# EDGAR Filing Document

**Accession Number:** 0001919204
**File Stem:** 0001829126-25-007809
**Filing Date:** 2025-10
**Character Count:** 49779
**Document Hash:** d1dc5f5275cc73ec76694538027a3f31
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001829126-25-007809.hdr.sgml**: 20251001

**ACCESSION NUMBER**: 0001829126-25-007809

**CONFORMED SUBMISSION TYPE**: 1-SA

**PUBLIC DOCUMENT COUNT**: 1

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20251001

**DATE AS OF CHANGE**: 20251001

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** COMPOUND REAL ESTATE BONDS INC
- **CENTRAL INDEX KEY:** 0001919204
- **STANDARD INDUSTRIAL CLASSIFICATION:** FINANCE SERVICES [6199]
- **ORGANIZATION NAME:** 02 Finance
- **EIN:** 882224023
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1031

**FILING VALUES:**
- **FORM TYPE:** 1-SA
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 24R-00723
- **FILM NUMBER:** 251363114

**BUSINESS ADDRESS:**
- **STREET 1:** 1185 AVENUE OF THE AMERICAS
- **STREET 2:** 3RD FLOOR
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10036
- **BUSINESS PHONE:** 1-800-560-5215

**MAIL ADDRESS:**
- **STREET 1:** 1185 AVENUE OF THE AMERICAS
- **STREET 2:** 3RD FLOOR
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10036

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 1-SA**

☒ **SEMIANNUAL REPORT PURSUANT TO REGULATION A**

**or**

**SPECIAL FINANCIAL REPORT PURSUANT TO REGULATION A**

For the fiscal semiannual period ended: <u>June 30, 2025</u>

**Compound Real Estate Bonds, Inc.**

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **Delaware** | **88-2224023** |
| (State or other jurisdiction of <br> incorporation or organization) | (I.R.S. Employer <br> Identification No.) |

---

**1185 Avenue of the Americas, 3rd floor**

**New York, NY 10036**

(Mailing Address of principal executive offices)

**1-800-560-5215**

Issuer's telephone number, including area code

[**Table of Contents**](#toc)

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
| [Statement Regarding Forward-Looking Information](#a_001) | 1 |
| [Management's Discussion and Analysis of Financial Condition and Results of Operations](#a_002) | 3 |
| [Other Information](#a_003) | 5 |
| [Consolidated Financial Statements of Compound Real Estate Bonds, Inc. (Unaudited)](#a_004) | F-1 |
| [Exhibits](#a_005) | 6 |

---

i

[**Table of Contents**](#toc)

**STATEMENT REGARDING FORWARD-LOOKING INFORMATION**

*In this report, the term "Compound", "we", "us", "our" or "the Company" refers to Compound Real Estate Bonds, Inc.*

We make statements in this Semi-Annual Report on Form 1-SA ("Semi-Annual Report") that are forward-looking statements within the meaning of the federal securities laws. The words "outlook," "believe," "estimate," "expect," "potential," "projected," "anticipate," "intend," "plan," "seek," "may," "could," and similar expressions or statements regarding future periods are intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance or achievements, or industry results, to differ materially from any predictions of future results, performance or achievements that we express or imply in this Semi-Annual Report or in the information incorporated by reference into this Semi-Annual Report.

The forward-looking statements included in this Semi-Annual Report are based upon our current expectations, plans, estimates, assumptions and beliefs that involve numerous risks and uncertainties. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our actual results and performance could differ materially from those set forth in the forward-looking statements. Factors which could have a material adverse effect on our operations and future prospects include, but are not limited to:

● our ability to effectively deploy the proceeds raised in our initial and any subsequent offerings (the "Offering(s)");

● changes in economic conditions generally and the real estate and securities markets specifically;

● limited ability to dispose of assets because of the relative illiquidity of real estate investments;

● increased interest rates and operating costs;

● our failure to obtain necessary outside financing;

● difficulties in identifying properties to invest in and consummating real estate acquisitions, developments, joint ventures and dispositions;

● our failure to successfully operate acquired properties and operations;

● public health crises, pandemics and epidemics, such as those caused by new strains of viruses such as H5N1 (avian flu), severe acute respiratory syndrome (SARS) and, most recently, the novel coronavirus (COVID-19);

● climate change and natural disasters that could adversely affect our properties and our business;

● exposure to liability relating to environmental and health and safety matters;

● changes in real estate and zoning laws and increases in real property tax rates;

● failure of acquisitions to yield anticipated results;

[**Table of Contents**](#toc)

● our level of debt and the terms and limitations imposed on us by our debt agreements;

● our ability to retain our executive officers and other key personnel of our advisor, our property manager and their affiliates;

● legislative or regulatory changes impacting our business or our assets and Securities and Exchange Commission ("SEC") guidance related to Regulation A ("Regulation A") of the Securities Act of 1933, as amended (the "Securities Act"), or the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act");

● changes in business conditions and the market value of our assets, including changes in interest rates, tenant defaults or bankruptcy, and generally the increased risk of loss if our investments fail to perform as expected;

● our ability to implement effective conflicts of interest policies and procedures among the various real estate investment opportunities sponsored by affiliates of our Manager;

● intense competition in the real estate market that may limit our ability to attract or retain tenants or re-lease units;

● defaults on or non-renewal of leases by tenants;

● decreased rental rates or increased vacancy rates;

● failure to achieve the target returns, internal rate of return, multiple and distributions to Members;

● our compliance with applicable local, state and federal laws, including the Investment Advisers Act of 1940, as amended (the "Advisers Act"), the Investment Company Act of 1940, as amended, and other laws; and

● changes to accounting principles generally accepted in the United States of America ("U.S. GAAP").

