Chicago Atlantic Real Estate Finance, Inc.

Previous wording

Our Manager and its affiliates seek to originate real estate loans between $5 million and $200 million, generally with one- to five-year terms and amortization when terms exceed three years. We generally act as co-lenders in such transactions and intend to hold up to $50 million of the aggregate loan amount, with the remainder to be held by affiliates or third party co-investors. We may revise such concentration limits from time to time as our loan portfolio grows. Other investment vehicles managed by our Manager or affiliates of our Manager may co-invest with us or hold positions in a loan where we have also invested, including by means of splitting commitments, participating in loans or other means of syndicating loans. We will not engage in a co-investment transaction with an affiliate where the affiliate has a senior position to the loan held by us. To the extent that an affiliate provides financing to one of our borrowers, such loans will be working capital loans or loans that are subordinate to our loans. We may also serve as co-lenders in loans originated by third parties and, in the future, we may also acquire loans or loan participations. Loans that have one to two year maturities are generally interest only loans.

Current wording

Our Manager and its affiliates seek to originate real estate loans between $5 million and $200 million, generally with one- to five-year terms and amortization when terms exceed three years. We generally act as co-lenders in such transactions and intend to hold up to $50 million of the aggregate loan amount, with the remainder to be held by affiliates or third party co-investors. We may revise such concentration limits from time to time as our loan portfolio grows. Other investment vehicles managed by our Manager or affiliates of our Manager may co-invest with us or hold positions in a loan where we have also invested, including by means of splitting commitments, participating in loans or other means of syndicating loans. We will not engage in a co-investment transaction with an affiliate where the affiliate has a senior position to the loans held by us. To the extent that an affiliate provides financing to one of our borrowers, such loans will be working capital loans or loans that are subordinate to our loans. We may also serve as co-lenders in loans originated by third parties and, in the future, we may also acquire loans or loan participations. Loans that have one to two year maturities are generally interest only loans.

Previous wording

Our loans are secured by real estate and, in addition, when lending to owner-operators in the cannabis industry, other collateral, such as equipment, receivables, licenses or other assets of the borrowers to the extent permitted by applicable laws and regulations. In addition, we seek to impose strict loan covenants and seek personal or corporate guarantees for additional protection. As of March 31, 2025 and December 31, 2024, 61.2% and 50.0%, respectively, of the principal of loans held in our portfolio are backed by personal or corporate guarantees. We aim to maintain a portfolio diversified across jurisdictions and across verticals, including cultivators, processors, dispensaries, as well as ancillary businesses. In addition, we may invest in borrowers that have equity securities that are publicly traded on the Canadian Stock Exchange (“CSE”) in Canada and/or over-the-counter in the United States.

Current wording

Our loans are secured by real estate and, in addition, when lending to owner-operators in the cannabis industry, other collateral, such as equipment, receivables, licenses or other assets of the borrowers to the extent permitted by applicable laws and regulations. In addition, we seek to impose strict loan covenants and seek personal or corporate guarantees for additional protection. As of June 30, 2025 and December 31, 2024, 34.9% and 50.0%, respectively, of the principal of loans held in our portfolio are backed by personal or corporate guarantees. We aim to maintain a portfolio diversified across jurisdictions and across verticals, including cultivators, processors, dispensaries, as well as ancillary businesses. In addition, we may invest in borrowers that have equity securities that are publicly traded on the Canadian Stock Exchange (“CSE”) in Canada and/or over-the-counter in the United States.

Previous wording

We generate revenue primarily in the form of interest income on loans. As of March 31, 2025 and December 31, 2024, approximately 58.5% and 62.1%, respectively, of our total portfolio was comprised of floating rate loans, and 41.5% and 37.9% of our total portfolio was comprised of fixed rate loans, respectively. The floating rate loans described above are variable based upon the Prime Rate plus an applicable margin, and in many cases, a Prime Rate floor. We have one floating rate loan, which comprises approximately 0.1% of the aggregate portfolio outstanding principal that bears a rate based on SOFR.

