What changed in this filing

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Item 1. Financial Statements

2026-05-14 compared with 2025-11-07 · 422 added, 510 removed, 1233 unchanged (43% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Cash and cash equivalents $ 4,970,512 $ 33,172,814

1 unchanged sentence

Cash held in escrow 3,290,787 3,519,393

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

Real estate asset held for sale 9,788,999 —

Loans held for investment, net of allowance for credit losses of $ 65,901,219 and $ 58,950,552

29 unchanged sentences

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

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

issued, as of both March 31, 2026 and December 31, 2025

Class B Common Stock, $ 0.01 par value, 450,000,000 shares authorized and 24,340,114

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

and 24,339,891 shares issued and outstanding as of March 31, 2026 and

December 31, 2025, respectively

7 unchanged sentences

Terra Property Trust, Inc.

Consolidated Statements of Operations and Comprehensive Income (Loss)

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

2025 2024 2025 2024

Consolidated Statements of Operations and Comprehensive Loss

Three Months Ended March 31,

Interest income $ 1,623,636 $ 10,205,897

6 unchanged sentences

Asset servicing fee 211,211 329,600

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

Provision for credit losses 6,927,419 2,119,736

Real estate operating expenses 784,950 975,228

1 unchanged sentence

Professional fees 2,072,080 518,354

Impairment charge on real estate assets held for sale — — 3,399,684 —

Impairment charge on real estate asset 595,984 —

Directors’ fees 68,750 83,750

1 unchanged sentence

13,226,204 8,372,537

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

Operating (loss) income ( 10,012,354 ) 4,084,212

Other income and expenses

2 unchanged sentences

Interest expense on obligations under participation agreements ( 844,617 ) ( 888,904 )

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

Income from equity interest in unconsolidated investments 660,007 2,560,110

Loss on sale of real estate, net ( 560,634 ) —

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

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

Unrealized loss on investments, net — ( 75 )

( 5,029,939 ) ( 5,369,276 )

Net loss before income taxes ( 15,042,293 ) ( 1,285,064 )

Provision for income tax ( 6,690 ) —

Net loss $ ( 15,048,983 ) $ ( 1,285,064 )

Other comprehensive income (loss)

Unrealized gain (loss) on available-for-sale debt securities 259,805 5,051 487,926 ( 14,339 )

259,805 5,051 487,926 ( 14,339 )

Other comprehensive income

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

Comprehensive loss $ ( 15,048,983 ) $ ( 1,139,320 )

19 unchanged sentences

Net loss — — — — — — ( 15,048,983 ) — ( 15,048,983 )

Other comprehensive income:

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

Balance at March 31, 2026

$ — — $ — 24,340,114 $ 243,401 $ 444,497,891 $ ( 314,293,187 ) $ — $ 130,448,105

Shares issued from reinvestment of shareholder

distributions — — — 338 3 3,120 — — 3,123

Distributions declared on common shares ($ 0.10 per share)

— — — — — — ( 2,329,214 ) — ( 2,329,214 )

Net loss — — — — — — ( 9,172,096 ) — ( 9,172,096 )

Other comprehensive income:

Unrealized gain on available-for-sale debt securities — — — — — — — 82,377 82,377

Balance at June 30, 2025

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

Shares issued from reinvestment of shareholder

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

Distributions declared on common shares ($ 0.09 per share)

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

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

Other comprehensive income:

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

Balance at September 30, 2025

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

See notes to unaudited consolidated financial statements .

Terra Property Trust, Inc.

Consolidated Statements of Changes in Equity (Continued)

Preferred Stock Class A Common Stock Class B Common Stock Additional

9 unchanged sentences

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

Other comprehensive loss:

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

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

Shares issued from reinvestment of shareholder

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

Distributions declared on common shares ($ 0.19 per share)

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

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

Other comprehensive income:

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

Balance at June 30, 2024

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

Shares issued from reinvestment of shareholder

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

Distributions declared on common shares ($ 0.19 per share)

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

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

Other comprehensive income:

— — — — — — — —

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

Balance at September 30, 2024

Balance at March 31, 2025

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

2 unchanged sentences

Consolidated Statements of Cash Flows

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

Net loss $ ( 15,048,983 ) $ ( 1,285,064 )

Adjustments to reconcile net loss to net cash used in operating activities:

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

Depreciation and amortization 854,622 1,345,937

Provision for credit losses 6,927,419 2,119,736

Impairment charge on real estate assets held for sale 3,399,684 —

Impairment charge on real estate asset held for sale 595,984 —

Loss on sale of real estate, net 560,634 —

Loss on repayment of loan — 5,629,510

Amortization of net purchase premiums on loans — 6,913

4 unchanged sentences

Amortization and accretion of investment-related fees, net 1,170,305 ( 562,336 )

Realized loss on investments, net — 446,009

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

Unrealized loss on investments, net — 75

Distributions received from equity interest in unconsolidated investments 1,040,987 1,267,522

9 unchanged sentences

Other liabilities 1,001,481 69,313

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

Net cash (used in) provided by operating activities ( 1,477,281 ) 861,561

Cash flows from investing activities:

6 unchanged sentences

Repayments of promissory note receivable — 168,966

Funding for promissory note receivable — ( 4,962,369 )

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

Proceeds from sale of trading equity securities — 3,551,098

Net cash provided by investing activities 24,469,346 46,219,625

2 unchanged sentences

Consolidated Statements of Cash Flows (Continued)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from financing activities:

Principal repayments on secured financing ( 141,949,552 ) ( 159,125,167 )

Repayments on secured financing ( 13,282,500 ) ( 43,700,349 )

Proceeds from secured financing — 3,254,091

Proceeds from obligations under participation agreements — 668,574

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

Repayments on unsecured notes payable ( 36,824,025 ) —

Distributions paid ( 967,140 ) ( 4,644,854 )

Payment of financing costs — ( 1,065,085 )

Payment of deferred financing costs ( 349,308 ) —

Change in interest reserve and other deposits held on investments ( 633,054 ) ( 1,447,180 )

Net cash used in financing activities ( 52,056,027 ) ( 45,869,718 )

Net increase in cash, cash equivalents and restricted cash 3,050,013 13,638,492

Net (decrease) increase in cash, cash equivalents and restricted cash ( 29,063,962 ) 1,211,468

Cash, cash equivalents and restricted cash at beginning of period 37,894,341 18,965,026

1 unchanged sentence

$ 8,830,379 $ 20,176,494

Nine Months Ended September 30,

Three Months Ended March 31,

Supplemental disclosure of cash flow information:

2 unchanged sentences

Reinvestment of shareholder distributions $ 1,665 $ 6,165

Supplemental Non-Cash Investing and Financing Activities:

On January 22, 2026, the Company foreclosed on one multifamily property encumbering a $ 31.4 million first mortgage in exchange for the relief of the first mortgage and related expenses ( Note 5 ).

The following table summarizes the carrying value of the first mortgage and the fair value of assets acquired and liabilities assumed in the transaction:

Total Capitalized Costs:

Loans held for investment $ 31,445,183

Other assets 27,099

Net Assets Acquired

Land $ 12,263,796

Buildings and Improvements 18,973,000

In-place lease intangibles 363,000

Other liabilities ( 127,514 )

On March 30, 2026, the Company exchanged $ 24.0 million of its 6.00 % unsecured senior notes maturing on June 30, 2026 and $ 1.6 million of Terra Income Fund 6, LLC’s 7.00 % unsecured senior notes maturing on March 31, 2026 for $ 25.6 million of the Company’s 7.00 % secured senior notes due 2029 ( Note 8 ).

See notes to unaudited consolidated financial statements .

1 unchanged sentence

Notes to Consolidated Financial Statements (Unaudited)

September 30, 2025

March 31, 2026

Terra Property Trust, Inc.

( and, together with its consolidated subsidiaries, the “Company” or “Terra Property Trust”) is a real estate investment trust (“REIT”) that originates, invests in and manages a diverse portfolio of real estate and real estate-related assets.

( “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.

12 unchanged sentences

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.

On October 1, 2022, pursuant to the 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, approximately 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.

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.

2 unchanged sentences

Notes to Unaudited Consolidated Financial Statements

As of September 30, 2025, Terra Fund 7 and Terra Offshore Funds REIT, LLC (“Terra Offshore REIT”) held 8.7 % and 10.1 %, respectively, of the issued and outstanding shares of the Company’s common stock.

As of March 31, 2026, 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 Class B Common Stock.

On May 7, 2026, the Company filed a registration statement on Form S-4 (as may be amended from time to time, the “Form S-4”) with the Securities and Exchange Commission in connection with a registered exchange offer to exchange any and all of its outstanding 6.00 % Senior Notes Due 2026 (as defined below) for newly issued Senior Secured Notes due 2029 by the Company.

The exchange offer is scheduled to expire on June 7, 2026, unless extended.

For additional information regarding the exchange offer, including the terms and conditions thereof, please refer to the Form S-4, including the prospectus contained therein.

