Loans Held For Investment, Net

3 Months Ended

Mar. 31, 2026

Loans Held For Investment, Net [Abstract]

LOANS HELD FOR INVESTMENT, NET

3. LOANS HELD FOR INVESTMENT, NET

The Company primarily originates senior secured loans that it has the intent and ability to hold until maturity or payoff. Such loans are classified as held for investment and are reported on the consolidated balance sheets at amortized cost. Our loans bear interest rates that are either fixed or determined periodically on the basis of U.S. Prime Rate (“Prime”) or Secured Overnight Financing Rate (“SOFR”) plus a premium. Loans which bear interest on either Prime or SOFR are collectively referred to as "Floating-rate loans". The following tables present summarized information regarding our loans held for investment by interest rate type as of March 31, 2026 and December 31, 2025:

	As of March 31, 2026
	Total Principal		Original Issue Discount			Carrying Value		Percentage of loans held for investment
Fixed-rate loans	$	145,693,375	$	(621,849	)	$	145,071,526		35.2	%
Floating-rate loans		267,896,458		(3,730,498	)		264,165,960		64.8	%
Total	$	413,589,833	$	(4,352,347	)	$	409,237,486		100.0	%

	As of December 31, 2025
	Total Principal		Original Issue Discount			Carrying Value		Percentage of loans held for investment
Fixed-rate loans	$	154,680,286	$	(803,019	)	$	153,877,267		37.6	%
Floating-rate loans		256,394,802		(1,316,502	)		255,078,300		62.4	%
Total	$	411,075,088	$	(2,119,521	)	$	408,955,567		100.0	%

The following tables summarize the Company’s aggregate portfolio of loans held for investment, net of current expected credit loss reserve as of March 31, 2026 and December 31, 2025:

	As of March 31, 2026
	Outstanding Principal		Original Issue Discount			Carrying Value			Weighted Average Remaining Life (Years) (1)
Loans held for investment	$	413,589,833	$	(4,352,347	)	$	409,237,486			2.2
Current expected credit loss reserve		-		-			(8,680,583	)
Total loans held at carrying value, net	$	413,589,833	$	(4,352,347	)	$	400,556,903

	As of December 31, 2025
	Outstanding Principal		Original Issue Discount			Carrying Value			Weighted Average Remaining Life (Years) (1)
Loans held for investment	$	411,075,088	$	(2,119,521	)	$	408,955,567			2.2
Current expected credit loss reserve		-		-			(5,062,785	)
Total loans held at carrying value, net	$	411,075,088	$	(2,119,521	)	$	403,892,782

(1)Weighted average remaining life is calculated based on the carrying value of the loans as of March 31, 2026 and December 31, 2025, respectively.

The following tables present changes in loans held at carrying value as of and for the three months ended March 31, 2026 and 2025.

	Principal			Original Issue Discount			Current Expected Credit Loss Reserve			Carrying Value
Balance at December 31, 2025	$	411,075,088		$	(2,119,521	)	$	(5,062,785	)	$	403,892,782
Purchase of investments		52,805,107			(2,970,366	)		-			49,834,741
Principal repayment of loans		(51,565,404	)		-			-			(51,565,404	)
Accretion of original issue discount		-			737,540			-			737,540
Capitalized PIK Interest		1,275,042			-			-			1,275,042
Increase in provision for current expected credit losses		-			-			(3,617,798	)		(3,617,798	)
Balance at March 31, 2026	$	413,589,833		$	(4,352,347	)	$	(8,680,583	)	$	400,556,903

	Principal			Original Issue Discount			Current Expected Credit Loss Reserve			Carrying Value
Balance at December 31, 2024	$	404,721,554		$	(2,244,508	)	$	(4,346,869	)	$	398,130,177
Purchase of investments		4,365,832			(181,800	)		-			4,184,032
Principal repayment of loans		(9,170,628	)		-			-			(9,170,628	)
Accretion of original issue discount		-			369,971			-			369,971
Capitalized PIK Interest		1,595,058			-			-			1,595,058
Increase in provision for current expected credit losses		-			-			1,072,811			1,072,811
Balance at March 31, 2025	$	401,511,816		$	(2,056,337	)	$	(3,274,058	)	$	396,181,421

