SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Investments in Unconsolidated Joint Ventures

b.

Investments in Unconsolidated Joint Ventures - We accounted for our investments in unconsolidated joint ventures, namely, The Berkley, which was sold in April 2022, 250 North 10^th, which was sold in February 2023, and TPHGreenwich under the equity method of accounting (see Note 14 - Investments in Unconsolidated Joint Ventures for further information).

The Company uses the equity method of accounting to record its equity investments in entities in which it has significant influence but does not hold a controlling financial interest, including equity investments in VIEs in which the Company is not the primary beneficiary. Under the equity method, an investment is reflected on the statement of financial condition of an investor as a single amount, and an investor’s share of earnings or losses

from its investment is reflected in the statement of operations as a single amount. The investment is initially measured at cost and subsequently adjusted for the investor’s share of the earnings or losses of the investee and distributions received from the investee. The investor recognizes its share of the earnings or losses of the investee in the periods in which they are reported by the investee in its financial statements rather than in the period in which an investee declares a distribution. Intra-entity profits and losses on assets still remaining with an investor or investee are eliminated.

The Company recognizes its share of earnings or losses from certain equity method investments based on the hypothetical-liquidation-at-book value (“HLBV”) method. Under this method, earnings or losses are recognized based on how an entity would allocate and distribute its cash if it were to sell all of its assets and settle its liabilities for their carrying amounts and liquidate at the reporting date. This method is used to calculate the Company’s share of earnings or losses from equity method investments when the contractual cash disbursements to the investors are different than the investors’ stated ownership percentage. This method of accounting is used for our investment in TPHGreenwich given the non-pro rata distribution provision in the JV Operating Agreement in favor of Investor, and there is no obligation to fund losses or operations of the joint venture. Under the HLBV method we do not record our proportionate share of TPHGreenwich losses and we will not recognize losses from the joint venture in excess of our investment basis. As of December 31, 2024, our investment in TPHGreenwich has been reduced to $0, and our unrecorded share of suspended losses was approximately $27.6 million.

The Company reviews its investments on an ongoing basis for indicators of other-than-temporary impairment. This determination requires significant judgment in which the Company evaluates, among other factors, the fair market value of its investments, general market conditions, the duration and extent to which the fair value of an investment is less than cost, and the Company’s intent and ability to hold an investment until it recovers. The Company also considers specific adverse conditions related to the financial health and business outlook of the investee, including industry and market performance, rating agency actions, and expected future operating and financing cash flows. If a decline in the fair value of an investment is determined to be other-than-temporary, an impairment loss is recorded to reduce the investment to its fair value, and a new cost basis in the investment is established.

On February 14, 2024, we consummated the transactions contemplated by the Stock Purchase Agreement, dated as of January 5, 2024 (as amended, the “Legacy Stock Purchase Agreement”), between the Company, TPHS Lender LLC, the lender under the Company’s Corporate Credit Facility (“TPHS Lender”) and TPHS Investor LLC, an affiliate of TPHS Lender (the “JV Investor”, and together with the TPHS Lender, the “Legacy Investor”), pursuant to which (i) Legacy Investor purchased 25,112,245 shares of common stock, par value $0.01 per share of the Company for a purchase price of $0.30 per share, (ii) the Company and the JV Investor entered into an amended and restated limited liability company operating agreement of TPHGreenwich, pursuant to which the JV Investor was appointed the initial manager of, and acquired a five percent (5%) interest in TPHGreenwich, and TPHGreenwich continues to own, indirectly, all of the real property assets and liabilities formerly held by the Company, and (iii) TPHGreenwich entered into an asset management agreement (the “Asset Management Agreement”) with a newly formed subsidiary of the Company (the “TPH Manager”), pursuant to which TPHGreenwich hired the TPH Manager to act as initial asset manager for TPHGreenwich for an annual management fee, as described in more detail below (collectively, the “Recapitalization Transactions”).

Under the Recapitalization Transactions, all real estate assets and related liabilities of the Company were contributed to TPHGreenwich at fair value. This resulted in a gain on contribution to joint venture of approximately $21.0 million and was recorded during the year ended December 31, 2024.

Reportable Segments

d.

Reportable Segments - We operate in one reportable segment: Asset management. Financial information related to our reportable segment for the years ended December 31, 2024, 2023 and 2022 is set forth in Note 15 – Segment Information.

Real Estate

f.

Real Estate – Prior to the Recapitalization Transactions, real estate assets were stated at historical cost, less accumulated depreciation and amortization. All costs related to the improvement or replacement of real estate properties were capitalized. Additions, renovations and improvements that enhance and/or extend the useful life of a property were also capitalized. Expenditures for ordinary maintenance, repairs and improvements that do not materially prolong the useful life of an asset were charged to operations as incurred. Depreciation and amortization were determined using the straight-line method over the estimated useful lives as described in the table below:


Category		Terms
Buildings and improvements		10 - 39 years
Tenant improvements		Shorter of remaining term of the lease or useful life
Furniture and fixtures		5 - 8 years

Valuation of Long-Lived Assets

h.

Valuation of Long-Lived Assets – Prior to the Recapitalization Transactions, we periodically reviewed long-lived assets for impairment whenever changes in circumstances indicated that the carrying amount of the assets may not be fully recoverable. We considered relevant cash flow, management’s strategic plans and significant decreases, if any, in the market value of the asset and other available information in assessing whether the carrying value of the assets could be recovered. When such events occurred, we compared the carrying amount of the asset to the undiscounted expected future cash flows, excluding interest charges, from the use and eventual disposition of the asset. If this comparison indicated an impairment, the carrying amount was then compared to the estimated fair value of the long-lived asset. An impairment loss was measured as the amount by which the carrying value of the long-lived asset exceeded its estimated fair value. We considered all the aforementioned indicators of impairment for our real estate and condominium units for sale for the years ended December 31, 2023 and 2022, and no provision for impairment was recorded during the years ended December 31, 2023 and 2022, or for the

period from January 1, 2024 through February 14, 2024. The 77 Greenwich property and all real estate is being held at the unconsolidated joint venture level as of February 14, 2024, the date of the Recapitalization Transactions.

Cash and Cash Equivalents

j.

Cash and Cash Equivalents - Cash and cash equivalents include securities with original maturities of three months or less when purchased.

Revenue Recognition

l.

Revenue Recognition - Subsequent to the Recapitalization Transactions, we earn a management fee in accordance with the Asset Management Agreement. The Asset Management Agreement provides that the TPH Manager agrees to provide certain services in connection with the construction (with respect to 77 Greenwich), management, operation, supervision and maintenance of 77 Greenwich and 237 11^th. To compensate TPH Manager for such services, TPHGreenwich paid an annual management fee to TPH Manager equal to the greater of (x) $400,000 or (y) 1.25% of (i) the outstanding principal balance of the CCF plus (ii) the outstanding principal balance of the 77G Mezzanine Loan, plus (iii) the principal balance of any future fundings of any type under the CCF and/or 77G Mezzanine Loan. This management fee is recorded is “other income” in the consolidated statement of operations and comprehensive income (loss). These fees are recognized in earnings over time in accordance with ASC 606 (see Note 16 – Subsequent Events for further information on Asset Management Agreement).

Prior to the Recapitalization Transactions, leases with tenants were accounted for as operating leases. Minimum rents were recognized on a straight-line basis over the term of the respective lease, beginning when the tenant takes possession of the space. The excess of rents recognized over amounts contractually due pursuant to the underlying leases were included in deferred rents receivable. In addition, retail leases typically provided for the

reimbursement of real estate taxes, insurance and other property operating expenses. As lessor, when reporting revenue, we have elected to combine the lease and non-lease components of our operating lease agreements and accounted for the components as a single lease component in accordance with ASC Topic 842. Lease revenues and reimbursement of real estate taxes, insurance and other property operating expenses were presented in the consolidated statements of operations and comprehensive loss as “rental revenues.” Also, these reimbursements of expenses were recognized within revenue in the period the expenses were incurred. We assessed the collectability of our accounts receivable related to tenant revenues. We applied the guidance under ASC 842 in assessing our lease payments: if collection of rents under specific operating leases was not probable, then we recognized the lesser of that lease’s rental income on a straight-line basis or cash received, plus variable rents as earned. Once this assessment was completed, we applied a general reserve, as provided under ASC 450-20, if applicable.

Revenues on sale of residential condominiums reflected the gross sales price from sales of residential condominium units which were recognized at the time of the closing of a sale, when title to and possession of the units are transferred to the buyer. Our performance obligation, to deliver the agreed-upon condominium, was generally satisfied in less than one year from the original contract date. Cash proceeds from unit closings held in escrow for our benefit were included in restricted cash in the consolidated balance sheets. Customer cash deposits on residential condominiums that were in contract were recorded as restricted cash and the related liability is recorded in accounts payable and accrued expenses in our consolidated balance sheets. Our cost of sales consisted of allocated expenses related to the initial acquisition, demolition, construction and development of the condominium complex, including associated building costs, development fees, as well as salaries, benefits, bonuses and share-based compensation expense, including other directly associated overhead costs, in addition to qualifying interest and financing costs. See also Note 2g. Residential Condominium Units for Sale for further discussion.

Income Taxes

n.

Income Taxes - We account for income taxes under the asset and liability method as required by the provisions of ASC 740, “Income Taxes.” Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. We provide a valuation allowance for deferred tax assets for which we do not consider realization of such assets to be more likely than not.

ASC 740-10-65 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740-10-65, we may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. ASC 740-10-65 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and increased other disclosures. As of both December 31, 2024 and 2023, we had determined that no liabilities are required in connection with unrecognized tax positions. As of December 31, 2024, our tax returns for the years ended December 31, 2019, through December 31, 2023, are subject to review by the Internal Revenue Service. Our state returns are open to examination for the years December 31, 2018 or 2019, through December 31, 2023, depending on the jurisdiction.

We are subject to certain federal, state and local income and franchise taxes.

Deferred Finance Costs

p.

Deferred Finance Costs – Prior to the Recapitalization Transactions, capitalized and deferred finance costs represented commitment fees, legal, title and other third-party costs associated with obtaining commitments for mortgage financings which result in a closing of such financing. These costs were being offset against loans payable in the consolidated balance sheets for mortgage financings and was fully amortized at December 31, 2023. Costs for our corporate credit facility were offset against corporate credit facility, net, in the consolidated balance sheet and had an unamortized balance of $334,000 at December 31, 2023. Unamortized deferred finance costs were expensed when the associated debt is refinanced with a new lender or repaid before maturity. Costs incurred in seeking financing transactions which do not close were expensed in the period in which it is determined that the financing will not close.

Reclassifications

r.

Reclassifications – Certain reclassifications and adjustments have been made to the prior year’s financial statements to conform to the current year’s presentation and to ensure consistency with US GAAP. These reclassifications had no effect on previously reported net income (loss) or stockholders’ equity.