Current wording

We generate revenue primarily in the form of interest income on loans. As of June 30, 2025 and December 31, 2024, approximately 60.1% and 62.1%, respectively, of our portfolio of loans held for investment portfolio was comprised of floating rate loans, and 39.9% and 37.9% of our total portfolio was comprised of fixed rate loans, respectively. The floating rate loans described above are variable based upon the Prime Rate plus an applicable margin, and in many cases, a Prime Rate floor. We have one floating rate loan, which comprises approximately 0.1% of the aggregate portfolio outstanding principal that bears a rate based on SOFR.

Previous wording

To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement that we distribute annually to our stockholders at least 90% of our REIT taxable income prior to the deduction for dividends paid. To the extent that we distribute less than 100% of our REIT taxable income in any tax year (taking into account any distributions made in a subsequent tax year under Sections 857(b)(9) or 858 of the Code), we will pay tax at regular corporate rates on that undistributed portion. Furthermore, if we distribute less than the sum of 1) 85% of our ordinary income for the calendar year, 2) 95% of our capital gain net income for the calendar year, and 3) any undistributed shortfall from our prior calendar year (the “Required Distribution”) to our stockholders during any calendar year (including any distributions declared by the last day of the calendar year but paid in the subsequent year), then we are required to pay a non-deductible excise tax equal to 4% of any shortfall between the Required Distribution and the amount that was actually distributed. The 90% distribution requirement does not require the distribution of net capital gains. However, if we elect to retain any of our net capital gain for any tax year, we must notify our stockholders and pay tax at regular corporate rates on the retained net capital gain. Our stockholders must include their proportionate share of the retained net capital gain in their taxable income for the tax year, and they are deemed to have paid the REIT’s tax on their proportionate share of the retained capital gain. Furthermore, such retained capital gain may be subject to the nondeductible 4% excise tax. If it is determined that our estimated current year taxable income will be in excess of estimated dividend distributions (including capital gain dividend) for the current year from such income, we will accrue excise tax on estimated excess taxable income as such taxable income is earned. The annual expense is calculated in accordance with applicable tax regulations. Excise tax expense, if any, is included in the line item, income tax expense. For the three months ended March 31, 2025, we did not incur excise tax expense.

Current wording

To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement that we distribute annually to our stockholders at least 90% of our REIT taxable income prior to the deduction for dividends paid. To the extent that we distribute less than 100% of our REIT taxable income in any tax year (taking into account any distributions made in a subsequent tax year under Sections 857(b)(9) or 858 of the Code), we will pay tax at regular corporate rates on that undistributed portion. Furthermore, if we distribute less than the sum of 1) 85% of our ordinary income for the calendar year, 2) 95% of our capital gain net income for the calendar year, and 3) any undistributed shortfall from our prior calendar year (the “Required Distribution”) to our stockholders during any calendar year (including any distributions declared by the last day of the calendar year but paid in the subsequent year), then we are required to pay a non-deductible excise tax equal to 4% of any shortfall between the Required Distribution and the amount that was actually distributed. The 90% distribution requirement does not require the distribution of net capital gains. However, if we elect to retain any of our net capital gain for any tax year, we must notify our stockholders and pay tax at regular corporate rates on the retained net capital gain. Our stockholders must include their proportionate share of the retained net capital gain in their taxable income for the tax year, and they are deemed to have paid the REIT’s tax on their proportionate share of the retained capital gain. Furthermore, such retained capital gain may be subject to the nondeductible 4% excise tax. If it is determined that our estimated current year taxable income will be in excess of estimated dividend distributions (including capital gain dividend) for the current year from such income, we will accrue excise tax on estimated excess taxable income as such taxable income is earned. The annual expense is calculated in accordance with applicable tax regulations. Excise tax expense, if any, is included in the line item, income tax expense. For the six months ended June 30, 2025, we did not incur excise tax expense.