A more detailed listing of the Company’s loans held at carrying value based on information available as of March 31, 2026, is as follows:

		Initial Funding	Maturity	Principal		Original Issue			Carrying		Percent of Loans held			Future			Periodic	YTM
Loan	Location(s)	Date (1)	Date (2)	Balance		Premium/(Discount)			Value		for investment			Fundings		Interest Rate (3)	Payment (4)	IRR (5)
2a	Michigan	12/31/2021	12/31/2026	$	27,110,506	$	(1,140	)	$	27,109,366		6.6	%	$	-	P+3% Cash  (11)	P&I	16.8%
2b	Michigan	12/16/2025	12/31/2026		2,306,200		(18,103	)		2,288,097		0.6	%		-	0% Cash, 10% PIK	I/O	9.7%
4	Arizona	6/1/2024	6/17/2026		6,626,809		-			6,626,809		1.6	%		-	11.91% Cash  (16)	I/O	17.0%
6	Michigan	8/20/2021	1/30/2026		3,157,129		(1,537	)		3,155,592		0.8	%		-	P+6.5% Cash  (11)(15)	I/O	17.2%
7	Illinois, Arizona	6/30/2025	6/30/2028		36,130,667		(403,179	)		35,727,488		8.7	%		-	P+5.75% Cash  (8)	P&I	15.0%
8	West Virginia	8/30/2024	6/30/2026		8,491,943		-			8,491,943		2.1	%		-	12% Cash	I/O	15.0%
9a	Pennsylvania	3/31/2025	3/31/2028		14,576,987		(55,030	)		14,521,957		3.5	%		-	9% Cash  (12)	P&I	9.7%
9b	Pennsylvania	3/31/2025	3/31/2028		14,550,000		(53,007	)		14,496,993		3.5	%		-	9% Cash  (12)	P&I	9.7%
12	Various	11/8/2021	10/31/2027		15,327,206		(108,894	)		15,218,312		3.7	%		-	P+7% Cash, 2% PIK (9)	P&I	19.8%
18	Ohio	2/3/2022	12/31/2026		47,756,385		-			47,756,385		11.5	%		-	P+1.75% Cash, 5% PIK (8)(13)	P&I	17.9%
19	Florida	3/11/2022	12/31/2027		21,198,768		(32,021	)		21,166,747		5.1	%		-	11% Cash, 5% PIK	P&I	17.5%
21	Illinois	7/1/2022	7/29/2026		6,427,098		(5,612	)		6,421,486		1.6	%		-	P+7% Cash, 2% PIK (8)	P&I	23.3%
23	Arizona	3/27/2023	3/31/2027		1,320,000		(12,666	)		1,307,334		0.3	%		-	P+7.5% Cash  (10)	P&I	18.7%
25	New York	7/1/2023	6/29/2036		21,312,103		-			21,312,103		5.2	%		-	15% Cash	P&I	16.6%
30	Missouri, Arizona	12/19/2023	12/31/2026		9,494,831		(24,577	)		9,470,254		2.3	%		-	P+7.75% Cash  (11)(17)	I/O	18.6%
31	California, Illinois	5/3/2023	9/30/2028		7,439,091		(142,572	)		7,296,519		1.8	%		-	P+8.75% Cash  (9)	I/O	18.7%
34	Arizona	6/17/2024	5/29/2026		10,000,000		-			10,000,000		2.4	%		-	11.91% Cash  (16)	I/O	12.8%
35	California	8/23/2024	9/30/2028		24,768,977		(203,942	)		24,565,035		6.0	%		-	12% Cash, 3% PIK	P&I	16.6%
36	Illinois	10/28/2024	1/1/2027		27,150,398		(47,494	)		27,102,904		6.6	%		2,355,293	P+6.25% Cash  (9)(18)	P&I	15.0%
37	Various	11/26/2024	11/24/2028		17,006,837		(222,770	)		16,784,067		4.1	%			12% Cash, 1% PIK (14)	P&I	15.2%
38a	Various	12/13/2024	6/12/2026		2,065,000		(23,471	)		2,041,529		0.5	%		2,095,000	10% Cash  (14)	I/O	15.3%
38b	Various	1/15/2025	6/12/2026		840,000		(9,600	)		830,400		0.2	%		-	10% Cash  (14)	I/O	15.3%
40	Various	3/28/2025	7/28/2028		700,000		(20,428	)		679,572		0.2	%		-	SOFR +10.25% Cash (6)	I/O	20.4%
41	Ohio	3/1/2025	3/13/2027		271,429		(3,905	)		267,524		0.1	%		-	14.5% Cash	P&I	16.1%
42	Various	9/30/2025	2/28/2029		53,333,333		(281,528	)		53,051,805		12.9	%			SOFR +6.88% Cash (6)	P&I	13.2%
43	Missouri	8/20/2025	8/20/2028		11,398,314		(137,591	)		11,260,723		2.8	%		-	P+5.75% Cash  (10)	P&I	15.4%
44	Various	12/31/2025	12/31/2028		4,940,000		(117,776	)		4,822,224		1.2	%		-	SOFR+10.19% Cash (7)	I/O	16.0%
45	Canada	1/8/2026	1/31/2031		16,211,500		(2,425,504	)		13,785,996		3.9	%		-	SOFR+6.25% Cash	P&I	18.7%
46	Various	3/17/2026	12/31/2026		1,678,322		-			1,678,322		0.4	%		-	0% Cash, 13% PIK	I/O	12.7%
			Subtotal	$	413,589,833	$	(4,352,347	)	$	409,237,486		100	%	$	4,450,293			15.8%

