071 Year Ended December 31, 2024 Allowance on Non-Performing Loans Allowance on Performing Loans Total Funded Unfunded Allowance for credit losses, beginning of period $ 54,642,777 $ 2,333,248 $ 326,907 $ 57,302,932 Provision for credit losses 17,116,862 ( 312,240 ) ( 176,883 ) 16,627,739 Charge-offs ( 27,639,192 ) — — ( 27,639,192 ) Allowance for credit losses, end of period $ 44,120,447 $ 2,021,008 $ 150,024 $ 46,291,479 F-18 Notes to Consolidated Financial Statements Accrued Interest Receivable The Company elected not to measure a CECL reserve on accrued interest receivable due to the Company’s policy of writing off uncollectible accrued interest receivable balances in a timely manner. 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 year ended December 31, 2025, the Company did no t reverse any interest income accrual because all accrued interest income was deemed collectible. For the year ended December 31, 2024, the Company reversed $ 0.7 million of accrued interest income because such income was deemed uncollectible. For the years ended December 31, 2025 and 2024, the Company suspended interest income accrual of $ 14.4 million and $ 21.4 million on two and five loans, respectively, because recovery of such income was not probable. As of both December 31, 2025 and 2024, there was no interest receivable recognized on these loans. In August 2024, in connection with the repayment of a $ 65.0 million senior loan, the Company wrote off the related interest receivable of $ 4.8 million. Loan Risk Rating The Company assesses the risk factors of each performing loan and assigns each performing loan a risk rating between 1 and 5, which is an average of the numerical ratings in the following categories: (i) sponsor capability and financial condition; (ii) loan and collateral performance relative to underwriting; (iii) quality and stability of collateral cash flows and/or reserve balances; and (iv) loan to value. Based on a 5-point scale, the Company’s performing loans are rated “1” through “5”, from less risk to greater risk, as follows: Risk Rating Description 1 Very low risk 2 Low risk 3 Moderate/average risk 4 Higher risk 5 Highest risk 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. The following tables present the amortized cost of the Company’s loan portfolio by year of origination and loan risk rating: December 31, 2025 Loan Risk Rating Number of Loans Amortized Cost % of Total Amortized Cost by Year Originated 2025 2024 2023 2022 2021 Prior 1 — $ — — % $ — $ — $ — $ — $ — $ — 2 2 7,973,467 3.8 % 973,467 — — — — 7,000,000 3 2 49,726,646 23.4 % — 31,884,254 — 17,842,392 — — 4 — — — % — — — — — — 5 — — — % — — — — — — Non-performing (1) 5 154,710,396 72.8 % — — — 46,563,605 — 108,146,791 9 212,410,509 100.0 % $ 973,467 $ 31,884,254 $ — $ 64,405,997 $ — $ 115,146,791 Allowance for credit losses ( 59,023,096 ) Total carrying value, net $ 153,387,413 _______________ (1) Amount includes three loans that are in maturity default with total amortized costs of $ 78.7 million. The Company expects to recover the principal and interest payments in full and therefore, no specific allowance for loan losses was recorded on these three loans. F-19 Notes to Consolidated Financial Statements December 31, 2024 Loan Risk Rating Number of Loans Amortized Cost % of Total Amortized Cost by Year Originated 2024 2023 2022 2021 2020 Prior 1 — $ — — % $ — $ — $ — $ — $ — $ — 2 1 7,000,000 2.2 % — — — — — 7,000,000 3 5 104,009,643 32.4 % 30,812,857 27,121,997 — 30,035,052 — 16,039,737 4 3 81,168,702 25.3 % — — 52,494,051 — 28,674,651 — 5 — — — % — — — — — — Non-performing (1) 4 128,612,255 40.1 % — — 24,045,000 28,910,000 — 75,657,255 13 320,790,600 100.0 % $ 30,812,857 $ 27,121,997 $ 76,539,051 $ 58,945,052 $ 28,674,651 $ 98,696,992 Allowance for credit losses ( 46,141,455 ) Total carrying value, net $ 274,649,145 _______________ (1) Amount includes two loans that were in maturity default with total amortized costs of $ 53.0 million. The Company expected to recover the principal and interest payments in full and therefore, no specific allowance for loan losses was recorded on these two loans. Note 4. Equity Interest in Unconsolidated Investments The Company owns interests in a limited partnership, joint ventures and a preferred equity investment with profit-sharing feature. The Company accounts for its interests in these investments under the equity method of accounting ( Note 2 ). Equity Interest in Limited Partnerships Mavik Real Estate Special Opportunities Fund, LP On August 3, 2020, the Company entered into a subscription agreement with Mavik Real Estate Special Opportunities Fund, LP (“RESOF”) whereby the Company committed to fund up to $ 50.0 million to purchase a limited partnership interest in RESOF. RESOF ’s primary investment objective is to generate attractive risk-adjusted returns by purchasing performing and non-performing mortgages, loans, mezzanines and other credit instruments supported by underlying commercial real estate assets. RESOF may also opportunistically originate high-yield mortgages or loans in real estate special situations including rescue financings, bridge loans, restructurings and bankruptcies (including debtor-in-possession loans). The general partner of RESOF is Mavik Real Estate Special Opportunities Fund GP, LLC , which is a subsidiary of the Company’s sponsor, Terra Capital Partners . The Company evaluated its equity interest in RESOF and determined it does not have a controlling financial interest and is not the primary beneficiary. Accordingly, the equity interest in RESOF is accounted for as an equity method investment. The following tables present a summary of information regarding the Company’s equity interest in RESOF: December 31, 2025 December 31, 2024 Ownership Interest Carrying Value Unfunded Commitment Ownership Interest Carrying Value Unfunded Commitment Equity interest in RESOF 14.9 % $ 40,193,442 $ 11,333,135 14.9 % $ 48,171,168 $ 10,065,613 Years Ended December 31, 2025 2024 Income from equity interest in RESOF $ 8,661,998 $ 6,977,386 Distributions received from RESOF $ 16,639,724 $ 5,633,878 F-20 Notes to 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: December 31, 2025 2024 Investments at fair value (cost of $ 386,743,426 and $ 465,401,329 , respectively) $ 393,861,482 $ 468,862,953 Other assets 51,534,275 34,769,227 Total assets 445,395,757 503,632,180 Secured financing agreements, net of financing costs 116,985,111 100,033,166 Obligations under participation agreement (proceeds of $ 28,566,506 and $ 51,754,396 , respectively) 28,819,472 73,672,431 Other liabilities 38,977,816 14,114,335 Total liabilities 184,782,399 187,819,932 Partners’ capital $ 260,613,358 $ 315,812,248 Years Ended December 31, 2025 2024 Total investment income $ 73,856,515 $ 62,645,656 Total expenses 25,036,862 22,725,966 Net investment income 48,819,653 39,919,690 Net change in unrealized appreciation on investments 3,696,457 3,469,865 Net increase in partners’ capital resulting from operations $ 52,516,110 $ 43,389,555 Mavik Real Estate Special Opportunities VS2, LP On December 23, 2025, the Company entered into a subscription agreement with Mavik Real Estate Special Opportunities VS2, LP (“VS2”) whereby the Company committed to fund up to $ 8.4 million to purchase a limited