Previous wording

Our operating results depend in large part on differences between the income earned on our assets and our cost of borrowing. The cost of our borrowings generally are based on prevailing market interest rates. During a period of rising interest rates, our borrowing costs generally will increase (a) while the yields earned on our leveraged fixed-rate loan assets will remain static, and (b) at a faster pace than the yields earned on our leveraged floating-rate loan assets, which could result in a decline in our net interest spread and net interest margin. The severity of any such decline would depend on our asset/liability composition at the time as well as the magnitude and duration of the interest rate increase. Further, an increase in short-term interest rates could also have a negative impact on the market value of our target investments. If any of these events happen, we could experience a decrease in net income or incur a net loss during these periods, which could adversely affect our liquidity and results of operations.

Current wording

Our operating results depend in large part on differences between the income earned on our assets and our cost of borrowing. The cost of our borrowings generally is based on prevailing market interest rates. During a period of rising interest rates, our borrowing costs generally will increase (a) while the yields earned on our leveraged fixed-rate loan assets will remain static, and (b) at a faster pace than the yields earned on our leveraged floating-rate loan assets, which could result in a decline in our net interest spread and net interest margin. The severity of any such decline would depend on our asset/liability composition at the time as well as the magnitude and duration of the interest rate increase. Further, an increase in short-term interest rates could also have a negative impact on the market value of our target investments. If any of these events happen, we could experience a decrease in net income or incur a net loss during these periods, which could adversely affect our liquidity and results of operations.

Previous wording

These factors could lower our net interest income or cause a net loss during periods of rising interest rates, which would harm our financial condition, cash flows and results of operations. As of March 31, 2025, 58.5% of our floating rate loans, based on total principal outstanding have interest Prime rate floors as summarized below:

Current wording

These factors could lower our net interest income or cause a net loss during periods of rising interest rates, which would harm our financial condition, cash flows and results of operations. As of June 30, 2025, 60.1% of our portfolio of loans held for investment are floating rate loans, based on total principal outstanding have interest Prime rate floors as summarized below:

Previous wording

We may fund a portion of our origination of loans, or of loans that we may in the future acquire, with borrowings that are based on the Prime Rate or a similar measure, while the interest rates on these assets may be fixed or indexed to the Prime Rate or another index rate. Accordingly, any increase in the Prime Rate will generally result in an increase in our borrowing costs that would not be matched by fixed-rate interest earnings and may not be matched by a corresponding increase in floating-rate interest earnings. Any such interest rate mismatch could adversely affect our profitability, which may negatively impact distributions to our stockholders.

Current wording

We may fund a portion of our origination of loans, or of loans that we may in the future acquire, with borrowings that are based on the Prime Rate or a similar measure, while the interest rates on these assets may be fixed or indexed to the Prime Rate or another index rate, including the Secured Overnight Financing Rate ("SOFR"). Accordingly, any increase in the Prime Rate or SOFR will generally result in an increase in our borrowing costs that would not be matched by fixed-rate interest earnings and may not be matched by a corresponding increase in floating-rate interest earnings. Any such interest rate mismatch could adversely affect our profitability, which may negatively impact distributions to our stockholders.

Previous wording

Updates to Our Loan Portfolio during the First Quarter of 2025

Current wording

Updates to Our Loan Portfolio during the Second Quarter of 2025

Previous wording

During the three months ended March 31, 2025, we declared an ordinary cash dividend of $0.47 per share of our common stock, relating to the first quarter of 2025, which was paid on April 15, 2025 to stockholders of record as of the close of business on March 31, 2025. The total amount of the cash dividend payment was approximately $9.8 million.

Current wording

During the three months ended June 30, 2025, we declared an ordinary cash dividend of $0.47 per share of our common stock, relating to the second quarter of 2025, which was paid on July 15, 2025 to stockholders of record as of the close of business on June 30, 2025. The total amount of the cash dividend payment was approximately $9.9 million.