(1)Loan numbering in the table above is maintained from origination for purposes of comparability and may not be sequential due to maturities, payoffs, or refinancings.

(2)Certain loans are subject to contractual extension options as stipulated in the loan agreement. Actual maturities may differ from contractual maturities stated herein and certain borrowers may have the right to prepay with or without a contractual prepayment penalty. The Company may also extend contractual maturities and amend other terms of the loans in connection with loan modifications.

(3)"P" = prime rate; "SOFR"= Secured Overnight Financing Rate. "P" and "SOFR" represent floating rate loans that pay interest at the designed benchmark rate plus an applicable spread; "SOFR" loans are typically indexed to 30-day, 90-day or 180-day rates (1 month, 3 month, or 6 month, respectively); "PIK" = paid-in-kind interest.

(4)P&I = principal and interest. I/O = interest only. P&I loans may include interest only periods for a portion of the loan term. The frequency of loan payments may be monthly or quarterly as required by the respective credit agreement governing such loan.

(5)Estimated YTM, calculated on a weighted average principal basis, includes a variety of fees and features that affect the total yield, which may include, but is not limited to, OID, exit fees, prepayment fees, unused fees and contingent features. OID is recognized as a discount to the funded loan principal and is accreted to income over the term of the loan. The estimated YTM calculations require management to make estimates and assumptions, including, but not limited to, the timing and amounts of loan draws on delayed draw loans, the timing and collectability of exit fees, the probability and timing of prepayments and the probability of contingent features occurring. For example, certain credit agreements contain provisions pursuant to which certain PIK interest rates and fees earned by us under such credit agreements will decrease upon the satisfaction of certain specified criteria which we believe may improve the risk profile of the applicable borrower. To be conservative, we have not assumed any prepayment penalties or early payoffs in our estimated YTM calculation. Estimated YTM is based on current management estimates and assumptions, which may change. Actual results could differ from those estimates and assumptions.

(6)This Loan is subject to a SOFR floor of 4.00%

(7)This Loan is subject to a SOFR floor of 3.72%

(8)This Loan is subject to a prime rate floor of 7.00%

(9)This Loan is subject to a prime rate floor of 7.50%

(10)This Loan is subject to a prime rate floor of 8.00%

(11)This Loan is subject to a prime rate floor of 8.50%

(12)Loan #9, is comprised of two tranches, a $14.5 million first lien judgment loan (the "Judgment Loan") and a $14.6 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 7 for additional information. On May 1, 2023, Loan #9 was placed on non-accrual status but was restored to accrual status as of March 31, 2026.

