MacKenzie Realty Capital, Inc.

June 30, 2026

NOTE 1 – PRINCIPAL BUSINESS AND ORGANIZATION

MacKenzie Realty Capital, Inc. (the “Parent Company” together with its subsidiaries as discussed below, collectively, the “Company,” “we,” “us,” or “our”) was incorporated under the general corporation laws of the State of Maryland on January 27, 2012. We have elected to be treated as a real estate investment trust (“REIT”) as defined under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). We are authorized to issue 100,000,000 shares, of which (i)80,000,000 are designated as common stock, with a $0.0001 par value per share; and (ii)20,000,000 are designated as preferred stock, with a $0.0001 par value per share. We commenced our operations on February 28, 2013, and our fiscal year-end is June 30.

We are registered under Section 12(b) of the Securities Exchange Act of 1934 (the “Exchange Act”), and we will continue to file periodic reports on Form 10-K, Form 10-Q, and Form 8-K, as well as file proxy statements and other reports required under the Exchange Act.

We filed our initial registration statement with the Securities and Exchange Commission (“SEC”) in 2012 and have since completed multiple public offerings of our common stock. On November 6, 2024, The Nasdaq Stock Market (“Nasdaq”) approved the listing of our common stock, and trading commenced on the Nasdaq Capital Market on November 11, 2024.

We are externally managed by MacKenzie Capital Management, LP (“MacKenzie”) under a turnkey administration agreement dated and effective as of January 1, 2021 (the “Administration Agreement”). MCM Advisers, LP (the “Investment Adviser”), an affiliate of MacKenzie, advises us in our assessment, acquisition, and divestiture of securities under the advisory agreement amended and restated effective January 1, 2021 (the “Amended and Restated Investment Advisory Agreement”). Another affiliate of MacKenzie, MacKenzie Real Estate Advisers, LP (the “Real Estate Adviser”; together, the “Investment Adviser” and the “Real Estate Adviser” may be referred to as “Adviser” or “Advisers” as appropriate) advises us in our assessment, acquisition, and divestiture of real estate assets under the Advisory Management Agreement, dated January 27, 2021 and as amended on December 29, 2025, effective January 1, 2026 (as amended, the “Advisory Management Agreement”). Under the Advisory Management Agreement, as amended, we pay the Real Estate Adviser (i) a base management fee equal to 1.25% per annum of our gross assets under management (excluding depreciation and amortization), paid monthly, and (ii) a bonus management fee equal to 5% of our adjusted funds from operations for each quarter. The Advisory Management Agreement has afive-year term that renews automatically on each January 1 unless we deliver a timely non-renewal notice, and requires us to pay a substantial early termination fee if we terminate the agreement other than for cause. See Note 8 to the consolidated financial statements included in this report for additional information about the terms of these arrangements and the fees paid to our Advisers. We pursue a strategy focused on investing primarily in real estate assets, and to a lesser extent (intended to be less than 20% of our portfolio) in illiquid or non-traded debt and equity securities issued by U.S. companies generally owning commercial real estate. These companies are likely to be non-traded REITs, small-capitalization publicly traded REITs, public and private real estate limited partnerships, and limited liability companies.

Prior to January 1, 2026, the Company conducted substantially all of its real estate operations through MacKenzie Realty Operating Partnership, LP (the “Operating Partnership”), which was formed in May 2020. Effective January 1, 2026, the Company reorganized its real estate operations by separating its multi-family residential portfolio from its commercial real estate investments. The Company contributed its multi-family residential properties (Commodore, The Park View, Hollywood and Shoreline Apartments and Aurora at Green Valley) and Blue Ridge at Suisun Valley (“Blue Ridge”) development project to MacKenzie Apartment Communities, Inc. (“MAC”), a newly formed entity, in exchange for 1,906,580 shares of MAC, representing all of the outstanding shares of MAC at the time of the contribution, on a 1:1 basis with the Parent Company’s outstanding shares at the time of the contribution. Blue Ridge is a planned multi-family residential development project located on vacant land adjacent to the Company’s 220 Campus Lane Office Building in Fairfield, California. The project is expected to consist of 84 multi-family residential units, and the entitlement process is ongoing. The Parent Company is the sole shareholder of MAC as of June 30, 2026. On January 8, 2026, the Board of Directors of MAC approved an estimated net asset value of the common stock of MAC equal to$18.10 per share for MAC’s common stock. The estimated net asset value solely applies to MAC common stock and does not reflect the net asset value of the Parent Company’s common stock. The contributed properties and development project are held by MAC Operating Partnership, LP (“MAC OP”), of which MAC is the sole general partner and owner of all limited partnership units (except for 1 unit held by the Operating Partnership to ensure there are 2 partners in MAC OP). MAC OP directly or indirectly owns and operates five residential properties and one development project. Following the reorganization, the Company’s commercial real estate investments continued to be held through the Operating Partnership.

As of June 30, 2026, we own all limited partnership units of the Operating Partnership except for 81,909.89 Class A Limited Partnership units,1,063,239.94 Series A preferred units and 43,212.86 Series B preferred units. Upon a limited partner’s request for redemption or upon liquidation of the Operating Partnership, the 81,909.89 Class A Limited Partnership units are convertible into shares of the Company’s common stock on the basis of 1 share of common stock for every 10 units or, at the Company’s election, for cash based upon the 10-day average trading price of the Company’s common stock, also on the basis of 1 share of common stock for every 10 units (as a result of the Company’s 1-for-10 common stock reverse stock split (the “Reverse Stock Split”) on August 4, 2025; previously the units were convertible on the basis of 1 share of common stock for every 1 unit). Upon a request of a holder of Series A or Series B preferred units, the Company may elect to repurchase such units with the Company’s common stock based upon the volume weighted average price per share of common stock for the twenty (20) trading days prior to the repurchase date, or at the Company’s election or upon liquidation, the 1,063,239.94 Series A preferred units are entitled to a liquidation preference of $26,580,999 (based on the stated value of $25 per share for the Series A preferred units) and the 43,212.86 Series B preferred units are entitled to a liquidation preference of $1,080,322 (based on the stated value of $25 per share for the Series B preferred units). The Parent Company has contributed net capital of $72,457,055 to the Operating Partnership since inception; thus, the Class A, Series A and Series B preferred units represent approximately 28.23% of all capital contributions.

The consolidated financial statements include the accounts of the Parent Company, the Operating Partnership, MAC, MAC OP, MacKenzie NY Real Estate 2 Corp. (“MacKenzie NY 2”), a taxable REIT subsidiary, and their majority-owned and controlled subsidiaries, including joint ventures and property-owning entities acquired or formed to own, operate, develop, or manage multi-family, office, and mixed-use real estate properties. The consolidated entities include Madison-PVT Partners LLC (“Madison”), PVT-Madison Partners LLC (“PVT”), Hollywood Hillview Owner, LLC (“Hollywood Hillview”), MacKenzie-BAA IG Shoreline LLC (“MacKenzie Shoreline”), MacKenzie Satellite Place Corp. (“MacKenzie Satellite”), MRC Aurora, LLC (“MRC Aurora”), 220 Campus Lane, LLC (“220 Campus Lane”), Campus Lane Residential, LLC (“Campus Lane Residential”), GV Executive Center, LLC (“GVEC”), Innovate Napa, LLC (“Innovate Napa”), MRC QRS, Inc. (“MRC QRS”), and various limited partnerships (each a “Wiseman Partnership”) acquired in connection with the Wiseman transaction, including First & Main, LP (“First & Main”), 1300 Main, LP (“1300 Main”), Woodland Corporate Center Two, LP (“Woodland Corporate Center Two”), Main Street West, LP (“Main Street West”), One Harbor Center, LP (“One Harbor Center”), and Green Valley Medical Center, LP (“Green Valley Medical Center”). Each Wiseman Partnership owns a Class A or B office property in Napa, Fairfield, Suisun, or Woodland, California (the “Wiseman Properties”). Intercompany balances and transactions are eliminated in consolidation.

We are conducting a Regulation A offering of our preferred stock pursuant to an offering circular qualified by the SEC on November 21, 2025, (as amended, the “Offering Circular”) which permits the offer and sale of up to $72.90 million of Series A, Series B, and Series C preferred stock, at an offering price of $22.50 per Series A share and $25.00 per Series B or Series C share. Prior Regulation A offerings have been terminated or superseded.

In November 2024, we filed a new shelf registration statement on Form S-3 (the “Form S-3 Registration Statement”) to sell our common and preferred stock, warrants, rights and units up to an aggregate of $75 million. The Form S-3 Registration Statement was declared effective by the SEC on January 15, 2025. Also on January 15, 2025, we entered into an Equity Distribution Agreement (the “ATM Sales Agreement”) with Maxim Group LLC (the “Sales Agent” or “Maxim”) pursuant to which we may issue and sell shares of our common stock, covered by the prospectus supplement filed with the SEC on January 15, 2025 and accompanying base prospectus dated January 15, 2025 (together, the “ATM Prospectus”), subject to maintaining compliance with General Instruction I.B.6 of Form S-3 Registration Statement which requires that in no event will we sell securities in a public primary offering with a value exceeding more than one-third of our public float in any 12-month period so long as our public float remains below $75 million.

On January 7, 2026, in connection with the at the market offering program (the “ATM Offering”) through which the Company may sell up to $20,000,000 of shares of the Company’s common stock at $0.0001 par value per share, the Company entered into an amendment to the ATM Sales Agreement with Maxim.

In accordance with the terms of the amendment, the ATM Sales Agreement will now terminate upon the earlier of (i) the issuance and sale of all of the common stock subject to the ATM Sales Agreement, (ii) termination of the ATM Sales Agreement by the Company or the Sales Agent with 15 days written notice, or (iii)July 15, 2027.

On August 26, 2024, the Company entered into a letter agreement with Maxim to provide general financial advisory and investment banking services to the Company in connection with, among other things, strategic planning, potential uplisting to a U.S. exchange (Nasdaq, New York Stock Exchange), and potential rights offering, equity issuance or other mechanisms to enhance corporate and shareholder value. In connection with the agreement, the Company issued to Maxim’s affiliate in a private placement 13,300 shares of common stock, representing approximately 1% of the Company’s outstanding stock. The common stock does not have any conversion rights.

On August 4, 2025, the Company effected a 1-for-10 Reverse Stock Split of its common stock. In connection with the Reverse Stock Split, the Company amended its charter to temporarily increasethe par valueof the common stock from $0.0001 per share to $0.001 per share and, on the same date, further amended its charter torestore the par value to $0.0001 per share. The Reverse Stock Split did not change the number of authorized shares of common stock. Prior to the Reverse Stock Split, the Company had 16,760,978 shares of common stock outstanding. Immediately following the Reverse Stock Split (and after giving effect to the payment of cash in lieu of fractional shares), the Company had 1,675,776 shares of common stock outstanding. No fractional shares were issued as a result of the Reverse Stock Split. Stockholders entitled to receive a fractional share instead received a cash payment equal to the fraction of a share multiplied by the closing price of the Company’s common stock on The Nasdaq Capital Market on August 1, 2025, as adjusted for the Reverse Stock Split, without interest. All common share and per-share information in the accompanying consolidated financial statements and notes have been retroactively adjusted to reflect the Reverse Stock Split.

As of June 30, 2026, we have raised approximately $125.76 million from our common stock public offerings (including $4.83 million from our Registered Offering and the concurrent private placement, and $1.83 million from the ATM offering), $19.90 million from our Series A preferred stock offering, $3.72 million from our Series B preferred stock offering and $1.37 million from our Series C preferred stock offering pursuant to the Offering Circular. As of June 30, 2026, we have issued shares of common stock, Series A preferred stock, Series B preferred stock, and Series C preferred stock with gross proceeds of $15.56 million, $0.63 million, $0.04 million, and a minimal worth of shares, respectively, under our dividend reinvestment plans (each a “DRIP” and together the “DRIPs”). Of the total shares issued by us as of June 30, 2026, we have repurchased approximately $14.28 million in shares of common stock, $2.41 million in shares of Series A preferred stock and $0.15 million in shares of Series B preferred stock, respectively, under our share repurchase program. As of June 30, 2026, we have 2,512,270 shares of common stock,733,447.24 shares of Series A preferred stock,124,627.52 shares of Series B preferred stock, and 54,707.09 shares of Series C preferred stock outstanding.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Consolidation Policy

The accompanying consolidated financial statements of the Company have been prepared in accordance with the instructions to Form 10-K and Regulation S-X. We follow the accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of our wholly owned consolidated subsidiaries and majority-owned controlled subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

The assets and liabilities of each of the consolidated subsidiaries are separate from those of the Parent Company and the Operating Partnership. Consequently, the assets of the consolidated subsidiaries are not available to settle the obligations of the Parent Company or the Operating Partnership, and the obligations of the subsidiaries do not constitute obligations of the Parent Company or the Operating Partnership.

