InPoint Commercial Real Estate Income, Inc.

Previous wording

These forward-looking statements are not historical facts but reflect the intent, belief or current expectations of the management of InPoint Commercial Real Estate Income, Inc. (which we refer to herein as the “Company,” “we,” “our” or “us”) based on their knowledge and understanding of the business and industry, the economy and other future conditions. These statements are not guarantees of future performance, and we caution stockholders not to place undue reliance on forward-looking statements. Actual results may differ materially from those expressed or forecasted in the forward-looking statements due to a variety of risks, uncertainties and other factors, including but not limited to the factors listed and described under “Risk Factors” in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on March 14, 2025 (the “Annual Report”), some of which are briefly summarized below:

Current wording

These forward-looking statements are not historical facts but reflect the intent, belief or current expectations of the management of InPoint Commercial Real Estate Income, Inc. (which we refer to herein as the “Company,” “we,” “our” or “us”) based on their knowledge and understanding of the business and industry, the economy and other future conditions. These statements are not guarantees of future performance, and we caution stockholders not to place undue reliance on forward-looking statements. Actual results may differ materially from those expressed or forecasted in the forward-looking statements due to a variety of risks, uncertainties and other factors, including but not limited to the factors listed and described under “Risk Factors” in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on March 14, 2025 (the “Annual Report”) and subsequent Quarterly Reports on Form 10-Q, some of which are briefly summarized below:

Previous wording

The following discussion and analysis relate to the three months ended March 31, 2025 and 2024 and as of March 31, 2025 and December 31, 2024. You should read the following discussion and analysis along with our unaudited consolidated financial statements and the related notes included in this Quarterly Report on Form 10-Q.

Current wording

The following discussion and analysis relate to the three and six months ended June 30, 2025 and 2024 and as of June 30, 2025 and December 31, 2024. You should read the following discussion and analysis along with our unaudited consolidated financial statements and the related notes included in this Quarterly Report on Form 10-Q.

Previous wording

We are a Maryland corporation formed on September 13, 2016 to originate, acquire and manage an investment portfolio of CRE investments primarily comprised of CRE debt, including primarily floating-rate first mortgage loans and fixed rate mezzanine loans. We may also invest in participations in CRE debt, floating-rate CRE securities such as CMBS, senior unsecured debt of publicly traded REITs and select equity investments in single-tenant, net leased properties. Substantially all of our business is conducted through our Operating Partnership, of which we are the sole general partner. We are externally managed by our Advisor, an indirect subsidiary of IREIC. Our Advisor has engaged the Sub-Advisor, a subsidiary of Sound Point CRE Management, LP, to perform certain services on behalf of the Advisor for us.

Current wording

We may also invest in participations in CRE debt, floating-rate CRE securities such as CMBS, senior unsecured debt of publicly traded REITs and select equity investments in single-tenant, net leased properties. Substantially all of our business is conducted through our Operating Partnership, of which we are the sole general partner. We are externally managed by our Advisor, an indirect subsidiary of IREIC. Our Advisor has engaged the Sub-Advisor, a subsidiary of Sound Point CRE Management, LP, to perform certain services on behalf of the Advisor for us.

Previous wording

The CRE and CRE debt markets have improved as the Federal Reserve began lowering the interest rate in the second half of 2024 but signaled a pause to allow them to evaluate the impact of the implemented rate reductions. With the rate reductions, we observed the CRE debt market activity increasing with spreads tightening and more collateralized loan obligations entering the market. We believe the Federal Reserve will hold rates at current levels through at least the first half of 2025 and that the CRE debt markets will continue to be competitive which may improve the refinance market. While CRE properties have generally stabilized, office properties continue to incur significant challenges due to lower occupancies which, in turn, has reduced rental income.

Current wording

The CRE and CRE debt markets have improved as the Federal Reserve began lowering the interest rate in the second half of 2024 but signaled a pause to allow them to evaluate the impact of the implemented rate reductions. The Federal Reserve continues to predict two rate cuts during 2025, but it is uncertain when or if they will occur. The CRE debt market has been active with the stability of the lower interest rates. We believe the CRE debt markets will continue to be competitive and may become more active if the Federal Reserve lowers rates in the second half of 2025. If activity increases, interest rate spreads will likely tighten and should provide existing loans with more refinance opportunities. Office properties continue to see challenges as tenants adjust to the work from home arrangements. We do not believe this will improve during 2025.