Previous wording

General and administrative expenses and professional fees decreased by approximately $151 thousand for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. The decrease was primarily due to a decrease in overhead reimbursements for costs incurred by the Manager on behalf of the Company, which were approximately $1.1 million for the three months ended March 31, 2025, compared to approximately $1.2 million for the three months ended March 31, 2024.

Current wording

General and administrative expenses and professional fees increased by approximately $88 thousand for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024.

Previous wording

Stock based compensation expense increased slightly by approximately $0.1 million for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. The increase over the comparative period is driven by the incremental expense recognized on the 187,335 of restricted stock awards granted on during 2024, which had not been granted as of March 31, 2024.

Current wording

Stock based compensation expense slightly increased by approximately $45 thousand for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. The increase over the comparable period is driven by the incremental expense recognized on the 187,157 restricted stock awards granted to employees of our Manager on April 1, 2025, which have a vesting period of three years.

Previous wording

Interest income decreased by approximately $0.2 million during the quarter ended March 31, 2025, compared to the quarter ended March 31, 2024. The decrease was driven primarily by the outstanding principal of the Company's loans that bear a floating rate which decreased from 77% at March 31, 2024 to 58.5% at March 31, 2025. Interest income from prepayment fees and acceleration of original issue discounts and other upfront fees generated approximately $0.4 million and $0.1 million of gross interest income during the three months ended March 31, 2025 and 2024, respectively. Additionally, the weighted average YTM IRR on our portfolio decreased from 19.4% at March 31, 2024 to 16.9% at March 31, 2025, as a result of certain re-pricing amendments relating to de-risking of our portfolio and the impact of the 100 basis point prime rate decline on our floating rate portfolio.

Current wording

Interest income increased by approximately $1.2 million, or 4%, during the six months ended June 30, 2025, compared to the six months ended June 30, 2024. The increase is primarily driven by interest income from prepayment fees and acceleration of original issue discounts and other upfront fees generated approximately $1.9 million and $0.1 million of gross interest income during the six months ended June 30, 2025 and 2024, respectively. The increase was offset by the weighted-average yield-to-maturity internal rate of return (“YTM IRR”) on our portfolio decreased from 18.7% at June 30, 2024. to 16.8% at June 30, 2025, as a result of certain re-pricing amendments relating to de-risking of our portfolio and the impact of the 100 basis point prime rate decline on our floating rate portfolio.

Previous wording

Interest expense remained consistent over the comparative period. The Notes Payable, which were not included in interest expense during the three months ended March 31, 2024, contributed to approximately $1.2 million of the expense during the first quarter of 2025. This increase was offset by decrease in the weighted average outstanding balance on the Revolving Loan, which was approximately $41.6 million and $90.4 million, as of March 31, 2025 and 2024, respectively.

Current wording

Interest expense increased by approximately $0.2 million, or 5%, over the comparative period. The increase was attributable to the Notes Payable, which were not included in interest expense during the six months ended June 30, 2024, contributed to approximately $2.4 million of the expense during the six months ended June 30, 2025. The outstanding balance on the Revolving Loan was approximately $71.2 million and $76.8 million, as of June 30, 2025 and 2023, respectively.

Previous wording

Base management and incentive fees payable to our Manager remained consistent over the comparative period. Management fees were approximately $1.2 million for the three months ended March 31, 2025, as compared to approximately $1.1 million for the three months ended March 31, 2024. The slight increase in management fees was primarily attributable to the increase in weighted average equity as defined by the Management Agreement for the comparable period. The origination fee offsets in the three months ended March 31, 2025 were approximately $4 thousand, compared to approximately $16 thousand for the three months ended March 31, 2024. Incentive fees were approximately $0.5 million for the three months ended March 31, 2025, as compared to approximately $0.7 million for the three months ended March 31, 2024.

