Chicago Atlantic Real Estate Finance, Inc.

Previous wording

changes in financial and economic conditions, including inflation and tariffs, which may have an adverse impact on our portfolio companies and commercial real estate in general;

Current wording

changes in financial and economic conditions, including inflation, tariffs and the current government shutdown, which may have an adverse impact on our portfolio companies and commercial real estate in general;

Previous wording

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

Current wording

Our loans are secured by real estate and, in addition, when lending to owner-operators in the cannabis industry, other collateral, such as equipment, receivables, licenses or other assets of the borrowers to the extent permitted by applicable laws and regulations. In addition, we seek to impose strict loan covenants and seek personal or corporate guarantees for additional protection. As of September 30, 2025 and December 31, 2024, 34.8% and 50.0%, respectively, of the principal of loans held in our portfolio are backed by personal or corporate guarantees. We aim to maintain a portfolio diversified across jurisdictions and across verticals, including cultivators, processors, dispensaries, as well as ancillary businesses. In addition, we may invest in borrowers that have equity securities that are publicly traded on the Canadian Stock Exchange (“CSE”) in Canada and/or over-the-counter in the United States.

Previous wording

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

Current wording

We generate revenue primarily in the form of interest income on loans. As of September 30, 2025 and December 31, 2024, approximately 63.3% and 62.1%, respectively, of our portfolio of loans held for investment portfolio was comprised of floating rate loans, and 36.7% and 37.9% of our total portfolio was comprised of fixed rate loans, respectively. The floating rate loans described above are variable based upon the Prime Rate plus an applicable margin, and in many cases, a Prime Rate floor. We have two floating rate loan, which comprises approximately 5.1% of the aggregate portfolio outstanding principal that bears a rate based on SOFR.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

These factors could lower our net interest income or cause a net loss during periods of rising interest rates, which would harm our financial condition, cash flows and results of operations. As of September 30, 2025, 63.3% of our portfolio of loans held for investment are floating rate loans, based on total principal outstanding have interest Prime rate floors as summarized below:

Previous wording

Updates to Our Loan Portfolio during the Second Quarter of 2025

Current wording

Updates to Our Loan Portfolio during the Third Quarter of 2025

Previous wording

During the period from July 1, 2025 to August 7, 2025, the Company received principal repayments totaling $56.8 million, relating to the full repayment of Loans #3, #20, #29, #32, #33 and #39. In connection with the repayments prior to maturity, the Company recognized $1.0 million in prepayment fees.

Current wording

In July 2025, the Company received principal repayments totaling $56.8 million, relating to the full repayment of Loans #3, #20, #29, #32, #33 and #39. In connection with the repayments prior to maturity, the Company recognized $1.0 million in prepayment fees.

Previous wording

In June 2025, Loan #7 was refinanced, which extended the maturity date from June 30, 2025 to June 30, 2028. In addition, the Company made a $13 million commitment add-on.

Current wording

In July 2025, Loan #19 was amended, which extended the maturity date from December 30, 2025 to December 30, 2027. In addition, the Company made a $2.4 million commitment add-on.

Previous wording

During the period from July 1, 2025 to August 7, 2025, the Company advanced approximately $4.0 million to existing borrowers and received $0.5 million in scheduled principal repayments.

Current wording

During the period from October 1, 2025 to November 3, 2025, the Company advanced approximately $3.3 million to existing borrowers and received $0.9 million and $2.3 million in scheduled and unscheduled principal repayments.

Previous wording

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

Current wording

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

Previous wording

Interest expense increased by approximately $0.2 million, or 13%, over the comparative period. The increase was due to the interest on the Notes Payable, which were not included in the interest expense for the three months ended June 30, 2024, which contributed to approximately $1.2 million of the interest expense for the three months ended June 30, 2025. This increase was offset by 100 basis point prime rate decline and a decrease in the weighted average outstanding balance on the Revolving Loan, which was approximately $42.3 million and $78.4 million, as of June 30, 2025, and 2024, respectively.