Summary of Significant Accounting Policies

4 unchanged sentences

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

The Company has significant debt obligations of approximately $ 69.6 million coming due, including $ 56.4 million of its 6.00 % Senior Notes Due 2026 maturing on June 30, 2026 ( Note 8 ).

As of March 31, 2026, the Company had cash and cash equivalents of $ 5.0 million and did not have sufficient liquidity to satisfy these obligations.

The Company intends to refinance or repay the 6.00 % Senior Notes Due 2026 that are not exchanged in the exchange offer described in Note 1 above 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.

However, there can be no assurance that the Company will be able to obtain the additional liquidity needed to repay the 6.00 % Senior Notes Due 2026.

Therefore, substantial doubt about the Company’s ability to continue as a going concern exists.

The consolidated financial statements have been prepared in accordance with U.S.

GAAP assuming the Company will continue as a going concern.

The consolidated financial statements do not reflect any adjustments that might result from the outcome of this uncertainty.

Consolidation

8 unchanged sentences

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.

Generally, the primary beneficiary of a VIE is a reporting entity that has (a) the power to direct the

Notes to Unaudited Consolidated Financial Statements

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

1 unchanged sentence

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 subordinate to any loans but are senior to common equity, are accounted for as loans held for investment.

The Company’s preferred equity investments that are economically similar to mezzanine loans and 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.

4 unchanged sentences

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

Notes to Unaudited Consolidated Financial Statements

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.

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

16 unchanged sentences

The Company regularly evaluates the reasonable and supportable forecast period to determine if a change is needed.

Notes to Unaudited Consolidated Financial Statements

The Company also performs a qualitative assessment and applies qualitative adjustments as necessary, usually due to limitations of the loan loss model.

7 unchanged sentences

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

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

Notes to Unaudited Consolidated Financial Statements

The 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 September 30, 2025.

Equity Interest in Unconsolidated Investments

10 unchanged sentences

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

Notes to Unaudited Consolidated Financial Statements

Available-For-Sale Debt Securities

8 unchanged sentences

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

Notes to Unaudited Consolidated Financial Statements

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

6 unchanged sentences

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

Real Estate Asset Held for Sale

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

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

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

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

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

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

Revenue Recognition

6 unchanged sentences

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.

Notes to Unaudited Consolidated Financial Statements

Interest is then recorded on the basis of cash received until accrual is resumed when the loan becomes contractually current and performance is demonstrated.

21 unchanged sentences

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

Notes to Unaudited Consolidated Financial Statements

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

September 30,

Cash and cash equivalents $ 4,970,512 $ 11,941,464

8 unchanged sentences

See “ Obligations Under Participation Agreements ” in Note 8 for additional information.

Notes to Unaudited Consolidated Financial Statements

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.

2 unchanged sentences

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 financial instruments, including loans held for investment, loans held for investment acquired through participation, obligations under participation agreements, secured borrowing, unsecured notes, mortgage loan payable, term loan payable, repurchase agreement payment and revolving line of credit.

The Company has not elected the fair value option for its 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.

Marketable securities are financial instruments that are reported at fair value.

Available-for-sale securities are financial instruments that are reported at fair value.

Deferred Financing Costs

7 unchanged sentences

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

Any gains from the sale of foreclosed

Notes to Unaudited Consolidated Financial Statements

properties within two years are subject to U.S.

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

As of March 31, 2026, the Company had satisfied all the requirements for a REIT.

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

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

For the three and nine months ended September 30, 2025 and 2024, the Company did not incur any interest or penalties.

For the three months ended March 31, 2026 and 2025, 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 as of December 31, 2025, related to an unrealized gain on the investment.

For the three months ended March 31, 2026, the Company recorded additional income tax expense and deferred income tax liability of $ 6,690 , related to an increase in the unrealized gain on investment.

Deferred tax liabilities are included in Other liabilities on the Company’s consolidated balance sheets.

Notes to Unaudited Consolidated Financial Statements

Earnings Per Share

20 unchanged sentences

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.

Notes to Unaudited Consolidated Financial Statements

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

The Company adopted this ASU on December 31, 2024.

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”).

In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2023-09 “Improvements to Income Tax Disclosures” (“ASU 2023-09”).

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

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

The Company is currently assessing the impact of this guidance;

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

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.

Loans Held for Investment

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

As of September 30, 2025 and December 31, 2024, accrued interest receivable of $ 7.7 million and $ 5.4 million, respectively, is included in interest receivable on the consolidated balance sheets, and is excluded from the amortized cost of loans held for investment.

As of March 31, 2026 and December 31, 2025, accrued interest receivable of $ 9.0 million and $ 8.3 million, respectively, is included in interest receivable on the consolidated balance sheets, and is excluded from the amortized cost of loans held for investment.

Notes to Unaudited Consolidated Financial Statements

Portfolio Summary

1 unchanged sentence

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

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Fixed Rate Floating

13 unchanged sentences

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

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

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

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

Coupon rates shown were determined using the average SOFR of 3.65 % and Term SOFR of 3.66 % as of March 31, 2026 and average SOFR of 3.79 % and Term SOFR of 3.69 % as of December 31, 2025.

(2) As of March 31, 2026 and December 31, 2025, amount included $ 32.1 million and $ 63.6 million of senior mortgages used as collateral for $ 18.0 million and $ 31.3 million of borrowings under secured financing agreements, respectively ( Note 8 ).

(3) As of March 31, 2026 and December 31, 2025, four and five 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 September 30, 2025 and December 31, 2024, exclusive of any extension available.

Notes to Unaudited Consolidated Financial Statements

(5) Excludes loans that are in maturity default and represents current effective maturity as of March 31, 2026 and December 31, 2025, exclusive of any extension available.

Lending Activities

5 unchanged sentences

Origination, purchase and funding of loans 635,010 793,617 1,428,627

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

Foreclosure of collateral (1)

( 31,445,183 ) — ( 31,445,183 )

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

1 unchanged sentence

(Provision for) reversal of provision for credit losses ( 6,950,667 ) 12,974 ( 6,937,693 )

Balance, September 30, 2025

Balance, March 31, 2026

$ 94,832,555 $ 18,575,489 $ 113,408,044

______________

(1) On January 22, 2026, the Company foreclosed on one multifamily property encumbering a $ 31.4 million first mortgage in exchange for the relief of the first mortgage and related expenses ( Note 5 ).

Notes to Unaudited Consolidated Financial Statements

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

2 unchanged sentences

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

Loss on repayment of loan (1)

( 5,629,510 ) — ( 5,629,510 )

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

2 unchanged sentences

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

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

_______________

(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.

Balance, March 31, 2025 $ 192,866,547 $ 32,582,673 $ 225,449,220

Portfolio Information

2 unchanged sentences

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

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

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

3 unchanged sentences

Total $ 178,869,523 $ 113,408,044 100.0 % $ 210,442,338 $ 153,387,413 100.0 %

Notes to Unaudited Consolidated Financial Statements

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

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

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

Office $ 102,104,409 $ 37,113,002 32.6 % $ 101,711,046 $ 43,696,575 28.4 %

Infill land 41,389,766 41,481,579 36.6 % 40,609,561 41,821,242 27.3 %

Multifamily 6,082,598 5,302,598 4.7 % 37,855,514 37,389,999 24.4 %

Mixed-use 22,292,750 22,515,678 19.9 % 22,292,750 22,512,213 14.7 %

1 unchanged sentence

Retail — — — % 973,467 973,467 0.6 %

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

Total $ 178,869,523 $ 113,408,044 100.0 % $ 210,442,338 $ 153,387,413 100.0 %

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

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

1 unchanged sentence

California $ 22,292,750 $ 22,515,678 19.9 % $ 54,109,304 $ 54,643,252 35.6 %

Washington 38,653,822 38,834,990 19.1 % 26,894,593 26,907,157 9.8 %

Georgia 32,127,617 32,246,186 28.3 % 31,734,254 31,878,019 20.8 %

New Jersey 22,906,090 22,906,090 20.2 % 22,906,090 24,051,394 15.7 %

Arizona 18,483,676 18,575,489 16.4 % 17,703,471 17,769,848 11.6 %

New York 76,059,390 10,169,414 9.0 % 76,015,752 17,077,516 11.1 %

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

Massachusetts 7,000,000 6,995,187 6.2 % 7,000,000 6,993,917 4.6 %

Illinois — — — % 973,467 973,467 0.6 %

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

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

Total $ 178,869,523 $ 113,408,044 100.0 % $ 210,442,338 $ 153,387,413 100.0 %

Notes to Unaudited Consolidated Financial Statements

Allowance for Credit Losses

1 unchanged sentence

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

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

These unfunded commitments amounted to $ 8.0 million and $ 8.8 million as of March 31, 2026 and December 31, 2025, 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 September 30, 2025 and December 31, 2024, the Company had five and four non-performing loans with total amortized cost of $ 152.5 million and $ 128.6 million, respectively.