Current wording

Management and incentive fees to our Manager was approximately $3.7 million for the six months ended June 30, 2025, as compared to approximately $3.5 million for the six months ended June 30, 2024, a increase of $0.1 million. Management fees were approximately $2.3 million for the six months ended June 30, 2025, as compared to approximately $2.2 million for the six months ended June 30, 2024. The slight increase in management fees was primarily attributable to fewer origination fee offsets in the six months ended June 30, 2025 of approximately $137 thousand, compared to approximately $32 thousand for the six months ended June 30, 2024. Incentive fees were approximately $1.4 million for both the six months ended June 30, 2025 and 2024.

Previous wording

Benefit for current expected credit losses was approximately $1.1 million in the three months ended March 31, 2025, as compared to a provision of approximately $380 thousand in the three months ended March 31, 2024.The decrease in expected credit losses was primarily driven by the $1.2 million reversal from Loan #9 during the three months ended March 31, 2025. The current expected credit loss reserve represents approximately 83 basis points of our aggregate loan commitments held at carrying value of approximately $3.3 million as of March 31, 2025.

Current wording

Provision of current expected credit losses were approximately $74 thousand in the six months ended June 30, 2025, as compared to $105 thousand during the six months ended June 30, 2024. The decrease in expected credit losses was primarily driven by the $0.7 million reversal from Loan #9 during the six months ended June 30, 2025. The current expected credit loss reserve represents approximately 107 basis points of our aggregate loan commitments held at carrying value of approximately $4.4 million as of June 30, 2025.

Previous wording

We record a reserve liability based on the unfunded portion of loan commitments over the full contractual period over which we are exposed to credit risk through a current obligation to extend credit. Management considered the likelihood that funding will occur, and if funded, the expected credit loss on the funded portion. We continuously evaluate the credit quality of each loan by assessing the risk factors of each loan. The reserve recorded applicable to the $19.8 million of unfunded commitments as of March 31, 2025 is approximately $45 thousand.

Current wording

We record a reserve liability based on the unfunded portion of loan commitments over the full contractual period over which we are exposed to credit risk through a current obligation to extend credit. Management considered the likelihood that funding will occur, and if funded, the expected credit loss on the funded portion. We continuously evaluate the credit quality of each loan by assessing the risk factors of each loan. The reserve recorded applicable to the $16.6 million of unfunded commitments as of June 30, 2025 is approximately $45 thousand.

Previous wording

As of both March 31, 2025 and December 31, 2024, our portfolio included 30 loans held for investment, with a carrying value of approximately $399.5 million and $402.5 million, respectively, prior to the reserve for current expected credit losses. The aggregate outstanding principal was approximately $401.5 million and $404.7 million as of March 31, 2025 and December 31, 2024, respectively. As of March 31, 2025 and December 31, 2024, our loan portfolio had a weighted-average yield-to-maturity internal rate of return (“YTM IRR”) of 16.9% and 17.2%, respectively, and was substantially secured by real estate and, with respect to certain of our loans, substantially all assets of the borrowers and certain of their subsidiaries, including equipment, receivables, and licenses. YTM IRR is calculated using various inputs, including (i) cash and paid-in-kind (“PIK”) interest, which is capitalized and added to the outstanding principal balance of the applicable loan, (ii) original issue discount (“OID”), (iii) amortization, (iv) unused fees, and (v) exit fees. Certain of our loans have extension fees, which are not included in our YTM IRR calculations, but may increase YTM IRR if such extension options are exercised by borrowers.

Current wording

As of June 30, 2025 and December 31, 2024, our portfolio of loans held for investment had a weighted-average YTM IRR of 16.8% and 17.2%, and was substantially secured by real estate and, with respect to certain of our loans, substantially all assets of the borrowers and certain of their subsidiaries, including equipment, receivables, and licenses. YTM IRR is calculated using various inputs, including (i) cash and PIK interest, which is capitalized and added to the outstanding principal balance of the applicable loan, (ii) original issue discount (“OID”), (iii) amortization, (iv) unused fees, and (v) exit fees. Certain of our loans have extension fees, which are not included in our YTM IRR calculations, but may increase YTM IRR if such extension options are exercised by borrowers.