Certain prior period information has been reclassified to conform to the current year-end presentation. The reclassification has no effect on our consolidated balance sheet or the consolidated statement of operations as previously reported.

Use of Estimates

The preparation of consolidated financial statements requires management to make estimates and assumptions that affect reported asset values, liabilities, revenues, expenses and unrealized gains (losses) on investments during the reporting period. Material estimates are susceptible to change, and actual results could differ from those estimates.

Variable Interest Entities

We evaluate the need to consolidate our investments in securities in accordance with Accounting Standards Codification (“ASC”) 810. In determining whether we have a controlling interest in a variable interest entity and whether to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the partners, as well as whether the entity is a variable interest entity for which we are the primary beneficiary. Refer to Note 7 for additional information.

Cash, Cash Equivalents and Restricted Cash

Our cash and cash equivalents represent current bank accounts and other bank deposits free of encumbrances and having maturity dates of three months or less from the respective dates of deposit. We limit cash investments to financial institutions with high credit standing; therefore, we believe our cash investments are not exposed to any significant credit risk. The restricted cash includes escrow accounts for real property taxes, insurance, capital expenditures and tenant improvements, and debt service and leasing costs held by lenders. These balances are insured by the Federal Deposit Insurance Corporation up to certain limits. Often, the cash balances held in financial institutions by us may exceed these insured limits.

Restricted cash is subject to legal or contractual restrictions as to withdrawal or use, including restrictions that require the funds to be used for a specified purpose and restrictions that limit the purpose for which the funds can be used.

Investment Income Receivable

Investment income receivable represents dividends, distributions, and sales proceeds recognized in accordance with our revenue recognition policy but not yet received as of the date of the consolidated financial statements. We monitor and adjust our receivables, and those deemed to be uncollectible are written-off only after all reasonable collection efforts are exhausted. We believe, based on the credit worthiness of the obligors, that all investment income receivable balances outstanding as of June 30, 2026 and 2025, are collectible and do not require recording any uncollectible allowance.

Rental, Reimbursement and Other Property Income

We generate rental revenue by leasing office space and apartment units to a building’s tenants. These tenant leases fall under the scope of ASC Topic 842 and are classified as operating leases. Revenues from such leases are recognized on a straight-line basis over the terms of the lease agreements.

Rents and Other Receivables

We will periodically evaluate the collectability of amounts due from tenants and maintain an allowance for doubtful accounts for estimated losses resulting from the inability of tenants to make required payments under lease agreements. We exercise judgment in establishing these allowances and consider payment history and current credit status of tenants in developing these estimates. As of

June 30, 2026 and 2025, we recognized an allowance for doubtful accounts of $145,740 and $259,590, respectively.

Capital Pending Acceptance

We conduct closings for new issuance of our Series A, Series B and Series C preferred stock and MRC Aurora preferred units twice per month and admit new stockholders effective beginning the first day of each month. Subscriptions are effective only upon our acceptance. Any gross proceeds received from subscriptions which are not accepted as of the period-end are classified as capital pending acceptance in the consolidated balance sheets. We close our common stock ATM sales on a daily basis. As of June 30, 2026, no capital pending acceptance related to our Series A, Series B and Series C preferred stock was recognized. As of June 30, 2025, capital pending acceptance related to our Series A and Series B preferred stock was $13,411.

Organization and Offering Costs

Organization costs include, among other things, the cost of legal services pertaining to the organization and incorporation of the business, incorporation fees, and audit fees relating to the public offerings and the initial statement of assets and liabilities. These costs are expensed as incurred. Offering costs include, among other things, legal fees and other costs pertaining to the preparation of the registration statements and pre and post-effective amendments. Offering costs incurred in connection with our offering circulars to sell the Series A, Series B and Series C preferred stock are classified as a reduction of equity.

Income Taxes and Deferred Tax Liability

The Parent Company has elected to be treated as a REIT for tax purposes under the Code and as a REIT, is not subject to federal income taxes on amounts that it distributes to the stockholders, provided that, on an annual basis, it generally distributes at least 90% of its REIT taxable income (determined without regard to the dividends paid deduction and excluding any net capital gain) to the stockholders and meets certain other conditions. To the extent it satisfies the annual distribution requirement but distributes less than 100% of its REIT taxable income, it will be subject to U.S. federal corporate income tax on its undistributed taxable income. In addition, it will be subject to a 4% nondeductible excise tax if the actual amount that it pays to its stockholders in a calendar year is less than a minimum amount specified under U.S. federal tax laws.

The Parent Company satisfied the annual dividend payment and other REIT requirements for the tax year ended December 31, 2025. Therefore, it did not incur any tax expense or excise tax on its income from operations during the quarterly periods within the tax year 2025 Although the Board of Directors suspended the Company’s regular quarterly common stock dividend effective May 19, 2025, based on the Company’s current estimates, any REIT taxable income for the tax year 2026, if any, is expected to be fully covered by the dividends-paid deduction, including dividends paid on its preferred stock. Accordingly, the Parent Company did not record any provision for federal income taxes during the fiscal periods within the tax year 2026.

MacKenzie NY 2 is subject to corporate federal and state income tax on its taxable income at regular statutory rates. As of June 30, 2026, it didnot have any taxable income for tax years 2025 and 2026. Therefore, we didnot record any tax provisions during any fiscal periods within the tax years 2025 and 2026. MacKenzie Satellite, MRC QRS and MAC are qualified REIT subsidiaries of the Parent Company. Therefore, they donot file a separate tax return.

The Operating Partnership is a limited partnership.220 Campus Lane, GVEC and Innovate Napaare limited liability companies. First & Main, 1300 Main, Woodland Corporate Center Two, Main Street West, One Harbor Center, LP and Green Valley Medical Center, LP are limited partnerships. Accordingly, all income tax liabilities of these entities ultimately flow through to the Company, with the exception of minority membership interests. Therefore, no income tax provisions are recorded for these entities.

MAC OP is a limited partnership. Hollywood Hillview, MacKenzie Shoreline, Madison, PVT, Campus Lane Residential and MRC Auroraare limited liability companies. Accordingly, all income tax liabilities of these entities ultimately flow through to the Company, with the exception of minority membership interests. Therefore, no income tax provisions are recorded for these entities.

We follow ASC 740, Income Taxes (“ASC 740”), to account for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized for the future tax liabilities attributable to the net unrealized investment gain (losses) on existing investments. In estimating future tax consequences, we consider all future events, other than enactments of changes in tax laws or rates. The effect on deferred tax assets and liabilities of a change in tax rates will be recognized as income or expense in the period of enactment. In addition, ASC 740 provides guidance for recognizing, measuring, presenting, and disclosing uncertain tax positions in the financial statements. As of June 30, 2026 and 2025, there wereno uncertain tax positions. Management’s determinations regarding ASC 740 are subject to review and adjustment at a later date based upon factors including, but not limited to, an on-going analysis of tax laws, regulations and interpretations thereof.

Subsequent Events

Subsequent events are events or transactions that occur after the date of the consolidated balance sheets but before the date the consolidated financial statements are issued. Subsequent events that provide additional evidence about conditions that existed at the date of the consolidated balance sheets are considered in the preparation of the consolidated financial statements presented herein. Subsequent events that occur after the date of the consolidated balance sheets that do not provide evidence about the conditions that existed as of the date of the consolidated statements of changes in equity are considered for disclosure based upon their significance in relation to our consolidated financial statements taken as a whole.

Fair Value of Financial Instruments

Fair value estimates are made at discrete points in time based on relevant information. These estimates may be subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. We believe that the carrying amounts of our financial instruments, consisting of cash, restricted cash, investments income, rents and other receivables, prepaid expenses and other assets, mortgage notes payable, net, line of credit, net, notes payable, net, accounts payable and accrued liabilities, below-market lease liabilities, net, deferred rent and other liabilities and due to related entities, approximate the fair values of such items based on their nature, terms, and interest rates.

Revenue Recognition

Rental revenue, net of concessions, which is derived primarily from lease contracts and includes rents that each tenant pays in accordance with the terms of each lease agreement, is recognized on a straight-line basis over the term of the lease, when collectability is determined to be probable.

Minimum rent, including rental abatements, lease incentives, and contractual fixed increases attributable to operating leases are recognized on a straight-line basis over the term of the related leases when collectability is probable. Amounts expected to be received in later years are recorded as deferred rent receivable. If the lease provides for tenant improvements, we determine whether the tenant improvements, for accounting purposes, are owned by the tenant or the Company. When we are the owner of the tenant improvements, the tenant is not considered to have taken physical possession or have control of the physical use of the leased asset until the tenant improvements are substantially completed. When the tenant is the owner of the tenant improvements, any tenant improvement allowance (including amounts that can be taken in the form of cash or a credit against the tenant’s rent) that is funded is treated as a lease incentive and amortized as a reduction of rental revenue over the lease term.

Tenant improvement ownership is determined based on various factors including, but not limited to:

In accordance with ASC Topic 842, we determine whether collectability of lease payments in an operating lease is probable. If we determine the lease payments are not probable of collection, we fully reserve for rent and reimbursement receivables, including deferred rent receivable, and recognize rental income on a cash basis.

Distributions received from investments are evaluated by management and recorded as dividend income or a return of capital (reduction of investment) on the ex-dividend date. Operational dividends or distributions received from portfolio investments are recorded as investment income. Distributions resulting from the sale or refinance of an investee’s underlying assets are compared to the estimated value of the remaining assets and are recorded as a return of capital or as investment income as appropriate.

Realized gains or losses on investments are recognized in the period of disposal, distribution, or exchange and are measured by the difference between the proceeds from the sale or distribution and the cost of the investment. Investments are disposed of on a first-in, first-out basis. Net change in unrealized gain (loss) reflects the net change in portfolio investment values during the reporting period, including the reversal of previously recorded unrealized gains or losses.

Dividends and Distributions

Dividends (and distributions, if any) to stockholders are recorded on the date of declaration. The amount, if any, to be paid as a quarterly dividend (or distribution, if any) is approved quarterly by the Board of Directors and is generally based upon management’s estimate of our earnings for the quarter.

Fair Value Measurements

GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of market price observables used in measuring investments at fair value. Market price is impacted by a number of factors, including the type of investment and the characteristics specific to the investment. Investments with readily available actively quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observables and a lesser degree of judgment used in measuring fair value.

Investments measured and reported at fair value are classified and disclosed in one of the following categories:

Level I – Quoted prices are available in active markets for identical investments as of the reporting date. The type of investments included in Level I are publicly traded equity securities. We do not adjust the quoted price for these investments even in situations where we hold a large position and a sale could reasonably impact the quoted price.

Level II – Price inputs are quoted prices for similar financial instruments in active markets; quoted prices for identical or similar financial instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable in active markets. Investments which are generally included in this category are publicly traded equity securities with restrictions.

Level III – Pricing inputs are unobservable and include situations where there is little, if any, market activity for the investment. Fair values for these investments are estimated by management using valuation methodologies that consider a range of factors, including but not limited to the price at which the investment was acquired, the nature of the investment, local market conditions, trading values on public exchanges for comparable securities, current and projected operating performance, financial condition, and financing transactions subsequent to the acquisition of the investment. The inputs into the determination of fair value require significant judgment by management. Due to the inherent uncertainty of these estimates, these values may differ materially from the values that would have been used had an active market for these investments existed.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

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

Our consolidated financial statements include investments that are measured at their estimated fair values in accordance with GAAP. Our valuation procedures are summarized below:

Securities for which market quotations are readily available on an exchange will be valued at such price as of the closing price on the day closest to the valuation date. Where a security is traded but in limited volume, we may instead utilize the weighted average closing price of the security over the prior 10 trading days. We may value securities that do not trade on a national exchange by using published secondary market trading information. When doing so, we first confirm that GAAP recognizes the trading price as the fair value of the security.