Accordingly, the Company utilized the estimated fair value of the loan collateral or sponsor’s guarantee to estimate the total specific allowance for credit losses of $ 51.8 million and $ 44.1 million as of September 30, 2025 and December 31, 2024, respectively.

As of March 31, 2026 and December 31, 2025, the Company had four and five non-performing loans with total amortized cost of $ 121.5 million and $ 154.7 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 $ 65.9 million and $ 58.9 million as of March 31, 2026 and December 31, 2025, respectively.

Please see “Note 6.

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

Notes to Unaudited Consolidated Financial Statements

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

Nine Months Ended September 30, 2025

Three Months Ended March 31, 2026

Allowance on Non-Performing Loans Allowance on Performing Loans Total

3 unchanged sentences

Allowance for credit losses, end of period $ 65,889,976 $ 70,813 $ 25,701 $ 65,986,490

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

Allowance on Non-Performing Loans Allowance on Performing Loans Total

1 unchanged sentence

Allowance for credit losses, beginning of period $ 44,120,447 $ 2,021,008 $ 150,024 $ 46,291,479

Provision for credit losses 4,597,541 ( 746,927 ) ( 88,776 ) 3,761,838

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

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

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

2 unchanged sentences

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

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

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

For the three months ended September 30, 2025 and 2024, the Company suspended interest income accrual of $ 3.8 million and $ 5.3 million on two and five loans, respectively, because recovery of such income was not probable.

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

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

For the three months ended March 31, 2026 and 2025, the Company did no t reverse any interest income accrual because all accrued interest income was deemed collectible.

For the three months ended March 31, 2026 and 2025, the Company suspended interest income accrual of $ 4.5 million and $ 3.4 million on three and two loans, respectively, because recovery of such income was not probable.

Loan Risk Rating

2 unchanged sentences

(ii) loan and collateral performance relative to underwriting;

(iii) quality and stability of collateral cash flows and/or reserve balances;

(iii) quality and stability of collateral cash flows and/or reserve

Notes to Unaudited Consolidated Financial Statements

and (iv) loan to value.

6 unchanged sentences

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

Notes to Unaudited Consolidated Financial Statements

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

September 30, 2025

March 31, 2026

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

11 unchanged sentences

_______________

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

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

(1) Amount includes two loans that are in maturity default with total amortized costs of $ 45.4 million.

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

December 31, 2025

8 unchanged sentences

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 were in maturity default with total amortized costs of $ 78.7 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 three loans.

Equity Interest in Unconsolidated Investments

1 unchanged sentence

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

Equity Interest in a Limited Partnership

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

Notes to Unaudited Consolidated Financial Statements

Equity Interest in Limited Partnerships

Mavik Real Estate Special Opportunities Fund, LP

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.

3 unchanged sentences

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

Notes to Unaudited Consolidated Financial Statements

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

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

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

Equity interest in RESOF 14.9 % $ 35,813,168 $ 11,333,135 14.9 % $ 40,193,442 $ 11,333,135

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

2025 2024 2025 2024

Three Months Ended March 31,

Income from equity interest in RESOF $ 1,020,307 $ 2,206,934

2 unchanged sentences

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

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Investments at fair value (cost of $ 340,866,123 and $ 386,743,426 , respectively)

9 unchanged sentences

Partners’ capital $ 229,444,033 $ 260,613,358

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

Three Months Ended March 31,

Total investment income $ 18,804,916 $ 19,150,780

Total expenses 6,081,847 6,820,394

Net investment income 12,723,069 12,330,386

Net change in unrealized appreciation on investments ( 7,015,293 ) 1,038,111

Net increase in partners’ capital resulting from operations $ 5,707,776 $ 13,368,497

Notes to Unaudited Consolidated Financial Statements

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 limited partnership interests 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:

March 31, 2026 December 31, 2025

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

Equity interest in VS2 1.5 % 1,346,556 7,484,925 1.5 % 316,072 $ 8,369,755

Three Months Ended March 31,

Income from equity interest in VS2 $ 136,805 $ —

Distributions received from VS2 $ — $ —

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:

March 31, 2026 December 31, 2025

Investments at fair value (cost of $ 457,475,912 and $ 372,843,060 )

$ 465,600,745 $ 383,462,787

Other assets 19,161,647 19,534,617

Total assets 484,762,392 402,997,404

Secured financing agreements, net of financing costs 320,313,071 301,843,692

Obligations under participation agreement (proceeds of $ 71,286,429 and $ 75,783,803 )

71,851,966 76,025,965

Other liabilities 7,134,425 5,579,792

Total liabilities 399,299,462 383,449,449

Partners’ capital $ 85,462,930 $ 19,547,955

Three Months Ended March 31,

Total investment income $ 19,811,388 $ —

1 unchanged sentence

Net investment income 9,618,151 —

Net change in unrealized appreciation

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

Net increase in partners’ capital resulting

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

Net change in unrealized appreciation on investments ( 1,379,499 ) —

Net increase in partners’ capital resulting from operations $ 8,238,652 $ —

Equity Interest in Joint Ventures

1 unchanged sentence

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 Company evaluated its equity interests in these entities and determined it does not have a controlling

Notes to Unaudited Consolidated Financial Statements

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:

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

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

6 unchanged sentences

Axar Special Opportunity Fund

N/A 99.0 % 21,950,304 100.0 % 20,957,270

XS Acquisition Holdco LLC (3)

Third parties 46.0 % 5,466,845 46.0 % 7,599,187

VI-B LLC N/A 100.0 % 22,034,390 100.0 % 22,106,901

XS Acquisition Holdco LLC Third parties 46.0 % 1,949,095 46.0 % 2,124,011

VASPEN MS LLC (2)

3 unchanged sentences

(1) This entity invests in opportunistic equity and debt securities.

This entity is jointly owned with two related parties 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 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.

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

(2) This entity invests in opportunistic equity and debt securities.

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

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

2025 2024 2025 2024

Three Months Ended March 31,

Loss from equity interest in the joint ventures $ ( 1,202,653 ) $ ( 250,393 )

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

Distributions received from the joint ventures $ 771,700 $ 239,154

_______________

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

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

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

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Net investments in real estate $ 192,235,547 $ 194,450,383

6 unchanged sentences

Notes to Unaudited Consolidated Financial Statements

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

2025 2024 2025 2024

Three Months Ended March 31,

Revenues $ 5,976,204 $ 6,187,151

2 unchanged sentences

Interest expense ( 4,181,111 ) ( 4,271,689 )

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

One time charge off ( 41,651 ) —

Unrealized gain (loss) ( 1,374,782 ) 780,091

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

Net loss $ ( 4,634,036 ) $ ( 2,437,982 )

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.

The investment carries interest at an annual rate of 15.0 % and matures on May 30, 2026.

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

As of March 31, 2026 and December 31, 2025, the Company's investment had a carrying value of $ 19.3 million and $ 18.6 million, respectively.

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

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

2025 2024 2025 2024

Three Months Ended March 31,

Income from other equity investment $ 705,548 $ 603,569

Distributions received from other equity

investment 75,000 — 175,000 —

Distributions received from other equity investment — —

Real Estate Owned, Net

Real Estate Owned Activities

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

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

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

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

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

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

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

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

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.

On January 22, 2026, the Company foreclosed on one multifamily property in full satisfaction of a first mortgage and related fees and expenses.

The following table summarizes the carrying value of the first mortgage prior to the foreclosure and the allocation of the estimated fair value of the real estate acquired:

Carrying Value of First Mortgage:

Loans held for investment $ 31,445,183

Other assets 27,099

Net Assets Acquired:

Land $ 12,263,796

Buildings and Improvements 18,973,000

In-place lease intangibles 363,000

Other liabilities ( 127,514 )

In March 2026, the Company sold two industrial buildings for net proceeds of $ 20.6 million and recognized a net loss on sale of $ 0.6 million.

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

Notes to Unaudited Consolidated Financial Statements

Real Estate Asset Held for Sale

During the three months ended March 31, 2026, the Company entered into a purchase and sale agreement to sell one industrial building for a purchase price of $ 10.0 million.

In connection with the real estate asset held for sale, the Company recorded an impairment charge of $ 0.6 million to reduce the carrying value of the industrial building to its estimated selling price less the cost of the sale as of March 31, 2026.

The sale subsequently closed on April 8, 2026.

Operating Real Estate Owned, Net

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

The following table presents the components, net as of:

September 30, 2025 December 31, 2024

As of December 31, 2025, real estate owned was comprised of four industrial buildings located in Texas with lease intangible assets and liabilities.

During the three months ended March 31, 2026, the Company sold two industrial buildings, acquired one multifamily property through foreclosure, and reclassified one industrial building to held for sale, resulting in one industrial building located in Texas and one multifamily property located in California with lease intangible assets and liabilities as of March 31, 2026.