Previous wording

As of March 31, 2025, the Company has one loan held at fair value with a principal balance of $5.5 million, which bears a fixed rate. On an aggregate basis, our total loan portfolio is comprised of 58.5% and 41.5% floating rate loans and fixed rate loans, respectively.

Current wording

As of June 30, 2025, the Company has one loan held at fair value with a principal balance of $5.5 million, which bears a fixed rate. On an aggregate basis, our total loan portfolio is comprised of 59.3% and 40.7% floating rate loans and fixed rate loans, respectively.

Previous wording

The table below summarizes our portfolio as of March 31, 2025:

Current wording

The below summarizes our portfolio of loans held for investment as of June 30, 2025:

Previous wording

"P" = prime rate; "SOFR"= Secured Overnight Financing Rate. "P" and "SOFR" represent floating rate loans that pay interest at the designed benchmark rate plus an applicable spread; "PIK" = paid-in-kind interest.

Current wording

"P" = prime rate; "SOFR"= Secured Overnight Financing Rate. "P" and "SOFR" represent floating rate loans that pay interest at the designed benchmark rate plus an applicable spread; "SOFR" loans are typically indexed to 30-day, 90-day or 180-day rates (1 month, 3 month, or 6 month, respectively); "PIK" = paid-in-kind interest.

Previous wording

The following tables present changes in loans held for investment at carrying value as of and for the three months ended March 31, 2025 and 2024:

Current wording

The following tables present changes in loans held for investment at carrying value as of and for the six months ended June 30, 2025 and 2024:

Previous wording

The book value per share of our common stock as of March 31, 2025 and December 31, 2024 was approximately $14.87 and $14.83, respectively.

Current wording

The book value per share of our common stock as of June 30, 2025 and December 31, 2024 was approximately $14.71 and $14.83, respectively.

Previous wording

Our primary sources of cash generally consist of unused borrowing capacity under our financing sources, the net proceeds of future offerings of equity or debt securities, payments of principal and interest we receive on our portfolio of assets and cash generated from our operating results. On a long-term basis, we expect that our primary sources of financing will be, to the extent available to us, through (a) credit facilities and (b) public and private offerings of our equity and debt securities. We may utilize other sources of financing to the extent available to us. As the cannabis industry continues to evolve and to the extent that additional states legalize cannabis, the demand for capital continues to increase as operators seek to enter and build out new markets. In the short-term, we expect the principal amount of the loans we originate to increase and that we will need to raise additional equity and/or debt financing to increase our liquidity. We expect to achieve this through recycling capital from loan paydowns, repayments, and sales of common stock related to our shelf registration statement.

Current wording

Our primary sources of cash generally consist of unused borrowing capacity under our financing sources, the net proceeds of future offerings of equity or debt securities, payments of principal and interest we receive on our portfolio of assets and cash generated from our operating results. On a long-term basis, we expect that our primary sources of financing will be, to the extent available to us, through (a) credit facilities and (b) public and private offerings of our equity and debt securities. We may utilize other sources of financing to the extent available to us. As the cannabis industry continues to evolve and to the extent that additional states legalize cannabis, we expect the demand for capital will continue to increase as operators seek to enter and build out new markets. In the short-term, we expect the principal amount of the loans we originate will increase and that we will need to raise additional equity and/or debt financing to increase our liquidity. We expect to achieve this through recycling capital from loan paydowns, repayments, and sales of common stock related to our shelf registration statement.

Previous wording

As of March 31, 2025 and December 31, 2024, all of our cash was unrestricted and totaled approximately $9.9 million and $26.4 million, respectively. We believe that our cash on hand, capacity available under our Revolving Loan, and cash flows from operations for the next twelve months will be sufficient to satisfy the operating requirements of our business through at least the next twelve months. The sources of financing for our target investments are described below.

Current wording

As of June 30, 2025 and December 31, 2024, all of our cash was unrestricted and totaled approximately $35.6 million and $26.4 million, respectively. We believe that our cash on hand, capacity available under our Revolving Loan, the Unsecured Notes and cash flows from operations for the next twelve months will be sufficient to satisfy the operating requirements of our business through at least the next twelve months. The sources of financing for our target investments are described below.