Securities for which reliable market data are not readily available or for which the pricing source does not provide a valuation or methodology or provides a valuation or methodology that, in the judgment of the Investment Adviser or Board of Directors, does not represent fair value, are valued as follows: (i) each portfolio company or investment is initially valued by the investment professionals responsible for the portfolio investment; (ii) preliminary valuation conclusions are documented and discussed with our senior management; and (iii) the Board of Directors will discuss valuations and determine the fair value of each investment in our portfolio in good faith based on the input of the Investment Adviser and, where appropriate and necessary, the respective third-party valuation firms. The recommendation of fair value will generally be based on the following factors, as relevant:

Securities for which market data is not readily available or for which a pricing source is not sufficient may include the following:

Valuation of real property used to evaluate impairment of real property held for use, held for sale, or to determine the fair value of certain real properties held by equity method investments accounted for using the fair value method, involve subjective judgments and estimates. To determine the valuation of the real estate properties, management utilizes the income approach, either the discounted cash flow or direct capitalization valuation model. Determining fair value requires management to make estimates of future cash flows, which are based on a number of inputs and assumptions, including property operations, terminal capitalization rates, and discount rates. We estimate future leasing activities and associated costs, generally over a ten-year period, to determine the fair value of the property. Once the fair value is determined, we determine whether any impairment is required and document our conclusion. As part of their review of our quarterly and annual reports, the Board of Directors reviews the valuations and impairment determinations. In addition, we may obtain a third-party appraisal on directly owned properties.

The inputs used in the valuation of real property are unobservable and accordingly, the notes to our consolidated financial statements describe the uncertainty with respect to the possible effect of such valuations, and any changes in such valuations, on our consolidated financial statements.

Equity Securities

We have minority and non-controlling equity investments in various limited partnerships and non-traded entities, which do not have readily determinable fair values. We do not have controlling interests in these entities. Thus, these investments have been recorded as investments in equity securities in accordance with ASC Topic 321, Investments – Equity Securities, and measured at fair value. The changes in the fair value of these investments are recorded in the consolidated statements of operations.

Equity Method Investments with Fair Value Option Election

We elected the fair value option of accounting for the investments listed below that would have otherwise been recorded under the equity method of accounting. The primary purpose of electing the fair value option was to enhance the transparency of our financial condition. Changes in the fair value of these investments, which are inclusive of equity in income, are recorded in the consolidated statements of operations during the period such changes occur. The below investments would have been accounted for under the equity method if the fair value method had not been elected as of June 30, 2026 and 2025:

*The general partner has a 1% partnership interest but is also entitled to profit sharing distributions ranging from 25% to 50% after certain thresholds are met.

Lease Accounting Topic 842

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02 Leases (Topic 842) (“ASU 2016-02”). Under ASU 2016-02, an entity is required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing. ASU 2016-02 offers specific accounting guidance for a lessee, a lessor, and parties to sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to facilitate assessment of the amount, timing, and uncertainty of cash flows arising from leases.

In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”). ASU 2018-11 provides lessors with a practical expedient to not separate lease and non-lease components if both (i) the timing and pattern of revenue recognition for the non-lease component and the related lease component are the same and (ii) the combined single lease component would be classified as an operating lease. We adopted the practical expedient as of July 1, 2019, to account for lease and non-lease components as a single component in lease contracts where we or one of our subsidiaries is the lessor.

Our current portfolio consists of commercial office properties and residential apartment buildings whereby we generate rental revenue by leasing office space and apartment units to the building’s tenants. These tenant leases fall under the scope of Topic 842, and are classified as operating leases. Revenues from such leases are recognized on a straight-line basis over the terms of the lease agreements. Non-lease components of our leases are combined with the related lease components and accounted for as a single lease component under Topic 842. The balances of net real estate investments and related depreciation on our consolidated financial statements relate to assets for which we are the lessor.

Real Estate Assets, Capital Additions, Depreciation and Amortization

We capitalize costs, including certain indirect costs, incurred for capital additions, including redevelopment, development, and construction projects. We also allocate certain department costs, including payroll, at the corporate levels as “indirect costs” of capital additions, if such costs clearly relate to capital additions. We also capitalize interest, property taxes and insurance during periods in which redevelopment, development, and construction projects are in progress. Cost capitalization begins once the development or construction activity commences and ceases when the asset is ready for its intended use. Repair and maintenance and tenant turnover costs are expensed as incurred. Repair and maintenance and tenant turnover costs include all costs that do not extend the useful life of the real estate asset. Depreciation and amortization expense are computed on the straight-line method over the asset’s estimated useful life. We consider the period of future benefit of an asset to determine its appropriate useful life and anticipate the estimated useful lives of assets by class to be generally as follows:

We classify long-lived assets to be sold as held for sale in the period in which all of the following criteria are met:

On the day that these criteria are met, we suspend depreciation on the investment properties held for sale, including depreciation for tenant improvements and additions, as well as on the amortization of acquired in-place leases. Assets and liabilities of the disposal group are presented separately on the consolidated balance sheets and measured at the lower of carrying value or fair value less costs to sell. Prior period balances have been reclassified as assets and liabilities held for sale for comparative purposes on the consolidated balance sheet as of June 30, 2025. Woodland Corporate Center Two was listed for sale as discussed in Note 5.

Leases

Six of our properties, 1300 Main, Main Street West, Woodland Corporate Center, Green Valley Executive Center, One Harbor Center and Green Valley Medical Center had solar equipment leases in place at the time of our acquisition. Therefore, these existing solar leases were reassessed at the acquisition date and were recorded as finance leases in accordance with ASC 842. We record leases on the consolidated balance sheets in the form of a lease liability for the present value of future minimum payments under the lease terms and a right-of-use asset equal to the lease liability adjusted for items such as deferred or prepaid rent, lease incentives, and any impairment of the right-of-use asset. The discount rate used in determining the lease liability is based upon incremental borrowing rates that we could obtain for similar loans as of the date of commencement or renewal. We do not record leases on the consolidated balance sheets that are classified as short term (less than one year).

At lease inception, we determine the lease term by considering the minimum lease term and all optional renewal periods that are reasonably certain to be exercised. The lease term is also used to calculate straight-line rent expense. The depreciable life of leasehold improvements is limited by the estimated lease term, including renewals if they are reasonably certain to be exercised. Our leases do not contain residual value guarantees or material variable lease payments that will impact our ability to pay dividends or cause us to incur additional expenses.

The amortization of the right-of-use asset arising from finance leases is expensed through depreciation and amortization expense and the interest on the related lease liability is expensed through interest expense on our consolidated statements of operations.

Impairment of Real Estate Assets

We continually monitor events and changes in circumstances that could indicate that the carrying value of our real estate and related intangible assets may not be recoverable. When indicators of potential impairment emerge, we assess whether we will recover the carrying value of the asset through its undiscounted future cash flows and its eventual disposition. Based on this assessment, if we do not believe that we will recover the carrying value of the real estate and related intangible assets, we will record an impairment loss to the extent that the carrying value exceeds the estimated fair value of the real estate and related intangible assets.

During the year ended June 30, 2026, we recorded animpairment loss on assets held for saleof $1,687,783, which is discussed in Note 5. During the year ended June 30, 2025, due to an early lease termination by the anchor tenant at our Main Street West Office Building, we recognized an accumulated impairment loss of $9,500,167. We utilized a third-party appraisal to estimate the fair value of the property and determine the impairment amount. We consider these inputs as Level III measurements within the fair value hierarchy.

Stock-based Compensation

ASC 718, Stock-based Compensation, requires generally that all equity awards granted to employees and consultants be accounted for at fair value. This fair value is measured at grant date for stock settled awards, and at subsequent exercise or settlement for cash-settled awards. Under this method, we recorded the 13,300 shares of common stock issued to Maxim discussed in Note 1 at fair value as compensation for services rendered to the Company. The fair value is computed based on the trading price of the common stock on the OTCQX capital market at the grant date of August 26, 2024. Additionally, we recorded the 8,583.70 shares of common stock issued to Outside The Box Capital Inc. at fair value in consideration for their marketing and distribution services. The fair value is computed based on the public trading price of the common stock at the grant date of February 3, 2025.

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes – Improvements to Income Tax, to enhance the transparency and decision usefulness of income tax disclosures, primarily related to rate reconciliation and income taxes paid information. The amendment is effective for annual periods beginning after December 15, 2024, and should be applied on a prospective basis, with the option to apply retrospectively. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The adoption of these amendments did not have any impact on our consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses. The ASU’s purpose is to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales, SG&A, and research and development). This ASU is effective for the Company’s annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the impact of this ASU on our consolidated financial statements.

NOTE 3 – INVESTMENTS IN REAL ESTATE

The following tables provide summary information regarding our operating properties, which are owned through our subsidiaries. The ownership interest shown below is the percentage of the property owned by the subsidiary, not the percentage of the subsidiary owned by the Company.

Consolidated Operating Properties

In addition to our commercial and residential real estate properties, we own a vacant parcel adjacent to the 220 Campus Lane Office Building in Fairfield, California. We acquired the vacant land in September 2023 with the long-term objective of developing it into a multi-family residential community. This project, known as Blue Ridge, is expected to consist of 84 luxury multi-family units in Solano County, one of the fastest-growing counties in California. The entitlement process for the vacant land is on-going. Our goal is to commence construction in fall 2027; however, this is subject to the city’s approval of our development application submitted in April 2024 and to securing the necessary financial resources. The Company is currently evaluating potential development and financing structures for the project, including discussions with a third-party developer pursuant to which the Company may contribute the land and the third party may arrange construction financing and development capital for the project.

The total depreciation expense of our operating properties for the years ended June 30, 2026 and 2025 were $7,239,178 and $7,902,429, respectively.

Operating Leases:

Our real estate assets are leased to tenants under operating leases that contain varying terms and expirations. The leases may have provisions to extend the lease agreements, options for early termination after paying a specified penalty and other terms and conditions as negotiated. We retain substantially all the risks and benefits of ownership of the real estate assets leased to tenants. Generally, upon the execution of a lease, we do not require a security deposit from tenants on our commercial real estate properties, depending upon the terms of the respective leases and the creditworthiness of the tenants. Even when required, security deposits generally are not significant amounts. Therefore, exposure to credit risk exists to the extent that a receivable from a tenant exceeds the amount of the security deposit. Security deposits received in cash related to tenant leases are included in other accrued liabilities in the accompanying consolidated balance sheets and were immaterial as of June 30, 2026 and 2025.

The following table presents the components ofincome from real estate operations for the years ended June 30, 2026 and 2025:

(1)Primarily includes tenant reimbursements for utilities and common area maintenance.

As of June 30, 2026, the future minimum rental income from our real estate properties under non-cancelable operating leases are as follows:

Lease Intangibles, Above-Market Lease Assets and Below-Market Lease Liabilities, Net

As of June 30, 2026 and 2025, our acquired lease intangibles, above-market lease assets, and below-market lease liabilities were as follows:

Our amortization of lease intangibles, above-market lease assets and below-market lease liabilities for the year ended June 30, 2026, were as follows:

Our amortization of lease intangibles, above-market lease assets and below-market lease liabilities for the year ended June 30, 2025, were as follows:

The following table provides the projected amortization expense and adjustments to revenue from tenants for intangible assets and liabilities for the next five years:

NOTE 4 – INVESTMENTS

The following table summarizes the composition of our equity method investments with fair value option election and other equity securities at fair value as of June 30, 2026 and 2025. On the consolidated balance sheets, these investments are reflected in two separate lines: (i) investments at fair value, which are classified as equity securities under ASC Topic 321, and (ii) equity method investments with fair value option election.

During the year ended June 30, 2026, we realized a total net gain of $24,302 from nine investment liquidations and disposals (Highlands REIT, Inc., Starwood Real Estate Income Trust, Inc. – Class S, Starwood Real Estate Income Trust, Inc. – Class I, SmartStop Self Storage REIT, Inc. – Class A, SmartStop Self Storage REIT, Inc. – Class A sold short, SmartStop Self Storage REIT, Inc. – Class T, National Healthcare Properties, Inc., CNL Healthcare Properties, Inc. and Sonida Senior Living, Inc.).