The following table presents the components as of:

March 31, 2026 December 31, 2025

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

13 unchanged sentences

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

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

2025 2024 2025 2024

Three Months Ended March 31,

Real estate operating revenues:

9 unchanged sentences

Total $ 784,949 $ 975,228

Notes to Unaudited Consolidated Financial Statements

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

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

2025 2024 2025 2024

Net amortization of above- and below-market rent

intangibles (1)

Three Months Ended March 31,

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

$ ( 190,883 ) $ ( 404,245 )

3 unchanged sentences

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

Notes to Unaudited Consolidated Financial Statements

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

14 unchanged sentences

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

As of September 30, 2025 and December 31, 2024, the Company had not elected the fair value option for its financial instruments, including loans held for investment, loans held for investment acquired through participation, equity securities without readily determinable fair value, secured financing agreements, unsecured notes payable and obligations under participation agreements.

As of March 31, 2026 and December 31, 2025, the Company had not elected the fair value option for its financial instruments, including loans held for investment, loans held for investment acquired through participation, equity securities without readily determinable fair value, secured financing agreements, unsecured notes payable and obligations under participation agreements.

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

4 unchanged sentences

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.

In 2024, the Company owned certain trading

Notes to Unaudited Consolidated Financial Statements

equity securities that were carried at fair value.

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

2 unchanged sentences

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

Notes to Unaudited Consolidated Financial Statements

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

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

September 30, 2025

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

March 31, 2026

Fair Value Measurements

2 unchanged sentences

$ 757,317 $ — $ — $ 757,317

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

Total $ 757,317 $ — $ — $ 757,317

4 unchanged sentences

$ 28,928,772 $ — $ — $ 28,928,772

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

Derivative - interest rate cap (2)

Total $ 28,928,772 $ — $ — $ 28,928,772

1 unchanged sentence

(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.

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

Nine Months Ended September 30,

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

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

Proceeds from sale — — — ( 3,551,098 ) —

Reclassification of net realized loss on investments

into earnings — — — ( 446,009 ) —

Unrealized gain (loss) on investments 487,926 ( 75 ) ( 14,339 ) 183,881 ( 80,160 )

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

Notes to Unaudited Consolidated Financial Statements

Financial Instruments Not Carried at Fair Value

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

September 30, 2025 December 31, 2024

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:

March 31, 2026 December 31, 2025

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

15 unchanged sentences

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

The Company estimated that its other financial assets and liabilities, not included in the tables above, had fair values that approximated their carrying values at both September 30, 2025 and 2024 due to their short-term nature.

The Company estimated that its other financial assets and liabilities, not included in the tables above, had fair values that approximated their carrying values at both March 31, 2026 and December 31, 2025 due to their short-term nature.

Notes to Unaudited Consolidated Financial Statements

Other Items Measured at Fair Value (Including Impairment Charges)

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

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

The following table presents information about assets for which the Company recorded an impairment charge and that were measured at fair value on a non-recurring basis for the nine months ended September 30, 2025:

Nine Months Ended September 30, 2025

There was no impairment charge for the three months ended March 31, 2025.

The following table presents information about assets for which the Company recorded an impairment charge and that were measured at fair value on a non-recurring basis for the three months ended March 31, 2026:

Three Months Ended March 31, 2026

Level Fair Value Impairment Charge

Real estate assets held for sale

Real estate asset held for sale

Real estate and intangibles 3 $ 9,788,999 $ 595,984

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

During the three months ended March 31, 2026, the Company recorded an impairment charge of $ 0.6 million to reduce the carrying value of one industrial building to its estimated selling price less the cost of the sale.

The fair value measurement was determined by the selling price.

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.

Notes to Unaudited Consolidated Financial Statements

discounted cash flow methodology to arrive at an estimate of the fair value of each respective investment in the portfolio using an estimated market yield.

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

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;

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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, promissory notes payable, secured borrowings and a term loan, are determined by discounting the contractual cash flows at the interest rate the Company estimates such arrangements would bear if executed in the current market.

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

The 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.

Notes to Unaudited Consolidated Financial Statements

The following tables summarize the valuation techniques and significant unobservable inputs used by the Company to value the Level 3 loans as of March 31, 2026 and December 31, 2025.

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

Fair Value at September 30, 2025

Primary Valuation Technique Unobservable Inputs September 30, 2025

Fair Value at March 31, 2026

Primary Valuation Technique Unobservable Inputs March 31, 2026

Asset Category Minimum Maximum Weighted Average

9 unchanged sentences

Total Level 3 Liabilities $ 92,435,469

Notes to Unaudited Consolidated Financial Statements

Fair Value at December 31, 2025

17 unchanged sentences

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

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

2025 2024 2025 2024

Three Months Ended March 31,

Origination and extension fee expense (1)

9 unchanged sentences

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

Notes to Unaudited Consolidated Financial Statements

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

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

The Company must deliver prior written notice of any such termination to the Manager at least 180 days prior to the last calendar day of the Initial Term or the

Notes to Unaudited Consolidated Financial Statements

then-current Renewal Term, as applicable, and the Management Agreement will terminate effective as of the last calendar day of the Initial Term or the then-current Renewal Term, as applicable.

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

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

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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.

Notes to Unaudited Consolidated Financial Statements

Asset Servicing Fee

2 unchanged sentences

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

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

As of March 31, 2026 and December 31, 2025, the Company had not received any breakup fees.

Operating Expenses

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

Notes to Unaudited Consolidated Financial Statements

Disposition Fee

1 unchanged sentence

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

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 September 30, 2025 and December 31, 2024.

The promissory note receivable bore interest at the Prime Rate, as such Prime Rate is published in the Wall Street Journal, computed on the basis of the actual number of days elapsed and a year of 365 days.

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

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

Due from Related Parties

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

As of March 31, 2026 and December 31, 2025, amount due from related parties was $ 1.7 million and $ 1.7 million, primarily related to operational cash requirements the Company paid on behalf of its affiliates.

Promissory Note Payable

2 unchanged sentences

The promissory note matures on March 31, 2027.

As of September 30, 2025 and December 31, 2024, amount outstanding under this promissory note payable was $ 38.1 million and $ 45.1 million, respectively.

As of March 31, 2026 and December 31, 2025, amount outstanding under this promissory note payable was $ 16.0 million and $ 48.1 million, respectively.

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

3 unchanged sentences

Distributions Paid

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

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

Due to Manager

As of September 30, 2025 and December 31, 2024, approximately $ 1.1 million and $ 1.6 million, respectively, was due to the Manager, as reflected on the consolidated balance sheets, primarily related to the present value of the disposition fees on individual loans due to the Manager.

For the three months ended March 31, 2026 and 2025, the Company made distributions to related parties totaling $ 0.2 million and $ 0.9 million, respectively, all of which were returns of capital.

Notes to Unaudited Consolidated Financial Statements

Mavik Real Estate Special Opportunities Fund, LP

Due to Manager

As of March 31, 2026 and December 31, 2025, due to Manager was $ 0.2 million and $ 0.7 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.

For more information on this investment, please see Note 4 .

On December 23, 2025, the Company entered into a subscription agreement with VS2 whereby the Company committed to fund up to $ 8.4 million to purchase limited partnership interests in VS2.

For more information on these investments, please see Note 4 .

Participation Agreements

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

September 30, 2025

March 31, 2026

Participating Interests Principal Balance Carrying Value

1 unchanged sentence

$ 18,483,676 $ 18,575,489

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

December 31, 2025

1 unchanged sentence

38.27 % $ 17,703,471 $ 17,769,848

Loan C (1)(3)

Loan B (1)(2)

12.50 % 973,467 973,467

2 unchanged sentences

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

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

(3) This loan was repaid in January 2025.

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

Notes to Unaudited Consolidated Financial Statements

1 unchanged sentence

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

September 30, 2025

March 31, 2026

Transfers treated as

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Coupon Rate Effective Rate (1)

Maturity Date September 30, 2025 December 31, 2024

Maturity Date March 31, 2026 December 31, 2025

6.00 % Senior Notes Due 2026 (2)

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(1) Includes issue discount, purchase discount and deferred financing costs that are amortized to interest expense over the life of the notes.

(2) On March 30, 2026, the Company exchanged $ 24.0 million and $ 1.6 million of its 6.00 % Senior Notes Due 2026 and of Terra LLC’s 7.00 % Senior Notes Due 2026, respectively, for $ 25.6 million of the Company’s 7.00 % secured senior notes due 2029.

(3) On March 31, 2026, Terra LLC repaid the remaining 7.00 % Senior Notes Due 2026 in full.

(4) 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.

The 6.00 % Senior Notes Due 2026

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

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

Notes to Unaudited Consolidated Financial Statements

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

The 6.00 % Senior Notes Due 2026

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.

As discussed above, on March 31, 2026, the 7.00 % Senior Notes Due 2026 were repaid in full by Terra LLC and the outstanding balance as of March 31, 2026 was zero .

