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| STOCKHOLDERS' EQUITY | NOTE 9 — STOCKHOLDERS’ EQUITY The Company’s outstanding common stock was originally issued primarily through a public offering conducted by CMFT from January 2012 to April 2014 (the “Initial Offering”) and related DRIP offerings (the “DRIP Offerings”). The Company continues to issue shares of common stock under its DRIP pursuant to a registration statement covering up to $600.0 million of shares. All shares of such stock have a par value of $0.01 per share. The par value of stockholder proceeds raised from the DRIP Offerings is classified as common stock, with the remainder allocated to capital in excess of par value. In connection with the Transactions, on June 23, 2026, the Company amended its charter to authorize 3,100,000,000 shares of capital stock, consisting of 2,000,000,000 shares of common stock and 1,100,000,000 shares of preferred stock, $0.01 par value per share (“Preferred Stock”). 1,000,000,000 shares of Preferred Stock were classified as Special Voting Preferred Shares. Each Special Voting Preferred Share provides its holder with voting rights corresponding to one CMFH Class A LP Unit held by the holder. The Special Voting Preferred Shares do not provide their holders with economic rights or entitlements. The Board establishes an updated estimated per share value of the Company’s common stock on at least an annual basis. Distributions are reinvested in shares of the Company’s common stock for participants in the DRIP at the estimated per share value as determined by the Board. Additionally, the estimated per share value as determined by the Board serves as the per share value for purposes of the share redemption program. The most recent estimated per share value of the Company’s common stock was $5.14, which was established by the Board on March 19, 2026 using a valuation date of December 31, 2025. Until the next valuation is approved and established by the Board, the per share value used for purposes of reinvesting in the Company’s common stock pursuant to the Company’s DRIP program and redeeming shares pursuant to the Company’s share redemption program will continue to be $5.14. Equity-Based Compensation The Company maintains the Amended and Restated CIM Real Estate Finance Trust, Inc. 2022 Equity Incentive Plan (the “2022 Plan”) and the CIM Real Estate Finance Trust, Inc. 2024 Manager Equity Incentive Plan (the “Manager Plan”). The 2022 Plan provides for the issuance of certain awards to employees, non-employee directors, and consultants or advisors of the Company, including stock option awards, restricted stock awards or deferred stock awards, which awards will further align such persons’ interests with the interests of the Company’s stockholders. The Manager Plan provides for the grant of non-qualified stock options, restricted stock awards, restricted stock unit awards, and stock appreciation right awards, and dividend equivalents, to eligible named executive officers (as defined in Item 402 of Regulation S-K) of the Company or to CIM Real Estate Finance Management, LLC, the Company’s external manager prior to the effectiveness of the Transactions and, following the effectiveness of the Transactions, an indirect subsidiary of the Company (“CMFT Management”), which in turn historically has transferred such incentives to employees, advisors, or consultants of CMFT Management and its affiliates who provide services to CMFT Management or its affiliates in support of the Company and its subsidiaries. The terms of individual awards, including vesting and settlement provisions, are determined by the Board or its compensation committee. The 2022 Plan authorizes the issuance of up to 250,000 shares, and awards of approximately 4,000 shares of common stock are available for future grant at June 30, 2026. The Manager Plan authorizes awards covering up to 12,000,000 shares, of which approximately 4.2 million shares remained available for future grant as of June 30, 2026. The Contribution Agreement includes an acknowledgement by the parties that the Transactions do not constitute a “Change of Control” as defined under the Company’s equity plans, and that accordingly, all unvested existing equity awards will continue to operate and vest in accordance with their existing terms. Legacy Incentive Unit Awards Prior to the Transactions, CIM Group Management Holdings, LLC (“Holdings”), the previous parent of one of the Contributed Entities, entered into a grant agreement with an affiliated company, pursuant to which the affiliated company was granted incentive units in Holdings. These interests were granted in connection with admitting new principals and granting certain equity-based compensation awards to such principals. The awards generally vest over periods ranging from to seven years and are accounted for as equity-classified share-based payment awards under ASC 718. Compensation expense is measured based on the grant-date fair value of the awards and recognized over the applicable requisite service periods, net of estimated forfeitures. The Transactions did not result in the settlement, cancellation or acceleration of the outstanding awards, which continue to vest in accordance with their existing terms. The Company recognized $503,000 and $1.0 million of compensation expense related to these awards during the three and six months ended June 30, 2026, respectively and $814,000 and $1.6 million during the three and six months ended June 30, 2025, respectively. As of June 30, 2026, unrecognized compensation cost related to the awards was $7.0 million and is expected to be recognized over a weighted-average period of 2.0 years. The following tables summarize, beginning on June 24, 2026, the date of the Transactions, the (i) non-vested shares of restricted stock and restricted stock units and (ii) vesting schedule of shares of restricted stock and restricted stock units for the Company’s directors, officers and employees of the Company as of June 30, 2026 (dollar amounts in thousands):
____________________________________ (1)Each restricted stock unit represents a contingent right to receive one share of the Company’s common stock, payable 50% in the Company’s common stock and 50% in the cash value thereof. (2)The fair value of the Company’s share awards was determined using the Company’s per share NAV on the date of grant. Compensation expense related to the restricted shares and restricted stock units are recognized over the vesting period. The Company recorded compensation expense of $242,000 for both the three and six months ended June 30, 2026, respectively, which is included in general and administrative expenses in the accompanying condensed combined and consolidated statements of operations. As of June 30, 2026, there was $21.7 million of total unrecognized compensation expense related to these restricted shares and restricted stock units, which will be recognized ratably over the remaining respective periods of service. Below is a summary of restricted stock and restricted stock units vesting dates as of June 30, 2026:
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