Lument Finance Trust, Inc.

Other than items noted below, except for the Risk Factors disclosed in Part II, Item 1A of the Company's Quarterly Report on Form 10-Q for the period ended March 31, 2025, which are hereby incorporated by reference into this Part II, Item 1A of this Form 10-Q, there have been no material changes to the Company's risk factors since the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

Master repurchase agreements and other financings that we use or may use in the future to finance our assets currently require, or in the future may require, us to provide additional collateral or pay down debt.

We recently entered into an uncommitted master repurchase agreement with JPMorgan Chase Bank, National Association. Our master repurchase agreement, and additional repurchase agreements or other financings we may enter into in the future, involve the risk that the market value of the assets pledged or sold by us to the provider of the financing may decline in value, in which case the lender or counterparty may require us to provide additional collateral or lead to margin calls that may require us to repay all or a portion of the funds advanced. We may not have the funds available to repay our debt at that time, which would likely result in defaults unless we are able to raise the funds from alternative sources, including by selling assets at a time when we might not otherwise choose to do so and when we may not be able to do so on favorable terms or at all. Posting additional collateral would reduce our cash available to make other, higher yielding investments, thereby decreasing our return on equity. If we cannot meet these requirements, the lender or counterparty could accelerate our indebtedness, increase the interest rate on advanced funds and terminate our ability to borrow funds from it, which could materially and adversely affect our financial condition and ability to implement our investment strategy. In the case of repurchase transactions, if the value of the underlying security has declined as of the end of that term, or if we default on our obligations under the repurchase agreement, we will likely incur a loss on our repurchase transactions.

None.