During the year ended June 30, 2025, we realized a total net gain of $132,434 from four investment liquidations and disposals (Blackstone Real Estate Income Trust, Inc., Highlands REIT, Inc., National Healthcare Properties, Inc., and 5210 Fountaingate, LP).

The following table presents fair value measurements of our investments as of June 30, 2026 and 2025, according to the fair value hierarchy:

The following is a reconciliation of the beginning and ending balances for investments measured at fair value on a recurring basis using significant unobservable inputs (Level III of the fair value hierarchy) for the year ended June 30, 2026:

The transfers of $1,081,429 from Level III to Level I category during the year ended June 30, 2026 resulted from one of the Company’s investments converting from a non-traded company to a publicly traded company and one of the Company’s investments merging with a publicly traded company, survived by the latter. Transfers are assumed to have occurred at the beginning of the year.

For the year ended June 30, 2026, netchange in unrealized gains included in earnings relating to Level III investments still held at June 30, 2026 were $1,213,621.

The following is a reconciliation of the beginning and ending balances for investments measured at fair value on a recurring basis using significant unobservable inputs (Level III of the fair value hierarchy) for the year ended June 30, 2025:

For the year ended June 30, 2025, netchange in unrealized losses included in earnings relating to Level III investments still held at June 30, 2025 were $2,680,923.

The following table shows quantitative information about significant unobservable inputs related to the Level III fair value measurements used at June 30, 2026:

The following table shows quantitative information about significant unobservable inputs related to the Level III fair value measurements used at June 30, 2025:

Summarized Financial Statements for Equity Method Investments (Fair Value Option)

Our investments in securities are generally in small and mid-sized companies in a variety of industries. In accordance with the Rule 8-03(b)(3) of Regulation S-X applicable for smaller reporting companies, we must determine which of our equity method investments measured at fair value under the Fair Value Option are considered “significant”, if any. Regulation S-X mandates the use of three different tests to determine if any of our investments are considered significant investments: the investment test, the asset test, and the income test. The rule requires summarized financial statements for any significant equity method investments in an annual and interim report if any of the three tests exceed 20%.

In addition to the SEC rules, ASC 323-10-50-3(c) requires summarized financial statements of our equity method investments, including those reported under the fair value option, if they are material individually or in aggregate.

None of our equity method investments accounted under the fair value option were determined to be individually significant under any of the tests as of June 30, 2026. Furthermore, our equity method investments accounted under the fair value option in aggregate were not material as of June 30, 2026.

Unconsolidated Significant Subsidiaries

In accordance with SEC Rules 3-09 and 4-08(g) of Regulation S-X, we must determine which of our investments in securities are considered “significant subsidiaries”, if any. Regulation S-X mandates the use of three different tests to determine if any of our controlled investments are significant subsidiaries: the investment test, the asset test, and the income test. Rule 3-09 of Regulation S-X requires separate audited financial statements for any unconsolidated majority-owned subsidiary in an annual report if any of the three tests exceed 20%. Rule 4-08(g) of Regulation S-X requires summarized financial information in an annual report if any of the three tests exceeds 10%.

As of June 30, 2026 and 2025, none of our investments in securities were considered unconsolidated significant subsidiaries under the SEC rules described above.

NOTE 5 – HELD FOR SALE

In October 2025, we listed Woodland Corporate Center Two for sale and determined that the criteria to be classified as held for sale had been met, which requires us to present the related assets and liabilities as separate line items in our consolidated balance sheets. We recorded these assets and liabilities at the lesser of the carrying value or fair value less costs to sell. During the year ended June 30, 2026, we recorded an impairment loss on assets held for sale of $1,687,783 on Woodland Corporate Center Two, which was our only asset held for sale. During the year ended June 30, 2025, we didnot record any impairment loss on assets held for sale.

The following table presents information related to the major classes of assets and liabilities that were classified as held for sale in our consolidated balance sheets:

NOTE 6 – LEASES

Lessee Arrangements

As discussed in Note 2, we acquiredsix partnerships which had solar equipment leases in place. We reassessed the leases as of the acquisition date and recorded them as finance leases in accordance with ASC 842. Our leases have remaining terms of 2.17 to 6.75 years. Right-of-use assets and lease liabilities by lease type, and the associated balance sheet classifications, are as follows:

We have included these leases inreal estate assets, net as follows:

Lease Expense

The components of total lease cost were as follows for the years ended June 30, 2026 and 2025:

Lease Obligations

Future undiscounted lease payments for finance leases with initial terms of one year or more are as follows:

Supplemental Lease Information

NOTE 7 – VARIABLE INTEREST ENTITIES

A variable interest in a variable interest entity (“VIE”) is an investment or other interest that will absorb portions of the VIE’s expected losses and/or receive portions of the VIE’s expected residual returns. Our variable interests in VIEs include limited partnership interests. VIEs sometimes finance the purchase of assets by issuing limited partnership interests that are either collateralized by or indexed to the assets held by the VIE.

The enterprise with a controlling financial interest in a VIE is known as the primary beneficiary and consolidates the VIE. We determine whether we are the primary beneficiary of a VIE by performing an analysis that principally considers: (a) which variable interest holder has the power to direct activities of the VIE that most significantly impact the VIE’s economic performance; (b) which variable interest holder has the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE; (c) the VIE’s purpose and design, including the risks the VIE was designed to create and pass through to its variable interest holders; (d) the VIE’s capital structure; (e) the terms between the VIE and its variable interest holders and other parties involved with the VIE; and (f) related-party relationships. We reassess our evaluation of whether an entity is a VIE when certain reconsideration events occur. We reassess our determination of whether we are the primary beneficiary of a VIE on an ongoing basis based on current facts and circumstances.

Nonconsolidated VIEs

As of June 30, 2026 and 2025, we hadone investment in a limited liability company that is a VIE. We determined that the Company is not the primary beneficiary of this entity because the managing member of this VIE has the power to direct the activities that most significantly affect the VIE’s economic performance. Accordingly, this VIE was not consolidated, and this is reported as equity method investments at fair value in the June 30, 2026 and 2025 consolidated balance sheets.

The table below presents a summary of the nonconsolidated VIE in which we hold variable interests:

Our exposure to the obligations of VIEs is generally limited to the carrying value of the limited partnership interests in these entities.

NOTE 8 – RELATED PARTY TRANSACTIONS

Advisory Agreements Effective January 1, 2021:

As discussed in Note 1, on January 26, 2021, our Board of Directors approved, effective January 1, 2021, two advisory agreements, an Advisory Management Agreement with the Real Estate Adviser and the Amended and Restated Investment Advisory Agreement with the Investment Adviser.

The terms of the Advisory Management Agreement with the Real Estate Adviser, priortoits amendment effective January 1, 2026, provided thatwe would pay an Asset Management Feebased upon a percentage of invested capital (3% of the first $20 million,2% of the next $80 million, and 1.50% over $100 million). Invested capitalwas equal to the amount calculated by multiplying the total number of outstanding shares of common stock, shares of preferred stock, and the partnership units (units in our operating partnership issued by us and held by persons other than us) issued by us by the price paid for each, or the value ascribed to each in connection with their issuance. The Advisory Management Agreement also provided for a 2.50% Acquisition Fee on new (non-security) purchases, subject to certain limitations designed to eliminate incentives to “churn” our assets, andfor an incentive management fee equal to 15% of all distributions once shareholdershad received cumulative distributions equal to 6% from the effective date of the Advisory Management Agreement.

The Investment Adviser will receive an annual fee equal to $100 for providing the investment advice to us as to our securities portfolio under the Amended and Restated Investment Advisory Agreement.

The asset management fees incurred for the period from July 1, 2025 through December 31, 2025 under theprior Advisory Management Agreement effective January 1, 2021 were calculated based on quarter-end invested capital, segregated into the three categories presented below.

Advisory Agreements Effective January 1, 2026:

On December 29, 2025, the Board of Directors of the Company unanimously approved, effective January 1, 2026, an amendment to the Advisory Management Agreement with the Real Estate Adviser.

The amended Advisory Management Agreement requires the Company to pay a base management fee equal to 1.25% per annum of its gross assets under management, not including depreciation and amortization. The base management fee is paid monthly based on the assets under management for the quarter ending as reported in the most recently filed quarterly report. The amended Advisory Management Agreement also calls for a bonus management fee equal to 5% of adjusted funds from operations each quarter. The bonus fee replaces any incentive fee, acquisition fee, financing fee, or disposition fee. The amended agreement contains a rolling renewal provision that reinstates afive-year term at the beginning of each calendar year unless the Company provides notice of non-renewal. If the Company terminates the agreement prior to expiration for other than cause, the Company must pay a substantial early termination fee.

Thebase management fee for the six months ended June 30, 2026 was calculated based on gross assets under management (excluding depreciation and amortization) of approximately $257.30 million as of June 30, 2026. During the years ended June 30, 2026 and 2025, we incurred asset management feesor base management feesof $3,389,022 and $3,449,487, respectively.

During the year ended June 30, 2026, we incurred bonus management fees of $26,876 under the new Advisory Management Agreement. During the year ended June 30, 2025, we didnot incur or accrue any incentive management fee under the prior Advisory Management Agreement.

Property Management and Leasing Services:

When we acquired the Wiseman Properties on May 6, 2022, our Real Estate Adviser’s newly formed wholly owned subsidiary − Wiseman Company Management, LLC, which is now known as Wiseman Commercial, Inc. (“Wiseman Commercial”) − purchased the property management and leasing services rights from Wiseman. As a result, effective as of the acquisition date, Wiseman Commercial has been providing property management and leasing services to the Wiseman Partnerships under the pre-existing agreements. Since the acquisition of these service rights, there have been no changes to the terms of the management services agreements with these limited partnerships. In addition, Wiseman Commercial also provides the property management and leasing services to 220 Campus Lane under a similar term as the Wiseman Partnerships.

During the year ended June 30, 2026, these Wiseman Commercial managed limited partnerships paid total property management fees of $572,749 and total leasing commissions of $791,805 to Wiseman Commercial. In addition, during the year ended June 30, 2026, nine of the limited partnerships also paid $2,167,985 to Wiseman Commercial for direct operating costs and construction of tenant improvements.

During the year ended June 30, 2025, these Wiseman Commercial managed limited partnerships paid total property management fees of $663,427 and total leasing commissions of $529,836 to Wiseman Commercial. In addition, during the year ended June 30, 2025, nine of the limited partnerships also paid $1,246,476 to Wiseman Commercial for direct operating costs and construction of tenant improvements.

Organization and Offering Costs Reimbursement:

Under our Offering Circular, which the SEC qualified on November 21, 2025, offering costs incurred and paid by us in excess of $825,000 (excluding legal fees) in connection with the preferred stock offering are reimbursable by the Advisers. If broker fees of 10% are not incurred during the issuance of the preferred stock, the resulting savings may be applied to marketing expenses or other non-cash compensation. In such cases, the broker fee savings increase the reimbursement threshold from the Advisers. As of June 30, 2026, we had incurred total offering costs of $479,392 (excluding legal fees), of which $445,392 was paid by MacKenzie on our behalf in connection with the preferred stock offering. As of June 30, 2025, we had incurred total offering costs of $61,023 (excluding legal fees), of which $44,023 was paid by MacKenzie on our behalf in connection with the offering. The total offering costs incurred were below the reimbursable threshold as of June 30, 2026 and 2025.

Administration Agreement:

Under the Administration Agreement, we reimburse MacKenzie for its allocable portion of overhead and other expenses it incurs in performing its obligations under the Administration Agreement, including furnishing us with office facilities, equipment and clerical, bookkeeping and record keeping services at such facilities, as well as providing us with other administrative services, subject to the independent directors’ approval. In addition, we reimburse MacKenzie for the fees and expenses associated with performing compliance functions, and its allocable portion of the compensation of our Chief Financial Officer, Chief Compliance Officer, Director of Accounting and Financial Reporting, and any administrative support staff.

Since November 1, 2018, MacKenzie has provided transfer agent services, with the out-of-pocket costs incurred by MacKenzie being reimbursed by us. No fee (only cost reimbursement) is paid to MacKenzie for this service. Effective March 5, 2024, to comply with Nasdaq listing requirements, we hired Securities Transfer Corporation, a third-party transfer agent, to provide these services for our common and Series B preferred stock. However, effective September 30, 2024, Computershare Inc., another third-party transfer agent, took over as transfer agent for our common stock.

The administrative cost reimbursements for the years ended June 30, 2026 and 2025 were $881,000 and $669,855, respectively. During the year ended June 30, 2026, we did not incur any transfer agent services cost reimbursements. The transfer agent services cost reimbursement for the year ended June 30, 2025 was $6,145.

The table below outlines the related party expenses incurred for the years ended June 30, 2026 and 2025, and unpaid as of June 30, 2026 and 2025.

(1)Asset acquisition fees paid to the Real Estate Adviser were capitalized as a part of the real estate basis in accordance with our policy. The acquisition fee paid during the year ended June 30, 2025 was for the acquisition of Green Valley Medical Center in August 2024.

(2)Offering costs paid by MacKenzie - discussed in this Note under organization and offering costs reimbursements.

(3)Expenses paid by MacKenzie and General Partner of a subsidiary on behalf of us and subsidiary.

NOTE 9 – MARGIN LOANS

We have a brokerage account through which we buy and sell publicly traded securities. The provisions of the account allow us to borrow on certain securities held in the account and to purchase additional securities based on the account equity (including cash). Amounts borrowed are collateralized by the securities held in the account and bear interest at a negotiated rate payable monthly. Securities pledged to secure margin balances cannot be specifically identified as a portion of all securities held in a brokerage account are used as collateral. As of June 30, 2026 and 2025, we hadno margin credit available for cash withdrawal or the ability to purchase additional securities. Accordingly, as of June 30, 2026 and 2025, there wasno amount outstanding under this short-term credit line.

NOTE 10 – MORTGAGE NOTES PAYABLE, NOTES PAYABLE AND DEBT GUARANTY

Madison and PVT Notes Payable

On February 26, 2021, Madison and PVT obtained mortgage loans from First Republic Bank in the amounts of $6,737,500 and $8,387,500, respectively, both at a fixed interest rate of 3% per annum through April 1, 2026. Effective May 1, 2026, interest rates are based on the average of thetwelve most recently published yields on U.S. Treasury securities adjusted to a constant maturity ofone year as published by the Federal Reserve System in the Statistical Release H.15 plus 2.75% per annum. The loans were obtained to finance the acquisition of Commodore Apartments and The Park View Apartments, which are located in Oakland, California. The loans matureon April 1, 2031 andare cross-collateralized by both properties owned by Madison and PVT. The loans require interest-only monthly payments through April 1, 2026, and beginning May 1, 2026, monthly payments of principal and interest are due based on a 360 month amortization period. The remaining unpaid principal balance is due at the maturity date. Accordingly, as of June 30, 2026, the outstanding balances of the loans were $6,725,997 for the Madison mortgage loan and $8,373,180 for the PVT mortgage loan. As of June 30, 2025, the outstanding balances of the loans were $6,737,500 for the Madison mortgage loan and $8,387,500 for the PVT mortgage loan. The mortgage notes payable balances are disclosed as a part of mortgage notes payable, net in the consolidated balance sheets.

The following table provides the projected principal payments on Madison’s loan for the next five years:

The following table provides the projected principal payments on PVT’s loan for the next five years:

PT Hillview Notes Payable

On October 4, 2021, PT Hillview entered into a loan agreement with Ladder Capital Finance in the amount of $17,500,000. The annual interest rate was equal to the greater of (i) a floating rate of interest equal to 5.50% plus LIBOR, and (ii)5.75%. The loan was obtained to finance the acquisition of Hollywood Apartments. The loan was secured by Hollywood Apartments and has an initial maturity date of October 6, 2023, which could be extended fortwo successive 12-month terms. On August 14, 2023, PT Hillview exercised the first extension option to extend the term of the loan to October 6, 2024. The loan required interest-only monthly payments with the principal balance due at maturity date. Interest was due based on a 360-day amortization period. PT Hillview also entered into an interest rate cap agreement on October 4, 2021, as required by the lender. The interest rate cap agreement was revised on September 29, 2023 and it matured on February 2, 2025. We did not record the fair value and the changes in the fair value of the contract in our consolidated financial statements because the amounts were insignificant to our consolidated financial statements.

On October 3, 2024, the loan agreement was amended to include extension options with principal paydowns. PT Hillview exercised the extension options pursuant to the amended agreement and the maturity date was extended until April 6, 2025 with total principal paydown of $3,975,000.

On March 28, 2025, PT Hillview entered into a loan agreement with Wells Fargo Bank, National Association, in the amount of $11,660,000 at a fixed annual interest rate of 5.87%. The loan was obtained to refinance the prior loan with Ladder Capital Finance which matured on April 6, 2025. The new loan matures in April 2030, is secured by Hollywood Apartments, and requires interest-only monthly payments with the principal balance due at maturity. The outstanding balance of the loan as of June 30, 2026 and 2025 was $11,660,000, which is disclosed as a part of mortgage notes payable, net in the consolidated balance sheets.

In connection with the refinancing, the Operating Partnership contributed $5,683,503 to PT Hillview to fund the principal paydown, replenish reserves, and pay loan fees. Of this amount, $568,350 (10%) represented the share of the non-controlling interest holder, True USA. Accordingly, as of June 30, 2026 and 2025, this amount has been recorded as a note receivable from True USA and is included in investments, income, rents, and other receivables in the consolidated balance sheet.

We (along with three other principals of True USA) guaranteed the “Recourse Obligations” as defined in the loan agreement, which are triggered only if the borrower of the loan engages in “Bad Boy Acts” (such as fraud, intentional misrepresentation, willful misconduct, waste, conversion, intentional failure to pay taxes or maintain insurance, filing for bankruptcy, ADA noncompliance, and environmental contamination, etc.). As of June 30, 2026, we have not recorded any guaranty obligations.

MacKenzie Shoreline Mortgage Notes Payable

On May 6, 2021, MacKenzie Shoreline entered into a loan agreement with Pacific Premier Bank, in the amount of $17,650,000. The annual interest rate under the agreement is 3.65% for the first 60 months, and a variable interest rate based on a 6-month CME Term Secured Overnight Financing Rate (“SOFR”) plus a margin of 3.00 percentage points, for months thereafter until maturity. The loan was obtained to finance the acquisition of Shoreline Apartments. The loan matures on June 1, 2032, and is secured by Shoreline Apartments. The loan requires interest-only monthly payments through June 30, 2027, and beginning July 1, 2027, monthly payments of principal and interest are due based on a 360 month amortization period. Accordingly, the outstanding balance of the loan as of June 30, 2026 and 2025, was $17,650,000, which is disclosed as a part of mortgage notes payable, net in the consolidated balance sheets.

First & Main Mortgage Notes Payable

The Company assumed a $12,000,000 loan agreement with Exchange Bank at the acquisition of First & Main, carrying a fixed annual interest rate of 3.75%. The loan is secured by the First & Main Office Building and requires monthly principal and interest payments based on a 25-year amortization schedule. The loan had an initial maturity date of February 1, 2026; however, the lender extended the payoff deadline through April 6, 2026 to allow additional time for the refinancing to close.

On April 6, 2026, the Company entered into a loan agreement with Meriwest Credit Union, in the amount of $12,240,000 at a fixed annual interest rate of 6.25%. The loan was obtained to refinance the prior loan with Exchange Bank. The new loan matures on April 1, 2031, and is secured by First & Main Office Building. The loan requires monthly payments of principal and interest of $75,340 over a period of 59 months, with the initial payment due on May 1, 2026. The final payment amounting to $11,429,491 will be due upon maturity. The loan is guaranteed by the Parent Company and the Operating Partnership.

The outstanding balances of the loan as of June 30, 2026 and 2025, were $12,206,569 and $10,626,226, respectively, which are disclosed as part of mortgage notes payable, net in the consolidated balance sheets.

First & Main Other Note Payables:

Junior Debt

As of the acquisition date, First & Main had $1,000,000 in interest-only junior promissory notes outstanding, which the Company assumed. The notes were issued in 2018 and 2019 with an original maturity date of December 31, 2023, and includedno prepayment penalty for early retirement. Of the total promissory notes, notes with a total principal balance of $350,000 and $100,000 were paid off as of December 31, 2023 and April 8, 2026, respectively. The maturity dates of the remaining promissory notes were extended to: December 31, 2026, for notes with a principal balance of $100,000, and December 31, 2028, for the remaining notes with a total principal balance of $450,000. Interest on the notes is payable on the first day of each month at 7% per annum. The promissory notes are disclosed as part of notes payable, net in the consolidated balance sheets.

In March 2024, the partnership obtained an additional loan with the principal amount of $200,000 in an interest-only junior promissory note. The note was issued on March 8, 2024 with a maturity date of March 31, 2025. Interest on the note is payable on the first day of each month at 8.50% per annum. The $200,000 note was repaid in full as of March 31, 2025.

Small Business Administration (“SBA”) Loan

As of the acquisition date, First & Main had an outstanding $151,000 loan from the SBA under the Economic Injury Disaster Loan program, which the Company assumed. The loan will be paid back over 30 years at an annual interest rate of 3.75% starting on December 20, 2022. Monthly payments will be $731. The outstanding balances of the loan as of June 30, 2026 and 2025 were $152,720 and $150,000, respectively, which are disclosed as part of notes payable, net in the consolidated balance sheets.

Solar System Loan (First & Main)

As of the acquisition date, First & Main had an outstanding $220,000 loan from The Wiseman Family Trust, which the Company assumed. The loan was used to finance the installation of a solar power system at the First & Main Office Building. The loan will be paid back over a period of 10 years at an annual interest rate of 5%. Monthly payments of principal and interest will be $1,486. The $220,000 loan was repaid in full as of June 30, 2026. The outstanding balance of the loan as of June 30, 2025 was $143,384, which is disclosed as a part of notes payable, net in the consolidated balance sheets.

1300 Main Mortgage Notes Payable

On November 4, 2024, 1300 Main entered into a loan agreement with Valley Strong Credit Union, in the amount of $8,000,000 at a fixed annual interest rate of 6.85%. The loan was obtained to refinance the prior loan from Suncrest Bank, which was originally obtained by 1300 Main under its previous ownership. The new loan matures on November 15, 2029, and is secured by a real property and the assignment of all its rental revenue. The loan requires monthly payments of principal and interest of $52,534 through maturity. The remaining unpaid principal balance is due at maturity. The note is guaranteed by the Parent Company. The outstanding balances of the loan as of June 30, 2026 and 2025 were $7,877,439 and $7,972,744, respectively, which are disclosed as part of mortgage notes payable, net in the consolidated balance sheets.

The following table provides the projected principal payments on the loan for the next four years:

1300 Main Other Notes Payable:

As of the acquisition date, 1300 Main had an outstanding $150,000 loan from the SBA under the Economic Injury Disaster Loan program, which the Company assumed. The loan will be paid back over 30 years at an annual interest rate of 3.75% starting on July 11, 2023. Monthly payments will be $731. The outstanding balances of the loan as of June 30, 2026 and 2025 were $154,043 and $157,191, respectively, which are disclosed as part of notes payable, net in the consolidated balance sheets.

Woodland Corporate Center Two Mortgage Notes Payable

As of the acquisition date, Woodland Corporate Center Two had a loan agreement with Western Alliance Bank, in the amount of $7,500,000 at a fixed annual interest rate of 4.15%, which the Company assumed. The loan matured on October 7, 2024 and was secured by Woodland Corporate Center. The loan was guaranteed by Wiseman, but Wiseman was subsequently indemnified by the Operating Partnership on July 1, 2022.

On October 4, 2024, Woodland Corporate Center Two entered into a loan agreement with Summit Bank, in the amount of $6,000,000 at a fixed annual interest rate of 6.50%. The loan was obtained to refinance the prior loan from Western Alliance Bank which matured on October 7, 2024. The loan matures on October 5, 2027, and is secured by the real property and the assignment of all its rental revenue. The loan requires monthly payments of principal and interest of $40,873 through October 5, 2027. The remaining unpaid principal balance is due at maturity. The loan is guaranteed by the Parent Company (and Wiseman is no longer a guarantor). The outstanding balances of the loan as of June 30, 2026 and 2025 were $5,830,275 and $5,932,794, respectively, which are disclosed as part of mortgage notes payable, net in the consolidated balance sheets.