Covenant Compliance

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

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

Notes Maturities

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

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

As of March 31, 2026, 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:

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Current Maturity Extended Maturity Weighted Average Interest Rate (1)

Pledged Asset Carrying Value Maximum Facility Size Principal Amount Principal

Repurchase Agreements:

Goldman Sachs Bank facility (2)

(2) (2) (2) $ — $ — $ — $ 48,188,441

Total — — — 48,188,441

Non-Recourse Financing:

Promissory notes payable (3)(4)

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

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

Property mortgages - variable rate (2)

(5) (5) (5) — N/A — 34,100,000

January 2027 January 2027 9.85 % 31,341,140 N/A 13,250,000 —

Property mortgages - fixed rate June 2028 June 2028 6.25 % 15,561,530 N/A 7,417,500 20,700,000

Total 46,902,670 20,667,500 20,700,000

Other Secured Financing:

Revolving line of credit (6)

(6) (6) (6) — — — 16,361,111

Term loan (3)

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Secured borrowings (4)

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

June 2027 June 2027 9.32 % 32,246,186 18,000,000 18,000,000 31,250,000

Secured notes payable (5)

March 2029 March 2029 7.00 % 149,650,767 25,578,000 25,578,000 —

Total 217,710,121 53,578,000 53,578,000 41,250,000

3 unchanged sentences

_______________

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

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

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

Notes to Unaudited Consolidated Financial Statements

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

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

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

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

(1) Amount is calculated using the applicable index rate as of March 31, 2026.

(2) Interest rate is based on Term SOFR plus a spread of 5.0 % with a combined floor rate of 9.85 %.

In connection with the foreclosure on one multifamily property in full satisfaction of a first mortgage loan investment and related fees and expenses ( Note 5 ), the Company’s lender converted the related $ 13.2 million in secured borrowings to a property mortgage.

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

1 unchanged sentence

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

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

(4) Interest rate is based on Term SOFR plus a spread of 5.0 % with a combined floor rate of 9.32 %.

The facility is used to finance the Company’s senior loan investment.

(5) See “Secured Notes Payable” below.

Notes to Unaudited Consolidated Financial Statements

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:

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

2025 2024 2025 2024

Amortization of deferred financing costs

and others $ 629,017 $ 878,986 $ 1,347,133 $ 2,400,370

Three Months Ended March 31,

Amortization of deferred financing costs and others $ 418,559 $ 526,414

Proceeds from secured financing $ — $ 3,254,091

Principal repayments on secured

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

Principal repayments on secured financing $ ( 13,282,500 ) $ ( 43,700,349 )

Secured Notes Payable

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 (“SEC”) in connection with registered exchange offers (the “Exchange Offer”) to exchange any and all of the Company’s outstanding 6.00 % Senior Notes due 2026 and Terra Income Fund 6 LLC’s 7.00 % Senior Notes due 2026 for the Company’s newly issued 7.00 % Senior Secured Notes due 2029 (the “Exchange Notes”).

The Registration Statement was declared effective by the SEC on March 26, 2026.

On March 30, 2026, the Exchange Offer was completed and settled.

In connection with the Exchange Offer, $ 24.0 million of the Company’s outstanding 6.00 % Senior Notes due 2026 and $ 1.6 million of Terra LLC’s 7.00 % Senior Notes due 2026 were validly tendered and not withdrawn in the Exchange Offers.

On March 30, 2026 (the “Issue Date”), the Company issued Exchange Notes with an aggregate principal balance of $ 25.6 million.

The Exchange Notes were issued pursuant to an Indenture (the “Indenture”), dated March 30, 2026, by and between the Company and U.S.

Bank Trust Company, National Association,

The Exchange Notes bear interest at 7.00 % per annum, payable monthly beginning April 30, 2026, and mature on March 31, 2029, unless earlier redeemed or repurchased by the Company in accordance with their terms prior to such date .

The Company may redeem the Exchange Notes at 101 % of outstanding principal amount prior to December 31, 2026, and at 100 % thereafter, in each case plus accrued and unpaid interest.

Subject to certain exceptions, the Exchange Notes are secured by perfected liens granted by the Company on certain equity interests in the Company’s subsidiaries held by the Company from time to time, as more fully described in the Registration Statement.

The Indenture includes customary covenants that restrict, among other things, the incurrence of additional indebtedness, dividend payments, and certain corporate transactions, subject to a minimum collateral coverage ratio of 1.35 to 1.00.

The Indenture also contains customary events of default, including nonpayment, covenant breaches, invalidity of collateral security, and certain bankruptcy or insolvency events, subject to specified cure periods and qualifications.

Covenant Compliance

1 unchanged sentence

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

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

As of March 31, 2026, the Company was in compliance with all such covenants, as amended or waived.

Notes to Unaudited Consolidated Financial Statements

Scheduled Debt Principal Payments

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

Scheduled debt principal payments for each of the five calendar years following March 31, 2026 are as follows:

Years Ending December 31, Total

2025 (October 1 through December 31) $ —

2026 (April 1 through December 31) 56,361,350

2027 41,250,000

7 unchanged sentences

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

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

(see “Participation Agreements” in Note 7 ).

As of March 31, 2026 and December 31, 2025, 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 18.65 % and 18.79 %, respectively.

Notes to Unaudited Consolidated Financial Statements

Commitments and Contingencies

1 unchanged sentence

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

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

These fundings amounted to $ 8.0 million and $ 8.8 million as of March 31, 2026 and December 31, 2025, respectively.

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

Unfunded Investment Commitment

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

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

Unfunded Investment Commitments

As discussed in Note 4 , the Company entered into subscription agreements 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 March 31, 2026 and December 31, 2025, the unfunded investment commitments were $ 18.8 million and $ 19.7 million, respectively.

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

5 unchanged sentences

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

Notes to Unaudited Consolidated Financial Statements

Earnings Per Share

The following table presents earnings per share:

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

2025 2024 2025 2024

Three Months Ended March 31,

Net loss $ ( 15,048,983 ) $ ( 1,285,064 )

5 unchanged sentences

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

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

As of March 31, 2026 and December 31, 2025, there were no shares of Preferred Stock issued or outstanding.

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

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

As of September 30, 2025, Terra Fund 7 and Terra Offshore REIT held 8.7 % and 10.1 %, respectively, of the issued and outstanding shares of the Company’s common stock.

Notes to Unaudited Consolidated Financial Statements

As of March 31, 2026, Terra Fund 7 and Terra Offshore REIT held 8.7 % and 10.1 %, respectively, of the issued and outstanding shares of the Company’s Class B 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.

8 unchanged sentences

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

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

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

For the three months ended March 31, 2026 and 2025, the Company made distributions to investors totaling $ 1.0 million and $ 4.7 million respectively, all of which were returns of capital.

Dividend Reinvestment Plan

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

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

For the three months ended March 31, 2026

Notes to Unaudited Consolidated Financial Statements

and 2025, the Company issued 223 and 629 shares of Class B Common Stock for a total of $ 1,665 and $ 6,165 pursuant to the Plan, respectively.

Subsequent Events

10 unchanged sentences

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

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

• the availability of attractive risk-adjusted investment opportunities in our target asset class and other real estate-related investments that satisfy our objectives and strategies;

4 unchanged sentences

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

• our ability to continue as a going concern;

• the performance and financial condition of our borrowers;

14 unchanged sentences

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

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

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

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

• actions and initiatives of the U.S.

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

As of September 30, 2025, we held a net loan portfolio (gross loans less obligations under participation agreements and secured borrowing) comprised of ten loans in eight states with an aggregate net principal balance of $235.2 million, a weighted average coupon rate of 13.2% and a weighted average remaining term to maturity of 0.8 years.

As of March 31, 2026, we held a net loan portfolio (gross loans less obligations under participation agreements and secured borrowing) comprised of seven loans in six states with an aggregate net principal balance of $160.8 million, a weighted average coupon rate of 12.3% and a weighted average remaining term to maturity of 0.7 years.

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

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

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

The profile of these properties ranges from

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

As of March 31, 2026, our portfolio included underlying properties located in seven markets, across six states and includes property types such as multifamily housing, commercial offices, industrial, mixed-use and infill properties.

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

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

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

As of September 30, 2025, Terra Fund 7 and Terra Offshore REIT held approximately 8.7% and 10.1%, respectively, of our issued and outstanding Class B Common Stock.

As of March 31, 2026, Terra Fund 7 and Terra Offshore REIT held approximately 8.7% and 10.1%, respectively, of our issued and outstanding Class B Common Stock.

On May 7, 2026, we filed a registration statement on Form S-4 (as may be amended from time to time, the “Form S-4”) with the Securities and Exchange Commission in connection with a registered exchange offer (the “Exchange Offer”) to exchange any and all of our outstanding 6.00% unsecured senior notes due 2026 (the “6.00% Senior Notes Due 2026”) for newly issued Senior Secured Notes due 2029 by the Company.

The Exchange Offer is scheduled to expire on June 7, 2026, unless extended.

For additional information regarding the Exchange Offer, including the terms and conditions thereof, please refer to the Form S-4, including the prospectus contained therein.

We have significant debt obligations of approximately $69.6 million coming due, including $56.4 million of the 6.00% Senior Notes Due 2026 maturing on June 30, 2026.

As of March 31, 2026, we had cash and cash equivalents of $5.0 million.