Previous wording

As of March 31, 2025 and December 31, 2024, unamortized debt issuance costs related to the Revolving Loan, including all amendments and amendments and restatements thereto, as applicable, of $254,229 and $305,075, respectively, are recorded in other receivables and assets, net on the consolidated balance sheets.

Current wording

As of June 30, 2025 and December 31, 2024, unamortized debt issuance costs related to the Revolving Loan, including all amendments and amendments and restatements thereto, as applicable, of $203,382 and $305,075, respectively, are recorded in other receivables and assets, net on the consolidated balance sheets.

Previous wording

As of and for the three months ended March 31, 2025, the Company had net repayments of $17.0 million against the Revolving Loan. As of March 31, 2025, the Company had $72.0 million available and $38.0 million outstanding under the Revolving Loan (Note 7 of Part 1, Item 1 -Financial Information).

Current wording

For the six months ended June 30, 2025, the Company had net paydowns of $16.2 million against the Revolving Loan. As of June 30, 2025, the Company had $38.8 million available and $71.2 million outstanding under the Revolving Loan (Note 7).

Previous wording

During the quarter ended March 31, 2025, the Company sold an aggregate of 64,557 shares of the Company’s common stock under the Sales Agreement at a weighted average price of $16.01 per share, generating net proceeds of approximately $1.0 million.

Current wording

For the six months ended June 30, 2025, the Company sold an aggregate of 64,557 shares of the Company’s common stock under the Sales Agreement at a weighted average price of $16.01 per share, generating net proceeds of approximately $1.0 million.

Previous wording

During the quarter ended March 31, 2024, the Company sold an aggregate of 896,443 shares of the Company’s common stock under the Sales Agreement at a weighted average price of $15.93 per share, generating net proceeds of approximately $13.9 million.

Current wording

For the six months ended June 30, 2024, the Company sold an aggregate of 1,306,803 shares of the Company’s common stock under the Sales Agreement at a weighted average price of $15.88 per share, generating net proceeds of approximately $20.2 million.

Previous wording

The following table sets forth changes in cash and cash equivalents for the three months ended March 31, 2025 and 2024, respectively:

Current wording

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

Previous wording

For the three months ended March 31, 2025 and 2024, we reported “Net cash provided by operating activities” of approximately $7.6 million and $6.9 million, respectively. Net cash provided by operating activities increased approximately $0.7 million, primarily attributable to a decrease in PIK interest of approximately $1.4 million, increase in related party net payable of approximately $2.1 million, a decrease in management and incentive fees payable of approximately $0.3 million and an increase in net income over the comparable period of approximately $1.3 million. These changes were offset by a decrease in the interest reserve for applied interest payments of approximately $2.2 million, a decrease in provision for current expected credit losses of approximately $1.4 million and an increase in stock based compensation of approximately $0.1 million, over the comparable period.

Current wording

For the six months ended June 30, 2025 and 2024, we reported “Net cash provided by operating activities” of approximately $14.1 million and $13.1 million, respectively. Net cash provided by operating activities increased approximately $1.0 million, primarily attributable to a decrease in PIK interest income of $2.7 million, an increase in related party receivables of $3.2 million, and an increase in stock based compensation expense of $0.2 million, an increase in net income over the comparable period of approximately $1.0 million, a decrease in the interest reserve for applied interest payments of approximately $2.5 million, a decrease in accounts payable and accrued expenses of approximately $1.3 million and a decrease in interest receivable of approximately $1.7 million, over the comparable period.

Previous wording

Net Cash Provided by/(Used in) by Investing Activities

Current wording

Net Cash Provided by Investing Activities

Previous wording

For the three months ended March 31, 2025 and 2024, we reported “Net cash provided by/(used in) investing activities” of approximately $5.5 million and $(18.7) million, respectively.