partnership interest in VS2. VS2 invests in stressed, distressed, and special situations investments, including the origination of first mortgage loans, mezzanine loans, preferred equity, and structured equity investments, as well as the acquisition of performing and non-performing notes, and public market real estate debt and equity securities. The general partner of VS2 is Mavik Real Estate Special Opportunities VS2 GP, L LC , which is a subsidiary of the Company’s sponsor, Terra Capital Partners. The Company evaluated its equity interest in VS2 and determined it does not have a controlling financial interest and is not the primary beneficiary. Accordingly, the equity interest in VS2 is accounted for as an equity method investment. The following tables present a summary of information regarding the Company’s equity interest in VS2: December 31, 2025 Ownership Interest Carrying Value Unfunded Commitment Equity interest in VS2 1.5 % 316,072 $ 8,369,755 Year Ended December 31, 2025 Income from equity interest in VS2 $ 316,072 Distributions received from VS2 $ — F-21 Notes to Consolidated Financial Statements The following tables present summarized financial information of the Company’s equity interest in VS2. Amounts provided are the total amounts attributable to the investment and do not represent the Company’s proportionate share: December 31, 2025 Investments at fair value (cost of $ 372,843,060 ) $ 383,462,787 Other assets 19,534,617 Total assets 402,997,404 Secured financing agreements, net of financing costs 301,843,692 Obligations under participation agreement (proceeds of $ 75,783,803 ) 76,025,965 Other liabilities 5,579,792 Total liabilities 383,449,449 Partners’ capital $ 19,547,955 Year Ended December 31, 2025 Total investment income $ 26,833,898 Total expenses 17,933,457 Net investment income 8,900,441 Net change in unrealized appreciation on investments 10,016,218 Net increase in partners’ capital resulting from operations $ 18,916,659 Equity Interest in Joint Ventures The Company beneficially owns equity interests in joint ventures that invest in real estate properties, opportunistic debt and equity securities, and indirectly, together with other non-affiliated entities, non-real estate operating companies. Non-real estate-related investments may take various forms, including preferred and common equity interests in private companies and other financial assets. The Company evaluated its equity interests in these entities and determined it does not have a controlling financial interest and is not the primary beneficiary. Accordingly, the equity interests in the joint ventures are accounted for as equity method investments. The following tables present a summary of the Company’s equity interest in the joint ventures: December 31, 2025 December 31, 2024 Entity Co-owner Beneficial Ownership Interest Carrying Value Beneficial Ownership Interest Carrying Value LEL Arlington JV LLC Third party/Affiliate 27.2 % $ 4,566,783 27.2 % $ 5,761,522 TCG Corinthian FL Portfolio JV LLC Third party/Affiliate 30.6 % 4,272,442 30.6 % 5,694,696 610 Walnut Investors LLC Third party 22.8 % 1,278,434 33.6 % 2,672,379 MASPEN MS I LLC (1) Affiliates 2.4 % 648,581 2.4 % 62,878 Axar Special Opportunity Fund VI-B LLC (2) N/A 100.0 % 22,106,901 100.0 % 20,957,270 XS Acquisition Holdco LLC (3) Third parties 46.0 % 2,124,011 46.0 % 7,599,187 VASPEN MS LLC (4) Affiliates 1.2 % 154,340 — % — $ 35,151,492 $ 42,747,932 _______________ (1) This entity invests in opportunistic equity and debt securities. This entity is jointly owned with a related party managed by the Manager. (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. Through November 2024, $ 10.0 million of the F-22 Notes to Consolidated Financial Statements commitment was funded. In December 2024, through a series of transactions, a wholly owned subsidiary of the Company issued a $ 10.0 million term loan payable to the entity in exchange for the satisfaction of the remaining funding commitment to this entity ( Note 8 ). The Company determined it is not a primary beneficiary of the entity and therefore accounts for the investment using the equity method of accounting. (3) In September 2024, the Company purchased preferred and common units in an entity that invests in a non-real estate operating company. The preferred units carry interest at an annual rate of 15 %, of which 10 % is paid in cash and 5 % is accrued. The Company determined it is not a primary beneficiary of the entity and therefore accounts for the investment using the equity method of accounting. The decrease in carrying value was primarily due to a loss recognized in 2025 in connection with a loss incurred on a portfolio investment. (4) This entity invests in opportunistic equity and debt securities. This entity is jointly owned with a related party managed by the Manager. Years Ended December 31, 2025 2024 Loss from equity interest in the joint ventures $ ( 8,293,140 ) $ ( 5,483,997 ) Distributions received from the joint ventures $ 980,832 $ 3,076,909 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. December 31, 2025 2024 Net investments in real estate $ 194,450,383 $ 196,206,089 Other assets 129,185,361 100,379,328 Total assets 323,635,744 296,585,417 Secured financing agreements 220,573,866 210,398,952 Other liabilities 6,571,012 8,948,512 Total liabilities 227,144,878 219,347,464 Members’ capital $ 96,490,866 $ 77,237,953 Years Ended December 31, 2025 2024 Revenues $ 25,852,485 $ 19,133,332 Operating expenses ( 15,084,038 ) ( 13,968,721 ) Depreciation and amortization expense ( 7,903,409 ) ( 7,889,130 ) Interest expense ( 17,579,278 ) ( 15,465,374 ) One time charge off ( 9,433,416 ) — Gain on sale of real estate — 4,816,477 Unrealized gain (loss) 9,696,063 ( 1,653,894 ) Net loss $ ( 14,451,593 ) $ ( 15,027,310 ) Other Equity Investments In June 2024, the Company entered into a preferred equity agreement with TCC Boundary Partners LLC. The investment carries interest at an annual rate of 15.0 % and matures on June 30, 2029. Additionally, the Company will receive distributions in the event that net proceeds from the sale of underlying property exceed certain internal rate of return thresholds. 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 December 31, 2025 and 2024, the Company's investment had a carrying value of $ 18.6 million and $ 15.9 million, respectively. F-23 Notes to Consolidated Financial Statements The following table presents a summary of the Company’s equity interest in TCC Boundary Partners LLC: Years Ended December 31, 2025 2024 Income from other equity investment $ 2,598,344 $ 1,245,021 Distributions received from other equity investment 175,000 — Note 5. Real Estate Owned, Net Real Estate Owned Activities 2025 — During the year ended December 31, 2025, the Company sold four industrial buildings for total net proceeds of $ 69.1 million and recognized a net loss on sale of $ 2.9 million, excluding an impairment charge of $ 3.4 million to reduce the carrying value of two industrial buildings to their estimated selling price less the cost of the sale. In connection with the sale, cash proceeds were used to repay the related mortgage loans payable ( 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. In connection with the lease termination, the Company wrote off the related unamortized in-place lease of $ 0.3 million and unamortized below-market rent of $ 0.1 million. Subsequent to the lease termination, the Company entered into a new lease with another tenant for the same space. Operating Real Estate Owned, Net Real estate owned is comprised of four and eight industrial buildings located in Texas with lease intangible assets and liabilities as of December 31, 2025 and 2024, respectively. The following table presents the components, net as of: December 31, 2025 December 31, 2024 Cost Accumulated Depreciation/Amortization Net Cost Accumulated Depreciation/Amortization Net Real estate: Land $ 8,096,412 $ — $ 8,096,412 $ 23,785,004 $ — $ 23,785,004 Building and building improvements 42,420,065 ( 3,571,732 ) 38,848,333 104,924,745 ( 5,140,431 ) 99,784,314 Tenant improvements 118,189 — 118,189 29,585 ( 1,114 ) 28,471 Total real estate 50,634,666 ( 3,571,732 ) 47,062,934 128,739,334 ( 5,141,545 ) 123,597,789 Lease intangible assets: In-place lease 5,365,527 ( 3,514,984 ) 1,850,543 12,060,731 ( 6,419,701 ) 5,641,030 Total intangible assets 5,365,527 ( 3,514,984 ) 1,850,543 12,060,731 ( 6,419,701 ) 5,641,030 Lease intangible liabilities: Below-market rent ( 3,850,707 ) 2,296,991 ( 1,553,716 ) ( 8,649,073 ) 4,746,657 ( 3,902,416 ) Total intangible liabilities ( 3,850,707 ) 2,296,991 ( 1,553,716 ) ( 8,649,073 ) 4,746,657 ( 3,902,416 ) Total operating real estate $ 52,149,486 $ ( 4,789,725 ) $ 47,359,761 $ 132,150,992 $ ( 6,814,589 ) $ 125,336,403 F-24 Notes to 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: Years Ended December 31, 2025 2024 Real estate operating revenues: Lease revenue $ 5,243,181 $ 8,295,021 Other operating income 1,559,672 2,445,149 Total $ 6,802,853 $ 10,740,170 Real estate operating expenses: Utilities $ 72,703 $ 49,825 Real estate taxes 1,243,382 1,119,689 Repairs and maintenances 436,406 326,395 Management fees 214,673 253,133 Other operating expenses 1,146,509 924,871 Total $ 3,113,673 $ 2,673,913 The following table presents the amortization of intangibles that is included in the consolidated statements of operations: Years Ended December 31, 2025 2024 Net amortization of above- and below-market rent intangibles (1) $ ( 1,150,390 ) $ ( 2,936,459 ) Amortization of in-place lease intangibles (2) $ 1,564,241 $ 4,228,333 _______________ (1) Net amortization of above- and below-market rent intangibles is recorded as an adjustment to real estate operating revenue on the consolidated statements of operations. (2) Amortization of in-place lease intangibles is included in depreciation and amortization expense on the consolidated statements of operations. Scheduled Future Minimum Rent Income Scheduled future minimum rents, exclusive of renewals and expenses paid by tenants, under non-cancelable operating leases at December 31, 2025 are as follows: Years Ending December 31, Total 2026 $ 2,509,455 2027 1,567,306 2028 1,377,912 2029 1,377,912 2030 1,377,912 Thereafter 902,902 Total $ 9,113,399 F-25 Notes to Consolidated Financial Statements Scheduled Annual Net Amortization of Intangibles Based on the intangible assets and liabilities recorded at December 31, 2025, scheduled annual net amortization of intangibles for each of the next five calendar years and thereafter is as follows: Years Ending December 31, Net Decrease in Real Estate Operating Revenue (1) Increase in Depreciation and Amortization (1) Total 2026 $ ( 763,535 ) $ 977,241 $ 213,706 2027 ( 236,345 ) 275,643 39,298 2028 ( 156,215 ) 183,892 27,677 2029 ( 170,409 ) 183,892 13,483 2030 ( 156,208 ) 168,568 12,360 Thereafter ( 71,004 ) 61,307 ( 9,697 ) Total $ ( 1,553,716 ) $ 1,850,543 $ 296,827 _______________ (1) Amortization of below-market rent and above-market rent intangibles is recorded as an adjustment to lease revenues; and amortization of in-place lease intangibles is included in depreciation and amortization. Note 6. Fair Value Measurements The Company follows the provisions of ASC 820, Fair Value Measurement (“ASC 820”), which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 established a fair value hierarchy that prioritizes and ranks the level of market price observability used in measuring investments at fair value. Market price observability is impacted by a number of factors, including the type of investment, the characteristics specific to the investment, and the state of the marketplace (including the existence and transparency of transactions between market participants). Investments with readily available, actively quoted prices or for which fair value can be measured from actively quoted prices in an orderly market will generally have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Investments measured and reported at fair value are classified and disclosed into one of the following categories based on the inputs as follows: Level 1 — Quoted prices (unadjusted) in active markets for identical assets and liabilities that the Company has the ability to access. 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 investments. 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. The inputs into the determination of fair value require significant management judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. 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 December 31, 2025 and 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 F-26 Notes to Consolidated Financial Statements 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. Marketable securities and derivatives are financial instruments that are reported at fair value. Financial Instruments Carried at Fair Value on a Recurring Basis From time to time, the Company may invest in debt securities. These securities are classified as available-for-sale debt securities and are carried at fair value. Changes in the fair value of the available-for-sale debt securities are reported in other comprehensive income or loss until a gain or loss on the securities is realized. In 2024, the Company owned certain trading equity securities that were carried at fair value. Changes in the fair value of the trading equity securities were reported in earnings. The trading equity securities were sold by April 2024. Additionally, the Company may invest in short-term money market funds. These funds are included in cash and cash equivalents on the consolidated balance sheet due to their short-term nature and can be easily converted to cash. As discussed in Note 8 , in March 2023, the Company entered into a loan agreement with a lender to provide financing for the acquisition of real estate properties ( Note 5 ). In connection with the financing, the Company purchased an interest rate cap for $ 258,500 to effectively cap the related index rate at 5.0 %. The interest rate cap met all the criteria of a derivative under ASC 815, but it did not meet the criteria under ASC 815-20-25 to qualify for hedging accounting. As such, the interest rate cap is reported at fair value and is included in other assets 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: December 31, 2025 Fair Value Measurements Level 1 Level 2 Level 3 Total Money market fund (1) $ 28,928,772 $ — $ — $ 28,928,772 Available-for-sale debt securities — — — — Total $ 28,928,772 $ — $ — $ 28,928,772 December 31, 2024 Fair Value Measurements Level 1 Level 2 Level 3 Total Money market fund (1) $ 2,360,936 $ — $ — $ 2,360,936 Available-for-sale debt securities 963,178 — — 963,178 Derivative - interest rate cap (2) — 75 — 75 Total $ 3,324,114 $ 75 $ — $ 3,324,189 ______________ (1) Amount is included in cash and cash equivalents on the consolidated balance sheets. (2) Amount is included in other assets on the consolidated balance sheets. The interest rate cap matured in May 2025. F-27 Notes to Consolidated Financial Statements Financial Instruments Not Carried at Fair Value The following table presents the carrying value, which represents the amortized cost of loans, 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: December 31, 2025 December 31, 2024 Level Principal Amount Carrying Value Fair Value Principal Amount Carrying Value Fair Value Assets: Loans Loans held for investment 3 $ 191,765,400 $ 134,644,098 $ 134,385,733 $ 275,802,476 $ 233,571,416 $ 234,665,528 Loans held for investment acquired through participation 3 18,676,938 18,743,315 18,555,149 41,452,547 41,077,729 41,871,690 Total loans 210,442,338 153,387,413 152,940,882 317,255,023 274,649,145 276,537,218 Equity securities without readily determinable fair value (1) 3 2,000,000 2,004,168 2,000,000 2,000,000 2,002,353 2,000,000 Total assets $ 212,442,338 $ 155,391,581 $ 154,940,882 $ 319,255,023 $ 276,651,498 $ 278,537,218 Liabilities: Unsecured notes payable 1 $ 118,763,375 $ 117,949,074 $ 114,366,824 $ 123,500,000 $ 120,424,100 $ 88,764,850 Secured financing agreements 3 61,950,000 60,908,096 61,866,780 207,593,942 205,718,782 206,731,436 Obligations under participation agreements 3 18,020,576 18,197,981 18,197,981 18,000,000 18,177,106 18,254,853 Total liabilities $ 198,733,951 $ 197,055,151 $ 194,431,585 $ 349,093,942 $ 344,319,988 $ 313,751,139 _____________ (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 December 31, 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 year ended December 31, 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 year ended December 31, 2025: Year Ended December 31, 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 During the year ended December 31, 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 F-28 Notes to 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; market credit spreads and yield curves; the investment’s yield; covenants of the investment, including prepayment provisions; the ability of our borrowers and investees to make payments and their net operating income and debt-service coverage ratio; construction progress reports and construction budget analysis; the nature, quality and realizable value of any collateral (and loan-to-value ratio); the forces that influence the local markets in which the asset (the collateral) is purchased and sold, such as capitalization rates, occupancy rates, rental rates and replacement costs; and the anticipated duration of each real estate-related loan investment. The Manager designates a valuation committee to oversee the entire valuation process of the Company’s Level 3 investments. The valuation committee is comprised of members of the Manager’s senior management, deal and portfolio management teams, who meet on a quarterly basis, or more frequently as needed, to review the Company investments being valued as well as the inputs used in the proprietary valuation model. Valuations determined by the valuation committee are supported by pertinent data and, in addition to a proprietary valuation model, are based on market data, industry accepted third-party valuation models and discount rates or other methods the valuation committee deems to be appropriate. 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 include mortgage loans 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 December 31, 2025 and 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 December 31, 2025 Primary Valuation Technique Unobservable Inputs December 31, 2025 Asset Category Minimum Maximum Weighted Average Assets: Loans held for investment, net $ 134,385,733 Discounted cash flow Discount rate 6.75 % 18.79 % 11.32 % Discounted cash flow Terminal capitalization rate 5.75 % 5.75 % 5.75 % Loans held for investment acquired through participation, net 18,555,149 Discounted cash flow Discount rate 16.00 % 18.30 % 18.18 % Equity securities (1) 2,000,000 N/A N/A N/A N/A N/A Total Level 3 Assets $ 154,940,882 Liabilities: Secured financing agreements $ 61,866,780 Discounted cash flow Discount rate 6.51 % 9.85 % 8.20 % Obligation under participation agreement 18,197,981 Discounted cash flow Discount rate 18.79 % 18.79 % 18.79 % Total Level 3 Liabilities $ 80,064,761 F-29 Notes to Consolidated Financial Statements Fair Value at December 31, 2024 Primary Valuation Technique Unobservable Inputs December 31, 2024 Asset Category Minimum Maximum Weighted Average Assets: Loans held for investment, net $ 234,665,528 Discounted cash flow Discount rate 6.75 % 16.48 % 9.63 % Discounted cash flow Terminal capitalization rate 5.75 % 5.75 % 5.75 % Loans held for investment acquired through participation, net 41,871,690 Discounted cash flow Discount rate 15.07 % 17.03 % 16.65 % Equity securities (1) 2,000,000 N/A N/A N/A N/A N/A Total Level 3 Assets $ 278,537,218 Liabilities: Secured financing agreements $ 206,731,436 Discounted cash flow Discount rate 6.33 % 11.28 % 8.30 % Obligation under participation agreement 18,254,853 Discounted cash flow Discount rate 14.78 % 14.78 % 14.78 % Total Level 3 Liabilities $ 224,986,289 _______________ (1) Fair market value is based on purchase price. Note 7. Related Party Transactions Management Agreement The Company entered into the Management Agreement with the Manager whereby the Manager is responsible for its day-to-day operations. 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: Years Ended December 31, 2025 2024 Origination and extension fee expense (1) $ 1,189,878 $ 1,334,709 Asset management fee 4,786,640 6,207,231 Asset servicing fee 1,143,783 1,489,674 Operating expenses reimbursed to Manager 4,035,222 7,468,132 Disposition fee (2) 1,698,415 907,224 Total $ 12,853,938 $ 17,406,970 _______________ (1) Origination and extension fee expense is generally offset with origination and extension fee income. Any excess is deferred and amortized to interest income over the term of the loan on the consolidated statements of operations. (2) Disposition fee is generally offset with exit fee income and included in interest income on the consolidated statements of operations. 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 F-30 Notes to 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 Pursuant to the Management Agreement, the Manager or its affiliates receives an origination fee in the amount of 1.0 % of the amount used to originate, fund, acquire or structure investments, including any third-party expenses related to such investments. In the event that the term of any loan held by the Company is extended, the Manager also receives an extension fee equal to the lesser of (i) 1.0 % of the principal amount of the loan being extended or (ii) the amount of fee paid to the Company by the borrower in connection with such extension. Asset Management Fee Under the terms of the Management Agreement, the Manager or its affiliates provides the Company with certain investment management services in return for a management fee. The Company pays a monthly asset management fee at an annual rate of 1.0 % of the aggregate funds under management, which includes the loan origination price or aggregate gross acquisition price, as defined in the Management Agreement, for each investment and cash held by the Company. Asset Servicing Fee The Manager or its affiliates receives from the Company a monthly servicing fee at an annual rate of 0.25 % of the aggregate gross origination price or acquisition price, as defined in the Management Agreement, for each investment held by the Company. Transaction Breakup Fee In the event that the Company receives any “breakup fees,” “busted-deal fees,” termination fees, or similar fees or liquidated damages from a third-party in connection with the termination or non-consummation of any 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 December 31, 2025 and 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. F-31 Notes to Consolidated Financial Statements Disposition Fee Pursuant to the Management Agreement, the Manager or its affiliates receive a disposition fee in the amount of 1.0 % of the gross sale price received by the Company from the disposition of an investment, but not upon the maturity, prepayment, workout, modification or extension of a loan unless there is a corresponding fee paid by the borrower, in which case the disposition fee will be the lesser of (i) 1.0 % of the principal amount of the loan and (ii) the amount of the fee paid by the borrower in connection with such transaction. If the Company takes ownership of a property as a result of a workout or foreclosure of a loan, the Company will pay a disposition fee upon the sale of such property equal to 1.0 % of the sales price. 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 outstanding balance of the promissory note receivable was repaid in full in July 2024 and had a balance of zero as of December 31, 2025 and 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 year ended December 31, 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 December 31, 2025 and 2024, amount due from related parties was $ 1.7 million and $ 0.9 million, primarily related to operational cash requirements the Company paid on behalf of its affiliates. Promissory Note Payable On January 24, 2024, the Company, as borrower, entered into a revolving promissory note payable with Terra LLC. The promissory note payable 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 promissory note matures on March 31, 2027. As of December 31, 2025 and 2024, amount outstanding under this promissory note payable was $ 48.1 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. Cost Sharing and Reimbursement Agreement The Company and Terra LLC have entered into a cost sharing and reimbursement agreement effective October 1, 2022, pursuant to which Terra LLC is responsible for its allocable share of the Company’s expenses, including fees paid by the Company to the Manager based on relative assets under management. These fees are eliminated in consolidation and therefore have no impact on the Company’s consolidated financial statements. Distributions Paid For the years ended December 31, 2025 and 2024, the Company made distributions to related parties totaling $ 2.2 million and $ 3.5 million, respectively, all of which were returns of capital. Due to Manager As of December 31, 2025 and 2024, due to Manager was $ 0.7 million and $ 1.6 million, respectively, as reflected on the consolidated balance sheets, primarily related to the present value of the disposition fees on individual loans due to the Manager. Mavik Real Estate Special Opportunities Fund, LP and Mavik Real Estate Special Opportunities VS2, LP 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. On December 23, 2025, the Company entered into F-32 Notes to Consolidated Financial Statements a subscription agreement with VS2 whereby the Company committed to fund up to $ 8.4 million to purchase a limited partnership interest in VS2. For more information on these investments, please see Note 4 . Participation Agreements In the normal course of business, the Company may enter into participation agreements with related parties, primarily other affiliated funds managed by the Manager, and to a lesser extent, unrelated parties (the “Participants”). The purpose of the participation agreements is to allow the Company and an affiliate to originate a specified loan when, individually, the Company does not have the liquidity to do so or to achieve a certain level of portfolio diversification. The Company may transfer portions of its investments to other Participants or it may be a Participant to a loan held by another entity. ASC 860, Transfers and Servicing (“ASC 860”) , establishes accounting and reporting standards for transfers of financial assets. ASC 860-10 provides consistent standards for distinguishing transfers of financial assets that are sales from transfers that are secured borrowings. The Company has determined that the participation agreements it enters into are accounted for as secured borrowings under ASC 860 (see “ Participation Interests ” in Note 2 and “ Obligations Under Participation Agreements ” in Note 8 ). Participation Interests Purchased by the Company From time to time, the Company may purchase investments from affiliates pursuant to participation agreements. In accordance with the terms of each participation agreement, each Participant’s rights and obligations, as well as the proceeds received from the related borrower/issuer of the loan, are based upon their respective pro rata participation interest in the loan. The table below lists the participation interests purchased by the Company pursuant to participation agreements as of: December 31, 2025 Participating Interests Principal Balance Carrying Value Loan A (1) 38.27 % $ 17,703,471 $ 17,769,848 Loan B (2) 12.50 % 973,467 973,467 $ 18,676,938 $ 18,743,315 December 31, 2024 Participating Interests Principal Balance Carrying Value Loan A (1) 38.27 % $ 33,407,815 $ 33,005,953 Loan C (1)(3) 40.80 % 8,044,732 8,071,776 $ 41,452,547 $ 41,077,729 ________________ (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. F-33 Notes to 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: December 31, 2025 Transfers treated as obligations under participation agreements Principal Carrying Value % Transferred Principal Carrying Value Loan D (1) $ 22,292,750 $ 22,512,213 80.8 % $ 18,020,576 $ 18,197,981 December 31, 2024 Transfers treated as obligations under participation agreements Principal Carrying Value % Transferred Principal Carrying Value Loan D (1) $ 18,567,296 $ 18,577,448 96.9 % $ 18,000,000 $ 18,177,106 ________________ (1) Participant is a certain separately managed account, an investment partnership managed by the Manager. This investment is held in the name of the Company, but the Participant’s rights and obligations, including interest income and other income (e.g., exit fee, prepayment income) and related fees/expenses (e.g., disposition fees, asset management and asset servicing fees), are based upon its pro rata participation interest in such participated investment, as specified in the participation agreement. The Participant’s share of the investment is repayable only from the proceeds received from the related borrower/issuer of the investment and, therefore, the Participant also is subject to credit risk (i.e., risk of default by the underlying borrower/issuer). Pursuant to the participation agreement with this entity, the Company receives and allocates the interest income and other related investment income to the Participant based on its pro rata participation interest. 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. Note 8. Debt Unsecured Notes Payable The following table presents a summary of the Company’s unsecured notes payable outstanding as of: Coupon Rate Effective Rate (1) Maturity Date December 31, 2025 December 31, 2024 6.00 % Senior Notes Due 2026 (2) 6.00 % 7.00 % 6/30/2026 $ 80,388,375 $ 85,125,000 7.00 % Senior Notes Due 2026 (3) 7.00 % 11.16 % 3/31/2026 38,375,000 38,375,000 Total principal amount 118,763,375 123,500,000 Unamortized issue discount ( 312,026 ) ( 902,312 ) Unamortized purchase discount (3) ( 391,525 ) ( 1,853,316 ) Unamortized deferred financing costs ( 110,750 ) ( 320,272 ) Unsecured notes payable, net $ 117,949,074 $ 120,424,100 _______________ (1) Includes issue discount, purchase discount and deferred financing costs that are amortized to interest expense over the life of the notes. (2) From time to time, the Company may repurchase certain of its 6.00 % Senior Notes Due 2026 and 7.00 % Senior Notes Due 2026. During 2025, the Company repurchased and retired 189,465 units of the 6.00 % Senior Notes Due 2026 for $ 4.2 million and recognized a gain on extinguishment of debt of $ 0.5 million. (3) In connection with the BDC Merger, Terra LLC assumed all the obligations under the 7.00 % Senior Notes Due 2026 (as defined below) and recorded a purchase discount of $ 4.6 million, representing the difference between the carrying value and the fair value of the notes on the date of the merger. F-34 Notes to Consolidated Financial Statements The 6.00 % Senior Notes Due 2026 On June 10, 2021, Terra Property Trust 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 Terra Property Trust’s option on or after June 10, 2023, at a redemption price equal to 100 % of the outstanding principal amount thereof, plus accrued and unpaid interest. The 7.00 % Senior Notes Due 2026 On February 10, 2021, Terra BDC issued $ 34.8 million in aggregate principal amount of 7.00 % fixed-rate notes due 2026, and on February 26, 2021, the underwriters exercised the option to purchase an additional $ 3.6 million of the notes (collectively the “ 7.00 % Senior Notes Due 2026”). In connection with the BDC Merger, Terra LLC agreed to take all necessary action to assume the payment of the principal of and interest on all of the outstanding 7.00 % Senior Notes Due 2026. The 7.00 % Senior Notes Due 2026 may be redeemed in whole or in part at any time or from time to time at Terra LLC’s option on or after February 10, 2023, at a redemption price equal to 100 % of the outstanding principal amount thereof, plus accrued and unpaid interest. Covenant Compliance The Company’s unsecured notes payable contain certain financial covenants. As of December 31, 2025, the Company was in compliance with such covenants. Secured Financing Arrangements The following table is a summary of the Company’s secured financing agreements in place as of: December 31, 2025 December 31, 2024 Current Maturity Extended Maturity Weighted Average Interest Rate (1) Pledged Asset Carrying Value Maximum Facility Size Principal Amount Principal Amount Repurchase Agreements: Goldman Sachs Bank facility (2) (2) (2) (2) $ — $ — $ — $ 48,188,441 Total — — — 48,188,441 Non-Recourse Financing: Promissory notes payable (3) (3) (3) (3) — N/A — 40,694,390 Property mortgages - fixed rate June 2028 June 2028 6.25 % 47,359,761 N/A 20,700,000 40,250,000 Property mortgages - variable rate (4) (4) (4) (4) — N/A — 34,100,000 Total 47,359,761 20,700,000 115,044,390 Other Secured Financing: Revolving line of credit (5) (5) (5) (5) — — — 16,361,111 Term loan (6) December 2027 December 2028 9.00 % 40,193,442 10,000,000 10,000,000 10,000,000 Secured borrowings (7) Nov 2026 - Jun 2027 Nov 2026 - Jun 2027 9.54 % 64,009,058 31,250,000 31,250,000 18,000,000 Total 104,202,500 41,250,000 41,250,000 44,361,111 $ 151,562,261 $ 41,250,000 61,950,000 207,593,942 Unamortized deferred financing costs and other ( 1,041,904 ) ( 1,875,160 ) Secured financing agreements, net $ 60,908,096 $ 205,718,782 _______________ (1) Amount is calculated using the applicable index rate as of December 31, 2025. (2) In June 2025, the outstanding balance was repaid in full and the facility was terminated. (3) In November 2025, the promissory notes were repaid in full. (4) In August 2025, the pledged asset was sold and the outstanding balance was repaid in full ( Note 5 ). (5) On July 1, 2025, the outstanding balance was repaid in full and the facility was terminated. (6) 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 ). The term loan payable is collateralized by the Company’s F-35 Notes to Consolidated Financial Statements equity interest in RESOF and the Company serves as a guarantor under the loan. Under the terms of the loan agreement, the Company is required to maintain certain loan-to-value ratio and investment rating. Additionally, the Company’s interest in RESOF is only available to pay the debt under the term loan and not available to pay the debt under any other financing arrangements. (7) 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 %. These facilities are used to finance the Company’s senior loan investments. In the normal course of business, the Company is in discussions with its lenders to extend, amend, or replace any financing facilities which contain near term expirations. The following table presents certain information about the Company’s secured financing agreements: Years Ended December 31, 2025 2024 Amortization of deferred financing costs and others $ 1,533,223 $ 2,921,917 Proceeds from secured financing $ 24,805,321 $ 81,284,441 Principal repayments on secured financing $ ( 170,854,544 ) $ ( 177,525,167 ) Covenant Compliance The Company’s secured financing agreements contain certain financial tests and covenants. 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 December 31, 2025, the Company was in compliance with all such covenants, as amended or waived. Scheduled Debt Principal Payments Scheduled debt principal payments for each of the five calendar years following December 31, 2025 are as follows: Years Ending December 31, Total 2026 132,013,375 2027 28,000,000 2028 20,700,000 2029 — 2030 — 180,713,375 Unamortized deferred financing costs and other ( 1,856,205 ) Total $ 178,857,170 Obligations Under Participation Agreements As discussed in Note 2 , the Company follows the guidance in ASC 860 when accounting for loan participations. Such guidance requires the transferred interests meet certain criteria in order for the transaction to be recorded as a sale. 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 December 31, 2025 and 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 18.79 % and 19.53 %, respectively. Note 9. Commitments and Contingencies Unfunded Commitments on Loans Held for Investment 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 $ 8.8 million and $ 18.7 million as of December 31, 2025 and 2024, respectively. The Company expects to maintain sufficient cash on hand to fund such F-36 Notes to Consolidated Financial Statements commitments through matching these commitments with principal repayments on outstanding loans or draw downs on credit facilities. Unfunded Investment Commitments As discussed in Note 4 , the Company entered into a subscription agreement with RESOF and VS2 whereby the Company committed to fund up to $ 50.0 million and $ 8.4 million to purchase limited partnership interests in RESOF and VS2, respectively. As of December 31, 2025 and 2024, the unfunded investment commitments were $ 19.7 million and $ 10.1 million, respectively. Other The Company enters into contracts that contain a variety of indemnification provisions. The Company’s maximum exposure under these arrangements is unknown; however, the Company has not had prior claims or losses pursuant to these contracts. The Manager has reviewed the Company’s existing contracts and expects the risk of loss to the Company to be remote. Additionally, from time to time, the Company and individuals employed by the Company and the Company’s Manager may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of the Company’s rights under contracts with borrowers and investees. While the outcome of these legal proceedings cannot be predicted with certainty, the Company does not expect that such proceedings will have a material effect upon the financial condition or results of operations. See Note 7 for a discussion of the Company’s commitments to the Manager. Note 10. Equity Earnings Per Share The following table presents earnings per share: Years Ended December 31, 2025 2024 Net loss $ ( 27,825,846 ) $ ( 37,159,955 ) Weighted-average shares outstanding - basic and diluted 24,338,825 24,336,834 Loss per share - basic and diluted $ ( 1.14 ) $ ( 1.53 ) Preferred Stock The Company’s charter gives it authority to issue 50,000,000 shares of preferred stock, $ 0.01 par value per share (“Preferred Stock”). 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 December 31, 2025 and December 31, 2024, there were no shares of Preferred Stock issued or outstanding. Common Stock 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 December 31, 2025, Terra Fund 7 and Terra Offshore REIT held 8.7 % and 10.1 %, respectively, of the issued and outstanding shares of the Company’s common stock. The Class B Common Stock rank equally with and have identical preferences, rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications, and terms and conditions of redemption as each other share of the Company’s common stock, except as set forth below with respect to conversion. F-37 Notes to Consolidated Financial Statements In connection with the potential liquidity transactions discussed in Note 1 , on December 1, 2023, the Company amended its articles of amendment and restatement (the “A&R Articles”) to provide the Board with greater flexibility to pursue a direct listing. 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. The A&R Articles also incorporate the provisions generally required by state regulators in order to become a non-traded REIT and publicly sell shares of the Company’s stock not listed on an exchange. These non-traded REIT provisions will spring into effect and become operative if the Company ultimately decides to register and sell shares in a non-traded REIT format. Distributions The Company generally intends to distribute substantially all of its taxable income, which does not necessarily equal net income as calculated in accordance with U.S. GAAP, to its stockholders each year to comply with the REIT provisions of the Internal Revenue Code. 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 years ended December 31, 2025 and 2024, the Company made distributions to investors totaling $ 11.6 million and $ 18.6 million respectively, all of which were returns of capital. Distributions paid to stockholders consist of ordinary income, capital gains, return of capital or a combination thereof for income tax purposes. The following table presents distributions per share, declared and paid during the years ended December 31, 2025 and 2024, reported for federal tax purposes and serves as a designation of capital gain distributions, if applicable, pursuant to Section 857(b)(3)(C) of the Internal Revenue Code and Treasury Regulation § 1.857-6(e): Years Ended December 31, 2025 2024 Ordinary income $ — $ — Capital gain — — Return of capital 0.48 0.76 $ 0.48 $ 0.76 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 years ended December 31, 2025 and 2024, the Company issued 1,939 and 1,919 shares of Class B Common Stock for a total of $ 17,311 and $ 20,750 pursuant to the Plan, respectively. Note 11. Subsequent Events On February 13, 2026, the Company filed a registration statement on Form S-4 (as amended on March 12, 2026, and as may be amended from time to time, the “Registration Statement”) with the Securities and Exchange Commission in connection with registered exchange offers to exchange any and all of the Company’s outstanding 6.00 % Senior Unsecured Notes due 2026 and Terra Income Fund 6 LLC’s 7.00 % Senior Unsecured Notes due 2026 for newly issued Senior Secured Notes due 2029. In connection with the exchange offer relating to the Company’s 6.00 % Senior Unsecured Notes due 2026, the Company is also soliciting consents to amend the indenture governing such notes to, among other things, eliminate substantially all of the restrictive covenants therein, eliminate certain events of default terms and conditions and eliminate provisions related to the Company’s reporting obligations thereunder. The exchange offers and consent solicitation were scheduled to expire on March 16, 2026, unless extended. On March 12, 2026, the Company amended the Registration Statement to reduce the interest rate on the newly issued senior secured notes to be issued in the exchange offers from 9.75 % to 7.00 % and to extend the expiration date of the exchange offers and consent solicitation to March 26, 2026. For additional information regarding the exchange offers and consent solicitation, including the terms and conditions thereof, please refer to the Registration Statement, including the prospectus contained therein. On February 24, 2026, the Company entered into a loan purchase agreement with a third party whereby the Company agreed to sell a $ 22.9 million senior loan for $ 15.0 million cash plus profit participation of up to $ 7.0 million upon selling the F-38 Notes to Consolidated Financial Statements underlying real estate property or selling the loan. The sale is expected to close in 60 days. As of December 31, 2025, the senior loan had a carrying value of $ 24.1 million and interest receivable of $ 7.0 million. Management has evaluated subsequent events through the date the consolidated financial statements were available to be issued. Management has determined that there are no additional material events that would require adjustment to, or disclosure in, the Company’s consolidated financial statements. F-39 Terra Property Trust, Inc. Schedule III – Real Estate and Accumulated Depreciation As of December 31, 2025 Initial Costs Cost Capitalized Subsequent to Acquisition Increase (Decrease) in Net Investment Gross Amount at Period End Description Encumbrance Land Building and Building Improvements Land Building and Building Improvements Total Accumulated Depreciation Date of Construction Date Acquired Life Used for Depreciation Industrial buildings in Dallas, TX $ 20,700,000 $ 8,096,412 $ 42,281,677 $ 256,577 $ — $ 8,096,412 $ 42,538,254 $ 50,634,666 $ 3,571,732 1970; 1978; 1980 May 2023 30 - 35 years $ 20,700,000 $ 8,096,412 $ 42,281,677 $ 256,577 $ — $ 8,096,412 $ 42,538,254 $ 50,634,666 $ 3,571,732 At December 31, 2025, the aggregate cost of real estate for federal income tax purposes was $ 49.8 million. The changes in total real estate assets and accumulated depreciation are as follows: Reconciliation of Real Estate Asset Reconciliation of Accumulated Depreciation Year Ended December 31, 2025 Year Ended December 31, 2025 Balance, beginning of year $ 128,739,334 Balance, beginning of year $ 5,141,545 Additions during the year: Additions during the year: Capital improvements 88,605 Depreciation for the year 2,277,420 Deductions during the year: Deductions during the year: Dispositions (1) ( 74,793,589 ) Dispositions (1) ( 3,847,233 ) Impairment charge (1) ( 3,399,684 ) Balance, end of the year $ 3,571,732 Balance, end of year $ 50,634,666 ___________________________ (1) During the year ended December 31, 2025, the Company recorded a total impairment charge of $ 3.4 million on two industrial buildings to reduce the carrying value of the buildings to their estimated fair value. During the year ended December 31, 2025, the Company recognized a net loss on sale of real estate of $ 2.9 million related to the sale of four industrial buildings. F-40 Terra Property Trust, Inc. Schedule IV – Mortgage Loans on Real Estate As of December 31, 2025 Description (1) Number of Loans Property Type/Location Contractual Interest Rate (2) Maximum Maturity Date (3) Periodic Payment Terms Prior Liens Face Amount Carrying Amount (4) Principal Amount of Mortgages Subject to Delinquent Principal or Interest Mezzanine loans individually > 3% of carrying amount of total loans: Loan A (5) Land/Arizona 17.0 % June 2027 Interest Only — $ 17,703,471 $ 17,769,848 — Loan B Industrial/Massachusetts 8.5 % September 2027 Interest Only — 7,000,000 6,993,917 — 24,703,471 24,763,765 — First mortgages individually > 3% of carrying amount of total loans: Loan C (6) Office/Georgia 9.7 % January 2026 Interest Only — 31,734,254 31,878,019 — Loan D (7) Land/New Jersey 15.7 % March 2024 Interest Only — 22,906,090 24,051,394 22,906,090 Loan E (8) Multifamily/California 13.9 % February 2025 Interest Only — 31,816,554 32,131,039 31,816,554 86,456,898 88,060,452 54,722,644 Preferred equity investments individually > 3% of carrying amount of total loans: Loan F (7) (9) Office/New York 12.1 % July 2022 Interest Only — 69,976,792 11,818,556 69,976,792 Loan G (7) (10) Mixed use/California 18.8 % August 2025 Interest Only — 22,292,750 22,512,213 22,292,750 Loan H (7) (11) Multifamily/New York 12.3 % August 2021 Interest Only — 6,038,960 5,258,960 6,038,960 Preferred equity investments individually < 3% if carrying amount of total loans: Preferred equity investment (12) 1 Retail / Illinois 16.0 % June 2026 Interest Only — 973,467 973,467 — 99,281,969 40,563,196 98,308,502 Total loans (13) $ 210,442,338 $ 153,387,413 $ 153,031,146 ___________________________ (1) All of the Company’s loans have a prepayment provision. (2) For all floating rate loans, contractual interest rate was determined using the applicable benchmark rate as of December 31, 2025. (3) Maximum maturity date assumes all extension options are exercised. (4) Carrying value represents the amortized cost of loan, net of applicable allowance for credit losses, and excludes $ 0.04 million of allowance for credit losses related to unfunded commitments. (5) Participation interest is with Mavik Real Estate Special Opportunities Fund REIT, LLC, a related-party REIT managed by the Manager. The Company acquired the investment through a participation agreement. See “ Participation Agreements ” in Note 7 in the accompanying notes to the consolidated financial statements. (6) Effective January 31, 2026, this loan was amended to extend the maturity date to March 31, 2026. (7) This loan is currently in maturity default. (8) This loan defaulted in October 2025. In January 2026, the Company foreclosed on the property assigned as collateral under the loan agreement and obtained control of the underlying asset. F-41 (9) As of December 31, 2025, the Company recorded an allowance for credit losses of $ 58.2 million on this loan as a result of a decline in our estimated recoverable amount on a non-performing subordinated loan primarily due to an increase in funding on the senior loan as well as a decrease in the estimated fair value of underlying collateral. (10) The Company sold a portion of its interest in this loan through a participation agreement to an affiliate managed by the Manager ( Note 7 ). The loan participation from the Company does not qualify for sale accounting under ASC 860 and therefore, the gross amount of this loan remains in the Company's consolidated balance sheets. See “Obligations under Participation Agreement in Note 8 and “Transfers of Participation Interest by the Company” in Note 7 in the accompanying notes to the consolidated financial statements. (11) The Company initiated a litigation to seek full repayment of the loan from the sponsor. (12) Participation interest is with Mavik Real Estate Special Opportunities VS2 REIT, LLC, a related-party REIT managed by the Manager. The Company acquired the investment through a participation agreement. See “ Participation Agreements ” in Note 7 in the accompanying notes to the consolidated financial statements. In January 2026, the loan was repaid in full. (13) The aggregate cost for U.S. federal income tax purposes was $ 212.2 million. F-42 Terra Property Trust, Inc. Notes to Schedule IV - Mortgage Loans on Real Estate December 31, 2025 Reconciliation of Mortgage Loans on Real Estate Year Ended December 31, 2025 Balance, beginning of year $ 274,649,145 Additions during the period: New mortgage loans 29,632,403 Deductions during the period: Collections of principal ( 136,445,087 ) Amortization of premium ( 6,913 ) Accrual, payment and accretion of investment-related fees and other, net ( 1,560,494 ) Provision for loan losses ( 12,881,641 ) Balance, end of year $ 153,387,413 F-43 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: March 19, 2026 TERRA PROPERTY TRUST, INC. By: /s/ Vikram S. Uppal Vikram S. Uppal Chief Executive Officer and Chief Investment Officer (Principal Executive Officer) By: /s/ Gregory M. Pinkus Gregory M. Pinkus Chief Financial Officer, Treasurer and Secretary (Principal Financial and Accounting Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ Vikram S. Uppal Chairman of the Board, Chief Executive Officer and Chief Investment Officer March 19, 2026 Vikram S. Uppal (Principal Executive Officer) /s/ Gregory M. Pinkus Chief Financial Officer, Treasurer and Secretary March 19, 2026 Gregory M. Pinkus (Principal Financial and Accounting Officer) /s/ Roger H. Beless Director March 19, 2026 Roger H. Beless /s/ Michael L. Evans Director March 19, 2026 Michael L. Evans /s/ Spencer E. Goldenberg Director March 19, 2026 Spencer E. Goldenberg /s/ Gaurav Misra Director March 19, 2026 Gaurav Misra 60