Previous wording

We did not originate any new loans during 2024 or during the first three months of 2025 as we focused on maintaining our liquidity with several of our loans approaching maturity. During the first quarter of 2025, we funded $1.0 million and received paydown of $0.8 million on existing loans. During 2025, we will continue to focus on extending or restructuring our maturing loans with an emphasis on obtaining principal reductions.

Current wording

We did not originate any new loans during 2024 or during the first six months of 2025 as we focused on maintaining our liquidity with several of our loans approaching maturity. During the second quarter of 2025, we funded $0.5 million and received paydowns of $10.5 million on existing loans. We also foreclosed on one loan with an outstanding principal balance of $38.9 million resulting in the acquisition of a multifamily property. During 2025, we will continue to focus on extending or restructuring our maturing loans with an emphasis on obtaining principal reductions or loan payoffs.

Previous wording

As described in our Annual Report on Form 10-K for the year ended December 31, 2024, we are continuing to focus on positioning the portfolio to pursue a potential future strategic alternative when capital market conditions have improved, in order to maximize stockholder value and potentially provide our investors with access to some level of liquidity. There is no assurance that the Company will be able to successfully implement any strategic plan. We are continually impacted by evolving market conditions and other complex factors such as (i) the state of the commercial real estate market and financial markets, (ii) our ability to access additional capital or leverage and (iii) changes in general economic conditions such as high interest rates, among other factors. We will provide updates as the Company considers appropriate or as required under applicable law.

Current wording

The Company’s management has been analyzing the portfolio impact of liquidating the real estate in the portfolio and potentially redeploying those proceeds into newly originated first mortgage loans. The goal is to position the portfolio in order to attempt to pursue a future strategic transaction when capital market conditions have improved, in order to maximize stockholder value and potentially provide our investors with access to some level of liquidity. There is no assurance that the Company will be able to successfully implement any strategic plan. We are continually impacted by evolving market conditions and other complex factors such as (i) the state of the commercial real estate market and financial markets, (ii) our ability to access additional capital or leverage and (iii) changes in general economic conditions such as high interest rates, among other factors. We will provide updates as the Company considers appropriate or as required under applicable law.

Previous wording

Net income attributable to common stockholders was $2.5 million, or $0.24 per share, during the three months ended March 31, 2025, which included $1.5 million in reversal of credit losses.

Current wording

Net income attributable to common stockholders was $1.6 million, or $0.16 per share, during the three months ended June 30, 2025, which included $1.0 million in reversal of credit losses.

Previous wording

During the first quarter of 2025, we declared gross distributions at an annual rate of $1.25 per common share, which represents an annualized rate of 7.7% on our aggregate NAV of $16.1342 as of March 31, 2025. Holders of Class D and Class T shares of common stock received less than the gross distribution amount after the deduction of stockholder servicing fees applicable to those classes.

Current wording

During the second quarter of 2025, we declared gross distributions at an annual rate of $1.25 per common share, which represents an annualized rate of 7.8% on our aggregate NAV of $16.1070 as of June 30, 2025. Holders of Class D and Class T shares of common stock received less than the gross distribution amount after the deduction of stockholder servicing fees applicable to those classes.

Previous wording

Our loan portfolio increased 0.4% to $551.4 million during the three months ended March 31, 2025. The increase includes $1.0 million in advances on previously originated loans and $1.5 million of reversal of credit losses, and is partially offset by $0.8 million in loan repayments.

Current wording

Our loan portfolio decreased 8.6% to $503.9 million during the three months ended June 30, 2025. The decrease includes $10.5 million in loan repayments and a loan transferred on foreclosure to real estate owned of $38.9 million, partially offset by $0.5 million in advances on previously originated loans and $1.0 million of reversal of credit losses.

Previous wording

22 out of our 25 loans were current on their contractual interest payments during the three months ended March 31, 2025.

Current wording

21 out of our 23 loans were current on their contractual interest payments during the three months ended June 30, 2025.

Previous wording

As of March 31, 2025, 3 out of our 25 loans were on nonaccrual status. After being placed on nonaccrual status, any cash collected, including any interest payments, on such loans is applied against their principal balance.

Current wording

As of June 30, 2025, 2 out of our 23 loans were on nonaccrual status. After being placed on nonaccrual status, any cash collected, including any interest payments, on such loans is applied against their principal balance.

Previous wording

We had net repayments of $2.8 million on our repurchase agreements during the three months ended March 31, 2025.

Current wording

We had net repayments of $40.0 million on our repurchase agreements during the three months ended June 30, 2025.

Previous wording

There were no changes in our loan portfolio by property type and by region as of March 31, 2025 compared to December 31, 2024.

Current wording

The changes in our loan portfolio by property type and by region as of June 30, 2025 compared to December 31, 2024 were primarily due to transfer of a loan to REO upon foreclosure and loans that were repaid by borrowers in ordinary course.

Previous wording

The size of our portfolio did not change during the three months ended March 31, 2025. The decrease in the all-in yield was primarily driven by the loans placed on nonaccrual status.

Current wording

The decrease in the size of our portfolio is primarily due to loan payoffs and foreclosure of a loan with no new loans originated during the six months ended June 30, 2025. The decrease in the all-in yield was primarily driven by the changes in the composition of loans in the portfolio.

Previous wording

Cash coupon is the stated rate on the loan. All-in yield is the present value of all future principal and interest payments on the loan and does not include any origination fees or deferred commitment fees. Loan numbers 5, 13 and 25 are on nonaccrual basis as of March 31, 2025 and excluded from the total. The total is the weighted average of the stated yield, excluding any default interest, as of March 31, 2025. Our first mortgage loans are all floating rate and each contains a minimum SOFR floor. As of March 31, 2025, the weighted average SOFR floor was 0.68%.

Current wording

Cash coupon is the stated rate on the loan. All-in yield is the present value of all future principal and interest payments on the loan and does not include any origination fees or deferred commitment fees. Loan numbers 5 and 23 are on nonaccrual basis as of

Previous wording

The loan matured on April 9, 2023 and was accruing default interest. On March 18, 2025, the Company extended the loan maturity date to February 9, 2026 to allow the borrower to obtain long-term financing or bridge financing to pay-off the existing loan. The property securing the loan is class A office and was 94% occupied as of March 2025. The Company has reviewed the loan and based on the estimated LTV recorded a $0.8 million asset-specific CECL reserve as of March 31, 2025.

Current wording

The loan matured on April 9, 2023 and was accruing default interest. On March 18, 2025, the Company extended the loan maturity date to February 9, 2026 to allow the borrower to obtain long-term financing or bridge financing to pay-off the existing loan. The property securing the loan is class A office and was 95% occupied as of June 2025.

Previous wording

The loan matures on October 9, 2025. In February 2025, the Company was notified that the borrower was delinquent on paying the property manager and, as a result, the Company notified the borrower that they were in default of the loan agreement. The Company began foreclosure procedures in March 2025 and expects to complete the process by the end of August 2025. The Company has reviewed the loan and based on the estimated LTV recorded a $3.3 million asset-specific CECL reserve as of March 31, 2025. The loan was placed on nonaccrual status effective March 1, 2025.

Current wording

The loan had a maturity date of October 9, 2025. In February 2025, the Company was notified that the borrower was delinquent on paying the property manager and, as a result, the Company notified the borrower that they were in default of the loan agreement. The Company began foreclosure procedures in March 2025 and acquired the property through a non-judicial foreclosure transaction on July 2, 2025. The Company reviewed the loan and based on the estimated LTV recorded a $2.3 million asset-specific CECL reserve as of June 30, 2025. The loan had been on nonaccrual status since March 1, 2025.

Previous wording

The loan matured on April 9, 2025, and the borrower is working on refinancing the property. The Company expects the loan to be paid off in May 2025.

Current wording

The loan matured on April 9, 2025 and was paid off in July 2025.

Previous wording

The loan has no unfunded commitment and matured on October 6, 2024. The borrower is current on all debt service payments. The property is occupied by a single tenant that is possibly exiting the property at the end of its lease. The Company has negotiated with the borrower a possible repayment at an amount less than the outstanding balance. The Company has recorded a $4.0 million asset-specific CECL reserve on this loan as of March 31, 2025. The loan has been on nonaccrual status since July 1, 2024.

Current wording

The loan has no unfunded commitment and matured on October 6, 2024. The borrower is current on all debt service payments. On July 1, 2025, the Company entered into a forbearance and modification agreement with the borrower which extended the maturity date to December 31, 2025. In addition, the Company agreed to accept $2.3 million for the satisfaction of the loan balance plus all accrued and unpaid interest and lender fees. The borrower made a payment of $0.5 million in July 2025 that will be applied against the required amounts due. The Company has recorded a $3.2 million asset-specific CECL reserve on this loan as of June 30, 2025. The loan has been on nonaccrual status since July 1, 2024.

Previous wording

As of March 31, 2025 and December 31, 2024, we had total borrowings of $357,835 and $360,677, respectively. During the three months ended March 31, 2025 and the year ended December 31, 2024, we had weighted average borrowings of $387,315 and $459,902 and weighted average borrowing costs of 6.7% and 7.7%, respectively.

Current wording

As of June 30, 2025 and December 31, 2024, we had borrowings under repurchase agreements totaling $317,852 and $360,677, respectively, and loan participations sold, net, of $47,753 and $48,524, respectively. During the six months ended June 30, 2025 and the year ended December 31, 2024, we had weighted average borrowings, which include borrowings under repurchase agreements and loan participations sold, net, of $372,679 and $459,902, respectively, and weighted average borrowing costs, which also include borrowings under repurchase agreements and loan participations sold, net, of 6.7% and 7.7%, respectively.

Previous wording

On October 23, 2024, we acquired legal title to a multifamily property located in Portland, OR through a non-judicial foreclosure transaction. The property previously collateralized a senior loan with an amortized cost basis of $29,476 that was risk rated 5 with a CECL reserve of $9,884 at the time of the acquisition. The acquisition was accounted for as an asset acquisition under applicable GAAP guidance, and we intend to hold this property as real estate held for use with the intent to eventually sell when the market improves. The property was recorded on our consolidated balance sheet at $19,592 based on the estimated fair value at acquisition. The fair market value estimate was determined based on an appraisal performed by an independent third-party appraiser. The acquisition resulted in a CECL reserve charge-off of $9,577 during the year ended December 31, 2024.

Current wording

During the six months ended June 30, 2025, we acquired the Kansas City property through a non-judicial foreclosure transaction. The Kansas City property previously collateralized a senior loan. The acquisition was accounted for as an asset acquisition under applicable

Previous wording

On July 2, 2024, we acquired legal title to two office properties, one located in Addison, TX, and the other located in Irving, TX, through non-judicial foreclosure transactions. The properties previously collateralized a senior loan with an amortized cost basis of $24,411 that was risk rated 5 with a CECL reserve of $281 at the time of the acquisitions. The acquisitions were accounted for as asset acquisitions under applicable GAAP guidance, and we intend to hold these properties as real estate held for use with the intent to eventually sell when the market improves. The properties were recorded on our consolidated balance sheet at $24,035 based on the estimated fair value at acquisition. The fair market value estimate was determined based on appraisals performed by an independent third-party appraiser. The acquisitions resulted in a CECL reserve charge-off of $855 during the year ended December 31, 2024.

Current wording

During the year ended December 31, 2024, we acquired legal title to two office properties, one located in Addison, TX, and the other located in Irving, TX, and one multifamily property located in Portland, OR through non-judicial foreclosure transactions. The properties previously collateralized two senior loans. The acquisitions were accounted for as asset acquisitions under applicable GAAP guidance, and we intend to hold these properties as real estate held for use with the intent to eventually sell when the market improves. The properties were recorded on our consolidated balance sheet based on the estimated fair value at acquisition. The fair market value estimate was determined based on appraisals performed by independent third-party appraisers.

Previous wording

The following table shows selected data for our REO in our portfolio as of March 31, 2025:

Current wording

The following table shows selected data for our real estate in our portfolio as of June 30, 2025:

Previous wording

Interest income excludes $608 and $638 for the three months ended March 31, 2025 and 2024, respectively, related to bank deposits not included in the investment portfolio. Interest expense excludes $309 and $0 of participation payments for the three months ended March 31, 2025 and 2024, respectively, related to the REO.

Current wording

Interest income excludes $328 and $582 for the three months ended June 30, 2025 and 2024, respectively, related to bank deposits not included in the investment portfolio. Interest expense excludes $312 and $0 of participation payments for the three months ended June 30, 2025 and 2024, respectively, related to the REO.

Previous wording

The change in our average interest-earning assets and interest-bearing liabilities was due to the paydown of the principal balance as loans matured or were foreclosed on and the subsequent repayment of the amount financed for these loans. The change in the weighted average levered yield was primarily due to the change in the composition of the loans in the portfolio.

Current wording

The change in our average interest-earning assets and interest-bearing liabilities was due to the paydown of the principal balance as loans matured or were foreclosed on and the subsequent repayment of the amount financed for these loans. The change in the weighted average levered yield was primarily due to the change in the composition of the loans in the portfolio and the change in the composition of financing.

Previous wording

Our revenue from real estate during the three months ended March 31, 2025 and 2024 was $1,528 and $0, respectively. The increase in revenue was primarily due to the acquisition of three properties during the second half of 2024.

Current wording

Our revenue from real estate during the three months ended June 30, 2025 and 2024 was $1,887 and $0, respectively. The increase in revenue was primarily due to the acquisition of one property in May 2025 and three properties during the second half of 2024.

Previous wording

Total operating expenses for the three months ended March 31, 2025 and 2024 were $3,335 and $1,900, respectively. The primary driver of the increase in total operating expenses was the acquisition of three properties during the second half of 2024.

Current wording

Total operating expenses for the three months ended June 30, 2025 and 2024 were $4,406 and $1,723, respectively. The primary driver of the increase in total operating expenses was the acquisition of one property in May 2025 and three properties during the second half of 2024.

Previous wording

The amount for the three months ended March 31, 2025 is presented net of $408 in employee retention credits received during the period. These credits relate to the Renaissance O’Hare property that we owned from August 20, 2020 through September 28, 2023.

Current wording

The amount for the six months ended June 30, 2025 is presented net of $408 in employee retention credits received during the period. These credits relate to the Renaissance O’Hare property that we owned from August 20, 2020 through September 28, 2023.

Previous wording

For the three months ended March 31, 2025 and 2024, our net income was $3,948 and $3,399, respectively. The increase in net income was primarily due to a decrease in the CECL reserve, partially offset by a reduction in net interest income as the loan portfolio decreased.

Current wording

For the six months ended June 30, 2025 and 2024, our net income was $7,021 and $8,389, respectively. The decrease in net income was primarily due to a reduction in net interest income as the loan portfolio decreased and an increase in real estate operating expenses and depreciation and amortization, partially offset by an increase in revenue from real estate and a decrease in the CECL reserve.

Previous wording

National Association of Real Estate Investment Trusts (“NAREIT”) has promulgated a standard known as FFO, which it believes more accurately reflects the operating performance of a REIT. As defined by NAREIT, FFO means net income (loss) attributable to common stockholders computed in accordance with GAAP, excluding gains (or losses) from sales of operating property, plus depreciation and amortization and after adjustments for unconsolidated entities. In addition, NAREIT has further clarified the FFO definition to add-back impairment write-downs of depreciable real estate or of investments in unconsolidated entities that are driven by measurable decreases in the fair value of depreciable real estate and to exclude the earnings impacts of cumulative effects of accounting changes. We have adopted the NAREIT definition for computing FFO.

Current wording

We use Funds from Operations (“FFO”), a widely accepted metric, to evaluate our performance. FFO provides a supplemental measure to compare our performance and operations to other REITs. Due to certain unique operating characteristics of real estate companies, the National Association of Real Estate Investment Trusts (“NAREIT”) has promulgated a standard known as FFO, which it believes more accurately reflects the operating performance of a REIT. As defined by NAREIT, FFO means net income (loss) attributable to common stockholders computed in accordance with GAAP, excluding gains (or losses) from sales of operating property, plus depreciation and amortization and after adjustments for unconsolidated entities. In addition, NAREIT has further clarified the FFO definition to add-back impairment write-downs of depreciable real estate or of investments in unconsolidated entities that are driven by measurable decreases in the fair value of depreciable real estate and to exclude the earnings impacts of cumulative effects of accounting changes. We have adopted the NAREIT definition for computing FFO.

Previous wording

Mortgage Loans, Participations in Mortgage Loans and Mezzanine Loans. Our Advisor estimates the fair value of our loan portfolio in accordance with the methodologies contained in our valuation guidelines approved by our Board. In general, the loan portfolio will be valued at amortized cost, subject to impairment testing. As of January 1, 2023, we are required under GAAP to record a Current Expected Credit Loss (“CECL”) reserve on the CRE debt portfolio that will be adjusted at least quarterly. The analytical portion (which is based on a probability-weighted quantitative analytical model that considers the likelihood of default and loss-given-default for each individual loan) of the CECL reserve is excluded from the value of the loans. The value of the loans does include any specific reserves for collateral-dependent loans included in the CECL reserve amount. We believe this methodology is consistent with institutional valuation practices and provides an appropriate valuation for purposes of establishing a purchase and repurchase price for our shares of common stock as it relates to assets that are intended to be held to maturity.

Current wording

Mortgage Loans, Participations in Mortgage Loans and Mezzanine Loans. Our Advisor estimates the fair value of our loan portfolio in accordance with the methodologies contained in our valuation guidelines approved by our Board. In general, the loan portfolio will be valued at amortized cost, subject to impairment testing. Beginning January 1, 2023, we have been required under GAAP to record a Current Expected Credit Loss (“CECL”) reserve on the CRE debt portfolio that will be adjusted at least quarterly. The analytical portion (which is based on a probability-weighted quantitative analytical model that considers the likelihood of default and loss-given-default for each individual loan) of the CECL reserve is excluded from the value of the loans. The value of the loans does include any specific reserves for collateral-dependent loans included in the CECL reserve amount. We believe this methodology is consistent with institutional valuation practices and provides an appropriate valuation for purposes of establishing a purchase and repurchase price for our shares of common stock as it relates to assets that are intended to be held to maturity.

Previous wording

Our valuation reports will not be addressed to the public and may not be relied upon by any other person to establish an estimated value of our common stock and will not constitute a recommendation to any person to purchase or sell any shares of our common stock. In preparing our NAV calculation, our Advisor will not solicit third-party indications of interest for our common stock in connection with possible purchases thereof or the acquisition of all or any part of our company. Real estate appraisals are reported on a free and clear basis (for example no mortgage), irrespective of any property-level financing that may be in place. The primary methodology used to value properties is the income approach, whereby value is derived by determining the present value of an asset’s stream of future cash flows (for example, discounted cash flow analysis). Consistent with industry practices, the income approach incorporates subjective judgments regarding comparable rental and operating expense data, the capitalization or discount rate, and projections of future rent and expenses based on appropriate evidence. Other methodologies that may also be used to value properties include sales comparisons and replacement cost approaches. Because the appraisals involve subjective judgments, the fair value of our assets, which is included in our NAV, may not reflect the liquidation value or net realizable value of our properties.

Current wording

Our valuation reports are not addressed to the public and may not be relied upon by any other person to establish an estimated value of our common stock and do not constitute a recommendation to any person to purchase or sell any shares of our common stock. In preparing our NAV calculation, our Advisor does not solicit third-party indications of interest for our common stock in connection with possible purchases thereof or the acquisition of all or any part of our company. Real estate appraisals are reported on a free and clear basis (for example no mortgage), irrespective of any property-level financing that may be in place. The primary methodology used to value properties is the income approach, whereby value is derived by determining the present value of an asset’s stream of future cash flows (for example, discounted cash flow analysis). Consistent with industry practices, the income approach incorporates subjective judgments regarding comparable rental and operating expense data, the capitalization or discount rate, and projections of future rent and expenses based on appropriate evidence. Other methodologies that may also be used to value properties include sales comparisons and replacement cost approaches. Because the appraisals involve subjective judgments, the fair value of our assets, which is included in our NAV, may not reflect the liquidation value or net realizable value of our properties.

Previous wording

Following the aggregation of the NAV of our investments, the addition of any other assets (such as cash on hand) and the deduction of any other liabilities, the independent valuation advisor will incorporate any class-specific adjustments to our NAV, including additional issuances and repurchases of our common stock and accruals of class-specific stockholder servicing fees. For each applicable class of shares, the stockholder servicing fees will be calculated as a percentage of the aggregate NAV for such class of shares. NAV per share for each class is calculated by dividing such class’s NAV at the end of each month by the number of shares outstanding for that class at the end of such month.

Current wording

Following the aggregation of the NAV of our investments, the addition of any other assets (such as cash on hand) and the deduction of any other liabilities, the independent valuation advisor incorporates any class-specific adjustments to our NAV, including additional issuances and repurchases of our common stock and accruals of class-specific stockholder servicing fees. For each applicable class of shares, the stockholder servicing fees are calculated as a percentage of the aggregate NAV for such class of shares. NAV per share for each class is calculated by dividing such class’s NAV at the end of each month by the number of shares outstanding for that class at the end of such month.

Previous wording

The overarching principle of our valuation guidelines is to produce reasonable estimated values for each of our investments (and other assets and liabilities). However, the majority of our assets will consist of real estate loans and, as with any real estate valuation protocol and as described above, the valuation of our loans (and other assets and liabilities) will be based on a number of judgments, assumptions and opinions about future events that may or may not prove to be correct. The use of different judgments, assumptions or opinions would likely result in a different estimate of the value of our real estate loans (and other assets and liabilities). Any resulting potential disparity in our NAV per share may be in favor of stockholders whose shares are repurchased, existing stockholders or new purchasers of our common stock, as the case may be, depending on the circumstances at the time (for cases in which our transaction price is based on NAV).

Current wording

The overarching principle of our valuation guidelines is to produce reasonable estimated values for each of our investments (and other assets and liabilities). However, the majority of our assets consist of real estate loans and, as with any real estate valuation protocol and as described above, the valuation of our loans (and other assets and liabilities) is based on a number of judgments, assumptions and opinions about future events that may or may not prove to be correct. The use of different judgments, assumptions or opinions would likely result in a different estimate of the value of our real estate loans (and other assets and liabilities). Any resulting potential disparity in our NAV per share may be in favor of stockholders whose shares are repurchased, existing stockholders or new purchasers of our common stock, as the case may be, depending on the circumstances at the time (for cases in which our transaction price is based on NAV).

Previous wording

Our primary sources of funds for liquidity consist of net cash provided by operating activities, repayments of our outstanding loans by borrowers, proceeds from repurchase agreements and other financing arrangements, future issuances of equity and/or debt securities and any follow-on public offerings of common stock. As of March 31, 2025, we had $59.1 million in cash, $168 million in available capacity on our borrowing facilities and $20 million in available borrowing capacity from our revolving credit letter agreements with IREIC and Sound Point.

Current wording

Our primary sources of funds for liquidity consist of net cash provided by operating activities, repayments of our outstanding loans by borrowers, proceeds from repurchase agreements and other financing arrangements, future issuances of equity and/or debt securities and any follow-on public offerings of common stock. As of June 30, 2025, we had $27 million in cash, $208 million in available capacity on our borrowing facilities and $20 million in available borrowing capacity from our revolving credit letter agreements with IREIC and Sound Point.

Previous wording

We experienced a net decrease in cash and cash equivalents of $5,426 for the three months ended March 31, 2025 compared to a net increase of $6,253 for the three months ended March 31, 2024. During the three months ended March 31, 2025, we funded $1,038 on existing mortgage loans, received $19 in principal payments from our loans, paid down $2,842 on our borrowing facilities, and paid distributions of $4,647.

Current wording

We experienced a net decrease in cash and cash equivalents of $37,524 for the six months ended June 30, 2025 compared to a net decrease of $9,586 for the six months ended June 30, 2024. During the six months ended June 30, 2025, we funded $1,498 on existing mortgage loans, received $11,835 in principal payments from our loans, paid down $42,825 on our borrowing facilities, and paid distributions of $9,293.

Previous wording

During the three months ended March 31, 2025 and 2024, we recorded $764 and $626 of interest expense related to loan participations sold, respectively.

Current wording

During the six months ended June 30, 2025 and 2024, we recorded $1,478 and $1,456, respectively, of interest expense related to loan participations sold.

Previous wording

During the three months ended March 31, 2025, 90% of our distributions were paid from cash flows from operating activities generated during the period, and the remainder was paid using cash generated during prior periods. During the three months ended March 31, 2024, 100% of our distributions were paid from cash flows from operating activities generated during the period.

Current wording

During the six months ended June 30, 2025, 96% of our distributions were paid from cash flows from operating activities generated during the period, and the remainder was paid using cash generated during prior periods. During the six months ended June 30, 2024, 100% of our distributions were paid from cash flows from operating activities generated during the period.