Current wording

Interest expense decreased by approximately $0.2 million, or 13%, over the comparative period. The decrease was due to the 25 basis point prime rate decline and a decrease in the weighted average outstanding balance on the Revolving Loan, which was approximately $14.0 million and $76.4 million, as of September 30, 2025, and 2024, respectively.

Previous wording

Management and incentive fees to our Manager increased by approximately $158 thousand, or 9%, over the comparative period. The increase was primarily related to the increase in incentive fees of $159 thousand during the June 30, 2025 , as compared to June 30, 2024, primarily as a result in the increase in Core Earnings of approximately $790 thousand over the comparable trailing twelve-month period.

Current wording

Management and incentive fees to our Manager decreased by approximately $234 thousand, or 14%, over the comparative period. The decrease was primarily related to the decrease in incentive fees of $323 thousand during the three months ended September 30, 2025, as compared to the three months ended September 30, 2024, primarily as a result in the decrease in Core Earnings of approximately $838 thousand over the comparable trailing twelve-month period.

Previous wording

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

Current wording

Stock based compensation expense increased by approximately $83 thousand for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. The increase over the comparable period was driven by the incremental expense recognized on the 187,157 restricted stock awards granted to employees of our Manager on April 1, 2025, which have a vesting period of three years.

Previous wording

Provision for current expected credit losses was approximately $1.1 million in the three months ended June 30, 2025, as compared to a reversal of $275 thousand in the three months ended June 30, 2024. The CECL reserve represents approximately 107 basis points of our aggregate loans held for investment, at carrying value, of approximately $416.4 million as of June 30, 2025, compared with 133 basis points as of June 30, 2024.

Current wording

Provision for current expected credit losses increased by approximately $1.5 million over the comparative period. The provision for current expected credit losses was $0.6 million in the three months ended September 30, 2025, as compared to a reversal of $1.0 million in the three months ended September 30, 2024. The CECL Reserve represents approximately 125 basis points of our aggregate loans held for investment, at carrying value, of approximately $398.1 million as of September 30, 2025, compared with 113 basis points as of September 30, 2024.

Previous wording

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

Current wording

Interest income increased by approximately $0.2 million, during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. The increase was primarily due to an increase in the outstanding principal balance of the loan portfolio which increased to approximately $399.9 million as of September 30, 2025 from approximately $356.3 million as of September 30, 2024. The increase was offset by the decrease of weighted-average yield-to-maturity internal rate of return (“YTM IRR”) on our portfolio to 16.5% at September 30, 2025 from 18.2% at September 30, 2024, as a result of certain re-pricing amendments relating to de-risking of our portfolio and the impact of the 75 basis point prime rate decline on our floating rate portfolio.

Previous wording

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

Current wording

Interest expense decreased slightly by approximately $34 thousand, over the comparative period. The decrease attributable to the average outstanding balance on the Revolving Loan was approximately $32.5 million and $81.7 million, for the nine months ended September 30, 2025 and 2024, respectively. The decrease was offset by an increase in interest expense attributable to the Notes Payable, which contributed to approximately $3.6 million of the expense during the nine months ended September 30, 2025, which were not included in the interest expense during the nine months ended September 30, 2024.

Previous wording

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

Current wording

Management and incentive fees to our Manager was approximately $5.1 million for the nine months ended September 30, 2025, as compared to approximately $5.2 million for the nine months ended September 30, 2024, a decrease of $0.1 million. Management fees were approximately $3.5 million for the nine months ended September 30, 2025, as compared to approximately $3.2 million for the nine months ended September 30, 2024. Incentive fees were approximately $1.7 million for the nine months ended September 30, 2025, as compared to $2.0 million and for the nine months ended September 30, 2024. The decrease in incentive fees primarily as a result from the decrease in annualized Core Earnings of approximately $716 thousand over the comparable trailing twelve-month period.

Previous wording

Stock based compensation expense increased by approximately $0.2 million for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024. The increase over the comparable period is driven by the incremental expense recognized on the 187,157 restricted stock awards granted to employees of our Manager on April 1, 2025.

