Company: CMCT
Filing Date: 2025-03-07
Form Type: 10-K
Source: 0000908311-25-000017
Chunk: 105

Company: Creative Media & Community Trust Corp
Filing Date: 2025-03-07
Form: 10-K
Item: Item 1A
Chunk 105
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 of the hedging instruments that we may enter into could involve additional risks if they are not traded on regulated exchanges, guaranteed by an exchange or our clearing house, or regulated by any U.S. or foreign governmental authorities. It cannot be assured that a liquid secondary market will exist for hedging instruments that we may enter into in the future, and we may be required to maintain a position until exercise or expiration, which could result in significant losses.

We intend to record any derivative and hedging transactions we enter into in accordance with GAAP. However, we may choose not to pursue, or fail to qualify for, hedge accounting treatment relating to such derivative instruments. As a result, our operating results may suffer because losses, if any, on these derivative instruments may not be offset by a change in the fair value of the related hedged transaction or item. Any losses sustained as a result of our hedging transactions would be reflected in our results of operations, and our ability to fund these obligations will depend on the liquidity of our assets and access to capital at the time, and the need to fund these obligations could have a material adverse effect on our business, financial condition, results of operations, cash flow or our ability to satisfy our debt service obligations or to maintain our level of distributions on our Common Stock or Preferred Stock.

We may not be able to complete the Austin Refinancing on terms acceptable to us or on the timeline necessary to repay amounts outstanding under the 2022 Credit Facility prior to the March 31, 2025 maturity. 

Our ability to complete the Austin Refinancing will depend upon market conditions, prevailing economic and competitive conditions and financial, business and other factors beyond our control. In addition, while we are in the process of obtaining new financing for the Austin Refinancing, the transaction remains subject to completion of final due diligence by lenders thereunder and finalization of definitive documentation, and there can be no assurance that we will enter into such definitive documentation or complete the Austin Refinancing on acceptable terms or at all. If we are unable to complete the Austin Refinancing and as a result do not have sufficient funds to repay the amounts outstanding under the 2022 Credit Facility by the March 31, 2025 maturity and do not receive additional extensions and waivers, the lenders under the 2022 Credit Facility may, among other remedies, declare the unpaid principal amount of all outstanding loans, and all interest accrued and unpaid thereon, to be immediately due and payable.

Risks Related to Our Lending Operations 

Our