In October 2025, we listed the underlying property for sale as discussed in Note 5.

Main Street West Mortgage Notes Payable

On June 6, 2025, the Company refinanced its mortgage on the Main Street West Office Building with EverTrust Bank. The loan is secured by the Main Street West Office Building and has a principal amount of $9,500,000. It bears interest at the Wall Street Journal Prime Rate, currently 6.75% per annum, with a floor of 6.50%. Monthly payments of principal and interest are required based on a 300‑month amortization schedule, with the remaining unpaid principal balance due at maturity. The loan matures on May 30, 2028 and is guaranteed by the Parent Company.

The Company also formed a wholly owned subsidiary, Innovate Napa, to enter into a master lease covering approximately 36.2% (13,806 square feet) of the rentable square feet of the Main Street West Office Building. Innovate Napa does not occupy the space; rather, the arrangement was established in connection with the refinancing of the Main Street West loan to satisfy the lender’s occupancy requirements. Lease payments from Innovate Napa to Main Street West are intercompany in nature and eliminated in consolidation. This related-party arrangement is temporary and is expected to remain in place until the space is leased to third-party tenants. In October 2025, the Company executed leases with third-party tenants for this space, and the leases commenced in December 2025 and January 2026. For the year ended June 30, 2026, rental revenue of $310,635 from Innovate Napa was eliminated in consolidation.

The outstanding balances of the loan as of June 30, 2026 and 2025 were $9,349,746 and $9,500,000, respectively, which are disclosed as part of mortgage notes payable, net in the consolidated balance sheets. Total accrued interest on the loan as of June 30, 2026 and 2025, was $52,592 and $51,239, respectively.

Main Street West Other Notes Payable:

As of the acquisition date, Main Street West had an outstanding $150,000 loan from the SBA under the Economic Injury Disaster Loan program, which the Company assumed. The loan will be paid back over 30 years at an annual interest rate of 3.75% starting on September 4, 2023. Monthly payments will be $731. The outstanding balances of the loan as of June 30, 2026 and 2025 were $154,853 and $161,300, respectively, which are disclosed as a part of notes payable, net in the consolidated balance sheets.

220 Campus Lane Mortgage Notes Payable

On September 8, 2023, 220 Campus Lane borrowed $2,145,000 from Northern California Laborers Pension Fund at a fixed annual interest rate of 5%. The loan was obtained to finance the acquisition of 220 Campus Lane Office Building and the underlying parcel of land. The loan matures on September 30, 2028, and is secured by the vacant office building and the underlying parcel of land. The loan requires interest-only monthly payments of $8,938 through September 30, 2028. The remaining unpaid principal balance is due at maturity date. Accordingly, the outstanding balance of the loan as of June 30, 2026 and 2025 was $2,145,000, which is disclosed as a part of mortgage notes payable, net in the consolidated balance sheets.

Consistent with asset acquisition accounting, this debt was measured at fair value. The interest rate on the debt was below the current market rates, as a result, $223,000 of the acquisition cost was allocated to debt mark-to-market. The debt mark-to-market value is amortized over the remaining loan term. The debt mark-to-market value, net of accumulated amortization as of June 30, 2026 and 2025 amounted to $97,996 and $142,596, respectively, and was netted against the total debt balance in the consolidated balance sheets.

Campus Lane Residential Mortgage Notes Payable

On September 8, 2023, Campus Lane Residential borrowed $1,155,000 from Northern California Laborers Pension Fund at a fixed annual interest rate of 5%. The loan was obtained to finance the acquisition of a vacant parcel of land. The loan matures on September 30, 2028, and is secured by the vacant parcel of land. The loan requires interest-only monthly payments of $4,813 through September 30, 2028. The remaining unpaid principal balance is due at maturity date. The outstanding balance of the loan as of June 30, 2026 and 2025 was $1,155,000, which is disclosed as a part of mortgage notes payable, net in the consolidated balance sheets.

Consistent with asset acquisition accounting, the debt acquired from the acquisition of the Campus Lane Land was measured at fair value. The interest rate on the debt was below the current market rates, as a result, $120,000 of the acquisition cost was allocated to debt mark-to-market. The debt mark-to-market value is amortized over the remaining loan term. The debt mark-to-market value, net of accumulated amortization as of June 30, 2026 and 2025, amounted to $52,733 and $76,733, respectively, and was netted against the total debt balance in the consolidated balance sheets.

GVEC Mortgage Notes Payable

As of the acquisition date, GVEC had a $14,000,000 fixed-rate loan agreement with Columbia State Bank, which the Company assumed on January 1, 2024 from the predecessor owner. The initial interest rate is 4.25% until October 1, 2027, increasing to 5.46% thereafter. The loan matures on September 1, 2032 and is secured by the Green Valley Executive Center. The loan requires monthly payments of principal and interest based on a 30-year amortization period with the remaining principal balance due at maturity. The outstanding balances of the loan as of June 30, 2026 and 2025 were $13,082,191 and $13,346,323, respectively, which are disclosed as part of mortgage notes payable, net in the consolidated balance sheets.

Consistent with asset acquisition accounting, the debt assumed from the acquisition of Green Valley Executive Center was measured at fair value. The interest rate on the debt was below the current market rates, as a result, $993,000 of the acquisition cost was allocated to debt mark-to-market. The debt mark-to-market value is amortized over the remaining loan term. The debt mark-to-market value, net of accumulated amortization as of June 30, 2026 and 2025, amounted to $744,750 and $844,050, respectively, and was netted against the total debt balance in the consolidated balance sheets.

One Harbor Center, LP Mortgage Notes Payable

As of the acquisition date, One Harbor Center, LP had an $8,378,825 loan from Travis Credit Union, which the Company assumed. The loan bears interest at a fixed rate of 4.96% per annum, matures on June 1, 2028, and is secured by the property and the assignment of all rental revenue. Monthly principal and interest payments of $46,092 are required through maturity, with the remaining unpaid principal balance due at the maturity date. The outstanding balances of the loan as of June 30, 2026 and 2025 were $7,549,007 and $7,704,950, respectively, which are disclosed as part of mortgage notes payable, net in the consolidated balance sheets.

Consistent with asset acquisition accounting, the debt assumed from the acquisition of One Harbor Center was measured at fair value. The interest rate on the debt was below the current market rates, as a result, $334,000 of the acquisition cost was allocated to debt mark-to-market. The debt mark-to-market value is amortized over the remaining loan term. The debt mark-to-market value, net of accumulated amortization as of June 30, 2026 and 2025 amounted to $161,698 and $241,222, respectively, and was netted against the total debt balance in the consolidated balance sheets.

One Harbor Center, LP Other Notes Payable:

As of the acquisition date, One Harbor Center, LP had a $150,000 loan from the SBA under the Economic Injury Disaster Loan program, which the Company assumed. The loan will be paid back over 30 years at an annual interest rate of 3.75% starting on February 10, 2023. The outstanding balances of the loan as of June 30, 2026 and 2025 were $152,844 and $150,000, respectively, which are disclosed as a part of notes payable, net in the consolidated balance sheets.

MRC Aurora Construction Loan

On February 21, 2024, the Company closed on a $17.15 million construction loan with Valley Strong Credit Union, headquartered in Bakersfield, California, to fund the development of Aurora at Green Valley. The loan bears interest at a variable rate equal to the Prime Rate plus 0.25% and had an initial maturity date of March 1, 2026. The Company has the option to extend the construction loan for an additional six-month period or to convert it to a conventional permanent loan. The Company exercised its extension options, and the loan was extended first through July 31, 2026 and subsequently through January 1, 2027. The monthly accrued interest is added on the outstanding loan balance. The outstanding balances of the loan as of June 30, 2026 and 2025, were $17,143,241 and $6,597,850, respectively, which are disclosed as part of mortgage notes payable, net in the consolidated balance sheets.

MacKenzie Satellite Mortgage Notes Payable

On August 21, 2024, MacKenzie Satellite entered into a loan agreement with Summit Bank, now known as Summit Financial, in the amount of $6,000,000 at a fixed annual interest rate of 6.50%. The loan matures on August 21, 2027, and is secured by MacKenzie Satellite’s real property and the assignment of all its rental revenue. The Parent Company has guaranteed the loan. The loan requires monthly payments of principal and interest of $40,867 through August 21, 2027. The remaining unpaid principal balance is due at maturity date. The outstanding balances of the loan as of June 30, 2026 and 2025 were $5,805,598 and $5,909,606, respectively, which are disclosed as part of mortgage notes payable, net in the consolidated balance sheets.

As of June 30, 2026, the Company was not in compliance with the required debt service coverage ratio under the loan agreement. If the lender elects to exercise its remedies as a result of the covenant violation, the Company intends to use amounts available under its revolving line of credit with Patterson Real Estate Services LP, which was increased from $10,000,000 to $18,000,000 on September 28, 2026, as discussed in Note 19, Subsequent Events, to repay the outstanding balance of the loan, if necessary.

As a result of the covenant violation, the remaining unpaid principal balance of the loan is presented as due within the fiscal year ending June 30, 2027 in the following table of projected principal payments, rather than within the fiscal year ending June 30, 2028.

Green Valley Medical Center, LP Mortgage Notes Payable

On July 15, 2024, Green Valley Medical Center, LP entered into a loan agreement with Valley Strong Credit Union, in the amount of $7,800,000 at a fixed annual interest rate of 7.12%. The loan matures on August 1, 2029, and is secured by the real property and the assignment of all its rental revenue. The Parent Company provided a guaranty of the note. The loan requires monthly payments of principal and interest of $52,628 through July 1, 2029. The remaining unpaid principal balance is due at maturity date. The outstanding balances of the loan as of June 30, 2026 and 2025 were $7,660,973 and $7,747,998, respectively, which are disclosed as part of mortgage notes payable, net in the consolidated balance sheets.

The following table provides the projected principal payments on the loan for the next four years:

Green Valley Medical Center, LP Other Notes Payable:

As of the acquisition date, Green Valley Medical Center, LP had a $150,000 loan from the SBA under the Economic Injury Disaster Loan program, which the Company assumed. The loan bears interest at 3.75% per annum and is repayable over a 30-year term. While the Company has been making interest payments, the Federal Government has not yet commenced amortization of the principal. The outstanding balances of the loan as of June 30, 2026 and 2025 were $153,521 and $150,000, respectively, which are disclosed as a part of notes payable, net in the consolidated balance sheets.

Line of Credit Agreement

On January 22, 2025, we entered into a revolving line of credit agreement with Patterson Real Estate Services LP (“PRES”), an affiliate of the Adviser, of up to $10,000,000. Interest accrueson any unpaid principal balance on the note at a fixed annual interest rate of 10%. In addition, an origination fee of 2%ischarged on each advance and the sumis added to the principal balance. The original maturity date of the loan was June 1, 2026. The loan requires monthly interest payments beginning on March 1, 2025, with the remaining principal balance due at maturity. The outstanding balances of the loan as of June 30, 2026 and 2025 were $10,000,000 and $9,588,000, respectively, which include $196,078 and $188,000 of loan origination fees, respectively, and are disclosed as part of line of credit, net in the consolidated balance sheets. The loan origination fee is capitalized and amortized over the life of the loan. As of June 30, 2026, the loan origination fee is fully amortized. As of June 30, 2025, the unamortized balance amounted to $138,611, which is netted against the total debt balance in the consolidated balance sheets.

On September 24, 2025, the line of credit agreement with PRES was amended to extend the maturity date to December 31, 2027.

For theyears ended June 30, 2026 and 2025, we incurred interest expense of $1,013,088 and $324,643, respectively, on the line of credit. Interest payable of $1,297,781 and $284,693 remained outstanding as of June 30, 2026 and 2025, respectively, andis disclosed as part of accounts payable and accrued liabilities in the consolidated balance sheets.

Secured Promissory Note Agreement

On June 11, 2025, the Company entered into a note purchase agreement with Streeterville Capital, LLC (the “Investor”) providing for the issuance of up to $3,270,000 in secured promissory notes to fund the REIT share purchases in MRC QRS. The secured promissory notes issued under the note purchase agreements bear interest at a fixed rate of 9% per annum. On that date, the Investor funded $1,000,000 in cash, and the Company issued the first secured promissory note in the principal amount of $1,115,000 (“Note #1”), which included an original issue discount of $90,000 and transaction expenses of $25,000. The note matures 18 months after the funding date, or on December 11, 2026. On August 1, 2025, the Investor funded $500,000 (“Note #2”) in cash, and the Company issued the second secured promissory note in the principal amount of $545,000, which included an original issue discount of $45,000. The note matures 18 months after the funding date, or on February 28, 2027.

On January 15, 2026, the Company issued the third secured promissory note (“Note #3”) to the Investor under the note purchase agreement in the aggregate principal amount of $1,635,000, which included an original issue discount of $135,000. Note #3 matures on July 15, 2027.

On March 6, 2026, the Company entered into another note purchase agreement with the Investor providing for the issuance of up to $1,095,000 in secured promissory notes to fund the REIT share purchases in MRC QRS. On that date, the Investor funded $1,000,000 in cash, and the Company issued the fourth secured promissory note in the principal amount of $1,095,000 (“Note #4”), which included an original issue discount of $90,000 and transaction expenses of $5,000. The note matures 18 months after the funding date, or on September 6, 2027.

For the first five months following issuance of each secured promissory note, the Company is required to make monthly payments equal to the accrued interest. Beginning in the sixth month and continuing until maturity, the Company must make monthly payments of $93,000, $45,500, $136,250 and $91,250 on Note #1, Note #2, Note #3 and Note #4, respectively, plus accrued interest.

In the event the notes above are outstanding on the 90-day anniversary of the purchase price date, the Company will be charged a one-time fee to cover the Investor’s accounting, legal and other costs incurred in monitoring the notes equal to the outstanding balance divided by 0.93 less the outstanding balance. The monitoring fee will be automatically added to the outstanding balance on that date. During the year ended June 30, 2026, the Company incurred $84,514, $41,310, $123,991 and $82,998 in monitoring fees related to Note #1, Note #2, Note #3 and Note #4, respectively.

The notes are guaranteed by MRC QRS through a security agreement entered into by MRC QRS in favor of the Investor. MRC QRS granted the Investor a first-position security interest in the assets of MRC QRS.

The Company also entered into a stock pledge agreement with the Investor, where the Company pledged to the Investor as collateral and security for the secured obligations, and granted the Investor a first-position security interest in the common stock of MRC QRS. The Investor shall have the right to exercise the rights and remedies set forth in the stock pledge agreement and in the transaction documents if an event of default has occurred.

As of June 30, 2026, the pledged assets had an aggregate carrying amount of $2,760,318 and consisted principally of cash and cash equivalents, investments at fair value, investments income, rents and other receivables and prepaid expenses and other assets. The pledged assets are included within their respective line items in the consolidated balance sheet.

The secured note is subject to certain trigger events, which provide the Investor with the option to increase the outstanding balance by 5% to 15% depending on the severity of the trigger event. Failure of the Company to cure the trigger event may result in an event of default, which would cause the outstanding balance to become immediately due and demandable.

Note #1 and Note #2 were repaid in full as of March 31, 2026.

The outstanding balances of the loan as of June 30, 2026 and 2025 were $2,936,989 and $1,115,000, respectively, which are disclosed as part of notes payable, net in the consolidated balance sheets.

The table below presents the total loans outstanding at the underlying companies as of June 30, 2026, and the fiscal years those loans mature. Amounts presented in the fiscal year ending June 30, 2027 include the remaining unpaid principal balance of the MacKenzie Satellite Mortgage Notes Payable as a result of the covenant violation described above.

Financial Covenants

Certain of our property-level mortgage loans contain customary financial and other covenants, including minimum debt service coverage ratio requirements. As of June 30, 2026, we were in compliance with all material covenants under our outstanding debt agreements, except for the MacKenzie Satellite Mortgage Notes Payable, for which the Company was not in compliance with the required debt service coverage ratio as discussed under MacKenzie Satellite Mortgage Notes Payable.

Debt Guaranty

The Wiseman Partnerships had mortgage loans and solar leases with various banks, all of which were guaranteed by The Wiseman Company, LLC (“Wiseman”) and its owner, Doyle Wiseman and his trust, as of May 6, 2022, the date the Operating Partnership acquired the management companies. The mortgage loans of 1300 Main, One Harbor Center, LP, Martin Plaza Associates, LP, and Main Street West are also guaranteed by the Wiseman Partnerships’ general partner as the co-guarantor.

On July 1, 2022, the Operating Partnership agreed to indemnify Doyle Wiseman for any losses he may suffer from a Wiseman Partnership default on its mortgage or solar lease obligations. Each of the Wiseman Partnerships remains adequately capitalized and has sufficient cash flow to service its mortgage notes; accordingly, no liability has been recorded under these guaranties as of June 30, 2026.

The First & Main mortgage was refinanced on April 6, 2026, with Meriwest Credit Union. The loan is secured by the First & Main Office Building and is guaranteed by the Parent Company and the Operating Partnership.

The Main Street West mortgage was refinanced on June 6, 2025, with EverTrust Bank. The loan is secured by the Main Street West Office Building and is guaranteed by the Parent Company.

As of June 30, 2026, refinancings have resulted in removal of Wiseman as guarantor at Westside Professional Center, Green Valley Medical Center, Woodland Corporate Center Two, 1300 Main, Main Street West and First & Main. The Parent Company now guarantees the mortgage note at each of these properties, with the exception of Westside Professional Center which is guaranteed by its sole limited partner.

The mortgage loan of GVEC is guaranteed by PRES (an affiliate of the Adviser) and by its owner, Berniece A. Patterson, and her trust. As part of the GVEC contribution agreement, the Operating Partnership indemnified Berniece Patterson and her trust for any losses suffered by her through the default by GVEC on the mortgage loan. The mortgage loans for MacKenzie Satellite, obtained in August 2024, and the construction loan for MRC Aurora are also guaranteed by the Parent Company. The note purchase agreement and secured note entered into in June 2025 are guaranteed by MRC QRS.

Management has evaluated all such guaranties and indemnities and determined that no liability is required to be recorded as of

June 30, 2026.

NOTE 11 – EARNINGS PER SHARE

Basic earnings per share is computed using the weighted average number of shares outstanding. Diluted earnings per share is computed using the weighted average number of shares outstanding adjusted for the incremental shares attributed to potentially dilutive securities. The following table sets forth the computation of basic and diluted earnings per share forthe years ended June 30, 2026 and 2025:

The Company incurred a net loss for the year ended June 30, 2026. As a result, the dilutive securities, the common stock series A and B warrants, were considered anti-dilutive and excluded from the calculation of diluted net loss per share. As of June 30, 2026,423,945 shares underlying these instruments were excluded.

In accordance with ASC Topic 260, Earnings Per Share, shares issuable for little to no consideration should be included in the number of outstanding shares used for basic earnings per share. The FASB proposed that warrants or options exercisable for little to no cost be included in the denominator of basic earnings per share (and therefore diluted earnings per share) once there were no further vesting conditions or contingencies associated with them. As of June 30, 2026, there wereno outstanding pre-funded warrants. As of June 30, 2025, the Company included 129,226.50 pre-funded warrants in the denominator of basic earnings per share.

NOTE 12 – SHARE OFFERINGS AND FEES

In June 2026, we issued 48,352 shares of common stock to the Series A preferred stock holders of the Operating Partnership who exercised their option to convert their Series A preferred stock to our common stock at $2.44 per share.

During the year ended June 30, 2026, we issued 665,111 and 36,969 shares of common stock to the Series A and Series B preferred stock holders, respectively, who exercised their option to convert their shares of Series A and Series B preferred stock to shares of our common stock at prices per share ranging from $3.51 to $5.47 and $3.27 to $4.59, respectively.

During the year ended June 30, 2026, we issued 51,777.11 shares of Series A preferred stock with total gross proceeds of $1,164,985,13,440.15 shares of Series B preferred stock with total gross proceeds of $332,488, and 54,640 shares of Series C preferred stock with total gross proceeds of $1,366,000 under the Offering Circular; and we incurred syndication costs of $761,706 in relation to common and preferred stock offerings. During the year ended June 30, 2026, we issued 8,329.62 shares of Series A preferred stock with total gross proceeds of $187,418 under the preferred stock DRIP,1,142.15 shares of Series B preferred stock with total gross proceeds of $25,697 under the preferred stock DRIP, and 67.09 shares of Series C preferred stock with total gross proceeds of $1,508 under the preferred stock DRIP.

During the year ended June 30, 2026,92,836.06 shares of Series A preferred stock with an aggregate stated value of $2,301,515 were converted into 665,111 shares of our common stock. Additionally,6,067.10 shares of Series B preferred stock with an aggregate stated value of $151,462, together with $8,804 of accrued liquidation preference representing 9% non-cash dividends, were converted into 36,969 shares of our common stock.

During the year ended June 30, 2025, no shares of common stock were issued under the common stock DRIP. Additionally, in March 2025, we issued 32.18 shares of common stock at $102.50 per share to the Class A unit holders of the Operating Partnership who exercised their option to convert their Class A units to our common share, and 15,668.10 shares of common stock to the Series A preferred stockholders who exercised their option to convert their shares of Series A preferred stock to shares of our common stock at prices per share ranging from $11.50 to $40.20.

During the year ended June 30, 2025, we issued 9,044 shares of Series A preferred stock with total gross proceeds of $226,100 and 65,903.16 shares of Series B preferred stock with total gross proceeds of $1,647,579 under the Offering Circular; and we incurred syndication costs of $1,301,283 in relation to common and preferred stock offerings. During the year ended June 30, 2025, we issued 8,567.49 shares of Series A preferred stock with total gross proceeds of $192,770 under the preferred stock DRIP and 644.60 shares of Series B preferred stock with total gross proceeds of $14,503 under the preferred stock DRIP.

During the year ended June 30, 2025,12,805.38 shares of Series A preferred stock with an aggregate stated value of $318,161 were converted into 15,668.10 shares of our common stock.

NOTE 13 – SHARE REPURCHASE PLAN

On March 4, 2024, the Board of Directors suspended the common stock share repurchase program and common stock DRIP in connection with its pursuit of the listing of its common stock on a securities exchange. When our common stock became eligible for trading on OTC Markets in April 2024, the share repurchase program automatically terminated, and the Board of Directors will decide whether, and when, to reinstate the common stock DRIP.

During the year ended June 30, 2026, we repurchased 92,836.06 shares of our Series A preferred stock, and 6,067.10 shares of our Series B preferred stock, at an aggregate cost of $2,452,977, under our previously-disclosed preferred stock share repurchase program as noted in the table below. These repurchases were settled through issuance of shares of the Company’s common stock.

We didnot repurchase any shares of our common stock and Series C preferred stock during the year ended June 30, 2026.

During the year ended June 30, 2025, we repurchased shares of our common stock through our Share Repurchase Program and through third-party auctions as noted in the table below:

*Fees paid for redemption lockup agreements

NOTE 14 – STOCKHOLDER DIVIDENDS AND DRIP

The following table reflects the dividends per share that we have declared on our preferred stock during the year ended June 30, 2026:

*Of the total dividends declared for Series B during the year ended June 30, 2026, $273,582 was an increase in liquidation preference and $91,193 was the cash dividend.

During the year ended June 30, 2026, we didnot issue any common shares under our common stock DRIP since the plan was suspended in March 2024. During the year ended June 30, 2026, $187,418 of Series A preferred dividends, $25,697 of Series B preferred dividends and $1,508 of Series C preferred dividends were reinvested under the preferred stock DRIP.

On May 19, 2025, following a review of the Company’s financials, the current economic climate, the potential impact of tariffs on demand for office and retail space, and the increased likelihood of a near-term recession, the Board of Directors approved the suspension of the regular quarterly dividend on the Company’s common stock effective immediately. This decision was made to preserve liquidity, enable the Company to make further investments in its own properties and developments where prudent, and to provide financial flexibility as to near-term commitments; the suspension will remain in effect until further notice. The Board of Directors will continue to evaluate the dividend policy quarterly based on the Company’s financial performance, liquidity needs, and market conditions.

On May 12, 2026, we declared the Series A preferred stock quarterly dividend of $0.375 per share payable at the rate of $0.125 per month for holders of record as of July 31, 2026, August 31, 2026, and September 30, 2026. This Series A preferred stock dividend will be paid in October 2026.