(13)The borrower of Loan #18, FarmaceuticalRX, LLC and its subsidiaries and affiliates (“FRX”), is a related party. Certain common control affiliates of the Company can exercise significant influence over certain credit parties to the Loan Agreement with FRX by virtue of voting representation on its board of managers. During the period ended March 31, 2026 and December 31, 2025, the Company made principal advances $0 and has a carrying value of $47.8 million and $47.1 million as of the periods then ended. As of March 31, 2026, the carrying value of $47.8 million is included in the line item, “Loans held for investment – related party”. (Note 7)

(14)Loan #37 and Loan #38 bear unused fees on the unfunded commitment of 0.75% and 1.50% per annum, respectively.

(15)Loan #6 was placed on non-accrual on May 9, 2025 and all accrued interest after April 1, 2025 was reversed at that time. This loan remains on non-accrual as of March 31, 2026. On April 6th, 2026, Loan #6 was repaid in full.

(16)Loan #4 and Loan #34 were placed on non-accrual on December 1, 2025 and all accrued interest through such date was reversed. These loans remain on non-accrual as of March 31, 2026 and the interest receivable balance relating to these loans was $0.

(17)Loan #30 was repaid in full on April 24, 2026.

(18)In April 2026, Loan #36 was amended, which decreased the cash interest rate from 13.75% to 0% and increased the PIK rate from 0% to 21.25%.

The following tables present aging analyses of past due loans by amortized cost, excluding the CECL reserve, as of March 31, 2026 and December 31, 2025.

	As of March 31, 2026
	Current Loans (1)		31-60 Days Past Due		61-90 Days Past Due		90+ Days Past Due		Total Past Due		Total Loans		Non- Accrual (2)
Loans held for investment	$	406,081,894	$	3,155,592	$	-	$	-	$	3,155,592	$	409,237,486	$	19,782,401
Total	$	406,081,894	$	3,155,592	$	-	$	-	$	3,155,592	$	409,237,486	$	19,782,401

	As of December 31, 2025
	Current Loans (1)		31-60 Days Past Due		61-90 Days Past Due		90+ Days Past Due		Total Past Due		Total Loans		Non- Accrual (2)(3)
Loans held for investment	$	408,955,567	$	-	$	-	$	-	$	-	$	408,955,567	$	48,801,351
Total	$	408,955,567	$	-	$	-	$	-	$	-	$	408,955,567	$	48,801,351

(1)Loans 1-30 days past due are included in the current loans.

(2)On December 1, 2025, Loan #4 and Loan #34 were placed on non-accrual and remain on non-accrual as of March 31, 2026.On May 9, 2025, Loan #6 was placed on non-accrual and remains on non-accrual as of March 31, 2026. Loan #6 was repaid in full on April 6, 2026.

(3)On May 1, 2023, Loan #9 was placed on non-accrual status. The Company was brought current on all interest and payments due on Loan #9 through December 31, 2025. Management elected to maintain the loan on non-accrual status until such time that the borrower demonstrates sustained ability to meet debt service obligations under both the Judgment Loan and the Term Loan. Loan #9 was restored to accrual status as of March 31, 2026. (Note 7).

Non-Accrual Loans

As of March 31, 2026 and December 31, 2025, there were three and four loans placed on non-accrual status.

As more fully described in Note 7, Loan #9 was placed on non-accrual status as of May 1, 2023 and has a carrying value of approximately $29.0 million as of both March 31, 2026 and December 31, 2025. Loan #9 carried a reserve for current expected credit losses of approximately $0.1 million and $0.5 million as of March 31, 2026 and as of December 31, 2025, respectively. In December 2025, the Company collected all past due unpaid interest and the borrower was current on all principal and interest payments. Management restored Loan #9 to accrual status as of March 31, 2026 as the borrower demonstrated sustained ability to meet debt service obligations for a minimum of 60 days.

