ICR-PA 10-K & 10-Q changes, risk factors and insider trading

As a result, we may not be able to pay distributions to our stockholders at any given time in the future, and the level of any distributions we do make to our common stockholders may not increase or even be maintained over time, any of which could materially and adversely affect the value of our common stockholders’ investments. Though we paid distributions to our common stockholders on a monthly basis from December 5, 2016 to March 24, 2020, our Board suspended distributions from March 24, 2020 to July 30, 2020 as a result of the COVID-19 pandemic and may do so again in the future.

We may not generate sufficient earnings and cash flow from operations to fully fund distributions to stockholders. Therefore, we have and may again choose to use cash flows from financing activities, which include borrowings (including borrowings secured by our assets), net proceeds of the Public Offerings, or other sources to fund distributions to our stockholders. We may be required to continue to fund our regular distributions from a combination of some of these sources if our investments fail to perform as anticipated, if expenses are greater than expected and due to numerous other factors. We have not established a limit on the amount of our distributions that may be paid from any of these sources. We have funded distributions, in part, using offering proceeds and, in the future, we may again pay distributions from sources other than earnings and cash flow from operations. During the year ended December 31, 2024, we did not use offering proceeds to pay distributions.

The Advisor seeks to determine the fair value of our investments as of the last day of each month. Within the parameters of our valuation guidelines, the valuation methodologies used to value our assets involve subjective judgments. In general, the loan portfolio is valued at amortized cost, subject to impairment testing. Impairment testing is subjective in nature as it partially relies on the Advisor’s judgment on whether a borrower can repay the loan. Valuation methodologies also involve assumptions and opinions about future events, which may or may not turn out to be correct. Valuations and appraisals of our investments are only estimates of fair value. Ultimate realization of the value of an asset depends to a great extent on economic and other conditions beyond our control and the control of the Advisor. Further, valuations do not necessarily represent the price at which an asset would sell, since market prices of assets can only be determined by negotiation between a willing buyer and seller. Therefore, the valuations of our investments may not correspond to the timely realizable value upon a sale of those assets. There will be no retroactive adjustment in the valuation of such assets, the price of our shares of common stock, the price we paid to repurchase shares of our common stock or fees we paid to the Advisor and the Dealer Manager to the extent such valuations prove to not accurately reflect the true estimate of value and are not a precise measure of realizable value. Because the price at which shares may be repurchased by us pursuant to our share repurchase plan is based on our estimated NAV per share, stockholders may receive less than realizable value for their investment.

The Advisor’s determination of our monthly NAV per share for each class of our common stock is based in part on estimates of the values of our illiquid assets in accordance with valuation guidelines approved by our Board. As a result, our most recently published NAV per share may not fully reflect any or all changes in value that may have occurred since the most recent valuation. We suspended the calculation of our NAV from March 24, 2020 to July 20, 2020 as a result of uncertainty caused by the COVID-19 pandemic, and we may do so again in the future. The Advisor reviews our CRE debt and CRE securities investments for the occurrence of any asset-specific or market-driven event it believes may cause a material valuation change in the asset valuation, but it may be difficult to reflect fully and accurately rapidly changing market conditions or material events that may impact the value of our illiquid assets or liabilities between valuations, or to obtain quickly complete information regarding any such events. As a result, the NAV per share may not reflect a material event until such time as sufficient information is available and analyzed, and the financial impact is fully evaluated, such that our NAV may be appropriately adjusted in accordance with our valuation guidelines. Depending on the circumstances, the resulting potential disparity in our NAV may negatively affect stockholders who have their shares repurchased, or stockholders who buy new shares, or our existing stockholders.

Our Second Public Offering was being madeterminated on aNovember “best1, efforts”2025. basis, meaning that the Dealer Manager and broker-dealers participating in the distribution of shares in our Second Public Offering (“participating broker-dealers”) were only required to use their best efforts to sell our shares and had no firm commitment or obligation to purchase any shares of our common stock in our Public Offerings. Our Second Public Offering is currently suspended. As of March 13, 2025, we hadWe received and$44.9 accepted investors’ subscriptions for and issued 794,715 Class A shares, 464,881 Class T shares, 53,815 Class D shares and 489,069 Class I sharesmillion in the IPO and Second Public Offering, resulting in gross proceeds of $44.9 million, including proceeds from the DRP. If we are unable to raise future equity capital, we will make fewer investments resulting in less diversification in terms of the type, number and size of investments that we make. Moreover, the potential impact of any single asset’s performance on the overall performance of our portfolio increases. Further, we have certain fixed operating expenses, including certain expenses as a public reporting company, regardless of whether we were able to raise substantial funds in our Second Public Offering.company. Our inability to raise future equity capital would increase our fixed operating expenses as a percentage of gross income, reducing our net income and limiting our ability to pay distributions to our stockholders.

The method for calculating our NAV, including the components that will be used in calculating our NAV, is not prescribed by rules of the SEC or any other regulatory agency. Further, there are no accounting rules or standards that prescribe which components should be used in calculating NAV, and our NAV will not be audited by our independent registered public accounting firm. We calculate and publish our monthly NAV solely for purposes of establishing the price at which we sell and repurchase shares of our common stock,NAV, and stockholders should not view our NAV as a measure of our historical or future financial condition or performance. The components and methodology that is used in calculating our NAV may differ from those used by other companies now or in the future.

We rely upon the Sub-Advisor to identify suitable investments. The investment professionals of the Sub-Advisor must determine which investment opportunities to recommend to us and to existing and future investment vehicles which are affiliated with Sound Point CRE, the parent of the Sub-Advisor. The Sub-Advisor may not be successful in locating suitable investments on financially attractive terms,terms or the Sub-Advisor may be unable to reinvest loan payoff proceeds due to financial covenant restrictions in our credit agreements, and we may not achieve our investment objectives. If we, through the Sub-Advisor, are unable to find suitable investments promptly, we may hold cash from any source, such as payoffs of our mortgage loans, in an interest-bearing account or invest the proceeds in short-term assets. We expect that the income we earn on these temporary investments will not be substantial. Further, we may use the principal amount of these investments, and any returns generated on these investments, to pay fees and expenses in connection with the Public Offerings and distributions. Therefore, delays in investinginvestment proceeds we raise from the Public Offerings or other large amounts of cash received could impact our ability to generate cash flow for distributions or to achieve our investment objectives.

Failure by us, the Advisor, the Sub-Advisor, the Dealer Manager or our service providers (including our transfer agent), tenants or borrowers to implement effective information and cybersecurity policies, procedures and capabilities could disrupt our business and harm our results of operations.

We, the Advisor, the Sub-Advisor, the Dealer Manager and our service providers (including our transfer agent), tenants and borrowers are dependent on the effectiveness of our respective information and cybersecurity policies, procedures and capabilities to protect our computer and telecommunications systems and the data that resides on or is transmitted through them. An externally caused information security incident, such as a hacker attack, virus or worm, or an internally caused issue, such as failure to control access to sensitive systems or insufficient policies or procedures, could materially interrupt business operations or cause disclosure or modification of sensitive or confidential information and could result in material financial loss, loss of competitive position, regulatory actions, breach of contracts, reputational harm or legal liability.

Our success depends in part on our ability to provide effective cybersecurity protection in connection with our business, and the digital technologies and internal digital infrastructure we utilize. We operate information technology networks and systems for internal purposes that incorporate third-party software and technologies. We also connect to and exchange data with external networks that may be operated by the Advisor, the Sub-Advisor, the Dealer Manager, service providers (including our transfer agent), tenants, borrowers or other third parties. We may also utilize software and other digital products and services that store, retrieve, manipulate, and manage our information and data, external data, personal data of our Advisor, Sub-Advisor, Dealer Manager, service providers (including our transfer agent), tenants, stockholders, borrowers or other third parties, and our own information and data.

Unauthorized access to or modification of, or actions disabling our ability to obtain authorized access to data of our Advisor, Sub-Advisor, Dealer Manager, service providers (including our transfer agent), tenants, stockholders, borrowers or other third parties, other external data, personal data, or our own data, as a result of a cyber incident, attack or exploitation of a security vulnerability, or loss of control of our operations could result in significant damage to our reputation or disruption to our business and to our Advisor, Sub-Advisor, Dealer Manager, service providers (including our transfer agent), tenants, borrowers or other third parties. In addition, allegations, reports, or concerns regarding vulnerabilities affecting our digital products or services could damage our reputation. This could lead to fewer using our services, which could have a material adverse impact on our financial condition, results of operations, cash flows, and future prospects.

In addition, if our systems or third-party products, services, and network systems for protecting against cybersecurity risks prove to be insufficient, we could be adversely affected by, among other things, loss of or damage to any of our intellectual property, proprietary or confidential information; loss of data or disruption to our Advisor, Sub-Advisor, Dealer Manager, service providers (including the transfer agent), tenants, borrowers or other third parties; breach of personal data; interruption of our business operations; increased legal and regulatory exposure, including fines and remediation costs; and increased costs required to prevent, respond to, or mitigate cybersecurity attacks. These risks could harm our reputation and our relationships with our employees (if any), our Advisor, Sub-Advisor, the Dealer Manager, service providers, tenants, stockholders, borrowers or other third parties, and may result in claims against us.

Because our systems sometimes retain information about our Advisor, Sub-Advisor, Dealer Manager, service providers (including our transfer agent), tenants, stockholders, borrowers or other third parties, our failure to appropriately maintain the security of the data we hold, whether as a result of our own error or the malfeasance or errors of others, could in the future lead, to disruptions in our services or other data systems, and could lead to unauthorized release of confidential or otherwise protected information or corruption of data. Our failure to appropriately maintain the security of the data we hold could also violate applicable privacy, data security and other laws and subject us to lawsuits, fines and other means of regulatory enforcement. Regulators have been imposing new data privacy and security requirements, including new and greater monetary fines for privacy violations. These laws and regulations may be broad in scope and subject to evolving interpretations and increasing enforcement, and we may incur costs to monitor compliance and alter our practices.

Moreover, certain new and existing data privacy laws and regulations could diverge and conflict with each other in certain respects, which makes compliance increasingly difficult. Complying with new regulatory requirements could require us to incur substantial expenses or require us to change our business practices, either of which could harm our business. As regulators have become increasingly focused on information security, data collection and use and privacy, we may be required to devote significant additional resources to modify and enhance our information security controls and to identify and remediate vulnerabilities, which could adversely impact our results of operations and profitability. Any compromise or breach of our systems could result in adverse publicity, harm our reputation, lead to claims against us and affect our relationships with our Advisor, Sub-Advisor, Dealer Manager, service providers (including our transfer agent), tenants, stockholders, borrowers or other third parties, any of which could have a material adverse effect on our business, operations, results of operations and profitability.

local, state, national or international economic conditions, including market disruptions caused by regional concerns, political upheaval, virus outbreaks and pandemics, war and military conflicts (including volatility as a result of the ongoing conflicts between Russia and Ukraine and in the Middle Eastoverseas), a sovereign debt crisis, inflation and other factors;

Our CRE debt we originate or acquire and securities investments we invest in are subject to changes in credit spreads. When credit spreads widen, the economic value of our investments decreasedecreases even if such investment is performing in accordance with its terms and the underlying collateral has not changed.

We have in the past and may in the future find it necessary or desirable to foreclose on certain of the loans we originate or acquire. In particular, as of December 31, 2024,2025, the Company had taken legal title to twothree office properties locatedand intwo Texasmultifamily properties through non-judicial foreclosure transactions and one multifamily property located in Oregon through a non-judicial foreclosure transaction.transactions.

We are subject to the risks inherent in the ownership and operation of real estate and real estate-related businesses and assets. Such investments are subject to the potential for deterioration of real estate fundamentals and the risk of adverse changes in local market and economic conditions, which may include changes in supply of and demand for competing properties in an area, changes in interest rates and related increases in borrowing costs, fluctuations in the average occupancy and room rates for hotel properties, changes in demand for commercial office properties (including as a result of an increased prevalence of remote work), changes in the financial resources of tenants, defaults by borrowers or tenants and the lack of availability of mortgage funds, which may render the sale or refinancing of properties difficult or impracticable. In addition, investments in real estate and real estate-related businesses and assets may be subject to the risk of environmental liabilities, contingent liabilities upon disposition of assets, casualty or condemnations losses, energy supply shortages, natural disasters, climate-related risks (including transition risks and acute and chronic physical risks), acts of God, terrorist attacks, war, pandemics or other public health events (such as the COVID-19 pandemic), and other events that are beyond our control, and various uninsured or uninsurable risks. Because landlord claims for future rent are capped under the U.S. Bankruptcy Code, tenants in our properties may be incentivized to enter bankruptcy proceedings for the purpose of rejecting leases at our properties and reducing liability thereunder. Further, investments in real estate and real estate-related businesses and assets are subject to changes in law and regulation, including in respect of building, environmental and zoning laws, rent control and other regulations impacting residential real estate investments and changes to tax laws and regulations, including real property and income tax rates and the taxation of business entities and the deductibility of corporate interest expense. In addition, if we acquire direct or indirect interests in undeveloped land or underdeveloped real property, which may often be non-income producing, we will be subject to the risks normally associated with such assets and development activities, including risks relating to the availability and timely receipt of zoning and other regulatory or environmental approvals, the cost and timely completion of construction (including risks beyond our control, such as weather or labor conditions or material shortages) and the availability of both construction and permanent financing on favorable terms. Further, ownership of real estate may increase our risk of direct and/or indirect liability under environmental laws that impose, regardless of fault, joint and several liability for the cost of remediating contamination and compensation for damages. In addition, changes in environmental laws or regulations or the environmental condition of real estate may create liabilities that did not exist at the time we became the owner of such real estate. Even in cases where we are indemnified against certain liabilities arising out of violations of laws and regulations, including environmental laws and regulations, there can be no assurance as to the financial viability of a third party to satisfy such indemnities or our ability to achieve enforcement of such indemnities.

We own twothree office properties in Texas and onetwo multifamily property in Oregonproperties that we recently acquired through foreclosure.foreclosures. We now receive revenues and income from rental income from these properties. As such, our business, financial condition and results of operations could be adversely affected if our tenants default on their rental payments or other lease obligations. Rental payment defaults, including those caused by the current economic climate or tenant liquidity limitations resulting from adverse developments affecting our tenants, could have an impact on our results of operations.

Our real estate portfolio includes twothree office assets we recently acquired through foreclosure,foreclosures, which have generally experienced a decrease in demand and value.value since the COVID-19 pandemic. Office assets may experience a further decrease in demand and value and such decrease in demand could have a material adverse effect on us. Further, our ability to sell any of our office assets may be limited in the current economic climate.

Our real estate portfolio includes twothree office assets we recently acquired through foreclosure,foreclosures, which have generally experienced a decrease in occupancy and value.value since the COVID-19 pandemic. Current economic conditions could lead our office tenants electing not to renew their leases, or to renew their leases for less space than they currently occupy, which could further increase vacancy rates and decrease rental income. Remote and hybrid work practices are likely to continue in a post-pandemic environment. As a result of the increased bargaining power of tenants, we may be required to spend increased amounts for property improvements. Additionally, if substantial office space reconfiguration is required, it may be more attractive for our tenants to pursue relocating to other office space than renewing their leases and renovating their existing space, which could have a material adverse effect on us.

Our real estate portfolio includes onetwo multifamily assetassets we recently acquired through foreclosure.foreclosures. Accordingly, our revenues from such assetassets will be significantly influenced by demand for multifamily housing generally, and a decrease in such demand would likely have an adverse effect on our revenues.

Our real estate portfolio includes onetwo multifamily asset we recentlyassets acquired through foreclosure.foreclosures. Accordingly, we are subject to risks inherent in investments in the multifamily industry. A decrease in the demand for multifamily housing would likely have an adverse effect on our rental revenues. Demand for multifamily housing has been and could be adversely affected by weakness in the national, regional, and local economies and changes in supply of or demand for similar or competing multifamily housing properties in an area. To the extent that any of these conditions occur, they are likely to affect demand and market rents for multifamily housing, which could cause a decrease in our rental revenue. Further, the underlying value of our multifamily assetassets depends upon the ability of the residents of such property to generate enough income to pay their rents in a timely manner, and the success of our investment will depend upon the occupancy levels, rental income, and operating expenses of such property. Residents’ inability to timely pay their rents may be impacted by employment and other constraints on their personal finances, including debts, purchases, and other factors. These and other changes beyond our control may adversely affect our residents’ ability to make rental payments. In the event of a resident default or bankruptcy, we may experience delays in enforcing our rights as landlord and may incur costs in protecting our investment.

Our primary interest rate exposures relate to the yield on our loans and the financing cost of our debt. Changes in interest rates and credit spreads may affect our net income from loans, which is the difference between the interest and related income we earn on our interest-earning investments and the interest and related expense we incur in financing these investments. Interest rate and credit spread fluctuations resulting in our interest and related expense exceeding interest and related income would result in operating losses for us. Changes in the level of interest rates and credit spreads also may affect our ability to make loans or investments, the value of our loans and investments and our ability to realize gains from the disposition of assets. Increases in interest rates and credit spreads may also negatively affect demand for loans and could result in higher borrower default rates. The U.S. Federal Reserve began reducing rates in September 2024 as inflation concerns lessened. During 2025, the U.S. Federal Reserve made three additional interest rate reductions and has not made any projections of further rate changes for 2026; however, the forward yield curve indicates that further reductions are expected.

We may invest in CRE securities, including CMBS, CRE CLOs and other subordinate securities, which entail certain heightened risks that resulted in losses following the onset of the COVID-19 pandemic.risks.

We may invest in a variety of CRE securities, including CMBS, CRE CLOs and other subordinate securities, which may be subject to the first risk of loss if any losses are realized on the underlying mortgage loans. CMBS and CRE CLOs entitle the holders thereof to receive payments that depend primarily on the cash flow from a specified pool of commercial or multifamily mortgage loans. Consequently, CMBS, CRE CLOs and other CRE securities will be adversely affected by payment defaults, delinquencies and losses on the underlying mortgage loans, which increase during times of economic stress and uncertainty and resulted in losses being incurred on our CRE securities investments after the onset of the COVID-19 pandemic.uncertainty.

FutureOur Board has suspended distributions in the past and future distribution levels are subject to adjustment based upon any one or more of the risk factors described in this Annual Report on Form 10-K or any subsequent periodic reports, as well as other factors that our Board may, from time-to-time, deem relevant to consider when determining an appropriate common stock distribution. The amount of distributions we may pay in the future is not certain.

The Advisor is paid a management fee and is entitled to a performance fee for its services that are based on the value of our investment portfolio as determined in connection with our determination of NAV, which is calculated by the Advisor in accordance with our valuation guidelines. The calculation of our NAV includes certain subjective judgments with respect to estimating, for example, our accrued expenses, net portfolio income and liabilities, and therefore, our NAV may not correspond to realizable value upon a sale of those assets. The Advisor may benefit by us retaining ownership of our assets at times when our stockholders may be better served by the sale or disposition of our assets in order to avoid a reduction in our NAV. If our NAV is calculated in a way that is not reflective of our actual net asset value, then the then-current transaction price of shares of our common stock on a given date may not accurately reflect the value of our portfolio, and our stockholders’ shares may be worth less than the then-current transaction price.

In recent years, numerous legislative, judicial and administrative changes have been made in the provisions of U.S. federal income tax laws applicable to investments similar to an investment in shares of our common stock. The 2017 tax legislation commonly referred to as the Tax Cuts and Jobs Act resulted in fundamental changes to the Code, with many of the changes applicable to individuals applyingmade onlypermanent throughby Decemberthe 31,One Big Beautiful Bill Act of 2025. Further changes to the tax laws are possible. In particular, the federal income taxation of REITs may be modified, possibly with retroactive effect, by legislative, administrative or judicial action at any time.

Rules enacted by the Tax Cuts and Jobs Act, as modified by the One Big Beautiful Bill Act of 2025, may limit our ability (and the ability of entities that are not treated as disregarded entities for U.S. federal income tax purposes and in which we hold an interest) to deduct interest expense. Under amended Section 163(j) of the Code, the deduction for business interest expense may be limited to the amount of the taxpayer’s business interest income plus 30% of the taxpayer’s “adjusted taxable income” unless the taxpayer’s gross receipts do not exceed $25 million per year during the applicable testing period or the taxpayer qualifies to elect and elects to be treated as an “electing real property trade or business.” A taxpayer’s adjusted taxable income will start with its taxable income and add back items of non-business income and expense, business interest income and business interest expense, net operating losses, and any deductions for “qualified business income,income.” and, in taxable years beginning before January 1, 2022, any deductions for depreciation, amortization or depletion. A taxpayer that is exempt from the interest expense limitations as an electing real property trade or business is ineligible for certain expensing benefits and is subject to less favorable depreciation rules for real property. The rules for business interest expense will apply to us and at the level of each entity in which or through which we invest that is not a disregarded entity for U.S. federal income tax purposes. To the extent that our interest expense is not deductible, our taxable income will be increased, as will our REIT distribution requirement and the amounts we need to distribute to avoid incurring income and excise taxes.

We did not originate any new loans during 20242025 as we focused on maintaining our liquidity with several of our loans approaching maturity. During 2024,2025, we hadfunded 8$2.0 loansmillion withand anreceived outstanding balancepaydowns of $110.9$99.4 million pay-offon inexisting full,loans, refinancedsold one loan with an outstanding principal balance of $23.1$47.5 million,million soldand wrote off one loan at par with an outstanding principal balance of $12.7$5.4 million and funded $10.2 million on existing loans.million. We also foreclosed on two loans during 2025 with an aggregate outstanding principal balance of $53.9$61.8 million resulting in the acquisition of threeone properties.office property and one multifamily property. In February 2026, we originated a first mortgage loan secured by a multifamily property in Texas with a principal balance of $11.4 million. The loan earns interest at SOFR+3.50%, has an all-in yield of 7.2%, and an LTV of 67.1%. During 2025,the remainder of 2026, we will focus on originating additional loans and continue toworking focuswith our current borrowers on extending or restructuring our maturing loans with an emphasis on obtaining principal reductions.reductions or loan payoffs.

Company Update – Strategic Plan

WeThe areCompany’s currentlymanagement focusinghas onbeen positioninganalyzing the portfolio impact of liquidating the real estate owned (“REO”) in the portfolio and potentially redeploying those proceeds into newly originated first mortgage loans. The Company’s goal is to position the portfolio to pursue a potential future strategic alternativetransaction when capital market conditions have improved, in order to maximize stockholder value and potentially provide our investors with access to some level of liquidity. There is no assurance that the Company will be able to successfully implement any strategic plan. We are continually impacted by evolving market conditions and other complex factors such as (i) the state of the commercial real estate market and financial markets, (ii) our ability to access additional capital or leverage and (iii) changes in general economic conditions such as high interest rates, among other factors. We will provide updates as the Company considers appropriate or as required under applicable law.

Net incomeloss attributable to common stockholders was $6.7$7.6 million, or $0.66$0.75 per share during the year ended December 31, 2024,2025, which included $2.3$1.2 million in provisionreversal forof credit losses.

On OctoberMay 23,1, 2024,2025, we acquired legal title to a multifamily property located in Portland,Kansas ORCity, MO (the “Arbor Mist property”) through a non-judicial foreclosure transaction. The Arbor Mist property previously collateralized a senior loan with an amortized cost basis of $29.5$38.9 million with a CECL reserve of $9.9$0.1 million at the time of the acquisition. The Arbor Mist property was recorded at $19.6$38.9 million based on the estimated fair value at acquisition.

24All out15 of our 25 loans were current on their contractual interest payments with no interest deferrals during the year ended December 31, 2024.2025.

We had net repayments of $96.8 million and $9.5$137.3 million on our repurchase agreements and line of credit, respectively,agreements, and principal repayments of loan participations of $8.9$1.6 million during the year ended December 31, 2024.2025.

During 2024,the year ended December 31, 2025, we paid a total of $18.6 million in distributions to common and preferred stockholders.

Investment Portfolio

The charts below summarize our debt investments portfolio as a percentage of par value by type of rate, our total investment portfolio by investment type, including real estate owned (“REO”),REO, and our loan portfolio by collateral type and geographical region as of December 31, 20242025 and 2023.2024.

The decrease in the size of our portfolio is primarily due to loan payoffs, the sale of one loan, the write off of one loan and the foreclosure of two loans, and a sale of a loanloans with no new loans originated during the year ended December 31, 2024.2025. The change in the all-in yield was primarily driven by athe decreasechanges in the SOFRcomposition rate.of the loans in the portfolio.

Cash coupon is the stated rate on the loan. All-in yield is the present value of all future principal and interest payments on the loan and does not include any origination fees or deferred commitment fees. Loan number 25 iswas on nonaccrual basis as of December 31, 20242024, and is excluded from the total. Loans numbers 2 and 16 were nonaccrual basis as of December 31, 2023, and were excluded from the total. As of December 31, 2024, loan number 5 iswas paying interest at a 4.0% fixed current rate and accruing the remaining amount as payment-in-kind. The total is the weighted average of the stated yield, excluding any default interest, as of December 31, 20242025 and 2023.2024. Our first mortgage loans are all floating rate and each contains a minimum SOFR floor as of December 31, 20242025 and 2023.2024. The weighted average SOFR floor was 0.68%0.31% and 0.65%,0.68%, respectively as of December 31, 20242025 and 2023.2024.

The loan matures on DecemberMay 9, 2025.2026. The Company has reviewed the loan and based on the estimated LTV recorded a $0.2$0.9 million asset-specific CECL reserve as of December 31, 2024.2025.

As of December 31, 20242025 and 2023,2024, we had totalborrowings borrowingsunder purchase agreements totaling $223,397 and $360,677, respectively, and loan participations sold, net, of $360,677$47,009 and $457,438,$48,524, respectively. For more information, see Part IV, Item 15, Note 4 – “Repurchase AgreementsAgreements, Credit Facility and CreditMortgage Facilities.Loan Payable.” During the years ended December 31, 20242025 and 2023,2024, we had weighted average borrowings, which include borrowings under repurchase agreements and loan participations sold, net, of $459,902$321,492 and $562,396$459,902 and weighted average borrowing costscosts, which also include borrowings under repurchase agreements and loan participations sold, net, of 7.7%6.6% and 7.4%,7.7%, respectively. The increasedecrease in weighted average borrowing costs was due to athe higher average SOFR indexdecrease in 2024 compared to 2023.SOFR.

OnDuring Octoberthe 23,year 2024,ended December 31, 2025, we acquired legal title to a multifamily property located in Portland,Kansas, ORMO, the Arbor Mist property, and an office property located in Charlotte, NC, the Parkview property, through a non-judicial foreclosure transaction.transactions. The propertyproperties previously collateralized atwo senior loan with an amortized cost basis of $29,476 that was risk rated 5 with a CECL reserve of $9,884 at the time of the acquisition.loans. The acquisitionacquisitions waswere accounted for as an asset acquisitionacquisitions under applicable GAAP guidance, and we intend to hold this property as real estate held for use with the intent to eventually sell when the market improves.guidance. The propertyproperties waswere recorded on our consolidated balance sheet at $19,592 based on the estimated fair value at acquisition. The fair market value estimate was determined based on an appraisalappraisals performed by an independent third-party appraiser. The acquisition resulted in a CECL reserve charge-off of $9,577 during the year ended December 31, 2024.appraisers.

The change in performance from December 31, 2023 toFor the yearyears ended December 31, 2024 and 2023, our net income (loss) was $12,669 and $(4,438), respectively. The increase in net income was primarily due to a decrease in reserve for credit losses during the year, partially offset by a decrease in our net interest income related to a smaller loan portfolio, and the loss related to the sale of the Renaissance O’Hare recognized in 2023 with no comparable activity in 2024.

ThereThe arefollowing norisk materialfactors changesamend toand supplement the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2025.

These forward-looking statements are not historical facts but reflect the intent, belief or current expectations of the management of InPoint Commercial Real Estate Income, Inc. (which we refer to herein as the “Company,” “we,” “our” or “us”) based on their knowledge and understanding of the business and industry, the economy and other future conditions. These statements are not guarantees of future performance, and we caution stockholders not to place undue reliance on forward-looking statements. Actual results may differ materially from those expressed or forecasted in the forward-looking statements due to a variety of risks, uncertainties and other factors, including but not limited to the factors listed and described under “Risk Factors” in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on March 13, 2026 (the “Annual Report”), some of which are briefly summarized below:

The following discussion and analysis relate to the three and six months ended MarchJune 31,30, 2026 and 2025 and as of MarchJune 31,30, 2026 and December 31, 2025. You should read the following discussion and analysis along with our unaudited consolidated financial statements and the related notes included in this Quarterly Report on Form 10-Q.

We are a Maryland corporation formed on September 13, 2016 to originate, acquire and manage an investment portfolio of CRE investments primarily comprised of (i) CRE debt, including primarily floating-rate first mortgage loans and fixed rate mezzanine loans.loans, and (ii) floating-rate CRE securities, such as CMBS. We may also invest in participations in CRE debt, floating-rate CRE securities such as CMBS, senior unsecured debt of publicly traded REITs and select equity investments in single-tenant, net leased properties. Substantially all of our business is conducted through our Operating Partnership, of which we are the sole general partner. We are externally managed by our Advisor, an indirect subsidiary of IREIC. Our Advisor has engaged the Sub-Advisor, a subsidiary of Sound Point CRE Management, LP, to perform certain services on behalf of the Advisor for us.

During the firstsecond quarter of 2026, we originated onetwo loanloans with aan aggregate principal balance of $11.4$36.1 million, purchased CMBS securities with a total par value of $10.0 million and received paydowns of $25.9$59.0 million on existing loans. In MayJuly 2026, we originated a first mortgage loan secured by an industrial property in FloridaPennsylvania with a principal balance of $16.9$11.0 million. The loan earns interest at SOFR+3.15%,3.00%, has an all-in yield of 6.8%,6.7%, and an LTV of 47.9%.70.0%. In August 2026, we originated a first mortgage loan secured by an industrial property in Arizona with a principal balance of $20.0 million. The loan earns interest at SOFR+2.70%, has an all-in yield of 6.4%, and an LTV of 74.9%. During the remainder of 2026, we intend to focus on originating additional loans and continue working with our current borrowers on extending or restructuring our maturing loans with an emphasis on obtaining principal reductions or loan payoffs.

The Company’s management has been analyzingredeploying proceeds from the portfolio impactpayoff of liquidatinglegacy the real estate in the portfolio and potentially redeploying those proceedsloans into newly originated first mortgage loans. The Company’s goal is to position the portfolio to pursue a future strategic transaction when capital market conditions have improved, in order to maximize stockholder value and potentially provide our investors with access to some level of liquidity. There is no assurance that the Company will be able to successfully implement any strategic plan. We are continually impacted by evolving market conditions and other complex factors such as (i) the state of the commercial real estate market and financial markets, (ii) our ability to access additional capital or leverage and (iii) changes in general economic conditions such as high interest rates, among other factors. We will provide updates as the Company considers appropriate or as required under applicable law.

Net loss attributable to common stockholders was $5.6$4.0 million, or $0.56$0.39 per share, during the three months ended MarchJune 31,30, 2026, which included $4.9$0.8 million in provision for credit losses.losses and a $2.5 million impairment loss on the Parkview property.

During the firstsecond quarter of 2026, we declared gross distributions at an annual rate of $1.25 per common share, which represents an annualized rate of 9.3%9.4% on our aggregate NAV of $13.4992$13.2318 as of MarchJune 31,30, 2026. Holders of Class D and Class T shares of common stock received less than the gross distribution amount after the deduction of stockholder servicing fees applicable to those classes.

Loan Portfolio:

We originated onetwo floating-rate loanloans with initial funding of $11.4$36.1 million during the three months ended MarchJune 31,30, 2026.

Our loan portfolio decreased 5.5%7.1% to $328.8$305.4 million during the three months ended MarchJune 31,30, 2026. The decrease includes $25.9$59.0 million in loan repayments and $4.9$0.8 million of provision for credit losses, partially offset by origination of onetwo loanloans with an outstanding principal balance of $11.4$36.1 million.

All 1514 of our loans were current on their contractual interest payments during the three months ended MarchJune 31,30, 2026.

We had net repayments of $8.3$35.6 million on our repurchase agreements during the three months ended MarchJune 31,30, 2026.

During the three months ended MarchJune 31,30, 2026, we paid a total of $4.6 million in distributions to common and preferred stockholders.

Disclosures discussing all significant accounting policies are set forth in our Annual Report under the heading “Note 2 – Summary of Significant Accounting Policies.” See “Note 2 – Summary of Significant Accounting Policies” for a discussion of changes to our significant accounting policies for the three months ended MarchJune 31,30, 2026.

Our strategy is to originate, acquire and manage an investment portfolio of CRE debt and CRE securities that is primarily floating rate and diversified based on the type and location of collateral securing the underlying CRE debt.debt and CRE securities.

The charts below summarize our debt and securities investments portfolio as a percentage of par value by type of rate, our total investment portfolio by investment type, including real estate owned (“REO”) and our loan portfolio by collateral type and geographical region as of MarchJune 31,30, 2026 and December 31, 2025:

The changes in our loan portfolio by property type and by region as of MarchJune 31,30, 2026 compared to December 31, 2025 were primarily due to the origination of onetwo loanloans and the repayment of loans by borrowers in ordinary course.

All-in yield is the present value of all future principal and interest payments on the loan and does not include any origination fees or deferred commitment fees. All-in yield also excludes the all-in yield for loans placed on nonaccrual status. All-in yield is calculated using the spread plus the values of the indices as of MarchJune 31,30, 2026.

During the threesix months ended MarchJune 31,30, 2026, onefour loanloans waswere paid off and onethree new loanloans waswere originated.

The table below presents select loan information for each of our commercial mortgage loans as of MarchJune 31,30, 2026:

As of MarchJune 31,30, 2026, an 80% undivided senior interest in the loan, which includes the right to receive priority interest payments at a rate of one-month term USD Secured Overnight Financing Rate (“SOFR”)+2.00%, was sold by our Operating Partnership pursuant to a Loan Participation Agreement dated November 15, 2021. Our Operating Partnership has retained a 20% undivided subordinate interest in the loan.

Cash coupon is the stated rate on the loan. All-in yield is the present value of all future principal and interest payments on the loan and does not include any origination fees or deferred commitment fees. The total is the weighted average of the stated yield, excluding any default interest, as of MarchJune 31,30, 2026. Our first mortgage loans are all floating rate and each contains a minimum SOFR floor. As of MarchJune 31,30, 2026, the weighted average SOFR floor was 0.42%.0.70%.

During the quarter ended March 31, 2026, the Company reviewed the property performance and estimated the property value, noting that the valuation exceeded the outstanding loan balance. As a result, no asset-specific CECL reserve was recorded for the loan as of March 31, 2026. The loan matured on February 9, 2026 and was not repaid or extended. The Company sent the borrower a maturity default notice and began the foreclosure process. The borrower has not paid the default interest but is current on its contractual interest payments. The Company has reviewed the loan and based on the estimated LTV recorded a $1.5 million asset-specific CECL reserve as of June 30, 2026.

The loan maturesmatured on May 9, 2026. TheDuring the quarter ended June 30, 2026, the Company hasobtained reviewedan updated third-party appraisal that exceeded the outstanding loan andbalance. based on the estimated LTV recordedAs a $3.6result, millionno asset-specific CECL reserve was recorded for the loan as of MarchJune 31,30, 2026. The Company is negotiating an extension with the borrower.borrower which it expects to complete in the third quarter of 2026.

The loan matured on March 9, 2026 and was not repaid or extended. The Company sent the borrower a maturity default notice and received default interest through the repayment date. All-in yield for the loan includes maturity default interest received. During the quarter ended MarchJune 31,30, 2026, the Company reviewed the property performance and estimated the property value, noting that the valuation exceeded the outstanding loan balance. As a result, no asset-specific CECL reserve was recorded for the loan as of MarchJune 31,30, 2026. The loan maturedwas repaid on MarchJuly 9,21, 2026 and was not repaid or extended. The Company sent the borrower a maturity default notice and the borrower is paying default interest until it completes the refinance with a third party. All-in yield for the loan includes maturity default interest received.2026.

The following table allocates the loan principal balance and the net loan exposure based on our internal risk ratings as of MarchJune 31,30, 2026:

As of MarchJune 31,30, 2026 and December 31, 2025, we had borrowings under repurchase agreements totaling $215,074$179,498 and $223,397, respectively, and loan participations sold, net, of $47,715 and $47,009, respectively. During the threesix months ended MarchJune 31,30, 2026 and the year ended December 31, 2025, we had weighted average borrowings, which include borrowings under repurchase agreements and loan participations sold, net, of $227,446$216,073 and $321,492, respectively, and weighted average borrowing costs, which also include borrowings under repurchase agreements and loan participations sold, net, of 6.2% and 6.6%, respectively.

During the year ended December 31, 2025, we acquired legal title to a multifamily property located in Kansas City, MO, the Arbor Mist property, and an office property located in Charlotte, NC, the Parkview property,property through non-judicial foreclosure transactions. The properties previously collateralized two senior loans. The acquisitions were accounted for as asset acquisitions under applicable GAAP guidance. The properties were recorded on our consolidated balance sheet based on the estimated fair value at acquisition. The fair market value estimate was determined based on appraisals performed by independent third-party appraisers.

The following table shows selected data for our REO in our portfolio as of MarchJune 31,30, 2026:

Comparison of the Three Months Ended MarchJune 31,30, 2026 to the Three Months Ended MarchJune 31,30, 2025

Based on amortized cost for real estate securities and principal amount for repurchase agreements. Amounts are calculated based on the average daily balance. Loan participations sold excludes the participation interest related to the REO.

Interest income excludes $500$515 and $608$328 for the three months ended MarchJune 31,30, 2026 and 2025, respectively, related to bank deposits not included in the investment portfolio. Interest expense excludes $534$537 and $309$312 of participation payments for the three months ended MarchJune 31,30, 2026 and 2025, respectively, related to the REO. Interest expense also excludes $497$501 and zero for the three months ended MarchJune 31,30, 2026 and 2025, respectively, related to interest expense on the mortgage loan payable.

The change in our average interest-earning assets and interest-bearing liabilities was due to origination of atwo new loan,loans, the paydown of the principal balance as loans maturedmatured, purchase of real estate securities and the subsequent repayment of the amount financed for these loans. The change in the weighted average levered yield was primarily due to the change in the composition of the loans in the portfolio and the change in the composition of financing.

Our revenue from real estate during the three months ended MarchJune 31,30, 2026 and 2025,2025 was $2,726$2,985 and $1,528,$1,887, respectively. The increase in revenue was primarily due to the acquisition of two propertiesproperties, afterone in the firstsecond quarter and one in the third quarter of 2025.

Operating expenses for the three months ended MarchJune 31,30, 2026 and 2025 consisted of the following:

Total operating expenses for the three months ended MarchJune 31,30, 2026 and 2025 were $4,431$4,664 and $3,335,$4,406, respectively. The primary driver of the increase in total operating expenses was the acquisition of two propertiesproperties, afterone in the firstsecond quarter and one in the third quarter of 2025.

For the three months ended MarchJune 31,30, 2026 and 2025, our net (loss) income was $(4,1432,483) and $3,948,$3,073, respectively. The decrease in net income was primarily due to a reduction in net interest income as the loan portfolio decreased, an increase in the CECL reservereserve, the impairment loss recorded on the Parkview property and an increase in real estate operating expenses and depreciation and amortization,expenses, partially offset by an increase in revenue from real estate.