Current wording

For the six months ended June 30, 2025 and 2024, we reported “Net cash provided by/(used in) investing activities” of approximately $2.0 million and $(21.6) million, respectively.

Previous wording

For the three months ended March 31, 2025 cash outflows primarily related to $3.7 million used for the origination and funding of loans held for investment, partially offset by $9.2 million of cash received from the principal repayment of loans held for investment.

Current wording

For the six months ended June 30, 2025, cash outflows primarily related to $10.3 million used for the origination and funding of loans held for investment, partially offset by $12.3 million of cash received from the principal repayment of loans held for investment.

Previous wording

For the three months ended March 31, 2024, cash outflows primarily related to $22.4 million used for the origination and funding of loans held for investment, partially offset by $3.7 million of cash received from the principal repayment of loans held for investment.

Current wording

For the six months ended June 30, 2024, cash outflows primarily related to $43.2 million used for the origination and funding of loans held for investment, partially offset by $21.6 million of cash received from the principal repayment of loans held for investment.

Previous wording

Net Cash (Used in)/Provided by Financing Activities

Current wording

Net Cash Used in Financing Activities

Previous wording

For the three months ended March 31, 2025 and 2024, we reported “Net cash (used in)/provided by financing activities” of approximately $(29.7) million and $10.8 million, respectively.

Current wording

For the six months ended June 30, 2025 and 2024, we reported “Net cash (used in)/provided by financing activities” of approximately $(6.9) million and $7.6 million, respectively.

Previous wording

For the three months ended March 31, 2025, cash inflows of approximately $1.0 million related to proceeds received from sales of our common stock through the registered at-the-market offering, which were offset by approximately $17.0 million in net repayments on our Revolving Loan, $13.6 million in dividends paid and approximately $82 thousand in offering costs associated with the registered at-the-market offering.

Current wording

For the six months ended June 30, 2025, cash inflows of approximately $1.0 million related to proceeds received from sales of our common stock through the ATM offering and $56.9 million related to draw downs on our Revolving Loan, which were offset by approximately $40.7 million in repayments on our Revolving Loan, $24.0 million in dividends paid, and approximately $82 thousand in offering costs associated with the registered at-the-market offering.

Previous wording

For the three months ended March 31, 2024, cash inflows of approximately $9.8 million related to proceeds received from sales of our common stock through the registered at-the-market offering and $15.3 million net draw downs on our Revolving Loan, which were offset by $13.9 million in dividends paid, approximately $50 thousand in debt issuance costs paid, and approximately $340 thousand in offering costs associated with the registered at-the-market offering.

Current wording

For the six months ended June 30, 2024, cash inflows of approximately $20.8 million related to proceeds received from sales of our common stock through the ATM offering and $44.0 million related to draw downs on our Revolving Loan, which were offset by approximately $33.3 million in repayments on our Revolving Loan, $23.1 million in dividends paid, approximately $113 thousand in debt issuance costs paid, and approximately $667 thousand in offering costs associated with the registered at-the-market offering.

Previous wording

The following table summarizes the Company’s dividends declared during the three months ended March 31, 2025 and 2024, respectively.

Current wording

The following table summarizes the Company’s dividends declared during the six months ended June 30, 2025 and 2024, respectively.

Previous wording

operating history, since the incorporation date of March 30, 2021. However, our Sponsor has had operations for the past five fiscal years and has made investments in similar loans that have similar characteristics, including interest rate, collateral coverage, guarantees, and prepayment/make whole provisions, which fall into the pools identified above.

Current wording

To estimate the historic loan losses relevant to our portfolio, we evaluate our historical loan performance, which includes zero realized loan losses since our inception of operations. Additionally, we analyzed our repayment history, noting we have limited “true” operating history, since the incorporation date of March 30, 2021. However, our Sponsor has had operations for the past five fiscal years and has made investments in similar loans that have similar characteristics, including interest rate, collateral coverage, guarantees, and prepayment/make whole provisions, which fall into the pools identified above.