*[Remainder of page intentionally left blank]*

[**Table of Contents**](#toc)

**Item 1. Management's Discussion and Analysis of Financial Conditions and Results of Operations**

**Formation**

We were incorporated under the laws of the State of Delaware on November 2, 2021 initially by Impactology Financial Corporation ("IFC"). On November 4, 2021, we issued 10,001 shares of our common stock to IFC in exchange for $50,100. On March 11, 2022, the Company effected a reverse stock split, reducing the Company's 10,000,000 authorized shares of common stock to 5,000 shares of common stock. As a result, the 10,001 shares owned by IFC converted to 5 shares of common stock, representing all of the outstanding shares of common stock of the Company. Subsequently, on March 17, 2022, IFC transferred all of its 5 shares of the Company's common stock to CRH, which became the new parent of the Company. CRH is the sole stockholder of the Company's common stock, and was formed by the same individuals behind IFC, which is now non-operational. The purpose of establishing CRH was a re-branding effort.

**Results of Operations**

From January 1, 2025 through June 30, 2025, we earned revenues of $739,600, which was substantially greater than the $180,698 in interest we accrued on outstanding Compound Bonds. However, our total expenses for this period were $1,067,392, driven primarily by Advertising and Marketing expenses of $308,682 (these spends in marketing costs were primarily associated with digital advertising campaigns to support the bond offering. As the offering is now closed, these specific advertising expenses will no longer be incurred) and Professional Expenses of $439,118 (these include fees for legal, accounting, and audit services, along with a major proportion allocated to management and consulting fees necessary for the company's ongoing operations and investment strategy. While the total amount may decline gradually now that the bond offering has ended, these essential operational expenses will continue as the company invests and manages its real estate portfolio), resulting in a $327,792 loss for the period.

By contrast, during the period from January 1, 2024 through June 30, 2024 we had not yet commenced operations, and our only revenues were $8,695 in interest earned on cash and cash equivalents and Treasury Bonds. Our expenses were lower during this period ($393,798) with substantially less spent on Advertising, Marketing expenses ($42,580), and Professional expenses ($21,680), but a substantial outlay for Software Development & Maintenance ($158,650) as we added more features and did several enhancements to make the application more user friendly and efficient. However, our loss for the period was higher ($385,104) because we had not yet commenced operation and begun to generate revenue.

**Liquidity and Capital Resources**

As of August 31, 2025, we had a total of $21,736,244.54 in Compound Bonds outstanding (principal and interest), plus an additional $85,712.86 in other current liabilities and a further additional $10,809.73 owed to related parties, but only $5,017,016.99 in liquid assets (consisting of $2,527,713.38 in cash and cash equivalents and $2,489,303.61 in U.S. Treasury Bills) with which to satisfy potential redemptions of Compound Bonds and other liabilities, with an additional $14,238,812.34 deployed in mortgage assets.

As of June 30, 2025, we had liquid assets of $3,945,764, (consisting of $2,453,499 in cash and cash equivalents and $1,492,265 in Treasury Bills), while the total original principal amount of the outstanding Compound Bonds was $19,961,511, and the total outstanding amount of original principal and compounded interest on Compound Bonds was $20,299,641. In addition to Compound Bonds outstanding, the Company had an additional $46,093 in other current liabilities and Compound Administrative Services has incurred expenses of $211,648 on the Company's behalf during the first six months of 2025 which were subsequently reimbursed.

As of December 31, 2024, we had liquid assets of $7,975,592, (consisting of $2,782,160 in cash and cash equivalents and $5,193,432 in Treasury Bills), while the total original principal amount of the outstanding Compound Bonds was $12,239,873, and the total outstanding amount of original principal and compounded interest on Compound Bonds was $12,446,343. In addition to Compound Bonds outstanding, the Company had an additional $278,923 in other current liabilities and a further additional $65,955 owed to related parties.

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As of June 30, 2025 and the date of this report, the Company has started generating revenues sufficient to cover the compounding interest on its Compound Bonds. Based on the Company's current financial position and capital available, it is reasonably foreseeable that revenues and reserves will remain sufficient to meet these obligations for the balance of the financial year. We do not have any external sources of capital, other than advances from CH, which is under no obligation to advance us any funds. The Company has been and will continue to be dependent on the monies raised via its Regulation A offering to fund its operations until it has made investments which generate sufficient revenue. However, the Company cannot provide any assurances that its plans will achieve success even if this amount of funding is raised.

The Company currently has no binding agreements, arrangements, or understandings with any person to obtain funds through bank loans, lines of credit or any other sources. As such, in order for us to close successfully on additional investments we will need to either raise sufficient additional funds in the offering or be able to borrow adequate funds.

**Going Concern**

The Company's consolidated financial statements have been prepared assuming that the Company will continue as a going concern. However, the Company has not yet generated sufficient revenues to be able to pay all principal and interest due on its issued bonds, and there is no assurance that the Company will succeed in doing so. The Company's Regulation A offering ends on September 19, 2025, and the Company has no plans to raise additional capital after that date. . These conditions raise substantial doubt about the Company's ability to continue as a going concern.

We cannot assure you that our existing assets will generate enough revenue to pay all bonds in full. Additionally, should demand for redemptions exceed our ability to meet such demand with ready reserves, we will be dependent on Compound Real Estate Holdings, Inc. ("CH") to provide capital for our operations. CH, however, is under no obligation to advance any funds. The consolidated financial statements do not include adjustments related to the recoverability and classifications of assets or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

**Contingent Liabilities**

We may be subject to lawsuits, investigations, and claims (some of which may involve substantial dollar amounts) that can arise out of our normal business operations. We would continually assess the likelihood of any adverse judgments or outcomes to our contingencies, as well as potential amounts or ranges of probable losses, and recognize a liability, if any, for these contingencies based on a thorough analysis of each matter with the assistance of outside legal counsel and, if applicable, other experts. Because most contingencies are resolved over long periods of time, liabilities may change in the future due to new developments (including new discovery of facts, changes in legislation and outcomes of similar cases through the judicial system), changes in assumptions or changes in our settlement strategy. There were no contingent liabilities as of June 30, 2025.

**Income Taxes**

Compound Bonds will receive interest income. At the end of the calendar year, investors with over $10 of realized interest will receive a form 1099-INT. These will need to be filed in accordance with the United States Tax Code. Investor's tax situations will likely vary greatly, and all tax and accounting questions should be directed towards a certified public accountant.

As of June 30, 2025, we had no projected federal or state income tax expense.

**Off-Balance Sheet Arrangements**

As of the date of this Semi-Annual Report. we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to our Members or investors.

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**Significant Accounting Policies**

Our management's discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, or "GAAP." The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reported period. In accordance with GAAP, we base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. Our significant accounting policies are fully described in Note 3 to our financial statements appearing elsewhere in this report, and we believe those accounting policies are critical to the process of making significant judgments and estimates in the preparation of our financial statements.

**Trends & Uncertainties**

The Company is currently focused on managing and optimizing its existing portfolio of real estate and real estate-related debt investments. Our strategy continues to emphasize value investing — acquiring and holding real estate assets and debt instruments at prices below our assessment of their intrinsic value — but our primary emphasis has shifted to asset performance, risk management, and preservation of investor capital now that the initial offering has concluded.

Current U.S. real estate market dynamics continue to shape our outlook. High housing costs, affordability pressures, and ongoing credit constraints support the long-term demand for rental housing, while select opportunities remain in commercial and multifamily markets. The Company believes that disciplined asset management and selective opportunistic acquisitions can help maintain value for bondholders.

Expenses incurred during the period included a significant proportion for marketing and advertising, which were primarily associated with digital campaigns to promote the now-closed bond offering. Following the offering's closure on September 19, 2025, these specific marketing and advertising costs will cease, leading to an expected significant overall decline in offering-related expenditures. However, general operational expenses, including essential costs for accounting, auditing, legal, and management/consulting fees will continue to be incurred. These ongoing expenses are necessary for the company to actively manage its real estate investments, build a quality portfolio, and service investor needs, including future bond redemptions.

Because our bonds remain payable on demand, a continuing uncertainty for the Company is the balance between investor redemption requests and the liquidity profile of our real estate assets. While we maintain reserves to help manage withdrawals, there is a risk that redemption requests may exceed available liquid assets, which could force us to borrow or liquidate properties on unfavorable terms. This mismatch between liquid liabilities and less liquid assets remains the most significant operational risk factor for the Company. Should demand for redemptions exceed our ability to meet such demand with ready reserves, it will have a material effect on our ability to operate.

Looking forward, the Company does not plan to raise any additional capital following the conclusion of its Regulation A offering on September 19, 2025. The company's primary focus will be on strengthening portfolio performance and carefully managing liquidity. The Company's parent, CH, intends to raise funds for future investment opportunities through its affiliate, Compound Real Estate Bonds II, Inc., whose Regulation A offering was qualified on September 18, 2025.

**Item 2. Other Information**

None.

**Item 3. Financial Statements**

**Compound Real Estate Bonds, Inc.**

Updated Consolidated Financial Statements (Unaudited)

For the Six Months Period Ended June 30, 2024, and June 30, 2025

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**Compound Real Estate Bonds, Inc.**

**INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)**

---

| | |
|:---|:---|
| [Consolidated Balance Sheets](#b_001) | F-2 |
| [Consolidated Statements of Operations](#b_002) | F-3 |
| [Consolidated Statements of Changes in Shareholder's Equity](#b_003) | F-4 |
| [Consolidated Statements of Cash Flows](#b_004) | F-5 |
| [Notes to the Consolidated Financial Statements](#b_005) | F-6 to F-11 |

---

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**Compound Real Estate Bonds, Inc.**

**Consolidated Balance Sheet (Unaudited)**

**As of**

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| | | |
|:---|:---|:---|
|  | **June 30,<br> 2025** | **December 31,<br> 2024** |
| &nbsp;&nbsp;&nbsp;**<u>ASSETS</u>** |  |  |
| **Assets** |  |  |
| &nbsp;&nbsp;&nbsp;Cash & Cash Equivalents | $2453499 | $2782160 |
| &nbsp;&nbsp;&nbsp;Accounts Receivable | $644555 | $981557 |
| &nbsp;&nbsp;&nbsp;Treasury Bills | $1492265 | $5193432 |
| &nbsp;&nbsp;&nbsp;Mortgage Investments | $13767857 | $2171662 |
| &nbsp;&nbsp;&nbsp;Other Real Estate Assets | $10000 | $- |
| &nbsp;&nbsp;&nbsp;Accrued Interest | $- | $11270 |
| &nbsp;&nbsp;&nbsp;Office Equipments | $1554 | $2929 |
| &nbsp;&nbsp;&nbsp;Software Development (net) | $22891 | $22891 |
| **TOTAL ASSETS** | $**18392621** | $**11165901** |
| &nbsp;&nbsp;&nbsp;**<u>LIABILITIES AND SHAREHOLDER'S EQUITY</u>** |  |  |
| **Liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;Accounts Payable | $29038 | $219627 |
| &nbsp;&nbsp;&nbsp;Credit Card | $19912 | $58054 |
| &nbsp;&nbsp;&nbsp;Bank Over Draft | $290 | $290 |
| &nbsp;&nbsp;&nbsp;Accrued Interest | $338130 | $206470 |
| &nbsp;&nbsp;&nbsp;Beta Testing | $952 | $952 |
| &nbsp;&nbsp;&nbsp;Compound Bonds | $19961511 | $12239873 |
| &nbsp;&nbsp;&nbsp;Due to Related Parties | $(4099) | $65955 |
| &nbsp;&nbsp;&nbsp;**Total Liabilities** | $**20345734** | $**12791221** |
| **Shareholder's Equity** |  |  |
| &nbsp;&nbsp;&nbsp;Common Stock | $1 | $1 |
| &nbsp;&nbsp;&nbsp;Additional Paid-in Capital | $96249 | $96249 |
| &nbsp;&nbsp;&nbsp;Drawings | $(4227) | $- |
| &nbsp;&nbsp;&nbsp;Retained Earnings | $(2045137) | $(1721569) |
| &nbsp;&nbsp;&nbsp;**Total shareholder's Equity** | $**(1953114)** | $**(1625319)** |
| **TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY** | $**18392621** | $**11165902** |

---

The accompanying notes are an integral part of these consolidated financial statements.

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**Compound Real Estate Bonds, Inc.**

**Consolidated Statement of Operations (Unaudited)**

**For the**

---

| | | |
|:---|:---|:---|
|  | **Period<br> Jan'25 - Jun'25** | **Period<br> Jan'24 - Jun'24** |
| **Operating Expenses** |  |  |
| &nbsp;&nbsp;&nbsp;Legal | $60206 | $20634 |
| &nbsp;&nbsp;&nbsp;Other General and Administrative | $21909 | $6577 |
| &nbsp;&nbsp;&nbsp;Other Professional | $439118 | $21680 |
| &nbsp;&nbsp;&nbsp;Advertising and Marketing | $308682 | $42580 |
| &nbsp;&nbsp;&nbsp;Software & Subscriptions | $56781 | $63148 |
| &nbsp;&nbsp;&nbsp;Interest on Bonds | $180698 | $76714 |
| &nbsp;&nbsp;&nbsp;Software Development & Maintenance | $- | $158650 |
| &nbsp;&nbsp;&nbsp;Software Amortization | $- | $3815 |
| **Total Operating Expenses** | $**1067392** | $**393798** |
| **Other Incomes** |  |  |
| &nbsp;&nbsp;&nbsp;Interest earned on Treasury Bonds | $49312 | $8695 |
| &nbsp;&nbsp;&nbsp;Interest earned on Mortgages | $498740 | $- |
| &nbsp;&nbsp;&nbsp;Origination Fees earned on Mortgages | $191547 | $- |
| **Total Other Incomes** | $**739600** | $**8695** |
| **Loss Before Income Taxes** | $**(327792)** | $**(385104)** |
| **Less Provision for Income Taxes** | $- | $- |
| **Net Loss** | $**(327792)** | $**(385104)** |
| **Basic and Dilutive Net Loss Per Share** | $(65558) | $(77021) |
| &nbsp;&nbsp;&nbsp;Basic and Dilutive - Weighted average number of common shares outstanding | 5.00 | 5.00 |

---

The accompanying notes are an integral part of these consolidated financial statements.

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**Compound Real Estate Bonds, Inc.**

**Consolidated Statement of Changes in Shareholder's Equity (Unaudited)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Common<br> Shares** | **Common<br> Stock, Par<br> $0.0001** | **Additional<br> Paid in<br> Capital** | **Accumulated<br> Deficit** | **Total** |
| **Balance at December 31, 2021** | **5** | $**1** | $**50099** | $**(26298)** | $**23802** |
| **Share issuances:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Founding common shares issued for cash - parent company |  | $- | $3030 | $- | $3030 |
| **Net loss** | - | $- | $- | $(10933) | $(10933) |
| **Balance at June 30, 2022** | **5** | $**1** | $**53129** | $**(37231)** | $**15899** |
| **Share issuances:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Shareholder's contributed capital |  | $- | $23285 | $- | $23285 |
| **Net loss** | - | $- | $- | $(59487) | $(59487) |
| **Balance at December 31, 2022** | **5** | $**1** | $**76414** | $**(96718)** | $**(20303)** |
| **Share issuances:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Shareholder's contributed capital |  | $- | $15685 | $- | $15685 |
| **Net loss** | - | $- | $- | $(385104) | $(385104) |
| **Balance at June 30, 2023** | **5** | $**1** | $**92099** | $**(481822)** | $**(389722)** |
| **Share issuances:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Shareholder's contributed capital |  | $- | $4150 | $- | $4150 |
| **Net loss** | - | $- | $- | $(142421) | $(142421) |
| **Balance at December 31, 2023** | **5** | $**1** | $**96249** | $**(624243)** | $**(527993)** |
| **Share issuances:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Shareholder's contributed capital |  | $- | $- | $- | $- |
| **Net loss** | - | $- | $- | $(385104) | $(385104) |
| **Balance at June 30, 2024** | **5** | $**1** | $**96249** | $**(1009346)** | $**(913096)** |
| **Share issuances:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Shareholder's contributed capital |  | $- | $(4227) | $- | $(4227) |
| **Net loss** | - | $- | $- | $(1035791) | $(1035791) |
| **Balance at June 30, 2025** | **5** | $**1** | $**92023** | $**(2045137)** | $**(1953114)** |

---

The accompanying notes are an integral part of these consolidated financial statements.

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**Compound Real Estate Bonds, Inc.**

**Consolidated Statement of Cash Flows (Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **Period<br> Jan'25 - Jun'25** | **Period<br> Jan'24 - Jun'24** |
| **Cash Flow from Operating Activities** |  |  |
| &nbsp;&nbsp;&nbsp;Net Income (Loss) | $(327792) | $(385104) |
| &nbsp;&nbsp;&nbsp;Add Non-Cash Expense: Software Amortization | $- | $3815 |
| **Adjustments to reconcile net loss to net cash used in operating activities:** |  |  |
| &nbsp;&nbsp;&nbsp;Increase in current liabilities | $(167125) | $73756 |
| &nbsp;&nbsp;&nbsp;Decrease in current assets | $(17107) |  |
| &nbsp;&nbsp;&nbsp;**Net cash provided by Operating Activities** | $**(512024)** | $**(307532)** |
| **Cash flow from Investing Activities** |  |  |
| &nbsp;&nbsp;&nbsp;Payments for Treasury Bills | $3701167 | $(1802183) |
| &nbsp;&nbsp;&nbsp;Payments for Mortgage Investments | $(12211000) | $- |
| &nbsp;&nbsp;&nbsp;Payments for Other Real Estate Assets | $(10000) | $- |
| &nbsp;&nbsp;&nbsp;**Net cash provided by Investing Activities** | $**(8519832)** | $**(1802183)** |
| **Cash flow from Financing Activities** |  |  |
| &nbsp;&nbsp;&nbsp;Shareholder's contributed capital | $- | $- |
| &nbsp;&nbsp;&nbsp;Net Receipts from issuing bonds | $7721639 | $1730233 |
| &nbsp;&nbsp;&nbsp;**Net cash provided by Financing Activities** | $**7721639** | $**1730233** |
| Net change in Cash & Cash Equivalents | $(1310218) | $(379482) |
| Cash & Cash Equivalents at beginning of period | $3763717 | $1236253 |
| **Cash & Cash Equivalents at end of period** | $**2453499** | $**856771** |

---

The accompanying notes are an integral part of these consolidated financial statements.

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**NOTE 1. ORGANIZATION AND NATURE OF OPERATIONS**

Impact Bonds, Inc., a Delaware corporation was founded on November 2, 2021. Its name was changed to Compound Real Estate Bonds, Inc. ("the Company" or "CBI") on March 11, 2022. The Company is in the business of issuing debt bonds to raise capital to pool and invest in real estate loans and mortgages that will be issued by its wholly owned subsidiary Compound Lending, LLC ("CLL") and it has not begun to generate revenue. The Company formed, its subsidiary, CLL on March 16, 2022. CLL has not begun operations. The head office of the Company is located at 1185 Avenue of the Americas 3rd Floor, New York, NY 10036, United States.

The Company's fiscal year-end is December 31<sup>st</sup>.

**NOTE 2. GOING CONCERN**

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has started generating revenues, but it is not assured that it will be able to pay all principal and interest due on its issued bonds. The Company's Regulation A offering ends on September 19, 2025, and the Company has no plans to raise additional capital after that date. These conditions raise substantial doubt about its ability to continue as a going concern for a period of twelve months from the issuance date of this report. On June 30, 2024 and June 30, 2025, the Company incurred losses of $385,104 and $327,792 respectively.

No assurances can be given that the Company will achieve success, without seeking additional financing. There also can be no assurances that the Form 1-A will result in additional financing or that any additional financing required, can be obtained, or obtained on reasonable terms acceptable to the Company. These consolidated financial statements do not include adjustments related to the recoverability and classifications of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

**NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

***Basis of presentation***

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America or ("U.S. GAAP") as found in the Accounting Standards Codification ("ASC"), the Accounting Standards Update("ASU") of the Financial Accounting Standards Board ("FASB") and are expressed in US Dollars. Significant accounting policies applicable to the Company are summarized as follows:

***Use of estimates***

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

***Cash and cash equivalents***

For purposes of reporting within the statement of cash flows, the Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid securities purchased with a maturity of 90 days or less to be cash and cash equivalents.

***Related party disclosures***

Under ASC 850 "Related Party Transactions" an entity or person is considered to be a "related party" if it has control, significant influence or is a key member of management personnel. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. The Company in accordance With the standard ASC 850 presents disclosures about related party transactions and outstanding balances with related parties, see Note 9.

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**NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)**

***Fair value of financial instruments***

In accordance with ASC 820 "Fair Value Measurement" the Company categorizes financial instruments in a 'fair value hierarchy'. The hierarchy categorizes the inputs used in valuation techniques into three levels. The hierarchy gives the highest priority to (unadjusted) quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The following are the three categories related to the fair value measurement of such assets or liabilities:

● Level 1 inputs are quoted prices in active markets for identical assets or liabilities that the Company can access at the measurement date, it holds a position in a single asset or liability and the asset or liability is traded in an active market.

● Level 2 inputs are inputs other than quoted market prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Inputs are derived principally from or corroborated by observable market data by correlation or other means ('market-corroborated inputs').

● Level 3 inputs are unobservable for the asset or liability. An entity develops unobservable inputs using the best information available in the circumstances, which might include the entity's own data, taking into account all information about market participant assumptions that is reasonably available.

The Company has no financial instruments requiring hierarchy classification and disclosure.

***Intangible Assets***

In accordance with ASC No. 350-40, internal use software are Intangible assets that are not sold, leased or marketed but are acquired or internally developed to meet an entity's internal needs. Such intangibles have an estimable useful life, are amortized over this period and reviewed for impairment if impairment indicators arise. Accordingly, amortization of the asset is determined from the date it is placed in service. The Company spent on developing the software to facilitate the issuance of bonds to clients.

***Income taxes***

Deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The deferred tax assets of the Company relate primarily to operating loss carryforwards for federal income tax purposes. A full valuation allowance for deferred tax assets has been provided because the Company believes it is not more likely than not that the deferred tax asset will be realized. Realization of deferred tax assets is dependent on the Company generating sufficient taxable income in future periods.

The Company periodically evaluates its tax positions to determine whether it is more likely than not that such positions would be sustained upon examination by a tax authority for all open tax years, as defined by the statute of limitations, based on their technical merits. As of June 30, 2024 and June 30, 2025, the Company has not established a liability for uncertain tax positions.

***Share capital***

In accordance with ASC 505 "Equity" the Company considers an equity instrument to be any contract that evidences a residual interest in the assets of an entity after deducting all its liabilities. The Company's common shares are classified as equity instruments. Incremental costs directly attributable to the issuance of new shares are recognized in equity as a reduction from the gross proceeds received from the issued shares. Share capital is reported on the balance sheet and statement of changes in shareholder's equity.

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**NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)**

***Principles of Consolidation***

The consolidated financial statements present balances of the Company, as consolidated with its wholly owned subsidiary CLL. In accordance with ASC Topic 810 "Consolidation", intercompany accounts and transactions would be eliminated in consolidation.

***Basic and diluted earnings per share***

Under ASC 260 "Earnings Per Share", public companies shall present basic and diluted per-share amounts for income from continuing operations and for net income on the face of the income statement with equal prominence. The Company presents this information accordingly, because it is qualified by the SEC for a Regulation A offering, which allows it to raise capital of up to $75 million from the issuance of bonds. Basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Shares issued during the period and shares reacquired during the period shall be weighted for the portion of the period that they were outstanding. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued. The Company had no dilutive instruments on June 30, 2024, or June 30, 2025, and therefore the basic and dilutive loss per share on the statement of operations are the same, at an amount of $77,021 and $65,558 respectively.

***Recently issued accounting standards***

In June 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments - Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The standard also requires additional disclosures related to significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity's portfolio. Operating lease receivables are excluded from the scope of this guidance. The amended guidance is effective for the Company for fiscal years, and interim periods within those years, beginning January 1, 2023.

As a result of the amendments in ASU 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, the impairment model is no longer based on an impairment being other-than-temporary. We regularly review investment securities for impairment. For debt securities, if we do not intend to sell the security or it is not more likely than not that we will be required to sell the security before recovery of our amortized cost, we evaluate qualitative criteria, such as the financial health of and specific prospects for the issuer, to determine whether we do not expect to recover the amortized cost basis of the security. Accounting standards promulgated by the FASB are subject to change. Changes in such standards may have an impact on the Company's future consolidated financial statements.

The Company periodically reviews new accounting standards that are issued. Although some of these accounting standards may be applicable to the Company, the Company has not identified any new standards that it believes merit further discussion, and the Company expects that none would have a significant impact on its consolidated financial statements.

**NOTE 4. CONCENTRATION AND CREDIT RISK**

Financial instruments, which potentially subject CBI to credit risk, consist principally of cash. Cash deposits are maintained with a financial institution in the USA that is credit worthy. CBI maintains all cash with a bank insured up to $250,000 by the Federal Deposit Insurance Corporation. CBI at inception adopted a policy to closely monitor economic and regulatory conditions as it relates to federally uninsured balances, to promptly mitigate risks. No deposits were held with a financial institution in excess of federally insured limits on June 30, 2024 or June 30, 2025, and during the reporting periods. Currently, CBI's only source of capital to initiate and sustain operations came from its sole shareholder and parent company.

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**NOTE 5. INTANGIBLE ASSETS**

During 2022, the Company entered into an agreement with a media company to have a mobile app and website developed permitting it to communicate with clients and issue bonds. The company paid $38,152 for these software applications until they were ready to onboard new users. The development and maintenance of these applications will be ongoing throughout the life of the business. These assets were placed into services in 2023. The application was under beta testing during 2022 and began onboarding users from January 2023. The management intends to charge amortization on software development cost incurred till 31<sup>st</sup> December 2022 over next 60 months. Any expenditure during 2023 and 2024 done for software maintenance is charged to the Income Statement. On June 30, 2024, and 2025 balance details for intangible assets were as follows:

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| | | |
|:---|:---|:---|
| | **On June 30,<br> 2025 & <br> June 30,<br> 2024** | **On June 30,<br> 2025 & <br> June 30,<br> 2024** |
| <br>**INTANGIBLE ASSETS** | **2025** | **2024** |
| Computer software | $26706 | $34336 |
| Accumulated amortization | $(3815) | $(7630) |
| **INTANGIBLE ASSETS, NET** | $**22891** | $**26706** |

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**NOTE 6. INCOME TAXES**

The Company's tax expense differs from the "expected" tax expense for Federal and State income tax purposes (computed by applying the United States Federal tax rate of 21% and the State tax rate of 4.5% to income before taxes), as follows:

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| | | |
|:---|:---|:---|
|  | **For the<br> Periods Ending<br> June 30,<br> 2025 & 2024** | **For the<br> Periods Ending<br> June 30,<br> 2025 & 2024** |
|  | **Jan'25 - Jun'25** | **Jan'24 - Jun'24** |
| Income tax expense (credit) at statutory rate | $(83587) | $(98201) |
| Less nontaxable capital gain | $- | $- |
| Increase in valuation allowance | $83587 | $98201 |
| Income tax expense per books | $- | $- |

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The tax effects of the temporary differences between reportable consolidated financial statement income and taxable income are recognized as deferred tax assets and liabilities.

The tax effect of significant components of the Company's deferred tax assets and liabilities on June 30, 2024, and June 30, 2025, are estimated to be as follows:

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| | | |
|:---|:---|:---|
|  | **For the<br> Periods Ending<br> June 30,<br> 2025 & 2024** | **For the<br> Periods Ending<br> June 30,<br> 2025 & 2024** |
|  | **Jan'25 - Jun'25** | **Jan'24 - Jun'24** |
| NOL Carryover | $231603 | $190368 |
| Valuation allowance | $(231603) | $(190368) |
| Net deferred tax asset | $**-** | $**-** |

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**NOTE 7. COMMITMENTS AND CONTINGENCIES**

***Legal contingencies***

From time to time, the Company may be a defendant in pending or threatened legal proceedings arising in the normal course of its business. Management is not aware of any pending, threatened or asserted claims.

**NOTE 8. EQUITY – SHAREHOLDER'S EQUITY**

On November 4, 2021, the founder of the Company, Impactology Financial Corporation ("IFC"), contributed $50,100 in cash for the initial issuance of 10,001 shares of common stock.

On March 11, 2022, the Company had a reverse stock split, converting its, 10,000,000 authorized common shares to 5,000 common shares and retained its par value at $0.0001. As a result, its 10,001 common shares issued and outstanding converted to 5 common shares issued and outstanding.

Through June 30, 2025, the sole shareholder of the Company contributed cash in the amount of $96,249 for operational expenses.

**NOTE 9. RELATED PARTIES**

In 2021 the Company received capital contributions from IFC, its parent company and sole shareholder for the issuance of common shares, see Note 8.

CBI's corporate office address is 1185 Avenue of the Americas 3rd Floor, New York, NY 10036, United States, it is leased by Compound Administrative Services LLC ("CAS") a related party by common ownership. CAS permits the Company to use this office without charge. It was determined that the current use of the has no material fair value, in consideration that CBI has no employees, operations or physical assets that occupy the premises and presently uses the location as a business address.

Related party debt is due on demand and does not bear interest.

All the expenses incurred by CAS is on behalf of CREB amounting to $211,648 between January 01, 2025 and June 30, 2025 which is shown as follows:

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| | |
|:---|:---|
| **Expenses** | **CAS** |
| Advertising and Marketing | $9486 |
| Management Fees | $194750 |
| Legal fees | $3612 |
| Compound Bonds | $(34750) |
| Other General and Administrative | $- |
| Software & Subscriptions | $- |
| Other Professional | $38550 |
| Software Development & Maintenance | $- |
| Total | $**211648** |

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The Company formed CLL on March 16, 2022. The company intends for CLL to operate as a lender of residential and commercial mortgages, a role directly related to CBI's business objectives as an investor in mortgage-backed securities. As such, the financial statements present balances of the Company and CLL.

