NOTE 4. COMMERCIAL LOANS AND INVESTMENTS

2026 Activity. During the six months ended June 30, 2026, the Company originated two commercial loans for $72.0 million with an initial yield of 11% and acquired the 2026 Sale-Leaseback Property for a purchase price of $10.0 million and the 2026 Sales-Type Lease for $16.3 million. Additionally, during the six months ended June 30, 2026, the total face amounts of two loan investments were upsized by an aggregate of $31.9 million. In the aggregate, during the six months ended June 30, 2026, commercial loan and investment volume totaled $130.2 million, of which $73.8 million was funded, and $1.3 million of origination fees were received. Additionally, the Company funded $16.1 million for existing loans and received $17.5 million of principal repayments from borrowers during the six months ended June 30, 2026. Of the total amount funded, during the six months ended June 30, 2026, $1.4 million was non-cash paid-in-kind accrued interest.

During the six months ended June 30, 2026, the Company upsized and funded the 2025 Mortgage Note (hereinafter defined) by an additional $31.8 million and sold an additional $10.8 million A-1 participation interest in the 2025 Mortgage Note (the “2026 Loan Participation Sale”). In the aggregate, the initial 2025 Mortgage Note totaled $61.3 million and the initial A-1 participation interest, which is entitled to a 10.0% yield on its respective portion of the outstanding principal balance and has priority preference with respect to all principal and interest payments of the 2025 Mortgage Note, totaled $20.8 million. The 2026 Loan Participation Sale did not achieve sale accounting pursuant to ASC 860, Transfers and Servicing, and accordingly, is treated as a secured borrowing. See Note 12, “Obligation Under Participation Agreement” for further information.

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2025 Activity. During the six months ended June 30, 2025, the Company originated four commercial loans for an investment volume of $28.4 million at a weighted average initial cash yield of 9.7% and one $2.0 million short-term mortgage note with an initial cash yield of 16.5%, that was repaid in full on July 2, 2025. Additionally, during the six months ended June 30, 2025, the Company amended four existing commercial loan investments whereby certain maturity dates were extended and the total face amounts of two investments were upsized by an aggregate of $17.8 million. In the aggregate, during the six months ended June 30, 2025, commercial loan and investment volume totaled $48.2 million, of which $32.2 million was funded during the same period. Additionally, the Company funded $0.9 million for existing construction loans and received $11.9 million of principal repayments from borrowers during the six months ended June 30, 2025.

During the year ended December 31, 2025, the Company originated a $29.5 million first mortgage secured by a portfolio of assets and related improvements (the “2025 Mortgage Note”). The 2025 Mortgage Note is being repaid by the borrower as the underlying assets within the portfolio are sold. During the year ended December 31, 2025, the Company sold a $10.0 million A-1 participation interest (the “2025 Loan Participation Sale”) in its 2025 Mortgage Note, which is entitled to a 10.0% yield on its respective portion of the outstanding principal balance and has priority preference with respect to all principal and interest payments of the 2025 Mortgage Note. The 2025 Loan Participation Sale did not achieve sale accounting pursuant to ASC 860, Transfers and Servicing, and accordingly, is treated as a secured borrowing. See Note 12, “Obligation Under Participation Agreement” for further information.

Other Activity. During the year ended December 31, 2024, the Company acquired three single-tenant income properties in the greater Tampa Bay, Florida area. The acquisition of the three properties and the 2026 Sale-Leaseback Property (collectively, the “Sale-Leaseback Properties”) were structured as sale-leaseback transactions that include tenant repurchase options. Pursuant to FASB ASC Topic 842, Leases, the future repurchase rights present in the lease agreements preclude the transaction from being accounted for as a real estate acquisition. During the six months ended June 30, 2026, the Company acquired the 2026 Sales-Type Lease which qualifies as a sales-type lease pursuant to FASB ASC Topic 842, Leases. Accordingly, for GAAP purposes, the acquisitions of the Sale-Leaseback Properties and the 2026 Sales-Type Lease are accounted for as financing arrangements, and the related assets and corresponding revenue are included in the Company’s commercial loans and investments on its consolidated balance sheets and consolidated statements of operations. The Company has imputed interest on the leases for the properties which is recognized as interest income from commercial loans and investments on the accompanying consolidated statements of operations.

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The Company’s commercial loans and investments were comprised of the following at June 30, 2026 (in thousands):

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The Company’s commercial loans and investments were comprised of the following at December 31, 2025 (in thousands):

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The carrying value of the commercial loans and investments consisted of the following at June 30, 2026 and December 31, 2025 (in thousands).

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