Current wording

Stock based compensation expense increased by approximately $0.2 million for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. The increase over the comparable period was driven by the incremental expense recognized on the 187,157 restricted stock awards granted to employees of our Manager on April 1, 2025. The increase was offset by the 181,513 shares that vested during the nine months ended September 30, 2025.

Previous wording

Our provision for current expected credit losses decreased due to both borrower specific credit factors and regular re-evaluations of overall current macroeconomic conditions affecting our borrowers and the industry.

Current wording

Our provision for current expected credit losses increased due to both borrower specific credit factors and regular re-evaluations of overall current macroeconomic conditions affecting our borrowers and the industry.

Previous wording

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

Current wording

Provision of current expected credit losses were approximately $631 thousand in the nine months ended September 30, 2025, as compared benefit of $885 thousand during the nine months ended September 30, 2024. The increase in expected credit losses was primarily driven by the increase of loans held for investment risk rated "4" for the nine months ended September 30, 2025. The current expected credit loss reserve represents approximately 125 basis points of our aggregate loan commitments held at carrying value of approximately $5.0 million as of September 30, 2025. As of September 30, 2025, the carrying value of loans held for investment risk rated "4", was approximately $40.5 million, or 10.2%, of which $23.9 million relates to loans placed on non-accrual status.

Previous wording

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

Current wording

We record a reserve liability based on the unfunded portion of loan commitments over the full contractual period over which we are exposed to credit risk through a current obligation to extend credit. Management considered the likelihood that funding will occur, and if funded, the expected credit loss on the funded portion. We continuously evaluate the credit quality of each loan by assessing the risk factors of each loan. The reserve recorded applicable to the $29.8 million of unfunded commitments as of September 30, 2025 is approximately $33 thousand.

Previous wording

As of June 30, 2025 and December 31, 2024, the Company's portfolio included loans to 29 and 30 borrowers, respectively, of which approximately $414.0 million and $402.5 million at carrying value, respectively, prior to the reserve for current expected credit losses, are classified as held for investment. The aggregate outstanding principal was approximately $416.4 million and $404.7 million as of June 30, 2025 and December 31, 2024, respectively.

Current wording

As of September 30, 2025 and December 31, 2024, the Company's portfolio included loans to 26 and 30 borrowers, respectively, of which approximately $398.1 million and $402.5 million at carrying value, respectively, prior to the reserve for current expected credit losses, are classified as held for investment. The aggregate outstanding principal was approximately $399.9 million and $404.7 million as of September 30, 2025 and December 31, 2024, respectively.

Previous wording

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

Current wording

As of September 30, 2025 and December 31, 2024, our portfolio of loans held for investment had a weighted-average YTM IRR of 16.5% and 17.2%, and was substantially secured by real estate and, with respect to certain of our loans, substantially all assets of the borrowers and certain of their subsidiaries, including equipment, receivables, and licenses. YTM IRR is calculated using various inputs, including (i) cash and PIK interest, which is capitalized and added to the outstanding principal balance of the applicable loan, (ii) original issue discount (“OID”), (iii) amortization, (iv) unused fees, and (v) exit fees. Certain of our loans have extension fees, which are not included in our YTM IRR calculations, but may increase YTM IRR if such extension options are exercised by borrowers.

Previous wording

Loan #9, is comprised of two tranches, a $14.5 million first lien judgment loan (the "Judgment Loan") and a $2.0 million second lien term loan (the "Term Loan"). The Judgment Loan and the Term Loan bear interest at a rate of 9.0%. The Judgment Loan has no contractual maturity and will remain outstanding until paid by the obligor and the Term Loan has a maturity of March 31, 2028. For comparability to previously issued financial statements, management will continue to reference the Judgment Loan and the Term Loan, collectively, as Loan #9, and the maturity date presented represents the maturity date of the Term Loan. See Note 8 for additional information.

Current wording

Loan #9, is comprised of two tranches, a $14.5 million first lien judgment loan (the "Judgment Loan") and a $2.0 million second lien term loan (the "Term Loan"). The Judgment Loan and the Term Loan bear interest at a rate of 9.0%. The Judgment Loan has no contractual maturity and will remain outstanding until paid by the obligor and the Term Loan has a maturity of March 31, 2028. For comparability to previously issued financial statements, management will continue to reference the Judgment Loan and the Term Loan, collectively, as Loan #9, and the maturity date presented represents the maturity date of the Term Loan. See Note 8 for additional information. On May 1, 2023, Loan #9 was placed on non-accrual status and remains on non-accrual as of September 30, 2025.

Previous wording

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

Current wording

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

Previous wording

In addition to using certain financial metrics prepared in accordance with GAAP to evaluate our performance, we also use Distributable Earnings and Adjusted Distributable Earnings to evaluate our performance. Each of Distributable Earnings and Adjusted Distributable Earnings is a measure that is not prepared in accordance with GAAP. We define Distributable Earnings as, for a specified period, the net income (loss) computed in accordance with GAAP, excluding (i) non-cash equity compensation expense, (ii) depreciation and amortization, (iii) any unrealized gains, losses or other non-cash items recorded in net income (loss) for the period; provided that Distributable Earnings does not exclude, in the case of investments with a deferred interest feature (such as OID, debt instruments with PIK interest and zero coupon securities), accrued income that we have not yet received in cash, (iv) provision for current expected credit losses and (v) one-time events pursuant to changes in GAAP and certain non-cash charges, in each case after discussions between our Manager and our independent directors and after approval by a majority of such independent directors. We define Adjusted Distributable Earnings, for a specified period, as Distributable Earnings excluding certain non-recurring organizational expenses (such as one-time expenses related to our formation and start-up).

Current wording

Distributable Earnings is a measure that is not prepared in accordance with GAAP. We define Distributable Earnings as, for a specified period, the net income (loss) computed in accordance with GAAP, excluding (i) non-cash equity compensation expense, (ii) depreciation and amortization, (iii) any unrealized gains, losses or other non-cash items recorded in net income (loss) for the period; provided that Distributable Earnings does not exclude, in the case of investments with a deferred interest feature (such as OID, debt instruments with PIK interest and zero coupon securities), accrued income that we have not yet received in cash, (iv) provision for current expected credit losses and (v) one-time events pursuant to changes in GAAP and certain non-cash charges, in each case after discussions between our Manager and our independent directors and after approval by a majority of such independent directors. We define Adjusted Distributable Earnings, for a specified period, as Distributable Earnings excluding certain non-recurring organizational expenses (such as one-time expenses related to our formation and start-up).

Previous wording

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

Current wording

As of September 30, 2025 and December 31, 2024, all of our cash was unrestricted and totaled approximately $28.9 million and $26.4 million, respectively. We believe that our cash on hand, capacity available under our Revolving Loan, the Unsecured Notes and cash flows from operations for the next twelve months will be sufficient to satisfy the operating requirements of our business through at least the next twelve months. The sources of financing for our target investments are described below.

Previous wording

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

Current wording

As of September 30, 2025 and December 31, 2024, unamortized debt issuance costs related to the Revolving Loan, including all amendments and amendments and restatements thereto, as applicable, of $271,282 and $305,075, respectively, are recorded in other receivables and assets, net on the consolidated balance sheets.

Previous wording

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

Current wording

For the nine months ended September 30, 2025, the Company had net paydowns of $2.6 million against the Revolving Loan. As of September 30, 2025, the Company had $57.6 million available and $52.4 million outstanding under the Revolving Loan (Note 7).

Previous wording

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

Current wording

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

Previous wording

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

Current wording

For the nine months ended September 30, 2024, the Company sold an aggregate of 1,309,503 shares of the Company’s common stock under the Sales Agreement at a weighted average price of $15.88 per share, generating net proceeds of approximately $20.4 million.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

For the nine months ended September 30, 2025 and 2024, we reported “Net cash provided by operating activities” of approximately $22.3 million and $21.3 million, respectively. Net cash provided by operating activities increased approximately $0.9 million, primarily attributable to a decrease in PIK interest income of $3.3 million, an increase in related party receivables of $4.7 million, and an increase in stock based compensation expense of $0.2 million, an decrease in net income over the comparable period of approximately $1.3 million, a decrease in the interest reserve for applied interest payments of approximately $2.8 million, a decrease in accounts payable and accrued expenses of approximately $1.4 million and a decrease in interest receivable of approximately $3.6 million, over the comparable period.

Previous wording

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

Current wording

For the nine months ended September 30, 2025, cash outflows primarily related to $59.0 million used for the origination and funding of loans held for investment, offset by cash inflows $69.5 million of cash received from the principal repayment of loans held for investment and $5.5 million of cash received from the principal repayment of loans held a fair value.

Previous wording

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

Current wording

For the nine months ended September 30, 2024, cash outflows primarily related to $75.2 million used for the origination and funding of loans held for investment, offset by cash inflows $64.2 million of cash received from the principal repayment of loans held for investment and $13.0 million of cash received from proceeds from sales of loans.

Previous wording

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

Current wording

For the nine months ended September 30, 2025 and 2024, we reported “Net cash used in financing activities” of approximately $(35.8) million and $(24.4) million, respectively.

Previous wording

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

Current wording

For the nine months ended September 30, 2025, cash inflows of approximately $1.0 million related to proceeds received from sales of our common stock through the ATM offering and $106.1 million related to draw downs on our Revolving Loan, which were offset by $108.7 million in repayments on our Revolving Loan, approximately $33.9 million in dividends paid, approximately $151thousand in offering costs associated with the registered at-the-market offering and $132 thousand in payment of debt issuance costs.

Previous wording

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

Current wording

For the nine months ended September 30, 2024, cash inflows of approximately $20.8 million related to proceeds received from sales of our common stock through the ATM offering and $73.5 million related to draw downs on our Revolving Loan, which were offset by $85.5 million in repayments on our Revolving Loan, approximately $32.4 million in dividends paid, approximately $113 thousand in debt issuance costs paid, and approximately $757 thousand in offering costs associated with the registered at-the-market offering.

Previous wording

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

Current wording

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

Previous wording

The risk ratings are primarily based on historical data and current conditions specific to each portfolio company, as well as consideration of future economic conditions and each borrower’s estimated ability to meet debt service requirements. The risk ratings shown in the following table as of June 30, 2025 and December 31, 2024 consider borrower specific credit history and performance and quarterly re-evaluation of overall current macroeconomic conditions affecting the borrowers. As interest rates have increased due to rising rates from the Federal Reserve Board, it has impacted borrowers’ ability to service their debt obligations on a global scale. Changes in risk ratings had an effect on the level of the CECL reserve though, other than the two loans placed on non-accrual status, the loans continued to perform as expected. For approximately 47% of the portfolio, the fair value of the underlying real estate collateral exceeded the amounts outstanding under the loans as of June 30, 2025. The remaining approximately 53% of the portfolio, while not fully collateralized by real estate, may be partially collateralized by real estate and was secured by other forms of collateral including equipment, receivables, licenses and/or other assets of the borrowers to the extent permitted by applicable laws and regulations governing such borrowers.

Current wording

The risk ratings are primarily based on historical data and current conditions specific to each portfolio company, as well as consideration of future economic conditions and each borrower’s estimated ability to meet debt service requirements. The risk ratings shown in the following table as of September 30, 2025 and December 31, 2024 consider borrower specific credit history and performance and quarterly re-evaluation of overall current macroeconomic conditions affecting the borrowers. As interest rates have increased due to rising rates from the Federal Reserve Board, it has impacted borrowers’ ability to service their debt obligations on a global scale. Changes in risk ratings had an effect on the level of the CECL reserve though, other than the two loans placed on non-accrual status, the loans continued to perform as expected. For approximately 54% of the portfolio, the fair value of the underlying real estate collateral exceeded the amounts outstanding under the loans as of September 30, 2025. The remaining approximately 46% of the portfolio, while not fully collateralized by real estate, may be partially collateralized by real estate and was secured by other forms of collateral including equipment, receivables, licenses and/or other assets of the borrowers to the extent permitted by applicable laws and regulations governing such borrowers.