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**NOTE 10. SUBSEQUENT EVENTS**

The Company has evaluated the consolidated financial statements for subsequent events through June 30, 2025, the date these consolidated financial statements were available to be issued.

The consolidated financial statements do not include any adjustment that may result from these conditions.

Management is not aware of any other events that have occurred subsequent to the balance sheet date that would require adjustment to, or disclosure in the consolidated financial statements.

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**Item 4 Exhibits**

**Index to Exhibits**

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| | |
|:---|:---|
| **Exhibit No.** | **Exhibit Description** |
| [<u>2.1</u>](http://www.sec.gov/Archives/edgar/data/1919204/000182912622007465/compoundbonds_ex2-1.htm) | [<u>Certificate of Incorporation.\*</u>](http://www.sec.gov/Archives/edgar/data/1919204/000182912622007465/compoundbonds_ex2-1.htm) |
| [<u>2.2</u>](http://www.sec.gov/Archives/edgar/data/1919204/000182912622007465/compoundbonds_ex2-2.htm) | [<u>Certificate of Amendment to Certificate of Incorporation\*</u>](http://www.sec.gov/Archives/edgar/data/1919204/000182912622007465/compoundbonds_ex2-2.htm) |
| [<u>2.3</u>](http://www.sec.gov/Archives/edgar/data/1919204/000182912622007465/compoundbonds_ex2-3.htm) | [<u>Bylaws\*</u>](http://www.sec.gov/Archives/edgar/data/1919204/000182912622007465/compoundbonds_ex2-3.htm) |
| [3.1](https://www.sec.gov/Archives/edgar/data/1919204/000182912625001957/compoundbonds_ex3-1.htm) | [Form of Compound Bond.\*\*\*](https://www.sec.gov/Archives/edgar/data/1919204/000182912625001957/compoundbonds_ex3-1.htm) |
| [<u>4.1</u>](http://www.sec.gov/Archives/edgar/data/1919204/000182912622007465/compoundbonds_ex4-1.htm) | [<u>Form of Compound Bond Investor Agreement (for cash).\*</u>](http://www.sec.gov/Archives/edgar/data/1919204/000182912622007465/compoundbonds_ex4-1.htm) |
| [<u>4.2</u>](http://www.sec.gov/Archives/edgar/data/1919204/000182912622007465/compoundbonds_ex4-2.htm) | [<u>Form of Compound Bond Subscription Agreement (for Bond Rewards for Eligible Referrals).\*</u>](http://www.sec.gov/Archives/edgar/data/1919204/000182912622007465/compoundbonds_ex4-2.htm) |
| [<u>4.3</u>](http://www.sec.gov/Archives/edgar/data/1919204/000182912622007465/compoundbonds_ex4-3.htm) | [<u>Form of Compound Bond Auto-Invest Program information.\*</u>](http://www.sec.gov/Archives/edgar/data/1919204/000182912622007465/compoundbonds_ex4-3.htm) |
| [<u>6.1</u>](http://www.sec.gov/Archives/edgar/data/1919204/000182912622007465/compoundbonds_ex6-1.htm) | [<u>Administrative Services Agreement dated March 17, 2022 by and between Compound Administrative Services LLC and Compound Real Estate Bonds, Inc.\*</u>](http://www.sec.gov/Archives/edgar/data/1919204/000182912622007465/compoundbonds_ex6-1.htm) |
| [<u>6.2</u>](http://www.sec.gov/Archives/edgar/data/1919204/000182912623007572/compoundbonds_ex6-2.htm) | [<u>Amendment to Administrative Services Agreement dated November 13, 2023, by and between Compound Administrative Services LLC and Compound Real Estate Bonds, Inc.\*\*</u>](http://www.sec.gov/Archives/edgar/data/1919204/000182912623007572/compoundbonds_ex6-2.htm) |

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\* Previously filed with the preliminary offering circular dated April 4, 2022, and incorporated herein by reference.

\*\* Previously filed with the post-effective amendment to Form 1-A dated November 20, 2023, and incorporated herein by reference.

\*\*\* Previously filed with the post-effective amendment to Form 1-A dated March 21, 2024, and incorporated herein by reference.

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**SIGNATURES**

Pursuant to the requirements of Regulation A, the issuer has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in New York City, New York, on October 1, 2025.

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| | |
|:---|:---|
| **Compound Real Estate Bonds, Inc.** | **Compound Real Estate Bonds, Inc.** |
| By | */s/ Inderjit Tuli* |
|  | Inderjit Tuli, Chief Executive Officer |

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This report been signed by the following persons in the capacities and on the dates indicated.

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| | | |
|:---|:---|:---|
| **Name** | **Positions** | **Date** |
| */s/ Inderjit Tuli* | Chief Executive Officer, President and director | October 1, 2025 |
| Inderjit Tuli | (principal executive officer) |  |
| */s/ Harminder Singh Burmi* | Senior Vice President, Chief Financial Officer and director | October 1, 2025 |
| Harminder Singh Burmi | (principal financial and accounting officer) |  |

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