We intend to refinance or repay the 6.00% Senior Notes Due 2026 that are not exchanged in the Exchange Offer 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 our Manager and may also use debt or equity capital sources or facilities.

However, there can be no assurance that we will be able to obtain the additional liquidity needed to repay the 6.00% Senior Notes Due 2026.

Therefore, substantial doubt about our ability to continue as a going concern exists.

If we are unable to continue as a going concern, we may have to liquidate our assets and may receive less than the value at which those assets are carried on our financial statements, and it is likely that our investors will lose all or a part of their investment.

In addition, if there remains substantial doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling to provide additional funding to us on commercially reasonable terms, or at all.

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

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We cannot provide any assurance that any alternative liquidity transaction will be available or, if available, that we will pursue or be successful in completing any such alternative liquidity transaction.

One of the potential future liquidity transactions that we continue to evaluate is a “direct listing” of its Class A Common Stock, $0.01 par value per share (“Class A Common Stock”), on a national securities exchange (i.e., a listing not involving a concurrent public offering of newly issued shares).

If market conditions are not supportive of a direct listing that would in our view lead to a constructive trading environment for the Class A Common Stock, we will explore alternative paths to pursue our investment strategy and provide liquidity to our investors, including converting our company into a traditional “non-traded REIT.” As part of a potential conversion to a non-traded REIT, we would adopt a customary share repurchase plan pursuant to which our investors could request to have their shares of its common stock redeemed for cash.

One of the potential future liquidity transactions that we continue to evaluate is a “direct listing” of our Class A Common Stock, $0.01 par value per share (“Class A Common Stock”), on a national securities exchange (i.e., a listing not involving a concurrent public offering of newly issued shares).

We have elected to be taxed as a REIT for U.S.

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

September 30, 2025

March 31, 2026

Fixed Rate Floating

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

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

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

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

Coupon rates shown were determined using the average SOFR of 3.65% and Term SOFR of 3.66% as of March 31, 2026 and average SOFR of 3.79% and Term SOFR of 3.69% as of December 31, 2025.

(2) As of March 31, 2026 and December 31, 2025, amount included $32.1 million and $63.6 million of senior mortgages used as collateral for $18.0 million and $31.3 million of borrowings under secured financing agreements, respectively ( Note 8 ).

(3) As of March 31, 2026 and December 31, 2025, four and five 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 September 30, 2025 and December 31, 2024, exclusive of any extension available.

(5) Excludes loans that are in maturity default and represents current effective maturity as of March 31, 2026 and December 31, 2025, exclusive of any extension available.

Real Estate Owned

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

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

In addition to our net loan portfolio, we own one industrial building and one multifamily property as of March 31, 2026 and four industrial buildings as of December 31, 2025.

As of March 31, 2026 and December 31, 2025, the real estate and related lease intangible assets and liabilities had a net carrying value of $46.9 million and $47.4 million, respectively, and the mortgage loans payable encumbering the real estate properties had an outstanding principal amount of $20.7 million and $20.7 million, respectively.

Equity Interest in Unconsolidated Investments

As of both September 30, 2025 and December 31, 2024, we owned 14.9% of equity interest in a limited partnership that invests primarily in performing and non-performing mortgages, loans, mezzanines and other credit instruments supported by underlying commercial real estate assets.

operating companies, as well as a preferred equity investment with residual profit sharing from sale of the underlying property.

As of both March 31, 2026 and December 31, 2025, we owned 14.9% of equity interest in a limited partnership that invests primarily in performing and non-performing mortgages, loans, mezzanines and other credit instruments supported by underlying commercial real estate assets.

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

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

As of September 30, 2025 and December 31, 2024, these equity interests had total carrying value of $106.5 million and $106.8 million, respectively.

Additionally, in December 2025, we entered into a subscription agreement with another affiliated limited partnership that 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 for a 1.5% interest in the partnership.

As of March 31, 2026 and December 31, 2025, these equity interests had total carrying value of $90.0 million and $94.2 million, respectively.

Book Value Per Share

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

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

Our book value per share of Class B Common Stock as of March 31, 2026 and December 31, 2025 was $5.36 and $6.02, respectively.

Portfolio Investment Activity

Net Loan Portfolio

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

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

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

For the three months ended March 31, 2026 and 2025, we invested $2.6 million and $29.0 million in new and add-on investments and had $1.6 million and $23.7 million of repayments, resulting in net repayments of $1.0 million and $5.3 million, respectively.

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

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

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Loan Structure Principal Balance Carrying

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First mortgages $ 55,033,707 $ 55,152,276 57.9 % $ 86,456,898 $ 88,060,452 65.2 %

Preferred equity investments 80,179,704 28,414,638 15.3 % 76,224,551 31,937,149 12.5 %

Mezzanine loans 25,483,676 25,570,676 26.9 % 24,703,471 24,763,765 18.3 %

Preferred equity investments 80,331,564 14,484,310 15.2 % 81,261,393 22,365,215 16.5 %

Total $ 160,848,947 $ 95,207,262 100.0 % $ 192,421,762 $ 135,189,432 100.0 %

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Property Type Principal Balance Carrying

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Value % of Total

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

Office $ 102,104,409 $ 37,113,002 39.0 % $ 101,711,046 $ 43,696,575 32.3 %

Infill land 41,389,766 41,481,579 43.6 % 40,609,561 41,821,242 30.9 %

Multifamily 6,082,598 5,302,599 5.6 % 37,855,514 37,390,000 27.7 %

Industrial 7,000,000 6,995,187 7.3 % 7,000,000 6,993,917 5.2 %

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Retail — — — % 973,467 973,467 0.7 %

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

Total $ 160,848,947 $ 95,207,262 100.0 % $ 192,421,762 $ 135,189,432 100.0 %

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Geographic Location Principal Balance Carrying

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United States

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

California $ 4,272,174 $ 4,314,896 4.5 % $ 36,088,728 $ 36,445,271 27.0 %

Georgia 32,127,617 32,246,186 33.9 % 31,734,254 31,878,019 23.6 %

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

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

New Jersey 22,906,090 22,906,090 24.1 % 22,906,090 24,051,394 17.8 %

Arizona 18,483,676 18,575,489 19.5 % 17,703,471 17,769,848 13.1 %

New York 76,059,390 10,169,414 10.7 % 76,015,752 17,077,516 12.6 %

Massachusetts 7,000,000 6,995,187 7.3 % 7,000,000 6,993,917 5.2 %

Illinois — — — % 973,467 973,467 0.7 %

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

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

Total $ 160,848,947 $ 95,207,262 100.0 % $ 192,421,762 $ 135,189,432 100.0 %

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(iii) coupons on variable rate real estate-related loans to reset, although on a delayed basis, to lower interest rates;

(iv) to the extent applicable under the terms of our investments, prepayments on real estate-related loans to increase;

(iv) to the extent applicable under the terms

of our investments, prepayments on real estate-related loans to increase;

and (v) to the extent we enter into interest rate swap agreements as part of our hedging strategy, the value of these agreements to decrease.

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The following table presents the comparative results of our operations:

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

2025 2024 Change 2025 2024 Change

Three Months Ended March 31,

2026 2025 Change

Interest income $ 1,623,636 $ 10,205,897 $ (8,582,261)

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Operating expenses

Operating expenses reimbursed to

Manager 881,382 1,341,587 (460,205) 3,272,181 5,852,522 (2,580,341)

Operating expenses reimbursed to Manager 673,467 1,429,953 (756,486)

Asset management fee 935,071 1,367,789 (432,718)

Asset servicing fee 211,211 329,600 (118,389)

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

Provision for credit losses 6,927,419 2,119,736 4,807,683

Real estate operating expenses 784,950 975,228 (190,278)

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Professional fees 2,072,080 518,354 1,553,726

Impairment charge — — — 3,399,684 — 3,399,684

Impairment charge on real estate asset 595,984 — 595,984

Directors’ fees 68,750 83,750 (15,000)

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13,226,204 8,372,537 4,853,667

Operating income 490,780 6,607,576 (6,116,796) 2,133,282 12,105,995 (9,972,713)

Operating (loss) income (10,012,354) 4,084,212 (14,096,566)

Other income and expenses

Interest expense on secured

financing (3,728,682) (6,487,146) 2,758,464 (11,768,739) (20,357,898) 8,589,159

Interest expense on unsecured notes

payable (2,521,155) (2,465,390) (55,765) (7,520,199) (7,358,342) (161,857)

Interest expense on obligations

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

Unrealized (loss) gain on

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

Income from equity interest in

unconsolidated investments 795,029 1,025,176 (230,147) 5,620,736 2,223,759 3,396,977

Interest expense on secured financing (1,806,153) (4,548,870) 2,742,717

Interest expense on unsecured notes payable (2,478,542) (2,491,537) 12,995

Interest expense on obligations under participation agreements (844,617) (888,904) 44,287

Income from equity interest in unconsolidated investments 660,007 2,560,110 (1,900,103)