On May 12, 2026, we declared the Series B preferred stock quarterly 3% dividend of $0.1875 per share payable at the rate of $0.0625 per month for holders of record as of July 31, 2026, August 31, 2026, and September 30, 2026. This Series B preferred stock dividend will be paid in October 2026. In addition, the Series B preferred stock will accrue dividends at the rate of 9% per annum on the stated value as an increase in liquidation preference.

On May 12, 2026, we declared the Series C preferred stock quarterly dividend of $0.5625 per share payable at the rate of $0.1875 per month for holders of record as of July 31, 2026, August 31, 2026, and September 30, 2026. This Series C preferred stock dividend will be paid in October 2026.

The following table reflects the distributions declared by the Operating Partnership for the preferred unit holders during the year ended June 30, 2026:

*Of the total distributions declared for Series B during theyear ended June 30, 2026, $97,227 was an increase in liquidation preference and $32,412 was the cash dividend.

During the year ended June 30, 2026, the Operating Partnership paid Series A preferred distributions of $1,597,886, of which $112,134 have been reinvested under the preferred stock DRIP. During the year ended June 30, 2026, the Operating Partnership paid Series B preferred distributions of $129,639, none of which was reinvested.

The following table reflects the dividends per share that we have declared on our common stock and preferred stock during the year ended June 30, 2025:

*Of the total dividends declared for Series B during the year ended June 30, 2025, $204,889 was an increase in liquidation preference and $68,292 was the cash dividend.

During the year ended June 30, 2025, we didnot issue any common shares under our common stock DRIP since the plan was suspended in March 2024. During the year ended June 30, 2025, $192,770 of Series A preferred dividends and $14,503 of Series B preferred dividends were reinvested under the preferred stock DRIP.

The above dividends declared were recorded as dividends payable in the consolidated balance sheets as of June 30, 2025, and were subsequently paid in July 2025.

The following table reflects the distributions declared by the Operating Partnership for the Class A and Preferred unit holders during the year ended June 30, 2025:

*Of the total distributions declared for Series B during theyear ended June 30, 2025, $97,229 was an increase in liquidation preference and $32,410 was the cash dividend.

During the year ended June 30, 2025, the Operating Partnership paid Class A preferred distributions of $28,738, none of which was reinvested. During the year ended June 30, 2025, the Operating Partnership paid Series A preferred distributions of $1,521,500, of which $98,968 have been reinvested under the preferred stock DRIP. During the year ended June 30, 2025, the Operating Partnership paid Series B preferred distributions of $29,709, none of which was reinvested.

NOTE 15 – WARRANTS

On February 28, 2025, the Company entered into a securities purchase agreement with a single institutional investor pursuant to which the Company offered and sold 153,403.40 shares of the Company’s common stock, $0.0001 par value per share, pre-funded warrants to purchase up to 129,226.50 shares of common stock, and warrants to purchase up to an aggregate of 423,944.85 shares of common stock. The purchase price for each share and the exercise price for each common stock warrant to purchaseone share of common stock was $17.10 per share, and the purchase price for each pre-funded warrant to purchaseone share of common stock was $17.099. The common stock warrants consist of Series A common stock warrants and Series B common stock warrants. The Series A common stock warrants to purchase up to 141,314.95 shares of common stock are exercisable following the six-month anniversary of the closing date of the offering and expire 18 months from the date of issuance. The Series B common stock warrants to purchase up to 282,629.90 shares of common stock are exercisable following the six-month anniversary of the closing date of the offering and expire five years from the date of issuance.

The gross proceeds to the Company from this offering were $2.62 million from the sale of the common stock and $2.21 million from the sale of the pre-funded warrants. Because the Series A and B warrants were issued in conjunction with the sale of the common stock and the pre-funded warrants, the total gross proceeds of $4.83 million from the sale of the common stock and pre-funded warrants were proportionally allocated between the common stock, prefunded warrants, and the Series A and B warrants based on the estimated fair values of the stock and the warrants at the time of the issuance in accordance with ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity. The total fair value allocation was: $2.29 million to common stock, $1.94 million to the pre-funded warrants, $0.38 million to Series A warrants and $0.22 million to Series B warrants.

As of June 30, 2026, there were 141,314.95 and 282,629.90 in Series A common stock warrants and Series B common stock warrants, respectively, issued and outstanding. The exercise price for the Series A and B warrants is $17.10 per share. All 129,226.50 prefunded warrants were exercised at an exercise price of $0.001 per share in July and August 2025.

The Company evaluated the terms of the warrants under ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity, and determined that they qualify for equity classification. This conclusion was based on the fact that:

Accordingly, the warrants are classified as a component of stockholders’ equity, and no subsequent remeasurement is required. The proceeds from the issuance of the warrants were allocated to additional paid-in capital upon issuance.

The following table summarizes warrant activity during the year ended June 30, 2026:

All Series A and Series B common stock warrants became exercisable on September 3, 2025, and remained exercisable as of June 30, 2026.

NOTE 16 – SEGMENT REPORTING

ASC 280, Segment Reporting(“ASC 280”), establishes standards for reporting financial and descriptive information about an enterprise’s reportable segments.

We operate astwo primary operating and reportable segments: (i) commercial and (ii) residential. These segments include activities related to acquiring, owning, developing, and managing income-producing real estate properties. Although our properties are geographically diversified throughout the United States, we do not distinguish or group our operations on a geographical basis for purposes of allocating resources or measuring performance. Our business is managed based on thesetwo segments for internal reporting purposes. The investment committee led by the Chief Executive Officer serves as the CODM and evaluates performance and makes resource allocation decisions on this basis. The CODM evaluates operating performance primarily based on the Company’s net income (loss). Effective January 1, 2026, the CODM began separately evaluating the performance of the Company’s commercial real estate portfolio and residential real estate portfolio following the January 2026 portfolio reorganization and the formation of MAC. As a result, the Company changed its segment reporting structure and now presentstwo reportable segments: (i) commercial and (ii) residential. Prior period financial information has been recast to reflect this change in segment reporting. Expenses that are significant are the same as those presented in our consolidated statements of operations. Additionally, the CODM reviews the asset information and capital expenditures on a consolidated basis that are the same as shown on the accompanying consolidated balance sheets and statements of cash flows.

Our customers in the United States accounted for 100% of our revenues and we do not have any property or equipment outside of the United States.

We also have a real estate-related debt and equity securities investment portfolio; however, this portfolio does not constitute a reportable segment under ASC 280.

Segment net loss includes the direct costs of the reportable segment. Certain costs, including asset management fees to related party, administrative cost reimbursements to related party, directors’ fees, and transfer agent cost reimbursements to related party, and various other general corporate costs that are not specifically allocable to the segments, are included in the corporate/other columns below.

The Company’s segments derive revenue primarily from rental and other property income. The following financial metrics are regularly reviewed by the CODM:

*Consists of corporate overhead expenses that are not directly attributable to our commercial and residential segments.

The CODM does not review disaggregated expense information beyond the categories listed above.

Entity-wide disclosures:

Commercial:

Year ended June 30, 2026:

Year ended June 30, 2025:

Residential:

Year ended June 30, 2026:

Year ended June 30, 2025:

Our segment assets primarily consist of real estate assets, cash and cash equivalents, restricted cash, investments income, rents and other receivables and prepaid expenses and other assets. The following table sets forth our segment assets as of June 30, 2026 and 2025:

Our segment liabilities primarily consist of mortgage notes payable, net, deferred rent and other liabilities, accounts payable and accrued liabilities and due to related entities. The following table sets forth our segment liabilities as of June 30, 2026 and 2025:

NOTE 17 – COMMITMENTS

We commenced the Aurora at Green Valley construction in September 2024. MRC Aurora entered into several contracts with third parties for the construction of the project. These contracts represented MRC Aurora’s commitment to incur future expenditures for the development of the project. The project was completed in phases, with construction fully completed in September 2025. Therefore, as of June 30, 2026, MRC Aurora hadno outstanding commitments with third parties. As of June 30, 2025, the total commitments amounted to $5.91 million.

NOTE 18 – FORMATION OF MAC AND SUMMARIZED FINANCIAL INFORMATION

As discussed in Note 1, on January 1, 2026, the Company contributed all of its multi-family residential properties (Commodore, The Park View, Hollywood and Shoreline Apartments and Aurora at Green Valley) and the Blue Ridge development project to a newly formed entity, MAC, in exchange for 1,906,580 shares of MAC (on a 1:1 basis with the Parent Company’s outstanding shares). MAC is focused on developing and owning multi-family properties on the West Coast. The Parent Company is the sole shareholder of MAC as of June 30, 2026.

In connection with the formation of MAC, MAC OP was established as the operating partnership through which substantially all of MAC’s business is conducted. The contributed properties and development project are held by MAC OP, which directly or indirectly owns and operates a portfolio offive residential properties andone development project. MAC owns all the limited partnership units except for 1 owned by the Operating Partnership and is the sole general partner of MAC OP.

The following summarized financial information presents the combined financial position and results of operations of MAC and its subsidiaries (collectively, the “MAC Group”), including MAC OP and its consolidated real estate entities.

Basis of Presentation

The summarized financial information has been derived from the Company’s consolidated financial statements and reflects the financial position and results of operations of the MAC Group. Intercompany transactions within the MAC Group have been eliminated; however, transactions between the MAC Group and the Company have not been eliminated. This information is not intended to present the MAC Group as if it were a standalone independent entity.

Condensed Balance Sheet — MAC Group

Condensed Statement of Operations — MAC Group

NOTE 19 – SUBSEQUENT EVENTS

The Company has evaluated events and transactions occurring after June 30, 2026, through the date these consolidated financial statements were issued for potential recognition or disclosure in the consolidated financial statements and identified the following material subsequent events.

Additional Streeterville Secured Promissory Notes

In addition to the promissory notes discussed in Note 10, on August 13, 2026, the Company issued the fifth secured promissory note (“Note #5”) to the Investor under the note purchase agreement in the aggregate principal amount of $547,500 which included an original issue discount of $45,000 and transaction expenses of $2,500. Note #5 matures on February 13, 2028. Proceeds from Note #5 were used to begin the purchase of approximately 130,000 shares of National Healthcare Properties, Inc. (“NHP”) for $7.27 per share of common stock in a tender offer, which stock automatically converts to Class A common stock on October 19, 2026, which has closed on the New York Stock Exchange in the range of $14.65 and $17.08 since June 30, 2026.

Also on August 13, 2026, the Company issued a promissory note (“Collateral Note”) in the principal amount of $1,370,000, which included an original issue discount of $68,500 and transaction expenses of $1,500. The Collateral Note matures on October 30, 2026. The proceeds of the Collateral Note were used to provide collateral to support the short sale of 80,000 shares of NHP at an average price of $16.35 per share, which short position the Company intends to close by delivery of shares on or about October 19, 2026.

On August 26, 2026, the Company issued the sixth secured promissory note (“Note #6”) to the Investor under the note purchase agreement in the aggregate principal amount of $547,500 which included an original issue discount of $45,000 and transaction expenses of $2,500. Note #6 matures on February 26, 2028. The proceeds of Note #6 were used to purchase the remaining shares described above regarding Note #5.

For the first five months following issuance of each secured promissory note, the Company is required to make monthly payments equal to the accrued interest. Beginning in the sixth month and continuing until maturity, the Company must make monthly payments of $45,625 and $45,625 on Note #5 and Note #6, respectively, plus accrued interest.

Sale of Woodland Corporate Center Two

In September 2026, the Company entered into a purchase and sale agreement with a third party to sell Woodland Corporate Center Two, which was held for sale and discussed in Note 5. The sale is subject to customary closing conditions.

Line of Credit Amendment

On September 28, 2026, the Company amended its revolving line of credit agreement with PRES, discussed in Note 10, to increase the maximum amount available under the line of credit from $10,000,000 to $18,000,000. The amendment did not change the fixed annual interest rate of 10% or the maturity date of December 31, 2027.

Schedule III- Real Estate Properties and Accumulated Depreciation

June 30, 2026

(A)The initial cost to the Company represents the original purchase price of the investment property.

(B)Subsequent adjustments to basis include partial dispositions and costs capitalized subsequent to acquisitions.

A summary of activity for real estate and accumulated depreciation for the years ended June 30, 2026 and 2025: