# EDGAR Filing Document

**Accession Number:** 0001544190
**File Stem:** 0001493152-26-026287
**Filing Date:** 2026-5
**Character Count:** 123456
**Document Hash:** a4631b56bbcab24b0cd80495a7699127
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001493152-26-026287.hdr.sgml**: 20260529

**ACCESSION NUMBER**: 0001493152-26-026287

**CONFORMED SUBMISSION TYPE**: 424B3

**PUBLIC DOCUMENT COUNT**: 4

**FILED AS OF DATE**: 20260529

**DATE AS OF CHANGE**: 20260529

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Shepherd's Finance, LLC
- **CENTRAL INDEX KEY:** 0001544190
- **STANDARD INDUSTRIAL CLASSIFICATION:** SHORT-TERM BUSINESS CREDIT INSTITUTIONS [6153]
- **ORGANIZATION NAME:** 02 Finance
- **EIN:** 364608739
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 424B3
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 333-290256
- **FILM NUMBER:** 261041565

**BUSINESS ADDRESS:**
- **STREET 1:** 12276 SAN JOSE BLVD, SUITE 108
- **CITY:** JACKSONVILLE
- **STATE:** FL
- **ZIP:** 32223
- **BUSINESS PHONE:** 9045033989

**MAIL ADDRESS:**
- **STREET 1:** 12276 SAN JOSE BLVD, SUITE 108
- **CITY:** JACKSONVILLE
- **STATE:** FL
- **ZIP:** 32223

**Filed pursuant to Rule 424(b)(3)**

**File No. 333-290256**

![](form424b3_001.jpg)

**SHEPHERD'S FINANCE, LLC**

**SUPPLEMENT NO. 1 DATED may 29, 2026**

**TO THE PROSPECTUS DATED april 30, 2026**

This document supplements, and should be read in conjunction with, the prospectus of Shepherd's Finance, LLC (the "Company," "we," or "our") dated April 30, 2026. Unless otherwise defined in this supplement, capitalized terms used in this supplement shall have the same meanings as set forth in the prospectus.

The purpose of this supplement is to disclose:

● an update regarding the status of our offering;

● an update to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of our prospectus to include information for the three months ended March 31, 2026; and

● our unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2026.

**<u>Status of Our Offering</u>**

We commenced this offering of Fixed Rate Subordinated Notes ("Notes"), which is our fourth follow-on offering of Notes (our "Current Offering"), on April 30, 2026. As of May 28, 2026, we have issued approximately $0.21 million of Notes in our Current Offering. As of May 28, 2026, approximately $69.79 million of Notes remain available for sale to the public under our Current Offering.

We commenced our initial public offering of Notes on October 4, 2012. On September 29, 2015, we terminated our initial public offering, having issued approximately $8.25 million in Notes. We commenced our first follow-on offering of Notes (our "First Follow-on Offering") on September 29, 2015. On March 22, 2019, we terminated our First Follow-on Offering, having issued approximately $29.99 million in Notes. We commenced our second follow-on offering of Notes (our "Second Follow-on Offering") on March 22, 2019. On September 16, 2022, we terminated our Second Follow-on Offering, having issued approximately $34.50 million in Notes. We commenced our third follow-on offering of Notes (our "Third Follow-on Offering") on September 16, 2022. On March 15, 2026, we terminated our Third Follow-on Offering, having issued approximately $33.94 million in Notes.

**<u>Management's Discussion and Analysis of Financial Condition and Results of Operations</u>**

**(All dollar [$] amounts shown in thousands.)**

The following Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our interim consolidated financial statements and the notes thereto set forth at pages F-1 through F-23 in this supplement and with our audited annual consolidated financial statements and related notes and other consolidated financial data (the "2025 Financial Statements") included in our Annual Report on Form 10-K for the year ended December 31, 2025 (the "2025 Form 10-K").

**Overview**

During the quarter ended March 31, 2026, the Company continued to focus on the reduction of non-interest earning assets. As of March 31, 2026, 24 loans were classified as individually evaluated with a net loan receivables balance of $5,390 compared to 29 loans and $6,192 as of December 31, 2025. In addition, as of March 31, 2026, we had two assets with a net foreclosed asset balance of $387 compared to one and $499 as of December 31, 2025.

The estimated loss on interest income resulting from non-interest earning assets for the quarter ended March 31, 2026 was $160 compared to $183 for the same period of 2025. Looking ahead, we expect the balance of non-interest earnings to remain somewhat consistent.

During the quarter ended March 31, 2026, the Company increased the loan receivable balances compared to December 31, 2025. This was accomplished through an increase in loan originations, mostly in the third month of the quarter. The Company expects that the additional loan balance will increase net interest income during the second quarter. Also in the fourth quarter of 2025, the Company ran a promotion for new customers and certain established customers in an effort to increase balances starting at the beginning of 2026. That promotional interest rate discount offer ended as of the end of 2025, which helped increase net interest income and net profit during the quarter ended March 31, 2026.

While the Company continues to face risks as it relates to the economy and the homebuilding industry, management has decided to focus on the following during the remainder of 2026 and the beginning of 2027:

&nbsp;&nbsp;&nbsp;&nbsp;1. Continue
 to manage the balance of non-interest-bearing assets, which includes foreclosed real estate and individually evaluated assets.

2. Control
 SG&A expenses.

3. Maintain
 gross margin prior to loan loss.

4. Maintain
 liquidity at a level sufficient for loan originations.

5. Manage
 loan loss and impairment expense.

6. Increase
 originations and loan balances.

While some geographic markets are seeing some declines in pricing at certain price levels, generally we are not seeing reductions in selling prices as something that is creating losses for us. There is still a housing shortage, and many homeowners are not moving out of their sub 3% interest rates. The starter market and high-end market seem to be strong in most geographic locations, while the middle market seems to be weak. Mortgage interest rates for homeowners have slightly increased back up from recent lows late last year. Mortgage interest rates impact the middle market more than the higher and lower markets.

We had $68,633 and $59,223 in loan receivables, net as of March 31, 2026 and December 31, 2025, respectively. Loans receivables, net increased $9,410 as of March 31, 2026 compared to December 31, 2025 due to the increase in loan originations. As of March 31, 2026, the Company's portfolio consisted of 154 construction loans with 52 borrowers and 15 development loans with 14 borrowers in 21 states.

Net cash provided by operations increased $1,245 to $628 for the quarter ended March 31, 2026 compared to the same period of 2025. The increase in operating cash flow was due primarily to accrued interest payable.

**Critical Accounting Estimates**

To assist in evaluating our interim consolidated financial statements, we describe below the critical accounting estimates that we use. We consider an accounting estimate to be critical if: (1) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (2) changes in the estimate that are reasonably likely to occur from period to period, or use of different estimates that we reasonably could have used, would have a material impact on our consolidated financial condition or results of operations. See our 2025 Form 10-K, as filed with the SEC, for more information on our critical accounting estimates. No material changes to our critical accounting estimates have occurred since December 31, 2025, unless listed below.

***Credit Losses***

Fair value of collateral has the potential to impact the calculation of the loan loss provision (the amount we have expensed over time in anticipation of loan losses we have not yet realized). Specifically, relevant to the allowance for loan loss reserve is the fair value of the underlying collateral supporting the outstanding loan balances. Fair value measurements are an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Due to a rapidly changing economic market, an erratic housing market, the various methods that could be used to develop fair value estimates, and the various assumptions that could be used, determining the collateral's fair value requires significant judgment.

---

| | |
|:---|:---|
| **Change in Fair Value Assumption** | **March 31, 2026 <br> Loan Loss <br> Provision <br> Higher/(Lower)** |
| Increasing fair value of the real estate collateral by 35%\* | $- |
| Decreasing fair value of the real estate collateral by 35%\*\* | $7409 |

---

\* Increases in the fair value of the real estate collateral do not impact the loan loss provision, as the value generally is not "written up."

\*\* Assumes the loans were non-performing and a book amount of the loans outstanding of $68,633.

***Foreclosed Assets***

The fair value of real estate will impact our foreclosed asset value, which is recorded at 100% of fair value (after selling costs are deducted).

---

| | |
|:---|:---|
| **Change in Fair Value Assumption** | **March 31, 2026**<br> **Foreclosed**<br> **Assets**<br> **Higher/(Lower)** |
| Increasing fair value of the foreclosed asset by 35%\* | $- |
| Decreasing fair value of the foreclosed asset by 35%\*\* | $135 |

---

\* Increases in the fair value of the foreclosed assets do not impact the carrying value, as the value generally is not "written up." Those gains would be recognized at the sale of the assets.

\*\* Assumes a book amount of the foreclosed assets of $387.

**Results of Operations**

***Interest Spread***

The following table displays a comparison of our interest income, expense, fees, and spread:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended March 31,** | **Three Months Ended March 31,** | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
|  | **2026** | | **2025** | |
| &nbsp;&nbsp;&nbsp;**Interest Income** |  | \* |  | \* |
| &nbsp;&nbsp;&nbsp;Interest income on loans | $2386 | 15% | $1913 | 15% |
| &nbsp;&nbsp;&nbsp;Fee income on loans | $857 | 5% | $666 | 5% |
| &nbsp;&nbsp;&nbsp;Deferred loan fees | (106) | (1)% | (150) | (1)% |
| &nbsp;&nbsp;&nbsp;Fee income on loans, net | $751 | 4% | $516 | 4% |
| &nbsp;&nbsp;&nbsp;Interest and fee income on loans | $3137 | 19% | $2429 | 19% |
| &nbsp;&nbsp;&nbsp;Interest expense unsecured | $952 | 6% | $842 | 7% |
| &nbsp;&nbsp;&nbsp;Interest expense secured | 438 | 3% | 282 | 2% |
| &nbsp;&nbsp;&nbsp;Amortization offering costs | 23 | -% | 54 | -% |
| &nbsp;&nbsp;&nbsp;Interest expense | $1413 | 9% | $1178 | 9% |
| &nbsp;&nbsp;&nbsp;Net interest income (spread) | $1724 | 10% | $1251 | 10% |
| Weighted average outstanding loan asset balance\*\* | $64573 |  | $49684 |  |

---

\*Annualized amount as percentage of weighted average outstanding gross loan balance

Primarily three main components impact our interest spread:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● ***Difference between the interest rate received (on our loan assets) and the interest rate paid (on our borrowings).*** Our loan originations include interest rates which are based on our cost of funds, with a minimum rate of 10.25%. Primarily, the margin is fixed at 2.5%; however, for our development loans the margin is generally fixed at 7%. This component is also impacted by the lending of money with no interest cost (our equity). For both the quarters ended March 31, 2026 and 2025, interest income on loans was 15%.

We anticipate our standard margin to be 2.5% on all future construction loans and generally 7% on all development loans, which yields a blended margin of approximately 3.5%. This 2.5% margin may increase because some customers run past the standard repayment time and pay a higher rate of interest after that.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● ***Fee income.*** Our construction loan fee is 5% on the amount we commit to lend, which is amortized over the expected life of each loan. When loans terminate before their expected life, the remaining fee is recognized at that time.

Fee income on loans before deferred loan fee adjustments was 5% for both quarters ended March 31, 2026 and 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● ***Amount of non-performing assets.*** Generally, two types of non-performing assets negatively affect our interest spread which are loans not paying interest and foreclosed assets.

As of March 31, 2026 and December 31, 2025, we had 24 individually evaluated loans, net of reserves of $5,390 and 29 nonperforming loans, net of reserves of $6,192 that were not paying interest, respectively.

As of March 31, 2026 and December 31, 2025, foreclosed assets were $387 and $499, respectively, which resulted in a negative impact to our interest spread.

***Provision for Credit Losses***

Provision for credit losses (expense throughout the period) was $250 and $133 for the quarters ended March 31, 2026 and 2025, respectively.

The allowance for credit losses as of March 31, 2026 and December 31, 2025, was $1,374 and $1,113, respectively. The increase in the allowance for credit losses is due to the increase in originations and increase in individually evaluated allowances. As of March 31, 2026, the allowance on individually evaluated loans increased to $973 compared to $745 as of December 31, 2025. The Company believes it has properly reserved for all foreclosed and impaired loans.

***Non-Interest Income***

*Revenue from the Sale of Land Parcels*

Revenue from the sale of land parcels was $0 and $1,837 during the quarters ended March 31, 2026 and 2025, respectively. During the quarter ended March 31, 2025 the Company sold five land parcels.

 

 

*Option Fee Income*

During the quarter ended March 31, 2026 and 2025, the Company recognized 339 option fee income of $0 and $154, respectively.

*Other Income*

During the quarters ended March 31, 2026 and 2025, we consulted for two and three of our construction and development loan customers; respectively, which included accounting guidance. Other income related to our consulting fees were $86 and $47 for the quarters ended March 31, 2026 and 2025, respectively. We anticipate continuing our consulting services to our customers on an as needed basis during 2026.

***Non-Interest Expense***

*Selling, General and Administrative ("SG&A") Expenses*

The following table displays SG&A expenses:

---

| | | |
|:---|:---|:---|
|  | **Three Months<br> Ended**<br> **March 31, 2026** | **Three Months<br> Ended <br> March 31, 2025** |
| **Selling, general and administrative expenses** |  |  |
| Legal and accounting | $132 | $146 |
| Salaries and related expenses | 725 | 535 |
| Board related expenses | 30 | 27 |
| Advertising | 66 | 55 |
| Rent and utilities | 16 | 16 |
| Loan and foreclosed asset expenses | 6 | 2 |
| Travel | 28 | 46 |
| Other | 54 | 112 |
| Total SG&A | $1057 | $939 |

---

Our SG&A expense increased $118 to $1,057 during the quarter ended March 31, 2026 compared to the same period of 2025. The change in SG&A was primarily due to higher salaries and related expenses. The increase in salaries and related expenses related to additional employees hired during the nine months ended December 31, 2025 which resulted in higher compensation costs during the first quarter of 2026.

*Loss on Foreclosed Assets*

During the quarters ended March 31, 2026 and 2025, we transferred two and one loan receivable assets to foreclosed assets, respectively. Losses on foreclosed assets were $6 and $15 for the quarter ended March 31, 2026 and 2025, respectively.

**Consolidated Financial Position**

***Loans Receivables, net***

Financing receivables are comprised of the following as of March 31, 2026 and December 31, 2025:

---

| | | |
|:---|:---|:---|
|  | **March 31, 2026** | **December 31, 2025** |
| Loans receivable, gross | $71431 | $61683 |
| Less: Deferred loan fees | (1594) | (1516) |
| Plus: Deferred origination costs | 170 | 169 |
| Less: Allowance for credit losses | (1374) | (1113) |
| Loans receivable, net | $68633 | $59223 |

---

*Commercial Loans – Construction Loan Portfolio Summary*

We anticipate that the aggregate balance of our construction loan portfolio will increase as we originate more loan dollars than we receive in payoffs.

The following is a summary of our loan portfolio to builders for home construction loans as of March 31, 2026:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **State** | **Number**<br> **of**<br> **Borrowers** | **Number**<br> **of**<br> **Loans** | **Value of**<br> **Collateral<sup>(1)</sup>** | **Commitment**<br> **Amount** | **Gross**<br> **Amount**<br> **Outstanding** | **Loan to**<br> **Value**<br> **Ratio<sup>(2)</sup>** | **Loan Fee** |
| Arizona | 2 | 4 | $1724 | $1190 | $788 | 69% | 5% |
| California | 2 | 2 | 5016 | 3877 | 2211 | 77% | 5% |
| Connecticut | 1 | 3 | 1730 | 1162 | 938 | 67% | 5% |
| Florida | 11 | 56 | 28808 | 20299 | 14671 | 70% | 5% |
| Georgia | 6 | 10 | 5572 | 3814 | 2841 | 68% | 5% |
| Idaho | 2 | 6 | 5442 | 3376 | 1229 | 62% | 5% |
| Illinois | 1 | 1 | 1500 | 815 | 756 | 54% | 5% |
| Michigan | 1 | 1 | 970 | 582 | 325 | 60% | 5% |
| Mississippi | 1 | 1 | 334 | 258 | 263 | 77% | 5% |
| Missouri | 2 | 2 | 975 | 683 | 657 | 70% | 5% |
| New Jersey | 1 | 1 | 388 | 281 | 247 | 73% | 5% |
| New York | 1 | 5 | 2248 | 1345 | 541 | 60% | 5% |
| North Carolina | 9 | 16 | 7469. | 4766 | 3125 | 64% | 5% |
| Oklahoma | 1 | 1 | 167 | 117 | 113 | 70% | 5% |
| Pennsylvania | 1 | 16 | 19190 | 16355 | 14414 | 85% | 5% |
| South Carolina | 7 | 25 | 9754 | 8199 | 5184 | 84% | 5% |
| Texas | 1 | 1 | 480 | 336 | 50 | 70% | 5% |
| Utah | 1 | 1 | 4880 | 3538 | 1531 | 73% | 5% |
| Virginia | 1 | 2 | 592 | 362 | 263 | 61% | 5% |
| **Total** | 52 | 154 | $97239 | $71355 | $50147 | 73%<sup>(3)</sup> | 5% |

---

<sup>(1)</sup> The value is determined by the appraised value.

<sup>(2)</sup> The loan to value ratio is calculated by taking the commitment amount and dividing by the appraised value.

<sup>(3)</sup> Represents the weighted average loan to value ratio of the loans.

The following is a summary of our loan portfolio to builders for home construction loans as of December 31, 2025:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **State** | **Number of**<br> **Borrowers** | **Number of**<br> **Loans** | **Value of**<br> **Collateral** | **Commitment**<br> **Amount** | **Gross**<br> **Amount**<br> **Outstanding** | **Loan to Value**<br> **Ratio<sup>(1)</sup>** | **Loan Fee** |
| Arizona | 2 | 4 | $1719 | $1126 | $1126 | 66% | 5% |
| California | 1 | 1 | 1285 | 1750 | 1439 | 137% | 5% |
| Connecticut | 1 | 3 | 1730 | 1162 | 890 | 67% | 5% |
| Florida | 11 | 50 | 23854 | 16637 | 10984 | 70% | 5% |
| Georgia | 7 | 10 | 6448 | 4228 | 3068 | 66% | 5% |
| Idaho | 1 | 1 | 2770 | 1500 | 874 | 54% | 5% |
| Illinois | 1 | 1 | 1500 | 815 | 606 | 54% | 5% |
| Louisiana | 2 | 3 | 825 | 623 | 594 | 76% | 5% |
| Michigan | 1 | 1 | 970 | 582 | 171 | 60% | 5% |
| Mississippi | 1 | 1 | 335 | 258 | 258 | 77% | 5% |
| Montana | 2 | 2 | 975 | 683 | 578 | 70% | 5% |
| New Jersey | 1 | 4 | 1798 | 1531 | 1471 | 85% | 5% |
| New York | 1 | 5 | 2248 | 1345 | 488 | 60% | 5% |
| North Carolina | 8 | 14 | 6530 | 4135 | 1861 | 63% | 5% |
| Oklahoma | 1 | 1 | 167 | 117 | 77 | 70% | 5% |
| Pennsylvania | 2 | 18 | 20748 | 16368 | 13055 | 79% | 5% |
| South Carolina | 7 | 26 | 10739 | 8394 | 4808 | 78% | 5% |
| Tennessee | 2 | 3 | 1061 | 743 | 718 | 70% | 5% |
| Utah | 1 | 1 | 4880 | 3538 | 1213 | 73% | 5% |
| Virginia | 1 | 2 | 592 | 362 | 236 | 61% | 5% |
| **Total** | 54<sup>(3)</sup> | 151 | $91174 | $65897 | $44515 | 72%<sup>(2)</sup> | 5% |

---

<sup>(1)</sup> The value is determined by the appraised value.

<sup>(2)</sup> The loan to value ratio is calculated by taking the commitment amount and dividing by the appraised value.

<sup>(3)</sup> Represents the weighted average loan to value ratio of the loans.

*Commercial Loans – Real Estate Development Loan Portfolio Summary*

The following is a summary of our loan portfolio to builders for land development as of March 31, 2026:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **States** | **Number**<br> **of Borrowers** | **Number**<br> **of**<br> **Loans** | **Value of Collateral<sup>(1)</sup>** | **Commitment Amount** | **Gross** <br> **Amount**<br> **Outstanding<sup>(4)</sup>** | **Loan to**<br> **Value Ratio<sup>(2)</sup>** | **Interest**<br> **Spread<sup>(5)</sup>** |
| Florida | 3 | 3 | 7150 | 5945 | 4487 | 83% | 7% |
| Georgia | 1 | 1 | 490 | 100 | 99 | 20% | 7% |
| Louisiana | 1 | 1 | 150 | 88 | 89 | 59% | 7% |
| New Jersey | 1 | 1 | 88 | 50 | 31 | 57% | 7% |
| North Carolina | 2 | 2 | 2381 | 681 | 680 | 29% | 7% |
| Pennsylvania | 1 | 2 | 14883 | 14066 | 12821 | 95% | varies |
| South Carolina | 1 | 1 | 1500 | 487 | 545 | 32% | 7% |
| Texas | 1 | 1 | 62 | 28 | 28 | 45% | 7% |
| Utah | 2 | 2 | 2526 | 1600 | 868 | 63% | 7% |
| Wyoming | 1 | 1 | 2875 | 1635 | 1634 | 57% | 7% |
| **Total** | 14 | 15 | $32105 | $24680 | $21284 | 77%<sup>(3)</sup> | 7% |

---

<sup>(1)</sup> The value is determined by the appraised value adjusted for the remaining costs to be paid and third-party mortgage balances. In the event of a foreclosure on the property securing these loans, the portion of our collateral that is preferred equity in our Company might be difficult to sell, which could impact our ability to eliminate the loan balance.

<sup>(2)</sup> The loan to value ratio is calculated by taking the outstanding amount and dividing by the appraised value calculated as described above.

<sup>(3)</sup> Represents the weighted average loan to value ratio of the loans.

<sup>(4)</sup> Gross Amount Outstanding credit balances are due to deposits on account.

<sup>(5)</sup> The interest spread varies for the state of Pennsylvania and is 7% across other states.

The following is a summary of our loan portfolio to builders for land development as of December 31, 2025:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **States** | **Number of Borrowers** | **Number of**<br> **Loans** | **Value of Collateral** | **Commitment Amount** | **Gross**<br> **Amount**<br> **Outstanding** | **Loan to**<br> **Value Ratio<sup>(1)</sup>** | **Interest**<br> **Spread<sup>(3)</sup>** |
| Florida | 2 | 2 | 550 | 630 | 350 | 115% | 7% |
| Georgia | 1 | 1 | 560 | 100 | 99 | 18% | 7% |
| Louisiana | 1 | 1 | 150 | 88 | 88 | 59% | 7% |
| New Jersey | 1 | 1 | 88 | 56 | 56 | 64% | 7% |
| North Carolina | 2 | 2 | 3037 | 681 | 680 | 22% | 7% |
| Pennsylvania | 1 | 2 | 15337 | 14066 | 12854 | 92% | varies |
| South Carolina | 1 | 1 | 1500 | 487 | 539 | 32% | 7% |
| Utah | 2 | 2 | 3146 | 1600 | 868 | 51% | 7% |
| Wyoming | 1 | 1 | 2750 | 1635 | 1634 | 59% | 7% |
| **Total** | 12 | 13 | $27118 | $19343 | $17168 | 71%<sup>(2)</sup> | 7% |

---

<sup>(1)</sup> The value is determined by the appraised value adjusted for the remaining costs to be paid and third-party mortgage balances. In the event of a foreclosure on the property securing these loans, the portion of our collateral that is preferred equity in our Company might be difficult to sell, which could impact our ability to eliminate the loan balance.

<sup>(2)</sup> The loan to value ratio is calculated by taking the outstanding amount and dividing by the appraised value calculated as described above.

<sup>(3)</sup> Represents the weighted average loan to value ratio of the loans.

<sup>(4)</sup> Gross Amount Outstanding credit balances are due to deposits on account.

<sup>(5)</sup> The interest spread varies for the state of Pennsylvania and is 7% across other states.

The following is a roll forward of our loan receivables net, or construction and development loans:

---

| | | |
|:---|:---|:---|
|  | **March 31,**<br> **2026** | **December 31,**<br> **2025** |
| Beginning balance | $59223 | $49254 |
| &nbsp;&nbsp;&nbsp;Originations and modifications | 18346 | 59571 |
| &nbsp;&nbsp;&nbsp;Principal collections | (8204) | (48205) |
| &nbsp;&nbsp;&nbsp;Transferred from loans receivables, net | (393) | (909) |
| &nbsp;&nbsp;&nbsp;Change in allowance for credit losses | (261) | (245) |
| &nbsp;&nbsp;&nbsp;Change in loan fees, net | (78) | (243) |
| Ending balance | $68633 | $59223 |

---

***Credit Quality Information***

The following table presents the Company's gross loans receivable, commitment value and ACL for each respective credit rank loan pool category as of March 31, 2026:

---

| | | | |
|:---|:---|:---|:---|
|  | **Loans<br> Receivable<br> Gross** | **Commitment<br> Value** | **ACL** |
| **Construction Loans Collectively Evaluated:** |  |  |  |
| A Credit Risk | $26438 | $42948 | $145 |
| B Credit Risk | 16111 | 18666 | 163 |
| C Credit Risk | 1780 | 1989 | 23 |
| Individually Evaluated | 5818 | 7752 | 973 |
| **Development Loans Collectively Evaluated:** |  |  |  |
| A Credit Risk | $7818 | $10027 | $3 |
| B Credit Risk | 12822 | 14066 | 65 |
| C Credit Risk | 99 | 100 | 2 |
| Individually Evaluated | 545 | 487 | - |
| Total | $71431 | $96035 | $1374 |

---

The following table presents the Company's gross loans receivable, commitment value and ACL for each respective credit rank loan pool category as of December 31, 2025.

---

| | | | |
|:---|:---|:---|:---|
|  | **Loans<br> Receivable<br> Gross** | **Commitment<br> Value** | **ACL** |
| **Construction Loans Collectively Evaluated:** |  |  |  |
| A Credit Risk | $23490 | $37488 | $122 |
| B Credit Risk | 13799 | 18830 | 151 |
| C Credit Risk | 828 | 1099 | 12 |
| Individually Evaluated | 6399 | 8480 | 745 |
| **Development Loans Collectively Evaluated:** |  |  |  |
| A Credit Risk | $3457 | $4390 | $2 |
| B Credit Risk | 13072 | 14366 | 79 |
| C Credit Risk | 99 | 100 | 2 |
| Individually Evaluated | 539 | 487 | – |
| Total | $61683 | $85240 | $1113 |

---

The following table presents the amortized cost basis of loans individually evaluated and loans past due over 90 days and still accruing as of March 31, 2026:

---

| | | | |
|:---|:---|:---|:---|
|  | **Individually<br> Evaluated<br> without ACL** | **Individually<br> Evaluated <br> with ACL** | **Accrual <br> Loans Past <br> Due Over 90 Days** |
| **Construction Loans:** |  |  |  |
| Individually Evaluated | $2414 | $3404 | $– |
| **Development Loans:** |  |  |  |
| Individually Evaluated | $545 | $– | $– |
| Total | $2959 | $3405 | $– |

---

The following table presents the amortized cost basis of loans individually evaluated and loans past due over 90 days and still accruing on individually evaluated as of December 31, 2025:

---

| | | | |
|:---|:---|:---|:---|
|  | **Individually<br> Evaluated<br> without ACL** | **Individually<br> Evaluated <br> with ACL** | **Accrual Loans<br> Past Due Over<br> 90 Days** |
| **Construction Loans:** |  |  |  |
| Individually Evaluated | $3239 | $3160 | $– |
| **Development Loans:** |  |  |  |
| Individually Evaluated | $539 | $– | $– |
| Total | $3778 | $3160 | $– |

---

The following is an aging of our gross loan portfolio as of March 31, 2026:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Gross<br> Loan**<br>**Value** | **Current**<br>**0 - 89** | **Past Due**<br>**90 - 179** | **Past Due**<br>**180 - 269** | **Past Due**<br>**>270** |
| **Construction Loans:** |  |  |  |  |  |
| A Credit Risk | $26438 | $26438 | $– | $– | $– |
| B Credit Risk | 16111 | 16111 |  |  |  |
| C Credit Risk | 1780 | 1780 |  |  |  |
| Individually Evaluated | 5818 | 2810 | 2381 | 228 | 399 |
| **Development Loans:** |  |  |  |  |  |
| A Credit Risk | 7818 | 7818 |  |  |  |
| B Credit Risk | 12822 | 12822 |  |  |  |
| C Credit Risk | 99 | 99 |  |  |  |
| Individually Evaluated | 545 | – | – | 545 | – |
| Total | $71431 | $67878 | $2381 | $773 | $399 |

---

The following is an aging of our gross loan portfolio as of December 31, 2025:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Gross<br> Loan**<br>**Value** | **Current**<br>**0 - 89** | **Past Due**<br>**90 - 179** | **Past Due**<br>**180 - 269** | **Past Due**<br>**>270** |
| **Construction Loans:** |  |  |  |  |  |
| A Credit Risk | $23490 | $23490 | $– | $– | $– |
| B Credit Risk | 13799 | 13799 |  |  |  |
| C Credit Risk | 828 | 828 |  |  |  |
| Individually Evaluated | 6399 | 5201 | 618 | 446 | 134 |
| **Development Loans:** |  |  |  |  |  |
| A Credit Risk | 3457 | 3457 |  |  |  |
| B Credit Risk | 13072 | 13072 |  |  |  |
| C Credit Risk | 99 | 99 |  |  |  |
| Individually Evaluated | 539 | – | 539 | – | – |
| Total | $61683 | $59946 | $1157 | $446 | $134 |

---

Below is an aging schedule of loans receivable as of March 31, 2026, on a recency basis:

---

| | | | |
|:---|:---|:---|:---|
|  | **No. Loans** | **Unpaid <br> Balances** | **%** |
| Current loans (current accounts and accounts on which more than 50% of an original contract payment was made in the last 59 days) | 160 | $67878 | 95.0% |
| 60-89 days |  |  | –% |
| 90-179 days | 4 | 2381 | 3.3% |
| 180-269 days | 3 | 773 | 1.1% |
| >270 days | 2 | 399 | 0.6% |
| Subtotal | 169 | $71431 | 100.0% |
| Interest only accounts (Accounts on which interest, deferment, extension and/or default charges were received in the last 60 days) | – | $– | –% |
| Partial Payment accounts (Accounts on which the total received in the last 60 days was less than 50% of the original contractual monthly payment. "Total received" to include interest on simple interest accounts, as well as late charges on deferment charges on pre-computed accounts.) | – | $– | –% |
| Total | 169 | $71431 | 100.0% |

---

Below is an aging schedule of loans receivable as of December 31, 2025, on a recency basis:

---

| | | | |
|:---|:---|:---|:---|
|  | **No.**<br> **Loans** | **Unpaid**<br> **Balances** | **%** |
| Contractual terms (All current Direct Loans and Sales Finance Contracts with installments past due less than 60 days from due date.) | 155 | $58507 | 94.9% |
| 60-89 days | 1 | 1439 | 2.3% |
| 90-179 days | 5 | 1157 | 1.8% |
| 180-269 days | 2 | 446 | 0.7% |
| >270 days | 1 | 134 | 0.3% |
| Subtotal | 164 | $61683 | 100.0% |
| Interest only accounts (Accounts on which interest, deferment, extension and/or default charges were received in the last 60 days) | – | $– | –% |
| Partial payment accounts (Accounts on which the total received in the last 60 days was less than 50% of the original contractual monthly payment. "Total received" to include interest on simple interest accounts, as well as late charges on deferment charges on pre-computed accounts.) | – | $– | –% |
| Total | 164 | $61683 | 100.0% |

---

Below is an aging schedule of loans receivable as of March 31, 2026, on a contractual basis:

---

| | | | |
|:---|:---|:---|:---|
|  | **No. Loans** | **Unpaid <br> Balances** | **%** |
| Contractual Terms (All current Direct Loans and Sales Finance Contracts with installments past due less than 60 days from the due date.) | 160 | $67878 | 95.0% |
| 60-89 days |  |  | –% |
| 90-179 days | 4 | 2381 | 3.3% |
| 180-269 days | 3 | 773 | 1.1% |
| >270 days | 2 | 399 | 0.6% |
| Subtotal | 169 | $71431 | 100.0% |
| Interest only accounts (Accounts on which interest, deferment, extension and/or default charges were received in the last 60 days.) | – | $– | –% |
| Partial Payment accounts (Accounts on which the total received in the last 60 days was less than 50% of the original contractual monthly payment. "Total received" to include interest on simple interest accounts, as well as late charges on deferment charges on pre-computed accounts.) | – | $– | –% |
| Total | 169 | $71431 | 100.0% |

---

Below is an aging schedule of loans receivable as of December 31, 2025, on a contractual basis:

---

| | | | |
|:---|:---|:---|:---|
|  | **No.**<br> **Loans** | **Unpaid**<br> **Balances** | **%** |
| Contractual terms (All current Direct Loans and Sales Finance Contracts with installments past due less than 60 days from due date.) | 155 | $58507 | 94.9% |
| 60-89 days | 1 | 1439 | 2.3% |
| 90-179 days | 5 | 1157 | 1.8% |
| 180-269 days | 2 | 446 | 0.7% |
| >270 days | 1 | 134 | 0.3% |
| Subtotal | 164 | $61683 | 100.0% |
| Interest only accounts (Accounts on which interest, deferment, extension and/or default charges were received in the last 60 days) | – | $– | –% |
| Partial payment accounts (Accounts on which the total received in the last 60 days was less than 50% of the original contractual monthly payment. "Total received" to include interest on simple interest accounts, as well as late charges on deferment charges on pre-computed accounts.) | – | $– | –% |
| Total | 164 | $61683 | 100.0% |

---

The Company modifies loans for borrowers for various reasons, including but not limited to changes in what the builder is building versus what was appraised, changes in loan-to-value ("LTV") or market conditions, and a builder's inability to pay interest. This last grouping (builder's inability to pay interest) is done through forbearance agreements which will allow the builder to have a specified period not to pay interest while the home is either completed or marketed. Typically, those interest amounts are collected at final payoff of the loan.

***Allowance for Credit Losses on Loans***

The following table provides a roll forward of the allowance for credit losses and unfunded commitments as of March 31, 2026:

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Construction** | **Construction** | **Construction** | **Construction** | **Development** | **Development** | **Development** | **Development** | |
|  | **A<br> Credit Risk** | **B<br> Credit Risk** | **C<br> Credit Risk** | **Individually Evaluated** | **A<br> Credit Risk** | **B<br> Credit Risk** | **C<br> Credit Risk** | **Individually Evaluated** |<br>**Total** |
| Allowance for credit losses as of December 31, 2025 | $(122) | $(151) | $(12) | $(746) | $(2) | $(78) | $(2) | $– | $(1113) |
| Charge-offs |  |  |  | 8 |  |  |  |  | 8 |
| Recoveries |  |  |  | (6) |  |  |  |  | (6) |
| (Provision) benefit for credit losses on funded balances | (23) | (12) | (11) | (229) | (1) | 13 | – | – | (263) |
| Allowance for credit losses as of March 31, 2026 | $(145) | $(163) | $(23) | $(973) | $(3) | $(65) | $(2) | $– | $(1374) |
| Reserve for unfunded commitments as of December 31, 2025 | $(73) | $(55) | $(4) | $– | $- | $(8) | $– | $– | $(140) |
| (Provision) benefit) for credit losses on unfunded commitments | (18) | 29 | 1 | – | – | 1 | – | – | 13 |
| Reserve for unfunded commitments as of March 31, 2026 | $(91) | $(26) | $(3) | $– | $– | $(7) | $– | $– | $(127) |

---

The following table provides a roll forward of the allowance for credit losses and unfunded commitments as of March 31, 2025:

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Construction** | **Construction** | **Construction** | **Construction** | **Development** | **Development** | **Development** | **Development** | |
|  | **A<br> Credit Risk** | **B<br> Credit Risk** | **C<br> Credit Risk** | **Individually Evaluated** | **A<br> Credit Risk** | **B<br> Credit Risk** | **C<br> Credit Risk** | **Individually Evaluated** |<br>**Total** |
| Allowance for credit losses as of December 31, 2025 | $(150) | $(28) | $(13) | $(658) | $(1) | $– | $(18) | $– | $(868) |
| Charge-offs |  |  |  | 152 |  |  |  |  | 152 |
| Recoveries |  |  |  | (3) |  |  |  |  | (3) |
| (Provision) benefit for credit losses on funded balances | 23 | (32) | 4 | (133) | – | – | 8 | – | (130) |
| Allowance for credit losses as of March 31, 2026 | $(127) | $(60) | $(9) | $(642) | $(1) | $– | $(10) | $– | $(849) |
| Reserve for unfunded commitments as of December 31, 2025 | $(65) | $(10) | $(12) | $– | $(1) | $– | $– | $– | $(88) |
| (Provision) benefit for credit losses on unfunded commitments | 10 | (17) | 3 | – | 1 | – | – | – | (3) |
| Reserve for unfunded commitments as of March 31, 2026 | $(55) | $(27) | $(9) | $– | $– | $– | $– | $– | $(91) |

---

***Allowance for Credit Losses on Unfunded Loan Commitments***

Unfunded commitments to extend credit, which have similar collateral, credit and market risk to our outstanding loans, were $24,604 and $23,557 as of March 31, 2026 and December 31, 2025, respectively. The ACL is calculated at an estimated loss rate on the total commitment value for loans in our portfolio. The ACL on unfunded commitments is calculated as the difference between the ACL on commitment value less the estimated loss rated and the total gross loan value for loans in our portfolio. As of March 31, 2026, and December 31, 2025, the ACL for unfunded commitments was $127 and $140, respectively, and we had no off-balance sheet transactions, nor do we currently have any such arrangements or obligations.

***Loan Portfolio by Year of Origination***

The table below presents the Company's loan portfolio by year of origination, category, and credit quality indicator as of March 31, 2026. Loans acquired are shown in the tables by origination year.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **2026** | **2025** | **2024** | **2023** | **2022** | **Prior** | **Total** |
| **Construction loans Collectively Evaluated:** |  |  |  |  |  |  |  |
| A Credit Risk | $5738 | $15437 | $2120 | $2401 | $742 | $- | $26438 |
| B Credit Risk | 429 | 9089 | 4944 | 636 | 1013 |  | 16111 |
| C Credit Risk |  | 755 | 1025 |  |  |  | 1780 |
| Individually Evaluated | - | 2787 | 2260 | 655 | 116 | - | 5818 |
|  | 6167 | 28068 | 10349 | 3692 | 1871 |  | 50147 |
| Current Period Charge Offs |  |  |  | (8) |  |  | (8) |
| **Development Loans Collectively Evaluated:** |  |  |  |  |  |  |  |
| A Credit Risk | 4166 | 3213 | 439 |  |  |  | 7818 |
| B Credit Risk |  | 11402 |  |  |  | 1420 | 12822 |
| C Credit Risk |  |  |  | 99 |  |  | 99 |
| Individually Evaluated | - | - | - | - | - | 545 | 545 |
|  | 4166 | 146155 | 439 | 99 |  | 1965 | 21284 |
| Current Period Charge Offs | - | - | - | - | - | - | - |
| Total | $10333 | $42683 | $10788 | $3783 | $1871 | $1965 | $71423 |

---

The table below presents the Company's loan portfolio by year of origination, category, and credit quality indicator as of December 31, 2025. Loans acquired are shown in the tables by origination year.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **2025** | **2024** | **2023** | **2022** | **2021** | **Prior** | **Total** |
| **Construction loans Collectively Evaluated:** |  |  |  |  |  |  |  |
| A Credit Risk | $15907 | $3786 | $2277 | $939 | $581 | $- | $23490 |
| B Credit Risk | 7228 | 4938 | 620 | 1013 |  |  | 13799 |
| C Credit Risk |  | 827 |  |  |  |  | 827 |
| Individually Evaluated | 2323 | 2429 | 1050 | 597 | - | - | 6399 |
|  | 25458 | 11980 | 3947 | 2549 | 581 |  | 44515 |
| Current Period Charge Offs |  |  |  | (125) | (27) | (670) | (822) |
| **Development Loans Collectively Evaluated:** |  |  |  |  |  |  |  |
| A Credit Risk | 3020 | 438 |  |  |  |  | 3458 |
| B Credit Risk | 11602 |  |  |  |  | 1470 | 13072 |
| C Credit Risk |  |  | 99 |  |  |  | 99 |
| Individually Evaluated | - | - | - | - | - | 539 | 539 |
|  | 14622 | 438 | 99 |  |  | 2009 | 17168 |
| Current Period Charge Offs | - | - | - | - | - | - | - |
| Total | $40080 | $12418 | $4046 | $2424 | $554 | $1339 | $60861 |

---

***Concentration of Risks***

Financial instruments that potentially subject the Company to concentration of credit risk consist principally of loans receivable. Our concentration risks for our top three customers listed by geographic real estate market are summarized in the table below:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **March 31, 2026** | **March 31, 2026** | **December 31, 2025** | **December 31, 2025** |
|  | <br>**Borrower**<br>**City** | **Percent of**<br>**Loan**<br>**Commitments** | <br>**Borrower**<br>**City** | **Percent of**<br>**Loan**<br>**Commitments** |
| Highest concentration risk | Pittsburgh, PA | 32% | Pittsburgh, PA | 36% |
| Second highest concentration risk | Reunion, FL | 8% | Central and Southwest, FL | 7% |
| Third highest concentration risk | Central and Southwest FL | 6% | St. George, UT | 6% |

---

***Foreclosed Assets***

Below is a roll forward of foreclosed assets:

---

| | | | |
|:---|:---|:---|:---|
|  | **Three Months**<br> **Ended**<br> **March 31, 2026** | **Year Ended**<br> **December 31, 2025** | **Three Months**<br> **Ended**<br> **March 31, 2025** |
| Beginning balance | $499 | $1356 | $1356 |
| &nbsp;&nbsp;&nbsp;Transferred from loans receivables, net | 393 | 909 | 436 |
| &nbsp;&nbsp;&nbsp;Additions for construction in foreclosed assets | 3 | 96 | 35 |
| &nbsp;&nbsp;&nbsp;Sale proceeds | (502) | (1657) | (412) |
| &nbsp;&nbsp;&nbsp;Loss on foreclosed assets | (6) | (205) | (15) |
| Ending balance | $387 | $499 | $1400 |

---

***Segment Reporting***

Effective January 1, 2026, the Company changed their reportable segments to a single reportable segment. Following the sale of 339 Justabout Land Company on August 6, 2025, which was a reportable segment of the Company, the Company no longer has any separately reportable segments.

The Company's one reportable segment generates income principally from interest on loans, as well as from fees charged in connection with various lending services. The chief operating decision maker ("CODM") is the Chief Executive Officer, who for the purposes of assessing performance, making operating decisions, and allocating Company resources, regularly reviews net income as reported in the consolidated statements of operations. The level of disaggregation and amounts of significant segment income and expenses, such as interest and fee income, interest expense, provision for credit losses, salaries and employee benefits expense and other items, that are regularly provided to the CODM are the same as those presented in the accompanying consolidated statements of operations. Likewise, the measure of segment assets is reported on the accompanying consolidated balance sheets as total assets.

Information about reportable segments, and reconciliations of such information to the Interim Consolidated Financial Statements are described below.

*<u>Reconciliation of Consolidated Statements of Operations:</u>*

**Shepherd's Finance, LLC**

**Interim Consolidated Statements of Operations**

**For the Quarter Ended March 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
| *(in thousands of dollars)* | **339 Justabout<br> Land Company,<br> LLC** | **Shepherd's<br> Finance, LLC** | **Total** |
| **Net Interest and Fee Income** |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest and fee income on loans | $– | $2429 | $2429 |
| &nbsp;&nbsp;&nbsp;Interest expense: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest related to secure borrowings |  | 282 | 282 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest related to unsecured borrowings | – | 896 | 896 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense | $– | $1178 | $1178 |
| &nbsp;&nbsp;&nbsp;Net interest and fee income |  | 1251 | 1251 |
| &nbsp;&nbsp;&nbsp;Less: Provision for credit losses | – | 133 | 133 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net interest and fee income after provision for credit losses |  | 1118 | 1118 |
| **Non-Interest Income** |  |  |  |
| &nbsp;&nbsp;&nbsp;Revenue from the sale of land parcels | 1837 |  | 1837 |
| &nbsp;&nbsp;&nbsp;Option fee income | 154 |  | 154 |
| &nbsp;&nbsp;&nbsp;Other income | – | 47 | 47 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total non-interest income | $1991 | $47 | $2038 |
| **Non-Interest Expense** |  |  |  |
| &nbsp;&nbsp;&nbsp;Selling, general and administrative | $– | $939 | $939 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization |  | 20 | 20 |
| &nbsp;&nbsp;&nbsp;Loss on foreclosed assets |  | 15 | 15 |
| &nbsp;&nbsp;&nbsp;Cost of land parcels sold | 1837 | – | 1837 |
| &nbsp;&nbsp;&nbsp;Total non-interest expense | $1837 | $974 | $2811 |
| **Net Income** | $154 | $191 | $345 |

---

*<u>Reconciliation of total assets:</u>*

---

| | | | |
|:---|:---|:---|:---|
| *(in thousands of dollars)* | **339 Justabout<br> Land<br> Company,<br> LLC** | **Shepherd's**<br> **Finance,**<br> **LLC** | **Total** |
| Total assets as of December 31, 2025 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;– | $68536 | $68536 |

---

***Real Estate Investments***

During the three months ended March 31, 2026, the Company sold one asset for sale proceeds of $169 and a loss on sale of $3.

The following table is a roll forward of real estate investment assets:

---

| | | | |
|:---|:---|:---|:---|
|  | **Three Months**<br> **Ended**<br> **March 31, 2026** | **Year Ended**<br> **December 31,**<br> **2025** | **Three Months**<br> **Ended**<br> **March 31, 2025** |
| Beginning balance | $169 | $13529 | $13529 |
| &nbsp;&nbsp;&nbsp;Proceeds from disposal of 339 |  | (9876) |  |
| &nbsp;&nbsp;&nbsp;Gain on sale of real estate investments |  | 276 |  |
| &nbsp;&nbsp;&nbsp;Loss on sale of real estate investments | (3) |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from the sale of real estate investments | (169) | (4956) | (1837) |
| &nbsp;&nbsp;&nbsp;Additions for construction/development | 3 | 1196 | 485 |
| Ending balance | $– | $169 | $12177 |

---

***Capitalized Interest Activity***

The following table is capitalized interest for real estate investment assets:

---

| | | |
|:---|:---|:---|
|  | **March 31, 2026** | **March 31, 2025** |
| Capitalized interest | $2 | $259 |
| Cost of funds | 9.20% | 10.07% |

---

The capitalized interest is included within real estate investment assets on the consolidated balance sheet.

***Refundable Prepaid Interest***

Below is a roll forward of refundable prepaid interest:

---

| | | | |
|:---|:---|:---|:---|
|  | **Three Months**<br> **Ended**<br> **March 31, 2026** | **Year Ended**<br> **December 31,**<br> **2025** | **Three Months**<br> **Ended**<br> **March 31, 2025** |
| Beginning balance | $965 | $353 | $353 |
| &nbsp;&nbsp;&nbsp;Additions from Pennsylvania loans |  | 1198 |  |
| &nbsp;&nbsp;&nbsp;Additions from other loans | 113 | 1312 | 273 |
| &nbsp;&nbsp;&nbsp;Interest, fees, principal or repaid to borrower | (621) | (1898 | (170) |
| Ending balance | $457 | $965 | $456 |

---

***Related Party Borrowings***

As of March 31, 2026 and December 31, 2025, the Company had $30 and $26 borrowed against its lines of credit from affiliates, respectively, which have a total limit of $2,500 as of March 31, 2026 and December 31, 2025.

***Borrowings***

*<u>Secured Borrowings-Lines of Credit</u>*

*Lines of Credit with Mr. Wallach and His Affiliates*

As of March 31, 2026 and December 31, 2025, the Company had $30 and $26 borrowed against its lines of credit from affiliates, respectively, which have a total limit of $2,500 as of March 31, 2026 and December 31, 2025.

*United Lines of Credit*

In January 2025, we entered into a revolving line of credit with United Bank for $2,275, maturing in January 2027. The interest rate on this line of credit is 5.5%. As of March 31, 2026, the amount due on this line of credit was $2,275.

In January 2025, we entered into a revolving line of credit with United Bank for $725, with an expiration date of January 2040. The interest rate on this line of credit is 7.5%. As of March 31, 2026, the amount due on this line of credit was $725. The Company's office in Jacksonville, FL, is used as collateral for this line of credit.

*<u>Liberty Savings Bank Line of Credit</u>*

In December 2025, we entered into a revolving line of credit with Liberty Savings Bank for $5,000, which line of credit can be terminated on 90 days' written notice. The interest rate on this line of credit varies and is indexed to the current Prime rate plus 0.5%. As of March 31, 2026 and December 31, 2025, the Company had borrowed $1,153 and $0 against the revolving line of credit, respectively.

*<u>Secured Deferred Financing Costs</u>*

The Company had secured deferred financing costs of $12 as of March 31, 2026 and December 31, 2025.

*<u>Secured Borrowings Secured by Loan Assets</u>*

Borrowings secured by loan assets are summarized below:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **March 31, 2026** | **March 31, 2026** | **December 31, 2025** | **December 31, 2025** |
|  | **Book Value of<br> Loans which<br> Served as<br> Collateral** | **Due from<br> Shepherd's<br> Finance to<br> Loan<br> Purchaser or<br> Lender** | **Book Value of<br> Loans which<br> Served as<br> Collateral** | **Due from<br> Shepherd's<br> Finance to<br> Loan<br> Purchaser or<br> Lender** |
| **Loan Purchaser** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Builder Finance | $3082 | $1671 | $1813 | $1458 |
| &nbsp;&nbsp;&nbsp;S.K. Funding | 9244 | 6500 | 9011 | 6500 |
| **Lender** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Shuman | 199 | 125 | 210 | 125 |
| &nbsp;&nbsp;&nbsp;Jeff Eppinger | 6038 | 3000 | 5789 | 200 |
| &nbsp;&nbsp;&nbsp;R. Scott Summers | 1462 | 903 | 2731 | 903 |
| &nbsp;&nbsp;&nbsp;John C. Solomon | 1029 | 563 | 1057 | 563 |
| &nbsp;&nbsp;&nbsp;Judith Swanson | 11112 | 6368 | 12568 | 6407 |
| &nbsp;&nbsp;&nbsp;Liberty Savings Bank | 3.421 | 1153 | – | – |
| **Total** | $35587 | $20283 | $33179 | $16156 |

---

***Unsecured Borrowings***

*<u>Unsecured Notes through the Public Offering ("Notes Program")</u>*

The effective interest rate on borrowings through our Notes Program as of March 31, 2026 and December 31, 2025, was 8.91% and 8.90%, respectively.

We generally offer four durations at any given time, ranging from 12 to 48 months from the date of issuance. All Notes sold in our fourth public offering, which was declared effective on September 16, 2022 and terminated on March 15, 2026, included a mandatory early redemption option, provided that the proceeds were reinvested in additional Notes. In our other historical offerings, there were limited rights of early redemption. Our 36-month Note sold in our public note offerings had a mandatory early redemption option, subject to certain conditions.

The following table is a roll forward of our Notes Program:

---

| | | | |
|:---|:---|:---|:---|
|  | **Three Months**<br> **Ended**<br> **March 31, 2026** | **Year Ended**<br> **December 31,**<br> **2025** | **Three Months**<br> **Ended**<br> **March 31, 2025** |
| Gross Notes outstanding, beginning of period | $22164 | $19968 | $19968 |
| Notes issued | 450 | 7612 | 417 |
| Note repayments / redemptions | (511) | (5416) | (1159) |
| Gross Notes outstanding, end of period | $22103 | $22164 | $19226 |
| &nbsp;&nbsp;&nbsp;Less deferred financing costs, net | (238) | (229) | (114) |
| Notes outstanding, net | $21865 | $21935 | $19112 |

---

The following is a roll forward of deferred financing costs related to the Notes Program:

---

| | | | |
|:---|:---|:---|:---|
|  | **Three Months**<br> **Ended**<br> **March 31, 2026** | **Year Ended**<br> **December 31,**<br> **2025** | **Three Months**<br> **Ended**<br> **March 31, 2025** |
| Deferred financing costs, beginning balance | $1302 | $1060 | $1060 |
| &nbsp;&nbsp;&nbsp;Additions | 33 | 242 | 18 |
| Deferred financing costs, ending balance | 1335 | 1302 | 1078 |
| &nbsp;&nbsp;&nbsp;Less accumulated amortization | (1097) | (1073) | (964) |
| Deferred financing costs, net | $238 | $229 | $114 |

---

The following is a roll forward of the accumulated amortization of deferred financing costs:

---

| | | | |
|:---|:---|:---|:---|
|  | **Three Months**<br> **Ended**<br> **March 31, 2026** | **Year Ended**<br> **December 31,**<br> **2025** | **Three Months**<br> **Ended**<br> **March 31, 2025** |
| Accumulated amortization, beginning balance | $1073 | $910 | $910 |
| &nbsp;&nbsp;&nbsp;Additions | 24 | 163 | 54 |
| Accumulated amortization, ending balance | $1097 | $1073 | $964 |

---

*<u>Other Unsecured Debts</u>*

The following table is a detail of other unsecured debts are detailed below:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Loan** | **Maturity**<br> **Date** | **Interest**<br> **Rate<sup>(1)</sup>**  | **March 31,<br> 2026** | **December 31,**<br> **2025** |
| Unsecured Line of Credit | July 2026 | 10.0% | 631 | 592 |
| Unsecured Line of Credit | April 2027 | 10.0% | 500 | 500 |
| Unsecured Line of Credit – Senior Subordinated | January 2027 | 10.0% | 750 |  |
| Subordinated Promissory Note | February 2027 | 9.0% | 600 | 600 |
| Subordinated Promissory Note | March 2028 | 9.75% | 500 | 500 |
| Subordinated Promissory Note | December 2027 | 10.0% | 20 | 20 |
| Subordinated Promissory Note | January 2029 | 9.0% | 15 | 15 |
| Subordinated Promissory Note | February 2027 | 8.5% | 200 | 200 |
| Subordinated Promissory Note | March 2027 | 10.0% | 26 | 26 |
| Subordinated Promissory Note | November 2026 | 9.5% | 200 | 200 |
| Subordinated Promissory Note | March 2027 | 9.5% | 1000 | 1000 |
| Subordinated Promissory Note | September 2027 | 10% | 108 | 108 |
| Subordinated Promissory Note | July 2028 | 8.5% | 100 | 100 |
| Subordinated Promissory Note | August 2026 | 8.0% | 291 | 291 |
| Senior Subordinated Promissory Note | July 2026<sup>(2)</sup> | 1.0% | 740 | 740 |
| Junior Subordinated Promissory Note | July 2026<sup>(2)</sup> | 20.0% | 460 | 460 |
| Senior Subordinated Promissory Note | October 2028<sup>(2)</sup> | 1.0% | 1072 | 1072 |
| Junior Subordinated Promissory Note | October 2028<sup>(2)</sup> | 20.0% | 666 | 666 |
| Subordinated Promissory Note | March 2029 | 10.0% | 1200 | 1200 |
| Subordinated Promissory Note | May 2027 | 10.0% | 97 | 97 |
| Subordinated Promissory Note | November 2027 | 10.0% | 120 | 120 |
| Subordinated Promissory Note | April 2028 | 10.0% | 149 | 149 |
| Subordinated Promissory Note | April 2029 | 11.0% | 2000 | 2000 |
| Subordinated Promissory Note | October 2027 | 8.5% | 200 | 200 |
| Subordinated Promissory Note | October 2028 | 10.0% | 1043 | 1043 |
| Subordinated Promissory Note | December 2028 | 10.0% | 149 | 149 |
| Subordinated Promissory Note | October 2026 | 10.0% | 1142 | 1142 |
| Subordinated Promissory Note | April 2029 | 9.0% | 301 | 301 |
| Subordinated Promissory Note | December 2029 | 8.0% | 248 | 248 |
| Subordinated Promissory Note | October 2028 | 8.5% | 100 | 100 |
| Subordinated Promissory Note | March 2029 | 6.5% | 153 |  |
| Subordinated Promissory Note | January 2030 | 8.0% | 15 |  |
| Subordinated Promissory Note | February 2031 | 11.0% | 400 |  |
| Subordinated Promissory Note | February 2031 | 11.0% | 300 |  |
| Subordinated Promissory Note | February 2031 | 11.0% | 365 |  |
| Subordinated Promissory Note | February 2031 | 11.0% | 400 |  |
| Subordinated Promissory Note | February 2031 | 11.0% | 300 |  |
| Subordinated Promissory Note | March 2031 | 11.0% | 500 |  |
| Subordinated Promissory Note | March 2031 | 11.0% | 500 | – |
|  |  |  | $17561 | $13839 |

---

(1) Interest
 rate per annum, based upon actual days outstanding and a 365/366-day year.

(2) These
 notes were issued to the same holder and, when calculated together, yield a blended rate of 10% per annum.

***Series C Preferred Equity***

Series C preferred equity distributions, liquidation rights and conversion features are determined based on the undiscounted value, which was $9,221 and $9,085 as of March 31, 2026 and December 31, 2025, respectively.

The following table shows the earliest conversion options for investors in Series C preferred equity as of March 31, 2026. Amounts are presented at redeemable values, which are prior to discounts reflected in the carrying amounts:

---

| | |
|:---|:---|
| **Year Maturing** | **Total**<br> **Amount**<br> **Convertible** |
| Currently convertible (requires notice of 12 months) | $3415 |
| 2027 | 309 |
| 2028 | 1368 |
| 2029 | 206 |
| 2030 and thereafter | 3923 |
| Total | $9221 |

---

***Priority of Borrowings***

The following table displays our borrowings and a ranking of priority. The lower the number, the higher the priority.

---

| | | | |
|:---|:---|:---|:---|
|  | **Priority**<br> **Rank** | **March 31,<br> 2026** | **December 31,<br> 2025** |
| Borrowing Source |  |  |  |
| &nbsp;&nbsp;&nbsp;Purchase and sale agreements and other secured borrowings | 1 | $23283 | $18431 |
| &nbsp;&nbsp;&nbsp;Secured line of credit from affiliates | 2 | 30 | 26 |
| &nbsp;&nbsp;&nbsp;Unsecured line of credit (senior) | 3 | 750 |  |
| &nbsp;&nbsp;&nbsp;Other unsecured debt (senior subordinated) | 4 | 1812 | 1812 |
| &nbsp;&nbsp;&nbsp;Unsecured Notes through our public offering, gross | 5 | 22103 | 22164 |
| &nbsp;&nbsp;&nbsp;Other unsecured debt (subordinated) | 5 | 13873 | 10901 |
| &nbsp;&nbsp;&nbsp;Other unsecured debt (junior subordinated) | 6 | 1126 | 1126 |
| &nbsp;&nbsp;&nbsp;Less deferred financing fees |  | (250) | (241 |
| Total |  | $62727 | $54219 |

---

***Liquidity and Capital Resources***

Our primary liquidity management objective is to meet expected cash flow needs while continuing to service our business and customers. As of March 31, 2026 and December 31, 2025, we had combined loans outstanding of 169 and 161, respectively. In addition, loans receivables, gross were $71,431 and $61,683 as of March 31, 2026 and December 31, 2025, respectively.

Unfunded commitments to extend credit, which have similar collateral, credit and market risk to our outstanding loans, were $24,604 and $23,557 as of March 31, 2026, and December 31, 2025, respectively. For off-balance-sheet credit exposures, the estimate of expected credit losses has been presented as a liability on the balance sheet as of March 31, 2026. Other than unfunded commitments, we had no off-balance sheet transactions, nor do we currently have any such arrangements or obligations.

We anticipate the Company's originations to be higher in 2026 due to an increase in marketing and sales efforts.

To fund our combined loans, we rely on secured debt, unsecured debt, and equity, which are described in the following table:

---

| | | |
|:---|:---|:---|
| **Source of Liquidity** | **As of**<br> **March 31, 2026** | **As of**<br> **December 31, 2025** |
| Secured debt, net of deferred financing costs | $23301 | $18445 |
| Unsecured debt, net of deferred financing costs | $39426 | $35774 |
| Members' Capital | $8563 | $8211 |
| Cash and cash equivalents | $3316 | $3490 |

---

As of March 31, 2026 and December 31, 2025, cash and cash equivalents was $3,316 and $3,490, respectively.

Secured debt, net of deferred financing costs increased $4,856 to $23,301 as of March 31, 2026, compared to $18,445 for the year ended December 31, 2025. The increase in secured debt was due primarily to borrowings to partially fund our increase in loan assets.

Unsecured debt, net of deferred financing costs increased $3,652 to $39,426 as of March 31, 2026, compared to $35,774 as of December 31, 2025. The increase in unsecured debt was due primarily to borrowings to partially fund our increase in loan assets.

Members' Capital increased $352 to $8,563 as of March 31, 2026, compared to $8,211 as of December 31, 2025.

We anticipate equity to increase during the nine months subsequent to March 31, 2026, mostly through retained earnings. If we are not able to maintain our equity, we will rely more heavily on raising additional funds through the Notes Program.

The total amount of our debt maturing as of March 31, 2026 is $27,267, which consists of secured borrowings of $21,308 and unsecured borrowings of $6,229.

Secured borrowings maturing as of March 31, 2026 significantly consists of loan purchase and sale agreements with two loan purchasers (Builder Finance and S. K. Funding) and secured lines of credit with several lenders. These secured borrowings are listed as maturing over the next 12 months due primarily to their related demand loan collateral.

The following are secured facilities listed as principal maturing in 2026 with actual maturity and renewal dates:

● Swanson – $6,368 automatically renews unless notice given;

● Shuman – $125 due July 2026 and automatically renews unless notice is given;

● S. K. Funding – $4,500 due July 2026 and automatically renews unless notice is given;

● S. K. Funding – $2,000 of the total due January 2027;

● Builder Finance, Inc – $1,672 with no expiration date;

● Liberty Savings Bank - $1,152 no expiration date and may terminate upon 90 days of written notice

● New LOC Agreements - $4,466 generally one-month notice and nine months to reduce principal balance to zero;

● Line of credits with affiliates - $30 and due upon demand

Unsecured borrowings due by December 31, 2026, consist of Notes issued pursuant to the Notes Program and other unsecured debt of $2,146 and $4,083, respectively. To the extent that Notes issued pursuant to the Notes Program are not reinvested upon maturity, we will be required to fund the maturities, which we anticipate funding through the issuance of new Notes in our Notes Program. During the last twelve months, approximately 88% of our Notes Program holders reinvested upon maturity. The 36-month Note sold in our public note offerings had a mandatory early redemption option, subject to certain conditions. Historically, our other unsecured debt has renewed. For more information on other unsecured borrowings, see Note 7 – Borrowings. If other unsecured borrowings are not renewed in the future, we anticipate funding such maturity through investments in our Notes Program.

***Summary***

We have the funding available to address the loans we have today, including our unfunded commitments. We anticipate an increase in our assets during the remainder of 2026 due to an increase in our marketing efforts. We are prepared for an increase in assets through the net sources and uses (12-month liquidity) listed above as well as future capital from debt, preferred equity, and regular equity. Although our secured debt is almost entirely listed as current due because of the underlying collateral being demand notes, the vast majority of our secured debt is either contractually set to automatically renew unless notice is given or, in the case of purchase and sale agreements, has no end date as to when the purchasers will not purchase new loans (although they are never required to purchase additional loans).

***Inflation, Interest Rates, and Housing Starts***

Since we are in the housing industry, we are affected by factors that impact that industry. Housing starts impact our customers' ability to sell their homes. Faster sales generally mean higher effective interest rates for us, as the recognition of fees we charge is spread over a shorter period. Slower sales generally mean lower effective interest rates for us. Slower sales also are likely to increase the default rate we experience.

Housing inflation has a positive impact on our operations. When we lend initially, we are lending a percentage of a home's expected value, based on historical sales. If those estimates prove to be low (in an inflationary market), the percentage we loaned of the value actually decreases, reducing potential losses on defaulted loans. The opposite is true in a deflationary housing price market. It is our opinion that values are well above average in many of the housing markets in the U.S. today, and our lending against these values is having more risk than prior years. In some of our markets, prices of homes sold are dropping. This is both because some homes are selling for less and because the average home selling is smaller (more affordable). However, we anticipate significant declines in home values in some markets over the next 12 months.

Interest rates have several impacts on our business. First, rates affect housing (starts, home size, etc.). High long-term interest rates may decrease housing starts, having the effects listed above. Housing starts have been in a tight range over the last year, and generally payoffs appear stable. Higher interest rates will also affect our investors. We believe that there will be a spread between the rate our Notes yield to our investors and the rates the same investors could get on deposits at FDIC insured institutions. We also believe that the spread may need to widen if these rates rise. For instance, if we pay 7% above average CD rates when CDs are paying 0.5%, when CDs are paying 5%, we may have to have a larger than 7% difference. This may cause our lending rates, which are based on our cost of funds, to be uncompetitive. High interest rates may also increase builder defaults, as interest payments may become a higher portion of operating costs for the builder.

However, we note that one difference between the current housing cycle compared to prior cycles is that the supply of used homes in the market is low due to the number of homes owned with lower interest rates. Due to the new data on used homes in the market, this makes understanding future results an issue for the Company. Meanwhile, as housing cycles start to decline, foreclosures increase and with their initial interest rate at 3% or less if started within the last 24 months, foreclosures may not have as large of an impact.

Below is a chart showing three-year U.S. treasury rates and 30-year fixed mortgage rates. The U.S. treasury rates are used by us here to approximate CD rates. Both the short- and long-term interest rates have risen slightly to historically normal levels.

![](form424b3_002.jpg)

Housing prices are also generally correlated with housing starts; therefore, increases in housing starts usually coinciding with increases in housing values, and the reverse is generally true. Looking at the chart below, housing starts have fallen back from the pandemic high; however, since then the change remains relatively flat.

Below is a graph showing single family housing-starts from 2000 through today which is provided by Federal Reserve Economic Data ("FRED):

![](form424b3_003.jpg)

***Off-Balance Sheet Arrangements***

As of March 31, 2026, we had no off-balance sheet transactions, nor do we currently have any such arrangements or obligations.

**<u>Financial Statement index</u>**

The financial statements listed below are contained in this supplement:

---

| | |
|:---|:---|
| [Interim Consolidated Balance Sheets as of March 31, 2026 (Unaudited) and December 31, 2025](#sp_001) | F-2 |
| [Interim Consolidated Statements of Operations (Unaudited) for the Three Months Ended March 31, 2026 and 2025](#sp_002) | F-3 |
| [Interim Consolidated Statement of Changes in Members' Capital (Unaudited) for the Three Months Ended March 31, 2026 and 2025](#sp_003) | F-4 |
| [Interim Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended March 31, 2026 and 2025](#sp_004) | F-5 |
| [Notes to Interim Consolidated Financial Statements (Unaudited)](#sp_005) | F-7 |

---

**Shepherd's Finance, LLC**

**Interim Consolidated Balance Sheets - Unaudited**

---

| | | |
|:---|:---|:---|
| *(in thousands of dollars)* | **March 31, 2026** | **December 31, 2025** |
| **Assets** |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $3316 | $3490 |
| &nbsp;&nbsp;&nbsp;Restricted cash | 251 | 250 |
| &nbsp;&nbsp;&nbsp;Certificates of deposit, restricted | 2275 | 2275 |
| &nbsp;&nbsp;&nbsp;Accrued interest receivable | 1271 | 1111 |
| &nbsp;&nbsp;&nbsp;Loans receivable, net | 68633 | 59223 |
| &nbsp;&nbsp;&nbsp;Real estate investments |  | 169 |
| &nbsp;&nbsp;&nbsp;Foreclosed assets, net | 387 | 499 |
| &nbsp;&nbsp;&nbsp;Premises and equipment | 784 | 790 |
| &nbsp;&nbsp;&nbsp;Other assets | 595 | 729 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $77512 | $68536 |
| **Liabilities and Members' Capital** |  |  |
| &nbsp;&nbsp;&nbsp;Refundable prepaid interest | $457 | $965 |
| &nbsp;&nbsp;&nbsp;Loan deposits | 1084 | 838 |
| &nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | 492 | 708 |
| &nbsp;&nbsp;&nbsp;Accrued interest payable | 4189 | 3595 |
| &nbsp;&nbsp;&nbsp;Notes payable secured, net | 23301 | 18445 |
| &nbsp;&nbsp;&nbsp;Notes payable unsecured, net | 39426 | 35774 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 68949 | 60325 |
| Commitments and Contingencies (Note 11) |  |  |
| **Members' Capital** |  |  |
| &nbsp;&nbsp;&nbsp;Series C preferred equity, net of discounts of $2,042 and $2,043, respectively | 7179 | 7042 |
| &nbsp;&nbsp;&nbsp;Class A common equity | 1384 | 1169 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Members' capital | 8563 | 8211 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and members' capital | $77512 | $68536 |

---

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

**Shepherd's Finance, LLC**

**Interim Consolidated Statements of Operations - Unaudited**

**For the Three Months Ended March 31, 2026 and 2025**

---

| | | |
|:---|:---|:---|
| *(in thousands of dollars)* | **2026** | **2025** |
| **Net Interest and Fee Income** |  |  |
| &nbsp;&nbsp;&nbsp;Interest and fee income on loans | $3137 | $2429 |
| &nbsp;&nbsp;&nbsp;Interest expense: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest related to secured borrowings | 438 | 282 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest related to unsecured borrowings | 975 | 896 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense | 1413 | 1178 |
| &nbsp;&nbsp;&nbsp;Net interest and fee income | 1724 | 1251 |
| &nbsp;&nbsp;&nbsp;Less: Provision for credit losses | 250 | 133 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net interest and fee income after provision for credit losses | 1474 | 1118 |
| **Non-Interest Income** |  |  |
| &nbsp;&nbsp;&nbsp;Revenue from the sale of land parcels |  | 1837 |
| &nbsp;&nbsp;&nbsp;Option fee income |  | 154 |
| &nbsp;&nbsp;&nbsp;Other income | 86 | 47 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total non-interest income | 86 | 2038 |
| **Non-Interest Expense** |  |  |
| &nbsp;&nbsp;&nbsp;Selling, general and administrative | 1057 | 939 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 8 | 20 |
| &nbsp;&nbsp;&nbsp;Loss on sale of real estate investments | 3 |  |
| &nbsp;&nbsp;&nbsp;Loss on foreclosed assets | 6 | 15 |
| &nbsp;&nbsp;&nbsp;Cost of land parcels sold | – | 1837 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total non-interest expense | 1074 | 2811 |
| **Net income** | $486 | $345 |
| **Net income attributable to preferred equity holders** | 271 | 192 |
| **Net income attributable to common equity holders** | $215 | $153 |

---

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

**Shepherd's Finance, LLC**

**Interim Consolidated Statements of Changes in Members' Capital – Unaudited**

**For the Three Months Ended March 31, 2026 and 2025**

---

| | | | |
|:---|:---|:---|:---|
| *(in thousands of dollars)* | **Series C**<br> **Preferred**<br> **Equity** | **Class A**<br> **Common**<br> **Equity** | **Total**<br> **Members'**<br> **Capital** |
| **January 1, 2025** | $6430 | $2143 | $8573 |
| Net income | 192 | 153 | 345 |
| Distributions | (66) | (387) | (453) |
| Unit Based Compensation Expense | – | 1 | 1 |
| **March 31, 2025** | $6556 | $1910 | $8466 |
| **January 1, 2026** | 7042 | 1169 | 8211 |
| Net income | 271 | 215 | 486 |
| Distributions | (134) | (1) | (135) |
| Unit Based Compensation Expense | – | 1 | 1 |
| **March 31, 2026** | $7179 | $1384 | $8563 |

---

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

**Shepherd's Finance, LLC**

**Interim Consolidated Statements of Cash Flows - Unaudited**

**For the Three Months Ended March 31, 2026 and 2025**

---

| | | |
|:---|:---|:---|
| *(in thousands of dollars)* | **2026** | **2025** |
| **Cash flows from operations** |  |  |
| &nbsp;&nbsp;&nbsp;Net income | $486 | $345 |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net income to net cash provided by operating activities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of deferred financing costs | 24 | 54 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for credit losses | 250 | 133 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 8 | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on foreclosed assets | 6 | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on sale of real estate investments | 3 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue – real estate investments |  | 325 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unit based compensation expense | 1 | 1 |
| &nbsp;&nbsp;&nbsp;Net change in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets | 132 | (1363) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued interest receivable | (160) | 53 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Refundable prepaid interest | (508) | 103 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued interest payable | 602 | 72 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | (216) | (375) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used in) operating activities | 628 | (617) |
| **Cash flows from investing activities** |  |  |
| &nbsp;&nbsp;&nbsp;Loan originations and principal collections, net | (9807) | 1865 |
| &nbsp;&nbsp;&nbsp;Additions for construction in foreclosed assets | (3) | (35) |
| &nbsp;&nbsp;&nbsp;Additions for construction in real estate investments | (3) | (485) |
| &nbsp;&nbsp;&nbsp;Proceeds from sale of foreclosed assets | 502 | 412 |
| &nbsp;&nbsp;&nbsp;Proceeds from the sale of real estate investments | 169 | 1837 |
| &nbsp;&nbsp;&nbsp;Investments in certificates of deposit | – | (2275) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash (used in) provided by investing activities | (9142) | 1319 |
| **Cash flows from financing activities** |  |  |
| &nbsp;&nbsp;&nbsp;Distributions to Series C preferred equity holders | (134) | (66) |
| &nbsp;&nbsp;&nbsp;Distributions to common equity holders | (1) | (387) |
| &nbsp;&nbsp;&nbsp;Proceeds from secured note payable | 13872 | 2648 |
| &nbsp;&nbsp;&nbsp;Repayments of secured note payable | (8981) | (3925) |
| &nbsp;&nbsp;&nbsp;Proceeds from unsecured notes payable | 4129 | 1314 |
| &nbsp;&nbsp;&nbsp;Redemptions/repayments of unsecured notes payable | (511) | (2166) |
| &nbsp;&nbsp;&nbsp;Deferred financing costs paid | (33) | (33) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used in) financing activities | 8341 | (2615) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net change in cash, cash equivalents and restricted cash | (173) | (1913) |
| **Cash, cash equivalents and restricted cash** |  |  |
| &nbsp;&nbsp;&nbsp;Beginning of period | 3740 | 3347 |
| &nbsp;&nbsp;&nbsp;End of period | $3567 | $1434 |
| **Supplemental disclosure of cash flow information** |  |  |
| &nbsp;&nbsp;&nbsp;Cash paid for interest | $819 | $1127 |
| **Non-cash investing and financing activities** |  |  |
| &nbsp;&nbsp;&nbsp;Foreclosed assets transferred from loans receivable, net | $393 | $436 |
| &nbsp;&nbsp;&nbsp;Secured and unsecured notes payable transfers | $39 | $200 |
| &nbsp;&nbsp;&nbsp;Accrued interest payable transferred to unsecured notes payable | $8 | $123 |

---

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

**Shepherd's Finance, LLC**

**Notes to Consolidated Financial Statements (unaudited)**

Information presented throughout these notes to the consolidated financial statements is in thousands of dollars.

**1.** **Description of Business** 

Shepherd's Finance, LLC (together with its wholly owned subsidiary, Builder's Assistance (as defined below), the "Company", "we", or "our") was originally formed as a Pennsylvania limited liability company on May 10, 2007. Through August 6, 2025, we were the sole member of two consolidating subsidiaries, 339 Justabout Land Company, LLC ("339") and Builder's Assistance. On August 6, 2025, we sold 339, further described in Note 3 below. The Company operates pursuant to its Second Amended and Restated Limited Liability Company Agreement by and among Daniel M. Wallach and the other members of the Company effective as of March 16, 2017, and as subsequently amended.

The Company extends commercial loans to residential homebuilders (in 21 states as of March 31, 2026) to:

● construct single family homes,

● develop undeveloped land into residential building lots, and

● purchase and improve for sale older homes.

On March 14, 2025, the Company changed the name of its consolidated subsidiary, Shepherd's Stable Investments, LLC, to Builder's Assistance, LLC ("Builder's Assistance"). Builder's Assistance was established to provide accounting and other business support services to third parties, primarily customers of the Company.

**2.** **Fair Value** 

The Company had no financial instruments measured at fair value on a recurring basis as of March 31, 2026 and December 31, 2025.

The following tables present the balances of non-financial instruments measured at fair value on a non-recurring basis as of March 31, 2026, and December 31, 2025:

Schedule of Non-financial Instruments Measured at Fair Value on Non-recurring Basis

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **March 31, 2026** | **March 31, 2026** | | | |
|  | **Carrying**<br>**Amount** | **Estimated**<br>**Fair Value** | **Quoted Prices**<br> **in Active**<br> **Markets for**<br>**Identical**<br>**Assets**<br>**Level 1** | **Significant Other**<br>**Observable**<br>**Inputs**<br>**Level 2** | **Significant**<br>**Unobservable**<br>**Inputs**<br>**Level 3** |
| Foreclosed assets, net | $387 | $387 | $– | $– | $387 |
| Individually evaluated loans, net | 5390 | 5390 | – | – | 5390 |
| Total | $5777 | $5777 | $– | $– | $5777 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | | | |
|  | **Carrying**<br>**Amount** | **Estimated**<br>**Fair Value** | **Quoted Prices**<br> **in Active**<br> **Markets for**<br>**Identical**<br>**Assets**<br>**Level 1** | **Significant Other**<br>**Observable**<br>**Inputs**<br>**Level 2** | **Significant**<br>**Unobservable**<br>**Inputs**<br>**Level 3** |
| Foreclosed assets, net | $499 | $499 | $– | $– | $499 |
| Individually evaluated loans, net | 6192 | 6192 | – | – | 6192 |
| Total | $6691 | $6691 | $– | $– | $6691 |

---

The following methods and assumptions were used by the Company in estimating the fair value of assets and liabilities valued on a nonrecurring basis:

Schedule of Estimating the Fair Value of Assets and Liabilities Valued on a Nonrecurring basis

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Estimated Fair Value** | **Valuation Technique** | **Unobservable Inputs** | **Range of Discounts** | **Weighted Average Discount<sup>(1)</sup>** |
| **March 31, 2026** | | | | | |
| Individually evaluated loans, net | $5390 | Underlying collateral value, third party appraisals | Collateral discounts and estimated costs to sell | $0%-40 | 11% |
| Foreclosed assets, net | $387 | Underlying collateral value, third party appraisals | Collateral discounts | 18% | 18% |

---

<sup>(1)</sup> The loan to value ratio is calculated by taking the commitment amount and dividing by the appraised value.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Estimated Fair Value** | **Valuation Technique** | **Unobservable Inputs** | **Range of Discounts** | **Weighted Average Discount<sup>(1)</sup>** |
| **December 31, 2025** | | | | | |
| Individually evaluated loans, net | $6192 | Underlying collateral value, third party appraisals | Collateral discounts and estimated costs to sell | 0%-26% | 12% |
| Foreclosed assets, net | $499 | Underlying collateral value, third party appraisals | Collateral discounts | 7% | 7% |

---

<sup>(1)</sup> The loan to value ratio is calculated by taking the commitment amount and dividing by the appraised value.

*<u>Fair Value of Financial Instruments</u>*

**Borrowings under Credit Facilities**

The fair value of the Company's borrowings under credit facilities is estimated based on the expected cash flows discounted using the current rates offered to the Company for debt of the same remaining maturities. As all of the borrowings under credit facilities or the Notes are payable on demand or at similar rates to what the Company can borrow funds for today, the fair value of the borrowings is determined to approximate carrying value as of March 31, 2026 and December 31, 2025. The interest on our Notes Program is paid to our Note holders either monthly or at the end of their investment, compounded monthly. For the same reasons as the determination for the principal balances on the Notes, the fair value approximates the carrying value for the interest as well.

The table below is a summary of fair value estimates for financial instruments:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | | **March 31, 2026** | **March 31, 2026** | **December 31, 2025** | **December 31, 2025** |
|  |<br>**Fair Value**<br>**Level** | **Carrying**<br>**Amount** | **Estimated**<br>**Fair Value** | **Carrying**<br>**Amount** | **Estimated**<br>**Fair Value** |
| **Financial Assets** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents including restricted cash | 1 | $3567 | $3567 | $3740 | $3740 |
| &nbsp;&nbsp;&nbsp;Certificates of deposit | 2 | 2275 | 2275 | 2275 | 2275 |
| &nbsp;&nbsp;&nbsp;Loans receivable, net | 3 | 68633 | 68633 | 59223 | 59223 |
| &nbsp;&nbsp;&nbsp;Accrued interest on loans | 2 | 1271 | 1271 | 1111 | 1111 |
| **Financial Liabilities** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Refundable prepaid interest | 2 | 457 | 457 | 965 | 965 |
| &nbsp;&nbsp;&nbsp;Loan deposits | 2 | 1084 | 1084 | 838 | 838 |
| &nbsp;&nbsp;&nbsp;Notes payable secured, net | 2 | 23301 | 23301 | 18445 | 18445 |
| &nbsp;&nbsp;&nbsp;Notes payable unsecured, net | 2 | 39426 | 39426 | 35774 | 35774 |
| &nbsp;&nbsp;&nbsp;Accrued interest payable | 2 | 4189 | 4189 | 3595 | 3595 |

---

**3.** **Segment Reporting** 

Effective January 1, 2026, the Company changed their reportable segments to a single reportable segment. Following the sale of 339 Justabout Land Company on August 6, 2025, which was a reportable segment of the Company, the Company no longer has any separately reportable segments.

The Company's one reportable segment generates income principally from interest on loans, as well as from fees charged in connection with various lending services. The chief operating decision maker ("CODM") is the Chief Executive Officer, who for the purposes of assessing performance, making operating decisions, and allocating Company resources, regularly reviews net income as reported in the consolidated statements of operations. The level of disaggregation and amounts of significant segment income and expenses, such as interest and fee income, interest expense, provision for credit losses, salaries and employee benefits expense and other items, that are regularly provided to the CODM are the same as those presented in the accompanying consolidated statements of operations. Likewise, the measure of segment assets is reported on the accompanying consolidated balance sheets as total assets.

Information about reportable segments and reconciliations of such information to the Interim Consolidated Financial Statements are described below.

*<u>Reconciliation of Consolidated Statements of Operations:</u>*

**Shepherd's Finance, LLC**

**Interim Consolidated Statements of Operations**

**For the Quarter Ended March 31, 2025**

---

| | | | |
|:---|:---|:---|:---|
| *(in thousands of dollars)* | **339 Justabout Land Company, LLC** | **Shepherd's Finance, LLC** | **Total** |
| **Net Interest and Fee Income** |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest and fee income on loans | $– | $2429 | $2429 |
| &nbsp;&nbsp;&nbsp;Interest expense: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest related to secure borrowings |  | 282 | 282 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest related to unsecured borrowings | – | 896 | 896 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense | $– | $1178 | $1178 |
| &nbsp;&nbsp;&nbsp;Net interest and fee income |  | 1251 | 1251 |
| &nbsp;&nbsp;&nbsp;Less: Provision for credit losses | – | 133 | 133 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net interest and fee income after provision for credit losses |  | 1118 | 1118 |
| **Non-Interest Income** |  |  |  |
| &nbsp;&nbsp;&nbsp;Revenue from the sale of land parcels | 1837 |  | 1837 |
| &nbsp;&nbsp;&nbsp;Option fee income | 154 |  | 154 |
| &nbsp;&nbsp;&nbsp;Other income | – | 47 | 47 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total non-interest income | $1991 | $47 | $2038 |
| **Non-Interest Expense** |  |  |  |
| &nbsp;&nbsp;&nbsp;Selling, general and administrative | $– | $939 | $939 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization |  | 20 | 20 |
| &nbsp;&nbsp;&nbsp;Loss on foreclosed assets |  | 15 | 15 |
| &nbsp;&nbsp;&nbsp;Cost of land parcels sold | 1837 | – | 1837 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total non-interest expense | $1837 | $974 | $2811 |
| **Net Income** | $154 | $191 | $345 |

---

*<u>Reconciliation of total assets:</u>*

---

| | | | |
|:---|:---|:---|:---|
| *(in thousands of dollars)* | **339 Justabout Land Company, LLC** | **Shepherd's**<br> **Finance,**<br> **LLC** | **Total** |
| &nbsp;&nbsp;&nbsp;Total assets as of December 31, 2025 | $– $| 68536 | $68536 |

---

**4.** **Real Estate Investment Assets** 

During the three months ended March 31, 2026, the Company sold one asset for sale proceeds of $169 and a loss on sale of $3.

The following table is a roll forward of real estate investment assets:

Schedule of Roll Forward of Real Estate Investment Assets

---

| | | | |
|:---|:---|:---|:---|
|  | **Three Months**<br> **Ended**<br> **March 31, 2026** | **Year Ended**<br> **December 31, 2025** | **Three Months**<br> **Ended**<br> **March 31, 2025** |
| Beginning balance | $169 | $13529 | $13529 |
| &nbsp;&nbsp;&nbsp;Proceeds from disposal of 339 |  | (9876) |  |
| &nbsp;&nbsp;&nbsp;Gain on sale of real estate investments |  | 276 |  |
| &nbsp;&nbsp;&nbsp;Loss on sale of real estate investments | (3) |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from the sale of real estate investments | (169) | (4956) | (1837) |
| &nbsp;&nbsp;&nbsp;Additions for construction/development | 3 | 1196 | 485 |
| Ending balance | $– | $169 | $12177 |

---

**Capitalized Interest Activity**

The following table is capitalized interest included in additions for construction/development for real estate investment assets:

Schedule of Capitalized Interest for Construction/Development Real Estate Investment Assets

---

| | | |
|:---|:---|:---|
|  | **March 31, 2026** | **March 31, 2025** |
| Capitalized interest | $2 | $259 |
| Cost of funds | 9.20% | 10.07% |

---

The capitalized interest is included within real estate investment assets on the consolidated balance sheet.

**5.** **Loans Receivables, net** 

Financing receivables are comprised of the following as of March 31, 2026 and December 31, 2025:

Schedule of Financing Receivables

---

| | | |
|:---|:---|:---|
|  | **March 31, 2026** | **December 31, 2025** |
| Loans receivable, gross | $71431 | $61683 |
| Less: Deferred loan fees | (1594) | (1516) |
| Plus: Deferred origination costs | 170 | 169 |
| Less: Allowance for credit losses | (1374) | (1113) |
| Loans receivable, net | $68633 | $59223 |

---

**Commercial Construction and Development Loans**

As of March 31, 2026, the Company's loan portfolio consisted of 154 construction loans with 52 borrowers and 15 development loans with 14 borrowers in 21 states.

*<u>Construction Loan Portfolio Summary</u>*

The following is a summary of our loan portfolio to builders for home construction loans as of March 31, 2026 and December 31, 2025:

Schedule of Commercial Loans - Construction Loan Portfolio Summary

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Year** | **Number of**<br> **States** | **Number of**<br> **Borrowers** | **Number of**<br> **Loans** | **Commitment**<br> **Amount** | **Gross**<br> **Amount**<br> **Outstanding** | **Loan to Value**<br> **Ratio<sup>(2)</sup>** |
| 2026 | 19 | 52 | 154 | $71355 | $50147 | 73%<sup>(3)</sup> |
| 2025 | 20 | 53 | 151 | $65897 | $44515 | 72%<sup>(3)</sup> |

---

<sup>(1)</sup> The loan to value ratio is calculated by taking the commitment amount and dividing by the appraised value.

<sup>(2)</sup> Represents the weighted average loan to value ratio of the loans.

*<u>Real Estate Development Loan Portfolio Summary</u>*

The following is a summary of our loan portfolio to builders for land development as of March 31, 2026 and December 31, 2025:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Year** | **Number of**<br> **States** | **Number of**<br> **Borrowers** | **Number of**<br> **Loans** | **Commitment**<br> **Amount** | **Gross**<br> **Amount**<br> **Outstanding** | **Loan to Value**<br> **Ratio<sup>(2)</sup>** |
| 2026 | 10 | 14 | 15 | $24680 | $21284 | 77%(3) |
| 2025 | 9 | 12 | 13 | $19342 | $17168 | 71%(3) |

---

<sup>(1)</sup> The loan to value ratio is calculated by taking the outstanding amount and dividing by the appraised value calculated as described above.

<sup>(2)</sup> Represents the weighted average loan to value ratio of the loans.

The following is a roll forward of loan receivables, net of both construction and development loans:

Schedule of Construction and Development Loan Portfolio

---

| | | |
|:---|:---|:---|
|  | **March 31,**<br> **2026** | **December 31,**<br> **2025** |
| Beginning balance | $59223 | $49254 |
| &nbsp;&nbsp;&nbsp;Originations and modifications | 18346 | 59571 |
| &nbsp;&nbsp;&nbsp;Principal collections | (8204) | (48205) |
| &nbsp;&nbsp;&nbsp;Transferred from loans receivables, net | (393) | (909) |
| &nbsp;&nbsp;&nbsp;Change in allowance for credit losses | (261) | (245) |
| &nbsp;&nbsp;&nbsp;Change in loan fees, net | (78) | (243) |
| Ending balance | $68633 | $59223 |

---

**Credit Quality Information**

The following table presents the Company's gross loans receivable, commitment value and ACL for each respective credit rank loan pool category as of March 31, 2026:

Schedule of Gross Loan Receivable, Commitment Value and ACL Credit Rank Loan Pool Category

---

| | | | |
|:---|:---|:---|:---|
|  | **Loans<br> Receivable<br> Gross** | **Commitment<br> Value** | **ACL** |
| **Construction Loans Collectively Evaluated:** |  |  |  |
| A Credit Risk | $26438 | $42948 | $145 |
| B Credit Risk | 16111 | 18666 | 163 |
| C Credit Risk | 1780 | 1989 | 23 |
| Individually Evaluated | 5818 | 7752 | 973 |
| **Development Loans Collectively Evaluated:** |  |  |  |
| A Credit Risk | $7818 | $10027 | $3 |
| B Credit Risk | 12822 | 14066 | 65 |
| C Credit Risk | 99 | 100 | 2 |
| Individually Evaluated | 545 | 487 | - |
| Total | $71431 | $96035 | $1374 |

---

The following table presents the Company's gross loans receivable, commitment value and ACL for each respective credit rank loan pool category as of December 31, 2025.

---

| | | | |
|:---|:---|:---|:---|
|  | **Loans<br> Receivable<br> Gross** | **Commitment<br> Value** | **ACL** |
| **Construction Loans Collectively Evaluated:** |  |  |  |
| A Credit Risk | $23490 | $37488 | $122 |
| B Credit Risk | 13799 | 18830 | 151 |
| C Credit Risk | 828 | 1099 | 12 |
| Individually Evaluated | 6399 | 8480 | 745 |
| **Development Loans Collectively Evaluated:** |  |  |  |
| A Credit Risk | $3457 | $4390 | $2 |
| B Credit Risk | 13072 | 14366 | 79 |
| C Credit Risk | 99 | 100 | 2 |
| Individually Evaluated | 539 | 487 | – |
| Total | $61683 | $85240 | $1113 |

---

**Individually Evaluated Loans**

Individually evaluated loans are loans for which it is probable that all the amounts due under the contractual terms of the loan will not be collected. The ACL on loans that are individually evaluated is based on a comparison of the receivable loan balance, observable market price for the loan or the fair value of the collateral underlying secured loans.

The following table presents the amortized cost basis of loans on individually evaluated status and loans past due over 90 days still accruing as of March 31, 2026:

---

| | | | |
|:---|:---|:---|:---|
|  | **Individually Evaluated without ACL** | **Individually Evaluated with ACL** | **Accrual Loans Past Due Over 90 Days** |
| **Construction Loans:** |  |  |  |
| Individually Evaluated | $2414 | $3404 | $– |
| **Development Loans:** |  |  |  |
| Individually Evaluated | $545 | $– | $– |
| Total | $2959 | $3405 | $– |

---

The following table presents the amortized cost basis of loans individually evaluated and loans past due over 90 days still accruing as of December 31, 2025:

---

| | | | |
|:---|:---|:---|:---|
|  | **Individually Evaluated without ACL** | **Individually Evaluated with ACL** | **Accrual Loans Past Due Over 90 Days** |
| **Construction Loans:** |  |  |  |
| Individually Evaluated | $3239 | $3160 | $– |
| **Development Loans:** |  |  |  |
| Individually Evaluated | $539 | $– | $– |
| Total | $3778 | $3160 | $– |

---

The following is an aging of our gross loan portfolio as of March 31, 2026:

Schedule of Aging of Gross Loan Portfolio

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Gross Loan**<br>**Value** | **Current**<br>**0 - 89** | **Past Due**<br>**90 - 179** | **Past Due**<br>**180 - 269** | **Past Due**<br>**>270** |
| **Construction Loans:** |  |  |  |  |  |
| A Credit Risk | $26438 | $26438 | $– | $– | $– |
| B Credit Risk | 16111 | 16111 |  |  |  |
| C Credit Risk | 1780 | 1780 |  |  |  |
| Individually Evaluated | 5818 | 2810 | 2381 | 228 | 399 |
| **Development Loans:** |  |  |  |  |  |
| A Credit Risk | 7818 | 7818 |  |  |  |
| B Credit Risk | 12822 | 12822 |  |  |  |
| C Credit Risk | 99 | 99 |  |  |  |
| Individually Evaluated | 545 | – | – | 545 | – |
| Total | $71431 | $67878 | $2381 | $773 | $399 |

---

The following is an aging of our gross loan portfolio as of December 31, 2025:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Gross Loan**<br>**Value** | **Current**<br>**0 - 89** | **Past Due**<br>**90 - 179** | **Past Due**<br>**180 - 269** | **Past Due**<br>**>270** |
| **Construction Loans:** |  |  |  |  |  |
| A Credit Risk | $23490 | $23490 | $– | $– | $– |
| B Credit Risk | 13799 | 13799 |  |  |  |
| C Credit Risk | 828 | 828 |  |  |  |
| Individually Evaluated | 6399 | 5201 | 618 | 446 | 134 |
| **Development Loans:** |  |  |  |  |  |
| A Credit Risk | 3457 | 3457 |  |  |  |
| B Credit Risk | 13072 | 13072 |  |  |  |
| C Credit Risk | 99 | 99 |  |  |  |
| Individually Evaluated | 539 | – | 539 | – | – |
| Total | $61683 | $59946 | $1157 | $446 | $134 |

---

Below is an aging schedule of loans receivable as of March 31, 2026 on a recency basis:

Summary of Aging Schedule of Loans Receivables on a Recency Basis

---

| | | | |
|:---|:---|:---|:---|
|  | **No. Loans** | **Unpaid Balances** | **%** |
| Current loans (current accounts and accounts on which more than 50% of an original contract payment was made in the last 59 days) | 160 | $67878 | 95.0% |
| 60-89 days |  |  | –% |
| 90-179 days | 4 | 2381 | 3.3% |
| 180-269 days | 3 | 773 | 1.1% |
| >270 days | 2 | 399 | 0.6% |
| Subtotal | 169 | $71431 | 100.0% |
| Interest only accounts (Accounts on which interest, deferment, extension and/or default charges were received in the last 60 days) | – | $– | –% |
| Partial Payment accounts (Accounts on which the total received in the last 60 days was less than 50% of the original contractual monthly payment. "Total received" to include interest on simple interest accounts, as well as late charges on deferment charges on pre-computed accounts.) | – | $– | –% |
| Total | 169 | $71431 | 100.0% |

---

Below is an aging schedule of loans receivable as of December 31, 2025, on a recency basis:

---

| | | | |
|:---|:---|:---|:---|
|  | **No.**<br> **Loans** | **Unpaid**<br> **Balances** | **%** |
| Contractual terms (All current Direct Loans and Sales Finance Contracts with installments past due less than 60 days from due date.) | 155 | $58507 | 94.9% |
| 60-89 days | 1 | 1439 | 2.3% |
| 90-179 days | 5 | 1157 | 1.8% |
| 180-269 days | 2 | 446 | 0.7% |
| >270 days | 1 | 134 | 0.3% |
| Subtotal | 164 | $61683 | 100.0% |
| Interest only accounts (Accounts on which interest, deferment, extension and/or default charges were received in the last 60 days) | – | $– | –% |
| Partial payment accounts (Accounts on which the total received in the last 60 days was less than 50% of the original contractual monthly payment. "Total received" to include interest on simple interest accounts, as well as late charges on deferment charges on pre-computed accounts.) | – | $– | –% |
| Total | 164 | $61683 | 100.0% |

---

Below is an aging schedule of loans receivable as of March 31, 2026, on a contractual basis:

Schedule of Aging Schedule of Loans Receivables on a Contractual Basis

---

| | | | |
|:---|:---|:---|:---|
|  | **No. Loans** | **Unpaid Balances** | **%** |
| Contractual Terms (All current Direct Loans and Sales Finance Contracts with installments past due less than 60 days from the due date.) | 160 | $67878 | 95.0% |
| 60-89 days |  |  | –% |
| 90-179 days | 4 | 2381 | 3.3% |
| 180-269 days | 3 | 773 | 1.1% |
| >270 days | 2 | 399 | 0.6% |
| Subtotal | 169 | $71431 | 100.0% |
| Interest only accounts (Accounts on which interest, deferment, extension and/or default charges were received in the last 60 days.) | – | $– | –% |
| Partial Payment accounts (Accounts on which the total received in the last 60 days was less than 50% of the original contractual monthly payment. "Total received" to include interest on simple interest accounts, as well as late charges on deferment charges on pre-computed accounts.) | – | $– | –% |
| Total | 169 | $71431 | 100.0% |

---

Below is an aging schedule of loans receivable as of December 31, 2025, on a contractual basis:

---

| | | | |
|:---|:---|:---|:---|
|  | **No.**<br> **Loans** | **Unpaid**<br> **Balances** | **%** |
| Contractual terms (All current Direct Loans and Sales Finance Contracts with installments past due less than 60 days from due date.) | 155 | $58507 | 94.9% |
| 60-89 days | 1 | 1439 | 2.3% |
| 90-179 days | 5 | 1157 | 1.8% |
| 180-269 days | 2 | 446 | 0.7% |
| >270 days | 1 | 134 | 0.3% |
| Subtotal | 164 | $61683 | 100.0% |
| Interest only accounts (Accounts on which interest, deferment, extension and/or default charges were received in the last 60 days) | – | $– | –% |
| Partial payment accounts (Accounts on which the total received in the last 60 days was less than 50% of the original contractual monthly payment. "Total received" to include interest on simple interest accounts, as well as late charges on deferment charges on pre-computed accounts.) | – | $– | –% |
| Total | 164 | $61683 | 100.0% |

---

The Company modifies loans for borrowers for various reasons, including but not limited to changes in what the builder is building versus what was appraised, changes in loan-to-value ("LTV") or market conditions, and a builder's inability to pay interest. This last grouping (builder's inability to pay interest) is done through forbearance agreements which will allow the builder to have a specified period not to pay interest while the home is either completed or marketed. Typically, those interest amounts are collected at final payoff of the loan.

**Allowance for Credit Losses on Loans**

The following table provides a roll forward of the allowance for credit losses and unfunded commitments as of March 31, 2026:

Schedule of Allowance for Credit Losses

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Construction** | **Construction** | **Construction** | **Construction** | **Development** | **Development** | **Development** | **Development** | |
|  | **A<br> Credit Risk** | **B<br> Credit Risk** | **C<br> Credit Risk** | **Individually Evaluated** | **A<br> Credit Risk** | **B<br> Credit Risk** | **C<br> Credit Risk** | **Individually Evaluated** |<br>**Total** |
| Allowance for credit losses as of December 31, 2025 | $(122) | $(151) | $(12) | $(746) | $(2) | $(78) | $(2) | $– | $(1113) |
| Charge-offs |  |  |  | 8 |  |  |  |  | 8 |
| Recoveries | – | – | – | (6) | – | – | – | – | (6) |
| (Provision) benefit for credit losses on funded balances | (23) | (12) | (11) | (229) | (1) | 13 | – | – | (263) |
| Allowance for credit losses as of March 31, 2026 | $(145) | $(163) | $(23) | $(973) | $(3) | $(65) | $(2) | $– | $(1374) |
| Reserve for unfunded commitments as of December 31, 2025 | $(73) | $(55) | $(4) | $– | $- | $(8) | $– | $– | $(140) |
| (Provision) benefit for credit losses on unfunded commitments | (18) | 29 | 1 | – | – | 1 | – | – | 13 |
| Reserve for unfunded commitments as of March 31, 2026 | $(91) | $(26) | $(3) | $– | $– | $(7) | $– | $– | $(127) |

---

The following table provides a roll forward of the allowance for credit losses and unfunded commitments as of March 31, 2025:

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Construction** | **Construction** | **Construction** | **Construction** | **Development** | **Development** | **Development** | **Development** | |
|  | **A Credit Risk** | **B Credit Risk** | **C Credit Risk** | **Individually Evaluated** | **A Credit Risk** | **B Credit Risk** | **C Credit Risk** | **Individually Evaluated** |<br>**Total** |
| Allowance for credit losses as of December 31, 2024 | $(150) | $(28) | $(13) | $(658) | $(1) | $– | $(18) | $– | $(868) |
| Charge-offs |  |  |  | 152 |  |  |  |  | 152 |
| Recoveries |  |  |  | (3) |  |  |  |  | (3) |
| (Provision) benefit for credit losses on funded balances | 23 | (32) | 4 | (133) | – | – | 8 | – | (130) |
| Allowance for credit losses as of March 31, 2025 | $(127) | $(60) | $(9) | $(642) | $(1) | $– | $(10) | $– | $(849) |
| Reserve for unfunded commitments as of December 31, 2024 | $(65) | $(10) | $(12) | $– | $(1) | $– | $– | $– | $(88) |
| (Provision) benefit for credit losses on unfunded commitments | 10 | (17) | 3 | – | 1 | – | – | – | (3) |
| Reserve for unfunded commitments as of March 31, 2025 | $(55) | $(27) | $(9) | $– | $– | $– | $– | $– | $(91) |

---

**Allowance for Credit Losses on Unfunded Loan Commitments**

Unfunded commitments to extend credit, which have similar collateral, credit and market risk to our outstanding loans, were $24,604 and $23,557 as of March 31, 2026 and December 31, 2025, respectively. The ACL is calculated at an estimated loss rate on the total commitment value for loans in our portfolio. The ACL on unfunded commitments is calculated as the difference between the ACL on commitment value less the estimated loss rated and the total gross loan value for loans in our portfolio. As of March 31, 2026, and December 31, 2025, the ACL for unfunded commitments was $127 and $140, respectively, and we had no off-balance sheet transactions, nor do we currently have any such arrangements or obligations.

**Loan Portfolio by Year of Origination**

The table below presents the Company's loan portfolio by year of origination, category, and credit quality indicator as of March 31, 2026. Loans acquired are shown in the tables by origination year.

Schedule of Loan Portfolio by Year of Origination, Category, and Credit Quality Indicator

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **2026** | **2025** | **2024** | **2023** | **2022** | **Prior** | **Total** |
| **Construction loans Collectively Evaluated:** |  |  |  |  |  |  |  |
| A Credit Risk | $5738 | $15437 | $2120 | $2401 | $742 | $- | $26438 |
| B Credit Risk | 429 | 9089 | 4944 | 636 | 1013 |  | 16111 |
| C Credit Risk |  | 755 | 1025 |  |  |  | 1780 |
| Individually Evaluated | - | 2787 | 2260 | 655 | 116 | - | 5818 |
|  | 6167 | 28068 | 10349 | 3692 | 1871 |  | 50147 |
| Current Period Charge Offs |  |  |  | (8) |  |  | (8) |
| **Development Loans Collectively Evaluated:** |  |  |  |  |  |  |  |
| A Credit Risk | 4166 | 3213 | 439 |  |  |  | 7818 |
| B Credit Risk |  | 11402 |  |  |  | 1420 | 12822 |
| C Credit Risk |  |  |  | 99 |  |  | 99 |
| Individually Evaluated | - | - | - | - | - | 545 | 545 |
|  | 4166 | 14615 | 439 | 99 |  | 1965 | 21284 |
| Current Period Charge Offs | - | - | - | - | - | - | - |
| Total | $10333 | $42683 | $10788 | $3783 | $1871 | $1965 | $71423 |

---

The table below presents the Company's loan portfolio by year of origination, category, and credit quality indicator as of December 31, 2025. Loans acquired are shown in the tables by origination year.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **2025** | **2024** | **2023** | **2022** | **2021** | **Prior** | **Total** |
| **Construction loans Collectively Evaluated:** |  |  |  |  |  |  |  |
| A Credit Risk | $15907 | $3786 | $2277 | $939 | $581 | $- | $23490 |
| B Credit Risk | 7228 | 4938 | 620 | 1013 |  |  | 13799 |
| C Credit Risk |  | 827 |  |  |  |  | 827 |
| Individually Evaluated | 2323 | 2429 | 1050 | 597 | - | - | 6399 |
|  | 25458 | 11980 | 3947 | 2549 | 581 |  | 44515 |
| Current Period Charge Offs |  |  |  | (125) | (27) | (670) | (822) |
| **Development Loans Collectively Evaluated:** |  |  |  |  |  |  |  |
| A Credit Risk | 3020 | 438 |  |  |  |  | 3458 |
| B Credit Risk | 11602 |  |  |  |  | 1470 | 13072 |
| C Credit Risk |  |  | 99 |  |  |  | 99 |
| Individually Evaluated | - | - | - | - | - | 539 | 539 |
|  | 14622 | 438 | 99 |  |  | 2009 | 17168 |
| Current Period Charge Offs | - | - | - | - | - | - | - |
| Total | $40080 | $12418 | $4046 | $2424 | $554 | $1339 | $60861 |

---

**Concentration of Risks**

Financial instruments that potentially subject the Company to concentration of credit risk consist principally of loans receivable. Our concentration risks for our top three customers listed by geographic real estate market are summarized in the table below:

Schedule of Concentration Risks

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **March 31, 2026** | **March 31, 2026** | **December 31, 2025** | **December 31, 2025** |
|  | <br>**Borrower**<br>**City** | **Percent of**<br>**Loan**<br>**Commitments** | <br>**Borrower**<br>**City** | **Percent of**<br>**Loan**<br>**Commitments** |
| Highest concentration risk | Pittsburgh, PA | 32% | Pittsburgh, PA | 36% |
| Second highest concentration risk | Reunion, FL | 8% | Central and Southwest, FL | 7% |
| Third highest concentration risk | Central and Southwest FL | 6% | St. George, UT | 6% |

---

**6.** **Foreclosed Assets** 

The following table is our roll forward of foreclosed assets:

Schedule of Roll Forward of Foreclosed Assets

---

| | | | |
|:---|:---|:---|:---|
|  | **Three Months**<br> **Ended** <br> **March 31, 2026** | **Year Ended**<br> **December 31, 2025** | **Three Months**<br> **Ended**<br> **March 31, 2025** |
| Beginning balance | $499 | $1356 | $1356 |
| &nbsp;&nbsp;&nbsp;Transferred from loans receivables, net | 393 | 909 | 436 |
| &nbsp;&nbsp;&nbsp;Additions for construction in foreclosed assets | 3 | 96 | 35 |
| &nbsp;&nbsp;&nbsp;Sale proceeds | (502) | (1657) | (412) |
| &nbsp;&nbsp;&nbsp;Loss on foreclosed assets | (6) | (205) | (15) |
| Ending balance | $387 | $499 | $1400 |

---

**7.** **Borrowings** 

The following table displays our borrowings and a ranking of priority:

Schedule of Borrowings

---

| | | |
|:---|:---|:---|
|  | **March 31, 2026** | **December 31, 2025** |
| Borrowing Source |  |  |
| &nbsp;&nbsp;&nbsp;Purchase and sale agreements and other secured borrowings | $23283 | $18431 |
| &nbsp;&nbsp;&nbsp;Secured line of credit from affiliates | 30 | 26 |
| &nbsp;&nbsp;&nbsp;Less: deferred financing fees | (12) | (12) |
| Notes payable secured, net | 23301 | 18445 |
| &nbsp;&nbsp;&nbsp;Unsecured line of credit (senior) | 750 |  |
| &nbsp;&nbsp;&nbsp;Other unsecured debt (senior subordinated) | 1812 | 1812 |
| &nbsp;&nbsp;&nbsp;Unsecured Notes through our public offering, gross | 22103 | 22164 |
| &nbsp;&nbsp;&nbsp;Other unsecured debt (subordinated) | 13873 | 10901 |
| &nbsp;&nbsp;&nbsp;Other unsecured debt (junior subordinated) | 1126 | 1126 |
| &nbsp;&nbsp;&nbsp;Less: deferred financing fees | (238) | (229) |
| Notes payable unsecured, net | 39426 | 35774 |
| Total Borrowings | $62727 | $54219 |

---

The following table shows the maturity of outstanding debt as of March 31, 2026:

Schedule of Maturity of Debt

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Year Maturing** | **Total Amount Maturing** | **Public Offering** | **Other Unsecured** | **Secured Borrowings** |
| 2026 | $27267 | $2146 | $4083 | 21038 |
| 2027 | 12187 | 6910 | 3002 | 2275 |
| 2028 | 14831 | 11052 | 3779 |  |
| 2029 | 5854 | 1937 | 3917 |  |
| 2030 and thereafter | 2838 | 58 | 2780 | - |
| Total | $62977 | $22103 | $17561 | $23313 |

---

**Secured Borrowings**

Lines of Credit

*Lines of Credit with Mr. Wallach and His Affiliates*

As of March 31, 2026 and December 31, 2025, the Company had $30 and $26 borrowed against its lines of credit from affiliates, respectively, which have a total limit of $2,500 as of March 31, 2026 and December 31, 2025.

*United Lines of Credit*

In January 2025, we entered into a revolving line of credit with United Bank for $2,275, maturing in January 2027. The interest rate on this line of credit is 5.5%. As of March 31, 2026, the amount due on this line of credit was $2,275.

In January 2025, we entered into a revolving line of credit with United Bank for $725, with an expiration date of January 2040. The interest rate on this line of credit is 7.5%. As of March 31, 2026, the amount due on this line of credit was $725. The Company's office in Jacksonville, FL, is used as collateral for this line of credit.

*Liberty Savings Bank Line of Credit* 

 

In December 2025, we entered into a revolving line of credit with Liberty Savings Bank for $5,000, which line of credit can be terminated on 90 days' written notice. The interest rate on this line of credit varies and is indexed to the current Prime rate plus 0.5%. As of March 31, 2026 and December 31, 2025, the Company had borrowed $1,153 and $0 against the revolving line of credit, respectively.

Loan Purchase and Sale Agreements

As of March 31, 2026 and December 31, 2025, there is no limit on the maximum principal amount under the Builder Finance loan purchase and sale agreement, and the outstanding principal under such agreement was $1,672 and $1,459, respectively, with an interest rate of 8.99% for both periods. The agreement has a term of 12 months and renews automatically for an additional 12 months unless either party provides written notice of intent not to renew at least six months prior to the end of the term.

As of March 31, 2026 and December 31, 2025, the maximum principal amount under the S.K. Funding loan purchase and sale agreement was $6,500 for both period end dates. Borrowings up to $1,400 over the principal amount may be unsecured. There were $0 of unsecured borrowings as of both March 31, 2026 and December 31, 2025, with an interest rate of 10% for both periods. The agreement has a term of 12 months and renews automatically for an additional 12 months unless either party provides written notice of intent not to renew at least six months prior to the end of the term. Additionally, the Company executed an amendment to the agreement with S.K. Funding that allowed the Company to sell participating interests in loans. The balance of the portion sold on these loans is removed from the balance sheet of the Company and interest on the portion sold is not reflected in its statement of operations. As of March 31, 2026 and December 31, 2025, the loan receivable principal balance sold under this agreement was $1,400.

**Secured Deferred Financing Costs**

The Company had secured deferred financing costs of $12 as of March 31, 2026 and December 31, 2025.

 

**Secured Borrowings Secured by Loan Assets** 

As of March 31, 2026 and December 31, 2025 the Company pledged $35,587 and $33,179 of loans as collateral on $20,283 and $16,156 of secured notes payable, respectively.

**Unsecured Borrowings**

*Unsecured Notes through the Public Offering ("Notes Program")*

The effective interest rate on borrowings through our Notes Program as of March 31, 2026 and December 31, 2025, was 8.91% and 8.90%, respectively.

We generally offer four durations at any given time, ranging from 12 to 48 months from the date of issuance. All Notes sold in our fourth public offering, which was declared effective on September 16, 2022 and terminated on March 15, 2026, included a mandatory early redemption option, provided that the proceeds were reinvested in additional Notes. In our other historical offerings, there were limited rights of early redemption. Our 36-month Note sold in our third public note offering had a mandatory early redemption option, subject to certain conditions.

The following table is a roll forward of our Notes Program:

Schedule of Roll Forward of Notes Outstanding

---

| | | | |
|:---|:---|:---|:---|
|  | **Three Months**<br> **Ended**<br> **March 31, 2026** | **Year Ended**<br> **December 31, 2025** | **Three Months**<br> **Ended**<br> **March 31, 2025** |
| Gross Notes outstanding, beginning of period | $22164 | $19968 | $19968 |
| Notes issued | 450 | 7612 | 417 |
| Note repayments / redemptions | (511) | (5416) | (1159) |
| Gross Notes outstanding, end of period | $22103 | $22164 | $19226 |
| &nbsp;&nbsp;&nbsp;Less deferred financing costs, net | (238) | (229) | (114) |
| Notes outstanding, net | $21865 | $21935 | $19112 |

---

The following is a roll forward of deferred financing costs related to the Notes Program:

Schedule of Roll Forward of Deferred Financing Costs

---

| | | | |
|:---|:---|:---|:---|
|  | **Three Months**<br> **Ended**<br> **March 31, 2026** | **Year Ended**<br> **December 31, 2025** | **Three Months**<br> **Ended**<br> **March 31, 2025** |
| Deferred financing costs, beginning balance | $1302 | $1060 | $1060 |
| &nbsp;&nbsp;&nbsp;Additions | 33 | 242 | 18 |
| Deferred financing costs, ending balance | 1335 | 1302 | 1078 |
| &nbsp;&nbsp;&nbsp;Less accumulated amortization | (1097) | (1073) | (964) |
| Deferred financing costs, net | $238 | $229 | $114 |

---

The following is a roll forward of the accumulated amortization of deferred financing costs:

Schedule of Roll Forward of Accumulated Amortization of Deferred Financing Costs

---

| | | | |
|:---|:---|:---|:---|
|  | **Three Months**<br> **Ended**<br> **March 31, 2026** | **Year Ended**<br> **December 31, 2025** | **Three Months**<br> **Ended**<br> **March 31, 2025** |
| Accumulated amortization, beginning balance | $1073 | $910 | $910 |
| Additions | 24 | 163 | 54 |
| Accumulated amortization, ending balance | $1097 | $1073 | $964 |

---

*Other Unsecured Debts*

The following table is a detail of other unsecured debts are detailed below:

Schedule of Other Unsecured Loans

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Loan** | **Maturity**<br> **Date** | **Interest**<br> **Rate<sup>(1)</sup>**  | **March 31, 2026** | **December 31,**<br> **2025** |
| Unsecured Line of Credit | July 2026 | 10.0% | 631 | 592 |
| Unsecured Line of Credit | April 2027 | 10.0% | 500 | 500 |
| Unsecured Line of Credit – Senior Subordinated | January 2027 | 10.0% | 750 |  |
| Subordinated Promissory Note | February 2027 | 9.0% | 600 | 600 |
| Subordinated Promissory Note | March 2028 | 9.75% | 500 | 500 |
| Subordinated Promissory Note | December 2027 | 10.0% | 20 | 20 |
| Subordinated Promissory Note | January 2029 | 9.0% | 15 | 15 |
| Subordinated Promissory Note | February 2027 | 8.5% | 200 | 200 |
| Subordinated Promissory Note | March 2027 | 10.0% | 26 | 26 |
| Subordinated Promissory Note | November 2026 | 9.5% | 200 | 200 |
| Subordinated Promissory Note | March 2027 | 9.5% | 1000 | 1000 |
| Subordinated Promissory Note | September 2027 | 10% | 108 | 108 |
| Subordinated Promissory Note | July 2028 | 8.5% | 100 | 100 |
| Subordinated Promissory Note | August 2026 | 8.0% | 291 | 291 |
| Senior Subordinated Promissory Note | July 2026<sup>(2)</sup> | 1.0% | 740 | 740 |
| Junior Subordinated Promissory Note | July 2026<sup>(2)</sup> | 20.0% | 460 | 460 |
| Senior Subordinated Promissory Note | October 2028<sup>(2)</sup> | 1.0% | 1072 | 1072 |
| Junior Subordinated Promissory Note | October 2028<sup>(2)</sup> | 20.0% | 666 | 666 |
| Subordinated Promissory Note | March 2029 | 10.0% | 1200 | 1200 |
| Subordinated Promissory Note | May 2027 | 10.0% | 97 | 97 |
| Subordinated Promissory Note | November 2027 | 10.0% | 120 | 120 |
| Subordinated Promissory Note | April 2028 | 10.0% | 149 | 149 |
| Subordinated Promissory Note | April 2029 | 11.0% | 2000 | 2000 |
| Subordinated Promissory Note | October 2027 | 8.5% | 200 | 200 |
| Subordinated Promissory Note | October 2028 | 10.0% | 1043 | 1043 |
| Subordinated Promissory Note | December 2028 | 10.0% | 149 | 149 |
| Subordinated Promissory Note | October 2026 | 10.0% | 1142 | 1142 |
| Subordinated Promissory Note | April 2029 | 9.0% | 301 | 301 |
| Subordinated Promissory Note | December 2029 | 8.0% | 248 | 248 |
| Subordinated Promissory Note | October 2028 | 8.5% | 100 | 100 |
| Subordinated Promissory Note | March 2029 | 6.5% | 153 |  |
| Subordinated Promissory Note | January 2030 | 8.0% | 15 |  |
| Subordinated Promissory Note | February 2031 | 11.0% | 400 |  |
| Subordinated Promissory Note | February 2031 | 11.0% | 300 |  |
| Subordinated Promissory Note | February 2031 | 11.0% | 365 |  |
| Subordinated Promissory Note | February 2031 | 11.0% | 400 |  |
| Subordinated Promissory Note | February 2031 | 11.0% | 300 |  |
| Subordinated Promissory Note | March 2031 | 11.0% | 500 |  |
| Subordinated Promissory Note | March 2031 | 11.0% | 500 | – |
|  |  |  | $17561 | $13839 |

---

(1) Interest
 rate per annum, based upon actual days outstanding and a 365/366-day year.

(2) These
 notes were issued to the same holder and, when calculated together, yield a blended rate of 10% per annum.

**8.** **Refundable Prepaid Interest** 

Below is a roll forward of refundable prepaid interest:

Schedule of Refundable Prepaid Interest

---

| | | | |
|:---|:---|:---|:---|
|  | **Three Months**<br> **Ended**<br> **March 31, 2026** | **Year Ended**<br> **December 31, 2025** | **Three Months**<br> **Ended**<br> **March 31, 2025** |
| Beginning balance | $965 | $353 | $353 |
| &nbsp;&nbsp;&nbsp;Additions from Pennsylvania loans |  | 1198 |  |
| &nbsp;&nbsp;&nbsp;Additions from other loans | 113 | 1312 | 273 |
| &nbsp;&nbsp;&nbsp;Interest, fees, principal or repaid to borrower | (621) | (1898) | (170) |
| Ending balance | $457 | $965 | $456 |

---

**9.** **Series C Preferred Equity** 

Series C preferred equity distributions, liquidation rights and conversion features are determined based on the undiscounted value, which was $9,221 and $9,085 as of March 31, 2026 and December 31, 2025, respectively.

The following table shows the earliest conversion options for investors in Series C preferred equity as of March 31, 2026. Amounts are presented at redeemable values, which are prior to discounts reflected in the carrying amounts:

Schedule of Conversion Options for Investors in Series C Preferred Equity

---

| | |
|:---|:---|
| **Year Maturing** | **Total**<br> **Amount**<br> **Convertible** |
| Currently convertible (requires notice of 12 months) | $3415 |
| 2027 | 309 |
| 2028 | 1368 |
| 2029 | 206 |
| 2030 and thereafter | 3923 |
| Total | $9221 |

---

**10.** **Related Party Transactions** 

As of March 31, 2026 and December 31, 2025, the Company had $30 and $26 borrowed against its lines of credit from affiliates, respectively, which have a total limit of $2,500 as of March 31, 2026 and December 31, 2025.

A more detailed description of related party transactions is included in Note 13 to our audited annual consolidated financial statements and related notes and other consolidated financial data (the "2025 Financial Statements") included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025. These borrowings are included in notes payable secured and unsecured, net of deferred financing costs on the interim consolidated balance sheet.

**11.** **Commitments and Contingencies** 

In the normal course of business there may be outstanding commitments to extend credit that are not included in the consolidated financial statements. Commitments to extend credit are agreements to lend to a customer if there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon and some of the funding may come from the earlier repayment of the same loan (in the case of revolving lines), the total commitment amounts do not necessarily represent future cash requirements. The financial instruments involve, to varying degrees, elements of credit and interest rate risk more than amounts recognized in the consolidated financial statements. The Company evaluates each customer's creditworthiness on a case-by-case basis. Unfunded commitments to extend credit, which have similar collateral, credit risk and market risk to our outstanding loans, were $24,604 and $23,557 as of March 31, 2026 and December 31, 2025, respectively. From time to time, the Company also issues letters of credit on behalf of certain customers. The ACL for unfunded is commitments is described in Note 5.

**12.** **Non-Interest Expense Detail** 

The following table displays our selling, general and administrative expenses:

Schedule of Selling General and Administrative Expenses

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended**<br> **March 31, 2026** | **Three Months Ended <br> March 31, 2025** |
| **Selling, general and administrative expenses** |  |  |
| Legal and accounting | $132 | $146 |
| Salaries and related expenses | 725 | 535 |
| Board related expenses | 30 | 27 |
| Advertising | 66 | 55 |
| Rent and utilities | 16 | 16 |
| Loan and foreclosed asset expenses | 6 | 2 |
| Travel | 28 | 46 |
| Other | 54 | 112 |
| Total SG&A | $1057 | $939 |

---