Loss on sale of real estate, net (560,634) — (560,634)

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

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

Unrealized gain on investments, net — (75) 75

(5,029,939) (5,369,276) 339,337

Net loss before income taxes (15,042,293) (1,285,064) (13,757,229)

Provision for income tax (6,690) — $ (6,690)

Net loss $ (15,048,983) $ (1,285,064) $ (13,763,919)

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

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

Weighted Average Principal Amount (1)

Weighted Average Coupon Rate (2)

Weighted Average Principal Amount (1)

Weighted Average Coupon Rate (2)

Total portfolio

Gross loans $ 250,326,968 13.5 % $ 394,158,779 12.7 %

Obligations under participation agreements (20,057,753) 19.3 % (15,000,000) 20.2 %

Secured borrowing (31,250,000) 9.5 % — — %

Promissory notes payable (28,517,735) 9.3 % (52,264,913) 10.1 %

Repurchase agreements payable — — % (75,061,487) 8.6 %

Revolving line of credit payable — — % (34,761,111) 8.2 %

Net loans (3)

$ 170,501,480 14.2 % $ 217,071,268 15.0 %

Gross loans $ 166,789,792 14.1 % $ 301,309,122 12.7 %

Secured borrowing (31,250,000) 9.5 % — — %

Promissory notes payable (28,517,735) 9.3 % (52,264,913) 10.1 %

Repurchase agreements payable — — % (75,061,487) 8.6 %

Revolving line of credit payable — — % (34,761,111) 8.2 %

Net loans (3)

$ 107,022,057 16.8 % $ 139,221,611 17.0 %

Subordinated loans (4)

Gross loans $ 83,537,176 12.2 % $ 92,849,657 12.9 %

Obligations under participation agreements (20,057,753) 19.3 % (15,000,000) 20.2 %

Net loans (3)

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

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

Three Months Ended March 31, 2026 Three Months Ended March 31, 2025

Weighted Average Principal Amount (1)

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Interest Income

For the three and nine months ended September 30, 2025 as compared to the three and nine months ended September 30, 2024, interest income decreased by $3.8 million and $7.6 million, respectively, primarily due to a decrease in contractual interest income as a result of a decrease in the weighted average principal balance of performing loans.

For the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, interest income decreased by $8.6 million, primarily due to a decrease in contractual interest income as a result of a decrease in the weighted average principal balance of performing loans, an increase in suspended interest income accrual on one non-performing loan, and the write off of the exit fee on a non-performing loan.

Real Estate Operating Revenue

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

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

For the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, real estate operating revenue decreased by $0.8 million, primarily due to the sale of four and two industrial buildings in 2025 and 2026, respectively, partially offset by the acquisition of one multifamily property in 2026.

Other Operating Income

For the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, other operating income increased by $0.2 million, primarily due to an increase in dividend income earned on our money market account.

Operating Expenses Reimbursed to Manager

Under the terms of a management agreement (as amended, the “Management Agreement”) with our Manager, we reimburse our Manager for operating expenses incurred in connection with services provided to us, including our allowable share of our Manager’s overhead, such as rent, employee costs, utilities and technology costs.

For the three and nine months ended September 30, 2025 as compared to the three and nine months ended September 30, 2024, operating expenses reimbursed to our Manager decreased by $0.5 million and $2.6 million, respectively, primarily due to a decrease in the allocation ratio as a result of a decrease in our total funds under management.

For the three months ended March 31, 2026 as compared to the three months March 31, 2025, operating expenses reimbursed to our Manager decreased by $0.8 million, primarily due to a decrease in the allocation ratio as a result of a decrease in our total funds under management.

Asset Management Fee

Under the terms of the Management Agreement with our Manager, we paid our Manager a monthly asset management fee at an annual rate of 1% of the aggregate funds under management, which included the aggregate gross acquisition price, net of participation interest sold to affiliates, for each investment and cash held by us.

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

For the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, asset management fees decreased by $0.4 million, primarily due to a decrease in total assets under management resulting from repayment of loans as well as the sale of four and two industrial buildings in 2025 and 2026, respectively.

Asset Servicing Fee

Under the terms of the Management Agreement with our Manager, we paid our Manager a monthly servicing fee at an annual rate of 0.25% of the aggregate gross origination price or acquisition price for each investment held by us.

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

Provision for (Reversal of Provision for) Credit Losses

We follow the provisions of Accounting Standards Codification (“ASC”) 326, Financial Instruments – Credit Losses , which requires entities to recognize credit losses on financial instruments based on an estimate of current expected credit losses.

For the three and nine months ended September 30, 2025, provision for credit losses was $2.4 million and $5.9 million, respectively, primarily due to a decline in our estimated recoverable amount on a non-performing subordinated loan due to an increase in funding on the senior loan.

For the three months ended September 30, 2024, we recorded a reversal of provision for credit losses of $0.7 million, primarily due to an increase in modeled economic forecasts for commercial real estate and the overall shortening duration of loans in the portfolio, partially offset by a decline in our estimated recoverable amount on a non-performing subordinated loan due to an increase in funding on the senior loan.

For the nine months ended September 30, 2024, provision for credit losses was $3.8 million, primarily due to a decline in our estimated recoverable amount on a non-performing subordinated loan due to an increase in funding on the senior loan as well as a decline in modeled macroeconomic forecasts for commercial real estate.

For the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, asset servicing fees decreased by $0.1 million, primarily due to a decrease in total assets under management resulting from the repayment of loans as well as the sale of four and two industrial buildings in 2025 and 2026, respectively.

Provision for Credit Losses

We follow the provisions of Accounting Standards Codification 326, Financial Instruments – Credit Losses (“ASC 326”), which requires entities to recognize credit losses on financial instruments based on an estimate of current expected credit losses.

For the three months ended March 31, 2026, provision for credit losses was $6.9 million, primarily due to a decline in our estimated recoverable amount on a non-performing subordinated loan due to an increase in funding on the senior loan.

For the three months ended March 31, 2025, provision for credit losses was $2.1 million primarily related to a decline in our estimated recoverable amount on a non-performing subordinated loan due to an increase in funding on the senior loan.

Real Estate Operating Expenses

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

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

For the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, real estate operating expenses decreased by $0.2 million, primarily due the sale of four and two industrial buildings in 2025 and 2026, respectively, partially offset by the acquisition of one multifamily property in 2026.

Depreciation and Amortization

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

For the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, depreciation and amortization decreased by $0.5 million, primarily due to the sale of four industrial buildings in 2025 as well as two industrial buildings in 2026, partially offset by the acquisition of one multifamily property in 2026.

Professional Fees

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

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

Impairment Charge

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

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

For the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, professional fees increased by $1.6 million, primarily due to fees incurred in 2026 related to strategic financing alternatives.

Impairment Charge on Real Estate Asset

For the three months ended March 31, 2026, in connection with the pending sale of one industrial building, we recorded an impairment charge of $0.6 million to reduce the carrying value of these industrial building to its estimated selling price less the costs to sell.

There was no such impairment charge for the three months ended March 31, 2025.

Interest Expense on Secured Financing

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

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

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

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

The outstanding amounts under the repurchase agreement, the revolving line of credit and the promissory notes were repaid in full and the facilities were terminated in June 2025, July 2025 and November 2025 respectively.

For the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, interest expense on secured financing decreased by $2.7 million as a result of a decrease in the weighted average principal amount outstanding.

Interest Expense on Unsecured Notes Payable

1 unchanged sentence

In connection with the BDC Merger, we assumed $38.4 million in aggregate principal amount of 7.00% notes due in 2026.

For the three and nine months ended September 30, 2025 as compared to the three and nine months ended September 30, 2024, interest expense on unsecured notes payable increased by $0.1 million and $0.2 million, respectively, primarily due to an increase in the amortization of financing costs using the effective interest rate method.

Interest from Obligations under Participation Agreements

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

Unrealized (Loss) Gain on Investments, Net

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

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

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

Income (Loss) from Equity Interest in Unconsolidated Investments

As of both September 30, 2025 and December 31, 2024, we owned a 14.9% equity interest in RESOF, an affiliated limited partnership that invests primarily in performing and non-performing mortgages, loans, mezzanines and other credit instruments supported by underlying commercial real estate assets.

W e also beneficially owned equity interests in joint ventures that invest in real estate properties, opportunistic debt and equity securities and, indirectly, together with other non-affiliated entities, non-real estate operating companies, and a preferred equity investment with residual profit-sharing.

In March 2026, the 7.00% notes due in 2026 were repaid in full.

For the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, interest expense on unsecured notes payable was substantially the same.

Interest expense increased due to an increase in the amortization of financing costs using the effective interest rate method was substantially offset by a decrease in interest expense driven by the retirement of 189,465 units of the 6.00% Senior Notes Due 2026 in 2025.

Income from Equity Interest in Unconsolidated Investments

We owned a 14.9% equity interest in RESOF as of both March 31, 2026 and December 31, 2025, and a 1.5% equity interest in VS2 as of March 31, 2026.

Both RESOF and VS2 are affiliated limited partnerships that invest primarily in performing and non-performing mortgages, loans, mezzanines and other credit instruments supported by underlying commercial real estate assets.

As of both March 31, 2026 and December 31, 2025, w e also beneficially owned equity interests in joint ventures that invest in real estate properties, opportunistic debt and equity securities and, indirectly, together with other non-affiliated entities, non-real estate operating companies, and a preferred equity investment with residual profit-sharing.

Our income (loss) from equity interest in unconsolidated investments are as follows:

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

2025 2024 2025 2024

Three Months Ended March 31,

Income from equity interest in RESOF $ 1,020,307 $ 2,206,934

Income from equity interest in VS2 136,805 —

Loss from equity interest in the joint ventures (1,202,653) (250,393)

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

Income from other equity investment 705,548 603,569

$ 660,007 $ 2,560,110

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

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

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

For the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, equity income from RESOF decreased as a result of a decrease in RESOF’s net income generated due to a decrease in the amount of invested capital.

For the three months ended March 31, 2026, equity income from VS2 was recorded as a result of VS2’s net income generated by invested capital.

There was no such investment in VS2 or related income for the three months ended March 31, 2025.

For the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, equity loss from the joint ventures increased primarily due to an unrealized gain on investment recognized in 2025 by a joint venture.

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

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

For the nine months ended September 30,

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

For the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, the increase in income from other equity investment is due an increase in the outstanding principal balance.

Loss on Sale of Real Estate, Net

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

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

Loss on Repayment of Loan

In August 2024, a $65.0 million senior loan was repaid, resulting in a loss on repayment of $5.6 million for the three and nine months ended September 30, 2024, which included the write-off of interest receivable of $4.8 million.

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

Realized Loss On Investments, Net

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

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

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

For the three months ended March 31, 2026, we sold two industrial buildings and recognized a net loss on sale of $0.6 million.

There was no such gain or loss for the three months ended March 31, 2025.

For the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, the resulting net loss increased by $13.8 million.

Financial Condition, Liquidity and Capital Resources

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We expect to fund approximately $8.0 million of the unfunded commitments to borrowers during the next twelve months.

We expect to maintain sufficient liquidity to fund such commitments through matching these commitments with principal repayments on outstanding loans or draw downs on our credit facilities.

We expect to maintain sufficient liquidity to fund such commitments through matching these commitments with principal repayments on outstanding loans.

Obligations under participation agreements of $18.0 million will mature in the next twelve months.

We will use the proceeds from the repayment of the corresponding investment to repay the participation obligations.

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

We expect to use proceeds from the repayment of the underlying loans to repay the promissory notes payable.

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

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

sources or facilities, including exchange offers.

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

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

Additionally, a property mortgage with a total outstanding principal balance of $13.3 million that is collateralized by one multifamily property will mature within the next twelve months.

We expect to use proceeds from the sale of the underlying real estate to repay the property mortgage.

Finally, the 6.00% Senior Notes Due 2026 with an outstanding principal balance of $56.4 million are scheduled to mature on June 30, 2026.

We intend to repay the 6.00% Senior Notes Due 2026 that are not exchanged in the Exchange Offer 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 our Manager and may also use debt or equity capital sources or facilities.

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

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

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Summary of Financing

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

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

Unsecured notes payable N/A $ 85,125,000 N/A 6.00% June 2026

Unsecured notes payable N/A 38,375,000 N/A 7.00% March 2026

Property mortgages N/A 20,700,000 N/A 6.25% June 2028

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

$ 154,200,000

The table below summarizes our debt financing as of March 31, 2026:

Type of Financing Outstanding Balance Interest Rate Maturity Date

Unsecured notes payable $ 56,361,350 6.00% June 2026

Secured note payable 25,578,000 7.00% March 2029

Property mortgages 7,417,500 6.25% June 2028

Term loan payable 10,000,000 9.00% December 2027

Variable Rate:

Promissory notes payable N/A 28,904,992 N/A Term SOFR plus a spread ranging from 4.75% to 5.98% with a combined floor rate ranging from 9.0% to 11.28% March 2026

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

N/A $ 60,154,992

Cash Flows Used in Operating Activities

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

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

Property mortgage 13,250,000 Term SOFR + 5%, (combined floor rate ranging from 9.85%) January 2027

Secured borrowing 18,000,000 Term SOFR + 5%, (combined floor rate ranging from 9.32%) June 2027

Cash Flows (Used in) Provided by Operating Activities

For the three months ended March 31, 2026, cash flows used in operating activities were $1.5 million compared to cash flows provided by operating activities of $0.9 million for the three months ended March 31, 2025.

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

Cash Flows Provided by Investing Activities

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

For the nine months ended September 30, 2024, cash flows provided by investing activities were $117.9 million, primarily related to proceeds from repayment of loans of $206.0 million and promissory note receivable of $9.5 million, partially offset by origination, purchase and funding of loans of $49.8 million and capital contributions to and purchase of equity interests in unconsolidated investments of $47.2 million.

For the three months ended March 31, 2026, cash flows provided by investing activities were $24.5 million, primarily related to proceeds from sale of real estate of $20.6 million, proceeds from repayment of loans of $1.6 million and distributions received in excess of income of $4.9 million, partially offset by origination, purchase and funding of loans of $1.4 million and capital contribution to equity investments of $1.1 million.

For the three months ended March 31, 2025, cash flows provided by investing activities were $46.2 million, primarily related to proceeds from repayment of loans of $54.0 million, partially offset by origination.

purchase and funding of loans of $7.9 million.

Cash Flows Used in Financing Activities

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

For the nine months ended September 30, 2024, cash flows used in financing activities were $98.7 million, primarily related to principal repayments on secured financing of $159.1 million, distributions paid of $13.9 million and payment for

financing costs of $1.1 million, partially offset by proceeds from secured financing of $60.7 million and proceeds from obligations under participation agreements of $15.0 million.

For the three months ended March 31, 2026, cash flows used in financing activities were $52.1 million, primarily related to principal repayments on unsecured notes payable of $36.8 million, repayments on secured financing of $13.3 million, payment for financing costs of $0.3 million, distributions paid to investors of $1.0 million, and a decrease in interest reserve and other deposits held on investments of $0.6 million.

For the three months ended March 31, 2025, cash flows used in financing activities were $45.9 million, primarily related to principal repayments on secured financing of $43.7 million, distributions paid of $4.6 million and a decrease in interest reserve and other deposits held on investments of $1.4 million, partially offset by proceeds from secured financing of $3.3 million and proceeds from obligations under participation agreements of $0.7 million.

Distribution Reinvestment Plan

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The following table presents a summary of fees paid and costs reimbursed to our Manager in connection with providing services to us:

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

2025 2024 2025 2024

Three Months Ended March 31,

Origination and extension fee expense (1)

11 unchanged sentences

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

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

The Management Agreement may be terminated by us during the Initial Term or any Renewal Term upon a finding by either (i) at least two-thirds of the independent directors on our Board or (ii) the holders of a majority of the outstanding shares of our common stock (other than those shares held by members of our senior management team or affiliates of our Manager) that either (a) there has been unsatisfactory performance by our Manager that is materially detrimental to us, or (b) the compensation payable to our Manager pursuant to the Management Agreement is unfair;

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

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

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

period immediately preceding such termination (the “Termination Fee”), calculated as of the end of the most recently completed month prior to the date of such termination.

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

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The promissory note matures on March 31, 2027.

As of September 30, 2025 and December 31, 2024, amount outstanding under the promissory note payable was $38.1 million and $45.1 million, respectively.

As of March 31, 2026 and December 31, 2025, amount outstanding under the promissory note payable was $16.0 million and $48.1 million, respectively.

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

4 unchanged sentences

We have further diversified our exposure to loans and borrowers by entering into participation agreements whereby we transferred a portion of certain of our loans on a pari passu basis to related parties, primarily other affiliated funds managed by our Manager or its affiliates, and to a lesser extent, unrelated parties.

As of September 30, 2025, the principal balance of our participation obligation was $18.0 million, which was a participation obligation to a related-party managed by the Manager.

As of March 31, 2026, the principal balance of our participation obligation was $18.0 million, which was a participation obligation to a related-party managed by the Manager.

The loans that are subject to participation agreements are held in our name, but each of the participant’s rights and obligations, including with respect to interest income and other income (e.g., exit fee, prepayment income) and related fees/expenses (e.g., disposition fees, asset management and asset servicing fees), are based upon their respective pro rata participation interest in such participated investments, as specified in the respective participation agreements.

We do not have

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

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

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

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Similarly, interest earned on the entire loan balance is recorded within “Interest income” and the interest related to the participation interest is recorded within “Interest expense from obligations under participation agreements” in the consolidated statements of operations.

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

For the three months ended March 31, 2026 and 2025, the weighted average outstanding principal balance on obligations under participation agreements was approximately $18.0 million and $18.3 million, respectively, and the weighted average interest rate was approximately 18.8% and 19.3%, respectively.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements