Alpine Income Property Trust, Inc.

Previous wording

We seek to acquire, own and operate primarily freestanding, commercial retail real estate properties located in the United States primarily leased pursuant to long-term net leases. We target tenants in industries that we believe are favorably impacted by macroeconomic trends that support consumer spending, stable and growing employment, and positive consumer sentiment, as well as tenants in industries that have demonstrated resistance to the impact of the e-commerce retail sector or who use a physical presence as a component of their omnichannel strategy. We also seek to invest in properties that are net leased to tenants that we believe have attractive credit characteristics, stable operating histories, healthy rent coverage levels, are well-located within their respective markets and/or have rents at-or-below market rent levels. Furthermore, we believe that the size of our company allows us, for at least the near term, to focus our investment activities on the acquisition of single properties or smaller portfolios of properties that represent a transaction size that most of our publicly-traded net lease REIT peers will not pursue on a consistent basis.

Current wording

We seek to acquire, own and operate single-tenant net leased commercial income properties located in the United States. We target tenants in industries that we believe are favorably impacted by macroeconomic trends that support consumer spending, stable and growing employment, and positive consumer sentiment, as well as tenants in industries that have demonstrated resistance to the impact of the e-commerce retail sector or who use a physical presence as a component of their omnichannel strategy. We also seek to invest in properties that are net leased to tenants that we believe have attractive credit characteristics, stable operating histories, healthy rent coverage levels, are well-located within their respective markets and/or have rents at-or-below market rent levels. Furthermore, we believe that the size of our company allows us, for at least the near term, to focus our investment activities on the acquisition of single properties or smaller portfolios of properties that represent a transaction size that most of our publicly-traded net lease REIT peers will not pursue on a consistent basis.

Previous wording

During the six months ended June 30, 2026, the Company acquired four properties for a combined purchase price of $46.8 million, including capitalized acquisition costs. Of the total acquisitions, the Company acquired two properties for a combined purchase price of $20.5 million, including capitalized acquisition costs. The remaining $26.3 million of total acquisition costs are attributable to (i) the acquisition of one property for a purchase price of $10.0 million through a sale-leaseback transaction that includes a tenant repurchase option (the “2026 Sale-Leaseback Property”) and (ii) the acquisition of a property subject to a ground lease for $16.3 million which qualifies as a sales-type lease (the “2026 Sales-Type Lease”). Pursuant to FASB ASC Topic 842, Leases, GAAP requires that the 2026 Sale-Leaseback Property and the 2026 Sales-Type Lease be accounted for as financing arrangements, and accordingly the related assets and corresponding revenue are included in the Company’s commercial loans and investments in the accompanying consolidated balance sheets and consolidated statement of operations. However, as the 2026 Sale-Leaseback Property and the 2026 Sales-Type Lease both constitute real estate assets for both legal and tax purposes, we include them in the property portfolio when describing our property portfolio and for purposes of providing statistics related thereto. During the six months ended June 30, 2026, the Company sold three properties for an aggregate sales price of $5.8 million, generating aggregate gains on sale of $0.1 million.

Current wording

During the nine months ended September 30, 2026, the Company acquired seven properties for a combined purchase price of $86.3 million, including capitalized acquisition costs. Of the total acquisitions, the Company acquired five properties for a combined purchase price of $60.0 million, including capitalized acquisition costs. The remaining $26.3 million of total acquisition costs are attributable to (i) the acquisition of one property for a purchase price of $10.0 million through a sale-leaseback transaction that includes a tenant repurchase option (the “2026 Sale-Leaseback Property”) and (ii) the acquisition of a property subject to a ground lease for $16.3 million which qualifies as a sales-type lease (the “2026 Sales-Type Lease”). Pursuant to FASB ASC Topic 842, Leases, GAAP requires that the 2026 Sale-Leaseback Property and the 2026 Sales-Type Lease be accounted for as financing arrangements, and accordingly the related assets and corresponding revenue are included in the Company’s commercial loans and investments in the accompanying consolidated balance sheets and consolidated statement of operations. However, as the 2026 Sale-Leaseback Property and the 2026 Sales-Type Lease both constitute real estate assets for both legal and tax purposes, we include them in the property portfolio when describing our property portfolio and for purposes of providing statistics related thereto. During the nine months ended September 30, 2026, the Company sold four properties for an aggregate sales price of $6.2 million, generating aggregate gains on sale of $0.4 million.

Previous wording

As of June 30, 2026, we owned 128 properties, including the five properties classified as commercial loans and investments, with an aggregate gross leasable area of 4.5 million square feet, located in 31 states, with a weighted average remaining lease term of 9.2 years. Our portfolio was 100% occupied as of June 30, 2026.

Current wording

As of September 30, 2026, we owned 130 properties, including the five properties classified as commercial loans and investments, with an aggregate gross leasable area of 4.8 million square feet, located in 31 states, with a weighted average remaining lease term of 8.7 years. Our portfolio was 99.6% occupied as of September 30, 2026.

Previous wording

We also acquire or originate commercial loans and investments associated with commercial real estate located in the United States. Our investments in commercial loans are generally secured by real estate or the borrower’s pledge of its ownership interest in an entity that owns real estate. As of June 30, 2026, the Company’s portfolio of commercial loans and investments had a total carrying value of $238.6 million and was comprised of nine construction/redevelopment loans, four mortgage notes, four properties acquired pursuant to sale-leaseback transactions whereby the tenants have a future repurchase rights, and one sales-type lease.

Current wording

We also originate or acquire commercial loans and investments associated with commercial real estate located in the United States. Our investments in commercial loans are generally secured by real estate or the borrower’s pledge of its ownership interest in an entity that owns real estate. As of September 30, 2026, the Company’s portfolio of commercial loans and investments had a total carrying value of $231.4 million and was comprised of eight construction/redevelopment loans, three mortgage notes, four properties acquired pursuant to sale-leaseback transactions whereby the tenants have a future repurchase rights, and one sales-type lease.

Previous wording

Revenue from our property operations totaled $12.6 million and $12.0 million during the three months ended June 30, 2026 and 2025, respectively. The $0.6 million increase in lease income is primarily attributable to an increase in rents due to the volume of property acquisitions versus dispositions. The direct costs of revenues for our income properties totaled $2.1 million during the three months ended June 30, 2026 and 2025, respectively.

Current wording

Revenue from our property operations totaled $12.8 million and $12.1 million during the three months ended September 30, 2026 and 2025, respectively. The $0.7 million increase in lease income is primarily attributable to an increase in rents due to the volume of property acquisitions versus dispositions. The direct costs of revenues for our income properties totaled $2.1 million and $1.9 million during the three months ended September 30, 2026 and 2025, respectively.

Previous wording

Interest income from commercial loans and investments totaled $13.1 million and $5.0 million for the six months ended June 30, 2026 and 2025, respectively. The $8.1 million increase in income is attributable to the expanded portfolio of commercial loans and investments which, as of June 30, 2026, was comprised of nine construction/ redevelopment loans, four mortgage notes, four properties acquired pursuant to sale-leaseback transactions whereby the tenants have future repurchase rights, and one sales-type lease. As of June 30, 2025, the Company’s portfolio of commercial loans and investments was comprised of six construction loans, five mortgage notes, and three properties acquired pursuant to sale-leaseback transactions whereby the tenants have future repurchase rights.

Current wording

Interest income from commercial loans and investments totaled $7.6 million and $2.3 million for the three months ended September 30, 2026 and 2025, respectively. The $5.3 million increase in income is attributable to the expanded portfolio of commercial loans and investments which, as of September 30, 2026, was comprised of eight construction/redevelopment loans, three mortgage notes, four properties acquired pursuant to sale-leaseback transactions whereby the tenants have future repurchase rights, and one sales-type lease. As of September 30, 2025, the Company’s portfolio of commercial loans and investments was comprised of five construction loans, six mortgage notes, and three properties acquired pursuant to a sale-leaseback transaction whereby the tenant has a future repurchase right.

Previous wording

As further described in Note 7, “Provision for Impairment,” during the three months ended June 30, 2026 and 2025, the Company recorded impairment charges of $0.2 million and $2.8 million, respectively, representing the provision for losses related to certain income properties, for which the Company’s current intent is to dispose of such properties in order to facilitate the re-investment of the proceeds therefrom into new investment opportunities. During the three months ended June 30, 2026, the Company recorded a $0.2 million impairment charge representing the current expected credit losses (“CECL”) reserve related to our commercial loans and investments.

Current wording

As further described in Note 7, “Provision for Impairment and Adjustment to CECL Reserve,” during the three months ended September 30, 2025, the Company recorded a $1.9 million impairment charge representing the provision for losses related to a certain income property, for which the Company’s current intent is to dispose of such property in order to facilitate the re-investment of the proceeds therefrom into new investment opportunities. Additionally, during each of the three months ended September 30, 2026 and 2025, the Company recorded a less than $0.1 million adjustment to the provision for impairment representing the reduction in current expected credit losses (“CECL”) reserve related to our commercial loans and investments.

Previous wording

Depreciation and amortization expense totaled $6.8 million and $6.7 million during the three months ended June 30, 2026 and 2025, respectively. The $0.1 million increase in depreciation and amortization expense is reflective of the increase in asset cost basis of the Company’s income property portfolio, which is partially offset by the impact of less depreciation due to certain recent acquisitions completed under a ground lease structure.

Current wording

Depreciation and amortization expense totaled $6.9 million and $6.6 million during the three months ended September 30, 2026 and 2025, respectively. The $0.3 million increase in depreciation and amortization expense is reflective of the increase in asset cost basis of the Company’s income property portfolio, which is partially offset by the impact of less depreciation due to certain recent acquisitions completed under a ground lease structure.

Previous wording

Interest expense totaled $8.9 million and $7.9 million during the six months ended June 30, 2026 and 2025, respectively. The $1.0 million increase in interest expense is attributable to the higher average outstanding balance on the Company’s Credit Facility as well as $0.5 million of interest expense resulting from the sale of participation interest in the Company’s $24.0 million Mortgage Note as defined and further described in Note 4, “Commercial Loans and Investments” in the Notes to the Financial Statements. The overall increase in the Company’s long-term debt was primarily utilized to fund the acquisition of properties and commercial loans and investments during the six months ended June 30, 2026.

Current wording

Interest expense totaled $4.8 million and $3.9 million during the three months ended September 30, 2026 and 2025, respectively. The $0.9 million increase in interest expense is attributable to an increase in the Company’s long-term debt as well as $0.5 million of interest expense resulting from the sale of participation interest in the Company’s 2025 Mortgage Note as defined and further described in Note 4, “Commercial Loans and Investments” in the Notes to the Financial Statements. The overall increase in the Company’s long-term debt was primarily utilized to fund the acquisition of properties and commercial loans and investments during the nine months ended September 30, 2026.

Previous wording

Net income totaled $4.5 million and net loss totaled $1.8 million during the three months ended June 30, 2026 and 2025, respectively. The $6.3 million increase in net income is attributable to the factors described above, most notably the $4.6 million increase in interest income from commercial loans and investments and the $2.4 million decrease in provision for impairment, which is partially offset by the $0.9 million decrease in gains on sales of properties.

Current wording

Net income totaled $4.7 million and net loss totaled $1.3 million during the three months ended September 30, 2026 and 2025, respectively. The $6.0 million increase in net income is attributable to the factors described above, most notably the $5.3 million increase in interest income from commercial loans and investments and the $2.0 million decrease in provision for impairment, which is partially offset by the $0.9 million increase in interest expense.

Previous wording

The following presents the Company’s results of operations for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025 (in thousands):

Current wording

The following presents the Company’s results of operations for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025 (in thousands):

Previous wording

Revenue from our property operations totaled $25.2 million and $23.8 million during the six months ended June 30, 2026 and 2025, respectively. The $1.4 million increase in lease income is primarily attributable to an increase in rents due to the volume of property acquisitions versus dispositions. The direct costs of revenues for our income properties totaled $4.4 million and $4.1 million during the six months ended June 30, 2026 and 2025, respectively. The $0.3 million increase in the direct cost of revenues is reflective of increased expenses.

Current wording

Revenue from our property operations totaled $38.1 million and $36.0 million during the nine months ended September 30, 2026 and 2025, respectively. The $2.1 million increase in lease income is primarily attributable to an increase in rents due to the volume of property acquisitions versus dispositions. The direct costs of revenues for our income properties totaled $6.5 million and $6.0 million during the nine months ended September 30, 2026 and 2025, respectively. The $0.5 million increase in the direct cost of revenues is reflective of increased expenses.

Previous wording

Interest income from commercial loans and investments totaled $7.3 million and $2.7 million for the three months ended June 30, 2026 and 2025, respectively. The $4.6 million increase in income is attributable to the expanded portfolio of commercial loans and investments which, as of June 30, 2026, was comprised of nine construction/redevelopment loans, four mortgage notes, four properties acquired pursuant to sale-leaseback transactions whereby the tenants have future repurchase rights, and one sales-type lease. As of June 30, 2025, the Company’s portfolio of commercial loans and investments was comprised of six construction loans, five mortgage notes, and three properties acquired pursuant to sale-leaseback transactions whereby the tenants have future repurchase rights.

Current wording

Interest income from commercial loans and investments totaled $20.7 million and $7.4 million for the nine months ended September 30, 2026 and 2025, respectively. The $13.3 million increase in income is attributable to the expanded portfolio of commercial loans and investments which, as of September 30, 2026, was comprised of eight construction/ redevelopment loans, three mortgage notes, four properties acquired pursuant to sale-leaseback transactions whereby the tenants have future repurchase rights, and one sales-type lease. As of September 30, 2025, the Company’s portfolio of commercial loans and investments was comprised of five construction loans, six mortgage notes, and three properties acquired pursuant to a sale-leaseback transaction whereby the tenant has a future repurchase right.

Previous wording

Other revenue totaled $0.1 million and $0.2 million for the six months ended June 30, 2026 and 2025, respectively. The revenue is attributable to fees earned from a revenue sharing agreement the Company entered into with CTO as further described in Note 19, “Related Party Management Company” in the Notes to the Financial Statements. The $0.1 million decrease is attributable to the sale of properties resulting in less assets under management during the six months ended June 30, 2026.

Current wording

Other revenue totaled $0.1 million and $0.3 million for the nine months ended September 30, 2026 and 2025, respectively. The revenue is attributable to fees earned from a revenue sharing agreement the Company entered into with CTO as further described in Note 19, “Related Party Management Company” in the Notes to the Financial Statements. The $0.2 million decrease is attributable to the sale of properties resulting in less assets under management during the nine months ended September 30, 2026.

Previous wording

The following table represents the Company’s general and administrative expenses for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025 (in thousands):

Current wording

The following table represents the Company’s general and administrative expenses for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025 (in thousands):

Previous wording

General and administrative expenses totaled $3.9 million and $3.4 million during the six months ended June 30, 2026 and 2025, respectively. The $0.5 million increase is primarily the result of increases in the management fee due to an increase in the weighted average of the Company’s equity base.

Current wording

General and administrative expenses totaled $5.9 million and $5.1 million during the nine months ended September 30, 2026 and 2025, respectively. The $0.8 million increase is primarily the result of increases in the management fee due to an increase in the weighted average of the Company’s equity base.

Previous wording

As further described in Note 7, “Provision for Impairment”, during the six months ended June 30, 2026, the Company recorded a $0.2 million impairment charge representing the provision for losses related to certain income properties, for which the Company’s current intent is to dispose of such properties in order to facilitate the re-investment of the proceeds therefrom into new investment opportunities, and a $0.7 million impairment charge which represents the CECL reserve related to our commercial loans and investments. During the six months ended June 30, 2025, the Company recorded a $4.6 million impairment charge representing the provision for losses related to our income properties, and a $0.2 million impairment charge which represents the CECL reserve related to our commercial loans and investments.

Current wording

As further described in Note 7, “Provision for Impairment and Adjustment to CECL Reserve”, during the nine months ended September 30, 2026, the Company recorded a $0.2 million impairment charge representing the provision for losses related to certain income properties, for which the Company’s current intent is to dispose of such properties in order to facilitate the re-investment of the proceeds therefrom into new investment opportunities, and a $0.6 million impairment charge which represents the CECL reserve related to our commercial loans and investments. During the nine months ended September 30, 2025, the Company recorded a $6.6 million impairment charge representing the provision for losses related to certain income properties, for which the Company’s current intent is to dispose of such properties in order to facilitate the re-investment of the proceeds therefrom into new investment opportunities, and a $0.1 million impairment charge which represents the change in our CECL reserve related to our commercial loans and investments.

Previous wording

Investment and other income totaled $0.5 million and $0.1 million during the six months ended June 30, 2026 and 2025, respectively. The $0.4 million increase is primarily due to the receipt of a $0.3 million nonrefundable deposit forfeited by a potential buyer on a property that was previously under contract for sale.

Current wording

Investment and other income totaled $0.5 million and $0.2 million during the nine months ended September 30, 2026 and 2025, respectively. The $0.3 million increase is primarily due to the receipt of a $0.3 million nonrefundable deposit forfeited by a potential buyer on a property that was previously under contract for sale.

Previous wording

Interest expense totaled $4.6 million and $4.3 million during the three months ended June 30, 2026 and 2025, respectively. The $0.3 million increase in interest expense is primarily attributable to interest expense resulting from the sale of participation interest in the Company’s $24.0 million Mortgage Note as defined and further described in Note 4, “Commercial Loans and Investments” in the Notes to the Financial Statements.

Current wording

Interest expense totaled $13.7 million and $11.8 million during the nine months ended September 30, 2026 and 2025, respectively. The $1.9 million increase in interest expense is attributable to an increase in the Company’s long-term debt as well as $0.9 million of additional interest expense resulting from the sale of participation interest in the Company’s 2025 Mortgage Note as defined and further described in Note 4, “Commercial Loans and Investments” in the Notes to the Financial Statements. The overall increase in the Company’s long-term debt was primarily utilized to fund the acquisition of properties and commercial loans and investments during the nine months ended September 30, 2026.

Previous wording

Net income totaled $6.8 million and net loss totaled $3.1 million during the six months ended June 30, 2026 and 2025, respectively. The $9.9 million increase in net income is attributable to the factors described above, most notably the $8.1 million increase in interest income from commercial loans and investments.

Current wording

Net income totaled $11.1 million and net loss totaled $4.1 million during the nine months ended September 30, 2026 and 2025, respectively. The $15.2 million increase in net income is attributable to the factors described above, most notably the $13.3 million increase in interest income from commercial loans and investments.

Previous wording

Cash totaled $26.1 million as of June 30, 2026, including restricted cash of $23.3 million. See Note 2 “Summary of Significant Accounting Policies” under the heading Restricted Cash for the Company’s disclosure related to its restricted cash balance as of June 30, 2026.

Current wording

Cash totaled $30.9 million as of September 30, 2026, including restricted cash of $19.1 million. See Note 2 “Summary of Significant Accounting Policies” under the heading Restricted Cash for the Company’s disclosure related to its restricted cash balance as of September 30, 2026.

Previous wording

*Long-Term Debt.*As of June 30, 2026, the commitment level under the Revolving Facility was $250.0 million, and the Company had an outstanding balance of $169.5 million and $80.5 million of available capacity. The Company also had $200.0 million in term loans outstanding as of June 30, 2026. See Note 13, “Long-Term Debt” for the Company’s disclosure related to its long-term debt balance as of June 30, 2026.

Current wording

*Long-Term Debt.*As of September 30, 2026, the commitment level under the Revolving Facility was $250.0 million, and the Company had an outstanding balance of $198.5 million and $51.5 million of available capacity. The Company also had $200.0 million in term loans outstanding as of September 30, 2026. See Note 13, “Long-Term Debt” for the Company’s disclosure related to its long-term debt balance as of September 30, 2026.

Previous wording

*Acquisitions and Dispositions.*As further described in Note 3, “Property Portfolio,” during the six months ended June 30, 2026, the Company acquired four properties for a combined purchase price of $46.8 million, including capitalized acquisition costs. Of the total acquisitions, the Company acquired two properties for a combined purchase price of $20.5 million, including capitalized acquisition costs. The remaining $26.3 million of total acquisition costs are attributable to (i) the acquisition of the 2026 Sale-Leaseback Property for a purchase price of $10.0 million and (ii) the acquisition of the 2026 Sales-Type Lease for $16.3 million. During the six months ended June 30, 2026, the Company sold three properties for an aggregate sales price of $5.8 million, generating aggregate gains on sale of $0.1 million.

Current wording

*Acquisitions and Dispositions.*As further described in Note 3, “Property Portfolio,” during the nine months ended September 30, 2026, the Company acquired seven properties for a combined purchase price of $86.3 million, including capitalized acquisition costs. Of the total acquisitions, the Company acquired five properties for a combined purchase price of $60.0 million, including capitalized acquisition costs, and those five properties were subject to purchase accounting for acquisitions subject to a lease. The remaining $26.3 million of total acquisition costs are attributable to (i) the acquisition of the 2026 Sale-Leaseback Property for a purchase price of $10.0 million and (ii) the acquisition of the 2026 Sales-Type Lease for $16.3 million. During the nine months ended September 30, 2026, the Company sold four properties for an aggregate sales price of $6.2 million, generating aggregate gains on sale of $0.4 million.

Previous wording

*ATM Program.*During the six months ended June 30, 2026, the Company sold 2,801,075 shares under the 2022 ATM Program for gross proceeds of $54.1 million at a weighted average price of $19.31 per share, generating net proceeds of $53.3 million after deducting transaction fees totaling $0.8 million. During the six months ended June 30, 2026, the Company sold 342,540 shares under the 2025 Preferred Stock ATM Program for gross proceeds of $8.6 million at a weighted average price of $25.17 per share, generating net proceeds of $8.4 million after deducting transaction fees totaling less than $0.2 million.

Current wording

*ATM Program.*During the nine months ended September 30, 2026, the Company sold 3,136,532 shares under the Common Stock ATM Program for gross proceeds of $60.8 million at a weighted average price of $19.38 per share, generating net proceeds of $59.9 million after deducting transaction fees totaling $0.9 million. During the nine months ended September 30, 2026, the Company sold 406,419 shares under the 2025 Preferred Stock ATM Program for gross proceeds of $10.2 million at a weighted average price of $25.18 per share, generating net proceeds of $10.0 million after deducting transaction fees totaling $0.2 million.

Previous wording

Capital Expenditures. As of June 30, 2026, the Company has committed to fund certain capital improvements related to several properties, which include tenant improvements, landlord work, leasing commissions, and other capital improvements. As of June 30, 2026, the commitments totaled $2.0 million, of which $0.6 million has been paid, leaving a remaining commitment of $1.4 million. The improvements are generally expected to be completed within 12 months of June 30, 2026. Additionally, as of June 30, 2026, the Company has unfunded loan commitments under the Company’s nine construction/redevelopment loans as described in Note 4, “Commercial Loans and Investments”. The unfunded portion of the construction/redevelopment loans totaled $85.4 million as of June 30, 2026*.*

Current wording

Capital Expenditures. As of September 30, 2026, the Company has committed to fund certain capital improvements related to several properties, which include tenant improvements, landlord work, leasing commissions, and other capital improvements. As of September 30, 2026, the commitments totaled $3.3 million, of which $0.8 million has been paid, leaving a remaining commitment of $2.5 million. The improvements are generally expected to be completed within 12 months of September 30, 2026. Additionally, as of September 30, 2026, the Company has unfunded loan commitments under the Company’s eight construction/redevelopment loans as described in Note 4, “Commercial Loans and Investments”. The unfunded portion of the construction/redevelopment loans totaled $75.5 million as of September 30, 2026*.*

Previous wording

We believe we will have sufficient liquidity to fund our operations, capital requirements, maintenance, and debt service requirements over the next twelve months and into the foreseeable future, with cash on hand, cash flow from our operations, proceeds from the completion of the sale of assets utilizing the reverse like-kind 1031 exchange structure, $25.8 million of availability under the 2022 ATM Program, $24.3 million of availability under the 2025 Preferred Stock ATM Program, and $80.5 million of available capacity on the existing $250.0 million Revolving Facility.

Current wording

We believe we will have sufficient liquidity to fund our operations, capital requirements, maintenance, and debt service requirements over the next twelve months and into the foreseeable future, with cash on hand, cash flow from our operations, proceeds from the completion of the sale of assets utilizing the reverse like-kind 1031 exchange structure, current and future borrowings, and proceeds raised from periodically accessing the private and public equity and debt capital markets.

Previous wording

The Board and management consistently review the allocation of capital with the goal of providing the best long-term return for our stockholders. These reviews consider various alternatives, including increasing or decreasing regular dividends, repurchasing the Company’s securities, and retaining funds for reinvestment. Annually, the Board reviews our business plan and corporate strategies, and makes adjustments as circumstances warrant. Management’s focus is to continue our strategy of investing in net leased properties by utilizing the capital we raise and available borrowing capacity from the Revolving Facility to increase our portfolio of income-producing properties, providing stabilized cash flows with strong risk-adjusted returns primarily in larger metropolitan areas and growth markets.

Current wording

The Board and management consistently review the allocation of capital with the goal of providing the best long-term return for our stockholders. These reviews consider various alternatives, including increasing or decreasing regular dividends, repurchasing the Company’s securities, and retaining funds for reinvestment. Annually, the Board reviews our business plan and corporate strategies, and makes adjustments as circumstances warrant. Management’s focus is to continue our strategy of investing in net leased properties by utilizing the capital we raise and available borrowing capacity from our current and future borrowings to increase our portfolio of income-producing properties, providing stabilized cash flows with strong risk-adjusted returns primarily in larger metropolitan areas and growth markets.

Previous wording

FFO and AFFO do not represent cash generated from operating activities and are not necessarily indicative of cash available to fund cash requirements; accordingly, they should not be considered alternatives to net income or loss or as a performance measure or cash flows from operations as reported on our statement of cash flows as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures.

Current wording

FFO and AFFO do not represent cash generated from operating activities and are not necessarily indicative of cash available to fund cash requirements; accordingly, they should not be considered alternatives to net income or loss as a performance measure or cash flows from operations as reported on our statement of cash flows as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures.

Previous wording

We compute FFO in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT. NAREIT defines FFO as GAAP net income or loss adjusted to exclude real estate related depreciation and amortization, as well as extraordinary items (as defined by GAAP) such as net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets and impairments associated with the implementation of current expected credit losses on commercial loans and investments at the time of origination, including the pro rata share of such adjustments of unconsolidated subsidiaries. To derive AFFO, we further modify the NAREIT computation of FFO to include other adjustments to GAAP net income or loss related to non-cash revenues and expenses such as loss on extinguishment of debt, amortization of above- and below-market lease related intangibles, straight-line rental revenue, amortization of deferred financing costs, non-cash compensation, and other non-cash adjustments to income or expense. Such items may cause short-term fluctuations in net income or loss but have no impact on operating cash flows or long-term operating performance. We use AFFO as one measure of our performance when we formulate corporate goals.

Current wording

We compute FFO in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT. NAREIT defines FFO as GAAP net income or loss adjusted to exclude real estate related depreciation and amortization, as well as extraordinary items (as defined by GAAP) such as net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets and impairments associated with the implementation of current expected credit losses on commercial loans and investments at the time of origination, including the pro rata share of such adjustments of unconsolidated subsidiaries. The Company also excludes the gains or losses from sales of assets incidental to the primary business of the REIT which specifically include the sales of investment securities, if any, in addition to the mark-to-market of the Company’s investment securities. To derive AFFO, we further modify the NAREIT computation of FFO to include other adjustments to GAAP net income or loss related to non-cash revenues and expenses such as loss on extinguishment of debt, amortization of above- and below-market lease related intangibles, straight-line rental revenue, amortization of deferred financing costs, non-cash compensation, and other non-cash adjustments to income or expense. Such items may cause short-term fluctuations in net income or loss but have no impact on operating cash flows or long-term operating performance. We use AFFO as one measure of our performance when we formulate corporate goals.

Previous wording

Purchase Accounting for Acquisitions of Real Estate Subject to a Lease. As required by GAAP, the fair value of the real estate acquired with in-place leases is allocated to the acquired tangible assets, consisting of land, building and tenant improvements, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, the value of in-place leases, and the value of leasing costs, based in each case on their relative fair values. In allocating the fair value of the identified intangible assets and liabilities of an acquired property, above-market and below-market in-place lease values are recorded as other assets or liabilities based on the present value. The assumptions underlying the allocation of relative fair values are based on market information including, but not limited to: (i) the estimate of replacement cost of improvements under the cost approach, (ii) the estimate of land values based on comparable sales under the sales comparison approach, and (iii) the estimate of future benefits determined by either a reasonable rate of return over a single year’s net cash flow, or a forecast of net cash flows projected over a reasonable investment horizon under the income capitalization approach. The underlying assumptions are subject to uncertainty and thus any changes to the allocation of fair value to each of the various line items within the Company’s consolidated balance sheets could have an impact on the Company’s financial condition as well as results of operations due to resulting changes in depreciation and amortization as a result of the fair value allocation. The acquisitions of real estate subject to this estimate totaled two properties for a combined purchase price of $20.5 million, including capitalized acquisition costs, for the six months ended June 30, 2026.

Current wording

Purchase Accounting for Acquisitions of Real Estate Subject to a Lease. As required by GAAP, the fair value of the real estate acquired with in-place leases is allocated to the acquired tangible assets, consisting of land, building and tenant improvements, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, the value of in-place leases, and the value of leasing costs, based in each case on their relative fair values. In allocating the fair value of the identified intangible assets and liabilities of an acquired property, above-market and below-market in-place lease values are recorded as other assets or liabilities based on the present value. The assumptions underlying the allocation of relative fair values are based on market information including, but not limited to: (i) the estimate of replacement cost of improvements under the cost approach, (ii) the estimate of land values based on comparable sales under the sales comparison approach, and (iii) the estimate of future benefits determined by either a reasonable rate of return over a single year’s net cash flow, or a forecast of net cash flows projected over a reasonable investment horizon under the income capitalization approach. The underlying assumptions are subject to uncertainty and thus any changes to the allocation of fair value to each of the various line items within the Company’s consolidated balance sheets could have an impact on the Company’s financial condition as well as results of operations due to resulting changes in depreciation and amortization as a result of the fair value allocation. The acquisitions of real estate subject to this estimate totaled five properties for a combined purchase price of $60.0 million, including capitalized acquisition costs, for the nine months ended September 30, 2026.