Loan #6 was placed on non-accrual status as of May 9, 2025 and had an outstanding principal balance and carrying value of approximately $3.2 million as of March 31, 2026 and December 31, 2025. A Default Notice was sent to the borrower on May 9, 2025 specifying certain events of default such as outstanding tax liens and recent non-payment of interest and principal. Loan #6 was repaid on April 6, 2026.

Loan #4 and Loan #34 were placed on non-accrual status as of December 1, 2025 following periods of non-collection of interest since August 1, 2025. The loan and security agreements governing these loans include cross-default and cross-collateral provisions. Loan #4 and Loan #34 had an aggregate outstanding principal balance and carrying value of approximately $16.6 million as of March 31, 2026 and December 31, 2025. At the time these loans were placed on non-accrual status $0.9 million of interest receivable was reversed, and interest receivable as of March 31, 2026 and December 31, 2025 is $0.

Credit Quality Indicators

The Company assesses the risk factors of each loan, and assigns a risk rating based on a variety of factors, including, without limitation, payment history, real estate collateral coverage, property type, geographic and local market dynamics, financial performance, loan to enterprise value and fixed charge coverage ratios, loan structure and exit strategy, and project sponsorship. This review is performed quarterly. Based on a 5-point scale, the Company’s loans are rated “1” through “5,” from less risk to greater risk, which ratings are defined as follows:

Rating	Definition
1	Very low risk
2	Low risk
3	Moderate/average risk
4	High risk/potential for loss: a loan that has a risk of realizing a principal loss
5	Impaired/loss likely: a loan that has a high risk of realizing principal loss, has incurred principal loss or an impairment has been recorded

The risk ratings are primarily determined based on current and historical performance metrics 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 March 31, 2026 and December 31, 2025 consider borrower specific credit history and performance and reflect a quarterly re-evaluation of overall current macroeconomic conditions affecting the Company’s borrowers, specifically those designated as held for investment.

As of March 31, 2026 and December 31, 2025, the carrying value, excluding the current expected credit loss reserve (the “CECL Reserve”), of the Company’s loans within each risk rating category by year of origination is as follows:

	As of March 31, 2026 (1)(2)
Risk Rating	2026		2025		2024		2023		2022		Total
1	$	-	$	-	$	-	$	9,470,254	$	3,155,592	$	12,625,846
2		-		54,561,777		26,606,564		7,296,519		75,344,618		163,809,478
3		15,464,318		83,117,482		25,276,010		22,619,437		42,327,678		188,804,925
4		-		267,524		37,102,904		-		-		37,370,428
5		-		-		6,626,809		-		-		6,626,809
Total	$	15,464,318	$	137,946,783	$	95,612,287	$	39,386,210	$	120,827,888	$	409,237,486

	As of December 31, 2025 (1)
Risk Rating	2025		2024		2023		2022		2021		Total
1	$	-	$	-	$	17,200,000	$	-	$	-	$	17,200,000
2		56,825,751		26,726,735		43,676,371		43,542,664		-		170,771,521
3		104,831,283		52,297,509		1,363,484		-		42,709,369		201,201,645
4		-		16,626,809		-		-		3,155,592		19,782,401
5		-		-		-		-		-		-
Total	$	161,657,034	$	95,651,053	$	62,239,855	$	43,542,664	$	45,864,961	$	408,955,567

(1)Amounts are presented by loan origination year with subsequent advances on delayed draw facilities shown in the initial year of origination.

(2)Loan #2(a), Loan #6 and Loan #12 were originated in 2021, but were classified as 2022 as of March 31,2026

Real estate collateral coverage is also a significant credit quality indicator, and real estate collateral coverage, excluding the CECL Reserve, was as follows as of March 31, 2026 and December 31, 2025:

As of March 31, 2026 (1)
	< 1.0x		1.0x – 1.25x		1.25x – 1.5x		1.50x – 1.75x		1.75x – 2.0x		> 2.0x		Total
Fixed-rate	$	71,203,706	$	41,191,844	$	24,184,032	$	8,491,943	$	-	$	-	$	145,071,525
Floating-rate		88,341,068		9,470,254		122,303,684		-		-		44,050,955		264,165,961
	$	159,544,774	$	50,662,098	$	146,487,716	$	8,491,943	$	-	$	44,050,955	$	409,237,486

As of December 31, 2025 (1)
	< 1.0x		1.0x – 1.25x		1.25x – 1.5x		1.50x – 1.75x		1.75x – 2.0x		> 2.0x		Total
Fixed-rate	$	79,144,978	$	24,714,544	$	41,525,802	$	8,491,943	$	-	$	-	$	153,877,267
Floating-rate		118,379,752		6,547,194		35,683,291		27,087,360		-		67,380,703		255,078,300
	$	197,524,730	$	31,261,738	$	77,209,093	$	35,579,303	$	-	$	67,380,703	$	408,955,567

(1)Real estate collateral coverage is calculated based upon most recent third-party appraised values. The Company generally obtains new appraisals of all material real estate collateral at least once annually.

Geographic concentration of our loans held for investment is also a significant credit quality indicator. As of March 31, 2026 and December 31, 2025, our borrowers have operations in the jurisdictions in the table below:

As of March 31, 2026				As of December 31, 2025
Jurisdiction	Outstanding Principal (1)		Percentage of Our Loan Portfolio	Jurisdiction	Outstanding Principal (1)		Percentage of Our Loan Portfolio
Illinois	$	85,259,003	21%	Illinois	$	76,736,737	19%
Ohio		67,903,446	16%	Ohio		65,865,842	16%
Florida		64,542,243	16%	Florida		56,317,033	14%
Michigan		32,573,835	8%	Pennsylvania		46,114,129	11%
Pennsylvania		32,236,690	8%	Michigan		31,237,041	8%
Arizona		27,771,453	7%	California		27,316,846	7%
California		27,179,072	7%	Arizona		26,326,748	6%
Missouri		21,779,670	5%	Missouri		26,139,970	6%
New York		21,312,103	5%	New York		22,068,401	5%
Canada		16,211,500	4%	Nebraska		17,200,000	4%
West Virginia		8,491,943	2%	West Virginia		8,491,943	2%
Other (2)		2,584,377	1%	Other (2)		2,360,539	1%
Massachusetts		1,869,661	*%	Texas		2,335,787	1%
Texas		1,503,503	*%	Maryland		1,312,711	*%
Maryland		1,312,711	*%	Massachusetts		731,146	*%
Nevada		575,871	*%	Nevada		225,199	*%
Oregon		316,286	*%	Oregon		193,286	*%
Minnesota		166,467	*%	Minnesota		101,730	*%
Nebraska		-	*%	Canada		-	*%
Total	$	413,589,833	100%	Total	$	411,075,088	100%

(1)The principal balance of the loans not secured by real estate collateral are included in the jurisdiction representing the borrower's principal place of business.

(2)Represents Connecticut, Washington, and New Jersey

CECL Reserve

The Company records an allowance for current expected credit losses for its loans held for investment. The allowances are deducted from the gross carrying amount of the assets to present the net carrying value of the amounts expected to be collected on such assets. The Company estimates its CECL Reserve using, among other inputs, third-party valuations and a third-party probability-weighted model that considers the likelihood of default and expected loss given default for each individual loan based on the risk profile for approximately three years after which we immediately revert to use of historical loss data.

ASC 326 requires an entity to consider historical loss experience, current conditions, and a reasonable and supportable forecast of the macroeconomic environment. The Company considers multiple datapoints and methodologies that may include likelihood of default and expected loss given default for each individual loan, valuations derived from discount cash flows (“DCF”), and other inputs including the risk rating of the loan, how recently the loan was originated compared to the measurement date, and expected prepayment, if applicable. The measurement of expected credit losses under CECL is applicable to financial assets measured at amortized cost, and off-balance sheet credit exposures such as unfunded loan commitments.

The Company evaluates its loans on a collective (pool) basis by aggregating on the basis of similar risk characteristics as explained above. We make the judgment that loans to cannabis-related borrowers that are collateralized by real estate exhibit similar risk characteristics and are evaluated as a pool. Further, loans that have no real estate collateral, but are secured by other forms of collateral, including equity pledges of the borrower, and otherwise have similar characteristics as those collateralized by real estate may be evaluated as a separate pool. All other loans are analyzed individually, either because they operate in a different industry, may have a different risk profile, or maturities that extend beyond the forecast horizon for which we are able to derive reasonable and supportable forecasts.

Estimating the CECL Reserve also requires significant judgment with respect to various factors, including (i) the appropriate historical loan loss reference data, (ii) the expected timing of loan repayments, (iii) calibration of the likelihood of default to reflect the risk characteristics of the Company’s loan portfolio, and (iv) the Company’s current and future view of the macroeconomic environment including benchmark interest rate fluctuations. The Company also considers loan-specific qualitative factors which may include; among

other factors; (i) whether cash from the borrower’s operations is sufficient to cover the debt service requirements currently and into the future, (ii) the ability of the borrower to refinance the loan, and (iii) the liquidation value of collateral. For loans where we have deemed the borrower/sponsor to be experiencing financial difficulty, we may elect to apply a practical expedient, in which the fair value of the underlying collateral is compared to the amortized cost of the loan in determining a CECL Reserve.

To estimate the historic loan losses relevant to the Company’s portfolio, the Company evaluates its historical loan performance, which includes zero realized loan losses since the inception of its operations. Additionally, the Company analyzed its repayment history, noting it has limited operating history, since its incorporation on March 30, 2021. However, the Company’s Sponsor and its affiliates have had operations for the past six fiscal years and have made investments in similar loans that have similar characteristics including interest rate, collateral coverage, guarantees, and prepayment/make whole provisions, which fall into the pools identified above, and may be considered by management in determining the extent to which a CECL Reserve shall be recorded.

In addition, the Company reviews each loan on a quarterly basis and evaluates the borrower’s ability to pay the monthly interest and principal, if required, as well as the loan-to-value (LTV) ratio. When evaluating qualitative factors that may indicate the need for a CECL Reserve, the Company forecasts losses considering a variety of factors. In considering the potential current expected credit loss, the Manager primarily considers significant inputs to the Company’s forecasting methods, which include (i) key loan-specific inputs such as the value of the real estate collateral, liens on equity (including the equity in the entity that holds the state-issued license to cultivate, process, distribute, or retail cannabis), presence of personal or corporate guarantees, among other credit enhancements, LTV ratio, rate type (fixed or floating) and IRR, loan-term, geographic location, and expected timing and amount of future loan fundings, (ii) performance against the underwritten business plan and the Company’s internal loan risk rating, and (iii) a macro-economic forecast. Estimating the enterprise value of our borrowers in order to calculate LTV ratios is often a significant estimate. The Manager utilizes a third-party valuation appraiser to assist with the Company’s valuation process primarily using comparable transactions to estimate enterprise value of its portfolio companies and supplement such analysis with a multiple-based approach to enterprise value to revenue multiples of publicly-traded comparable companies obtained from S&P Capital IQ as of September 30, 2025, to which the Manager may apply a private company discount based on the Company’s current borrower profile.

Regarding the determination of value of real estate collateral, the Company generally cannot take the position of mortgagee-in-possession as long as the property is used by a cannabis operator, but it can request that the court appoint a receiver to manage and operate the subject real property until the foreclosure proceedings are completed. Additionally, while the Company cannot foreclose under state Uniform Commercial Code (“UCC”) and take title or sell equity in a licensed cannabis business, a potential purchaser of a delinquent or defaulted loan could. In order to estimate the future expected loan losses relevant to the Company’s portfolio, the Company utilizes historical market loan loss data obtained from a third-party database for commercial real estate loans, which the Company believes is a reasonably comparable and available data set to use as an input for its type of loans. The Company believes this dataset to be representative for future credit losses without historical loss data.

All of the above assumptions, although made with the most available information at the time of the estimate, are subjective and actual activity may not follow the estimated schedule. These assumptions impact the future balances that the loss rate will be applied to and as such impact the Company’s CECL Reserve. As the Company acquires new loans and the Manager monitors loan and borrower performance, these estimates will be revised each period.

During the period ended March 31, 2026, the Company's CECL Reserve increased by approximately $3.8 million compared to December 31, 2025. On a relative size basis, the CECL reserve represented 2.15% and 1.23% of principal on our loans held for investment as of March 31, 2026 and December 31, 2025 respectively. The period over period increase in the CECL reserve results from a combination of changes in portfolio composition driven by new originations and repayments, as well as portfolio company specific events and credit quality changes that impacted expected loss estimates. The key drivers of the change in the CECL reserve during the comparative period are outlined below:

•During the three months ended March 31, 2026, the Company recorded reserves on new originations of approximately $0.6 million, which were offset by $0.1 million of reserves which existed at December 31, 2025 and were reversed as a result of full loan repayments. The net effect of new originations and full repayments on the CECL reserve was approximately a $0.5 million increase.

•The CECL reserve relating to loans with a risk rating of "2" and "3" was $2.9 million or 0.7% of outstanding principal as of March 31, 2026 and $2.9 million or 0.8% of outstanding principal as of December 31, 2025 Management notes that loans risk rated "2" and "3" are generally deemed to be performing loans and generally carry similar CECL reserves.

•The CECL reserve for loans included in risk rating "4" was $4.7 million or 1.15% of outstanding principal as of March 31, 2026 and $2.2 million or 0.6% of outstanding principal as of December 31, 2025. The increase during the period primarily relates to Loan #36, which has a CECL reserve of $2.6 million as of March 31, 2026. Loans that are risk rated "4" are high risk for potential loss and require regular monitoring.

•Loans remaining on non-accrual, specifically Loan #4 and Loan #34, resulted in a $1.2 million increase to the CECL reserve compared to December 31, 2025. When the loans were placed on non-accrual status in December 2025, an aggregate of $0.9 million of accrued interest receivable was reversed.

•Loan #9(a)(b), which was placed on non-accrual in May 2023, were restructured during 2025. The Company made incremental advances to fund accretive acquisitions which management expects to result in improved operating performance. In December 2025 the Company collected all past due unpaid interest and the borrower was brought to current. The CECL reserve decreased $328 thousand in the three months ended March 31, 2026. Management restored Loan #9 to accrual status as of March 31, 2026. The borrower demonstrated sustained ability to meet debt service obligations for a minimum of 60 days.

•Loan #36 CECL reserve increased $2.6 million during the three months ended March 31, 2026. LTV increased to 96.4% as of March 31, 2026 from 65.3% as of December 31, 2025. Payments were delayed during the three months ended March 31, 2026, which resulted in deterioration in debt service coverage ratios. The Company collected all past due interest in early April 2026 and Management kept Loan #36 on accrual status as of March 31, 2026.

Activity related to the CECL Reserve for outstanding balances and unfunded commitments on the Company’s loans held at carrying value and loans receivable at carrying value as of and for the three months ended March 31, 2026 and 2025 is presented in the table below.

	Funded		Unfunded		Total
Balance at December 31, 2025	$	5,062,785	$	60,707	$	5,123,492
Provision (benefit) for current expected credit losses		3,617,798		220,053		3,837,851
Balance at March 31, 2026	$	8,680,583	$	280,760	$	8,961,343

	Funded			Unfunded			Total
Balance at December 31, 2024	$	4,346,869		$	45,572		$	4,392,441
Provision (benefit) for current expected credit losses		(1,072,811	)		(465	)		(1,073,276	)
Balance at March 31, 2025	$	3,274,058		$	45,107		$	3,319,165

The Company has made an accounting policy election to exclude accrued interest receivable from the amortized cost basis of the related loans held for investment in determining the CECL Reserve, as any uncollectible accrued interest receivable is written off in a timely manner. To date, the Company has had zero write-offs related to uncollectible interest receivable, but will discontinue accrual of interest on loans if deemed to be uncollectible, with any previously accrued uncollected interest on the loan charged to interest income in the same period. For the loan placed on non-accrual, the Company ceased accruing interest on the first date of delinquency, based on expectation of its ability to collect all amounts then due from the borrower. As a result, there was no accrued interest to write-off when the loan was placed on non-accrual status.