# EDGAR Filing Document

**Accession Number:** 0001544190
**File Stem:** 0001493152-25-023293
**Filing Date:** 2025-11
**Character Count:** 164874
**Document Hash:** d4b7accbe69ed99a71193d0baadec1db
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001493152-25-023293.hdr.sgml**: 20251114

**ACCESSION NUMBER**: 0001493152-25-023293

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 85

**CONFORMED PERIOD OF REPORT**: 20250930

**FILED AS OF DATE**: 20251114

**DATE AS OF CHANGE**: 20251114

**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:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 333-224557
- **FILM NUMBER:** 251484354

**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

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, DC 20549**

**FORM 10-Q**

☒ **Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934**

**For the Quarterly Period Ended September 30, 2025**

**or**

☐ **Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934**

**For the Transition Period From &nbsp;&nbsp;&nbsp;&nbsp; to**&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Commission File Number 333-224557**

**SHEPHERD'S FINANCE, LLC**

**(Exact name of registrant as specified on its charter)**

---

| | |
|:---|:---|
| **Delaware** | **36-4608739** |
| **(State or other jurisdiction of** | **(I.R.S. Employer** |
| **Incorporation or organization)** | **Identification No.)** |

---

**13241 Bartram Park Blvd., Suite 2401, Jacksonville, Florida 32258**

**(Address of principal executive offices)**

**(302) 752-2688**

**(Registrant's telephone number including area code)**

**Securities registered pursuant to Section 12(b) of the Act:**

---

| | | |
|:---|:---|:---|
| **Title of Each Class** | **Trading Symbol(s)** | **Name of Each Exchange on Which Registered** |
| **None** | **None** | **None** |

---

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ <br> Non-accelerated filer ☒ Smaller reporting company ☒ <br> Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

**FORM 10-Q**

**SHEPHERD'S FINANCE, LLC**

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
|  | Page |
| &nbsp;&nbsp;&nbsp;[Cautionary Note Regarding Forward-Looking Statements](#me_001) | 3 |
| PART I. FINANCIAL INFORMATION |  |
| &nbsp;&nbsp;&nbsp;Item 1. Financial Statements (Unaudited) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Interim Consolidated Balance Sheets](#me_002) | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Interim Consolidated Statements of Operations](#me_003) | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Interim Consolidated Statement of Changes in Members' Capital](#me_004) | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Interim Consolidated Statements of Cash Flows](#me_005) | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Notes to Interim Consolidated Financial Statements (Unaudited)](#me_006) | 8 |
| &nbsp;&nbsp;&nbsp;[Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](#me_007) | 26 |
| &nbsp;&nbsp;&nbsp;[Item 3. Quantitative and Qualitative Disclosure About Market Risk](#sq_001) | 52 |
| &nbsp;&nbsp;&nbsp;[Item 4. Controls and Procedures](#sq_002) | 52 |
| [PART II. OTHER INFORMATION](#sq_003) | 53 |
| &nbsp;&nbsp;&nbsp;[Item 1. Legal Proceedings](#sq_004) | 53 |
| &nbsp;&nbsp;&nbsp;[Item 1A. Risk Factors](#sq_005) | 53 |
| &nbsp;&nbsp;&nbsp;[Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](#sq_006) | 53 |
| &nbsp;&nbsp;&nbsp;[Item 3. Defaults upon Senior Securities](#sq_007) | 53 |
| &nbsp;&nbsp;&nbsp;[Item 4. Mine Safety Disclosures](#sq_008) | 53 |
| &nbsp;&nbsp;&nbsp;[Item 5. Other Information](#sq_009) | 53 |
| &nbsp;&nbsp;&nbsp;[Item 6. Exhibits](#sq_010) | 54 |

---

**CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS**

Certain statements contained in this Form 10-Q of Shepherd's Finance, LLC, other than historical facts, may be considered forward-looking statements within the meaning of the federal securities laws. Words such as "may," "will," "expect," "anticipate," "believe," "estimate," "continue," "predict," or other similar words identify forward-looking statements. Forward-looking statements appear in a number of places in this report, including without limitation, "Management's Discussion and Analysis of Financial Condition and Results of Operations," and include statements regarding our intent, belief or current expectation about, among other things, trends affecting the markets in which we operate, our business, financial condition and growth strategies.

Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, forward-looking statements are not guarantees of future performance and involve risks and uncertainties. These risks and uncertainties include, but are not limited to: the impact of inflation and rising interest rates on the economy and housing markets; general economic uncertainty in key global markets and a worsening of global economic conditions or low levels of economic growth; the rate and the pace of economic recovery following economic downturns; and those other risks described in other risk factors as outlined in our Registration Statement on Form S-1, as amended, and our Annual Report on Form 10-K for the year ended December 31, 2024. Actual results may differ materially from those predicted in the forward-looking statements as a result of various factors, including but not limited to those set forth in the "Risk Factors" section of our Registration Statement on Form S-1, as amended, and our Annual Report on Form 10-K. For further information regarding risks and uncertainties associated with our business, and important factors that could cause our actual results to vary materially from those expressed or implied in such forward-looking statements, please refer to the factors set forth in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" sections of the documents we file from time to time with the U.S. Securities and Exchange Commission, including, but not limited to, our Annual Report on Form 10-K for the year ended December 31, 2024.

When considering forward-looking statements, you should keep these risk factors, as well as the other cautionary statements in this report and in our Annual Report on Form 10-K for the year ended December 31, 2024 in mind. You should not place undue reliance on any forward-looking statement. We are not obligated to update forward-looking statements.

**Shepherd's Finance, LLC**

**Interim Consolidated Balance Sheets**

---

| | | |
|:---|:---|:---|
| *(in thousands of dollars)* | **September 30,**<br> **2025** | **December 31,**<br> **2024** |
|  | (Unaudited) |  |
| **Assets** |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $1575 | $3347 |
| &nbsp;&nbsp;&nbsp;Certificates of deposit | 972 |  |
| &nbsp;&nbsp;&nbsp;Certificates of deposit, restricted (Note 7) | 1303 |  |
| &nbsp;&nbsp;&nbsp;Accrued interest receivable | 1014 | 844 |
| &nbsp;&nbsp;&nbsp;Loans receivable, net | 59289 | 49254 |
| &nbsp;&nbsp;&nbsp;Real estate investments | 1981 | 13529 |
| &nbsp;&nbsp;&nbsp;Foreclosed assets, net | 1323 | 1356 |
| &nbsp;&nbsp;&nbsp;Premises and equipment | 797 | 805 |
| &nbsp;&nbsp;&nbsp;Other assets | 1621 | 1095 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total assets** | $69875 | $70230 |
| **Liabilities, Preferred Equity, and Members' Capital** |  |  |
| &nbsp;&nbsp;&nbsp;Refundable prepaid interest | $1359 | $353 |
| &nbsp;&nbsp;&nbsp;Loan Deposits | 684 | 867 |
| &nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | 773 | 768 |
| &nbsp;&nbsp;&nbsp;Accrued interest payable | 3167 | 3280 |
| &nbsp;&nbsp;&nbsp;Notes payable secured, net of deferred financing costs | 18784 | 21102 |
| &nbsp;&nbsp;&nbsp;Notes payable unsecured, net of deferred financing costs | 36549 | 35213 |
| &nbsp;&nbsp;&nbsp;Deferred revenue – real estate investments | – | 74 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | $61316 | $61657 |
| &nbsp;&nbsp;&nbsp;Commitments and Contingencies (Note 11) |  |  |
| **Members' Capital** |  |  |
| &nbsp;&nbsp;&nbsp;Series C preferred equity, net of discounts of $2,043 and $0, respectively | 6908 | 6430 |
| &nbsp;&nbsp;&nbsp;Class A common equity | 1651 | 2143 |
| &nbsp;&nbsp;&nbsp;Members' capital | $8559 | $8573 |
| &nbsp;&nbsp;&nbsp;Total liabilities, preferred equity and members' capital | $69875 | $70230 |

---

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 and Nine Months Ended September 30, 2025 and 2024**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Nine Months Ended** | **Nine Months Ended** |
| | **September 30,** | **September 30,** | **September 30,** | **September 30,** |
| <br>*(in thousands of dollars)* | **2025** | **2024** | **2025** | **2024** |
| **Interest Income** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest and fee income on loans | $2914 | $2476 | $7879 | $7665 |
| &nbsp;&nbsp;&nbsp;Interest expense: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest related to secured borrowings | 451 | 318 | 1060 | 1066 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest related to unsecured borrowings | 888 | 900 | 2678 | 2676 |
| &nbsp;&nbsp;&nbsp;Interest expense | 1339 | 1218 | 3738 | 3742 |
| &nbsp;&nbsp;&nbsp;Net interest and fee income | 1575 | 1258 | 4141 | 3923 |
| &nbsp;&nbsp;&nbsp;Less: Provision for credit losses | 179 | 332 | 299 | 719 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net interest and fee income after provision for credit losses | 1396 | 926 | 3842 | 3204 |
| **Non-Interest Income** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Revenue from the sale of land parcels |  | 1601 | 2805 | 1601 |
| &nbsp;&nbsp;&nbsp;Option fee income | 40 | 223 | 314 | 594 |
| &nbsp;&nbsp;&nbsp;Gain on sale of 339 Justabout Land Company | 193 |  | 193 |  |
| &nbsp;&nbsp;&nbsp;Other income | 52 | 12 | 153 | 40 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total non-interest income | 285 | 1836 | 3465 | 2235 |
| &nbsp;&nbsp;&nbsp;Income before non-interest expense | 1681 | 2762 | 7307 | 5439 |
| **Non-Interest Expense** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Cost of land parcels sold |  | 1601 | 2805 | 1601 |
| &nbsp;&nbsp;&nbsp;Selling, general and administrative | 1061 | 714 | 2957 | 2129 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 16 | 20 | 56 | 61 |
| &nbsp;&nbsp;&nbsp;Loss (gain) on foreclosed assets | 85 | (2) | 104 | 477 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total non-interest expense | 1162 | 2333 | 5922 | 4268 |
| **Net income** | $519 | $429 | $1385 | $1171 |
| **Net income attributable to preferred equity holders** | 263 | 185 | 720 | 513 |
| **Net income attributable to common equity holders** | $256 | $244 | $665 | $658 |

---

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 Nine Months Ended September 30, 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 attributable to Class A common equity |  | 153 | 153 |
| Net income attributable to Series C equity | 192 |  | 192 |
| Distributions to Series C equity | (66) |  | (66) |
| Distributions to Class A common equity |  | (387) | (387) |
| Issuance of Class A common equity units | – | 1 | 1 |
| **March 31, 2025** | $6556 | $1910 | $8466 |
| Net income attributable to Class A common equity |  | 256 | 256 |
| Net income attributable to Series C equity | 265 |  | 265 |
| Distributions to Series C equity | (326) |  | (326) |
| Distributions to Class A common equity |  | (222) | (222) |
| Series C preferred equity issued in exchange for Class A common equity | 2330 | (287) | 2043 |
| Discount on Series C preferred equity issued in exchange for Class A common equity | (2043) |  | (2043) |
| Issuance of Class A common equity units | – | 1 | 1 |
| **June 30, 2025** | $6782 | $1658 | $8440 |
| Net income attributable to Class A common equity |  | 256 | 256 |
| Net income attributable to Series C equity | 263 |  | 263 |
| Distributions to Series C equity | (137) |  | (137) |
| Distributions to Class A common equity |  | (265) | (265) |
| Issuance of Class A common equity units | – | 2 | 2 |
| **September 30, 2025** | $6908 | $1651 | $8559 |

---

**For the Nine Months Ended September 30, 2024**

---

| | | | |
|:---|:---|:---|:---|
| *(in thousands of dollars)* | **Series C**<br> **Preferred**<br> **Equity** | **Class A**<br> **Common**<br> **Equity** | **Total**<br> **Members'**<br> **Capital** |
| **January 1, 2024** | $– | $1994 | $1994 |
| Net income attributable to Class A common equity |  | 299 | 299 |
| Net income attributable to Series C equity | 145 |  | 145 |
| Contributions from Series C equity | 1200 |  | 1200 |
| Conversion of Series C equity | 4773 |  | 4773 |
| Distributions to Series C equity | (45) |  | (45) |
| Distributions to Class A common equity |  | (262) | (262) |
| Issuance of Class A common equity units | – | 5 | 5 |
| **March 31, 2024** | $6073 | $2036 | $8109 |
| Net income attributable to Class A common equity |  | 115 | 115 |
| Net income attributable to Series C equity | 183 |  | 183 |
| Distributions to Series C equity | (67) |  | (67) |
| Distributions to Class A common equity |  | (290) | (290) |
| Issuance of Class A common equity units | – | 5 | 5 |
| **June 30, 2024** | $6189 | $1866 | $8055 |
| Net income attributable to Class A common equity |  | 244 | 244 |
| Net income attributable to Series C equity | 185 |  | 185 |
| Distributions to Series C equity | (66) |  | (66) |
| Distributions to Class A common equity |  | (116) | (116) |
| Issuance of Class A common equity units | – | 7 | 7 |
| **September 30, 2024** | $6308 | $2001 | $8309 |

---

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 Nine Months Ended September 30, 2025 and 2024**

---

| | | |
|:---|:---|:---|
| | **Nine Months Ended** | **Nine Months Ended** |
| <br>*(in thousands of dollars)* | **September 30**<br> **2025** | **September 30,**<br> **2024** |
| **Cash flows from operations** |  |  |
| &nbsp;&nbsp;&nbsp;Net income | $1385 | $1171 |
| &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 | 139 | 157 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for credit losses | 299 | 719 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 56 | 61 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on foreclosed assets | 104 | 477 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on sale of 339 | (193) | – |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue – real estate investments | 166 | 297 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuance of Class A equity units for employee compensation | 4 | 17 |
| &nbsp;&nbsp;&nbsp;Net change in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets | (1290) | (702) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued interest receivable | (170) | 346 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Refundable prepaid interest | 1006 | 139 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued interest payable | 1205 | 1023 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | 5 | 298 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operating activities | 2716 | 4003 |
| **Cash flows from investing activities** |  |  |
| &nbsp;&nbsp;&nbsp;Loan originations and principal collections, net | (1064) | (229) |
| &nbsp;&nbsp;&nbsp;Additions for construction in foreclosed assets | (83) | (541) |
| &nbsp;&nbsp;&nbsp;Acquisition of 339, net of cash acquired |  | (2996) |
| &nbsp;&nbsp;&nbsp;Additions for construction in real estate investments | (940) | (3544) |
| &nbsp;&nbsp;&nbsp;Proceeds from sale of foreclosed assets | 921 | 659 |
| &nbsp;&nbsp;&nbsp;Proceeds from the sale of real estate investments | 2805 | 1601 |
| &nbsp;&nbsp;&nbsp;Investments in real estate asset trusts |  | (330) |
| &nbsp;&nbsp;&nbsp;Investment in certificate of deposit | (2275) |  |
| &nbsp;&nbsp;&nbsp;Purchases of premises and equipment | (10) | – |
| &nbsp;&nbsp;&nbsp;Net cash used in investing activities | (646) | (5380) |
| **Cash flows from financing activities** |  |  |
| &nbsp;&nbsp;&nbsp;Contributions from Series C equity holders |  | 1200 |
| &nbsp;&nbsp;&nbsp;Distributions to Series C equity holders | (529) | (178) |
| &nbsp;&nbsp;&nbsp;Distributions to Class A common equity holders | (874) | (668) |
| &nbsp;&nbsp;&nbsp;Proceeds from secured note payable | 31744 | 10885 |
| &nbsp;&nbsp;&nbsp;Repayments of secured note payable | (34188) | (9915) |
| &nbsp;&nbsp;&nbsp;Proceeds from unsecured notes payable | 8047 | 9624 |
| &nbsp;&nbsp;&nbsp;Redemptions/repayments of unsecured notes payable | (7854) | (8655) |
| &nbsp;&nbsp;&nbsp;Deferred financing costs paid | (188) | (90) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash (used in) provided by financing activities | (3842) | 2203 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net change in cash and cash equivalents | (1772) | 826 |
| **Cash and cash equivalents** |  |  |
| &nbsp;&nbsp;&nbsp;Beginning of period | 3347 | 3522 |
| &nbsp;&nbsp;&nbsp;End of period | $1575 | $4348 |
| **Supplemental disclosure of cash flow information** |  |  |
| &nbsp;&nbsp;&nbsp;Cash paid for interest | $3851 | $4208 |
| **Non-cash investing and financing activities** |  |  |
| &nbsp;&nbsp;&nbsp;Loan originating from sale of 339 assets | $10362 | $– |
| &nbsp;&nbsp;&nbsp;Foreclosed assets transferred from loans receivable, net | $909 | $2306 |
| &nbsp;&nbsp;&nbsp;Secured and unsecured notes payable transfers | $90 | $893 |
| &nbsp;&nbsp;&nbsp;Accrued interest payable transferred to unsecured notes payable | $1318 | $743 |
| &nbsp;&nbsp;&nbsp;Class A common equity exchanged for Series C preferred equity, net of $2,043 discount | $287 | $– |

---

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 and subsidiaries (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, LLC ("Builder's Assistance"). On August 6, 2025, we sold 339, further described in Note 2 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 and invests in land transactions (in 21 states as of September 30, 2025) to:

● construct single family homes,

● develop undeveloped land into residential buildings 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. Revenue generated from operations at Builder's Assistance was insignificant during the periods presented.

**2. Fair Value**

The Company had no financial instruments measured at fair value on a recurring basis as of September 30, 2025 and December 31, 2024.

The following tables present the balances of non-financial instruments measured at fair value on a non-recurring basis:

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

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | | | |
|  | **Carrying**<br>**Amount** | **Estimated**<br>**Fair Value** | **Quoted Prices**<br> **in Active**<br> **Markets for**<br> **Identical**<br>**Assets**<br>**Level 1** | **Significant**<br> **Other**<br> **Observable**<br>**Inputs**<br>**Level 2** | **Significant**<br> **Unobservable**<br>**Inputs**<br>**Level 3** |
| Foreclosed assets, net | $1323 | $1323 | $– | $– | $1323 |
| Individually evaluated loans, net | 2414 | 2414 | – | – | 2414 |
| Total | $3737 | $3737 | $– | $– | $3737 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | | | |
|  | **Carrying**<br>**Amount** | **Estimated**<br>**Fair Value** | **Quoted Prices**<br> **in Active**<br> **Markets for**<br> **Identical**<br>**Assets**<br>**Level 1** | **Significant**<br> **Other**<br> **Observable**<br>**Inputs**<br>**Level 2** | **Significant**<br> **Unobservable**<br>**Inputs**<br>**Level 3** |
| Foreclosed assets, net | $1356 | $1356 | $– | $– | $1356 |
| Individually evaluated loans, net | 4313 | 4313 | – | – | 4313 |
| Total | $5669 | $5669 | $– | $– | $5669 |

---

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

Schedule of Fair Value Estimates for Financial Instruments

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | | **September 30, 2025** | **September 30, 2025** | **December 31, 2024** | **December 31, 2024** |
|  | <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 | 1 | $1575 | $1575 | $3347 | $3347 |
| &nbsp;&nbsp;&nbsp;Certificate of deposit | 2 | 2275 | 2275 |  |  |
| &nbsp;&nbsp;&nbsp;Loan receivable, net | 3 | 59289 | 59289 | 49254 | 49254 |
| &nbsp;&nbsp;&nbsp;Accrued interest on loans | 2 | 1014 | 1014 | 844 | 844 |
| Financial Liabilities |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Refundable prepaid interest | 2 | 1359 | 1359 | 353 | 353 |
| &nbsp;&nbsp;&nbsp;Notes payable secured, net | 2 | 18784 | 18784 | 21102 | 21102 |
| &nbsp;&nbsp;&nbsp;Notes payable unsecured, net | 2 | 36549 | 36549 | 35213 | 35213 |
| &nbsp;&nbsp;&nbsp;Accrued interest payable | 2 | 3167 | 3167 | 3280 | 3280 |

---

**3. Segment Reporting**

Financial Accounting Standards Board ("FASB") Accounting Standards Codification Topic ("ASC") 280, Segment Reporting, requires that the Company report financial and descriptive information about reportable segments and how these segments were determined. We determine the allocation of resources and performance of business units based on operating income and net income, which are the same. Segments are identified and aggregated based on products sold or services provided. Based on these factors, we have determined that the Company's operations were in two segments prior to the sale of 339 Justabout Land Company, LLC, as further described below. The segments were commercial lending and the development of land parcels. Information about reportable segments, and reconciliations of such information to the Consolidated Financial Statements are described below.

On August 6, 2025, the Company completed the sale of all assets held by 339 Justabout Land Company, LLC ("339"), a business segment, to the principal owners of the Company's largest customer, Benjamin Marcus Homes ("BMH" or "Buyer"), for a sales price of $10,362. The assets sold consisted primarily of undeveloped lots, which had a net book value of $9,683 at the time of the sale. The sale includes the settlement of $725 in option fees receivable from BMH at the time of closing and a reduction of $240 in deferred revenue associated with prior deposits from BMH for lot purchases from 339. The Company recognized a gain of $193 on the sale.

Concurrent with the sale of 339, the Company amended its existing credit agreement with BMH to increase the total loan commitment to $13,450. At closing, BMH borrowed $11,416 under the amended agreement. Of this amount, $10,362 was used to fund the purchase of 339, $1,000 was allocated to an interest escrow account related to the increased loan commitment, and $54 was used to settle outstanding payables to the Company for accounting services. The balance on this credit agreement is presented in loans receivable in the accompanying Interim Consolidated Balance Sheet as of September 30, 2025. All assets transferred to BMH in connection with the sale of 339 sale are pledged as collateral under the amended credit agreement.

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

**Shepherd's Finance, LLC**

**Interim Consolidated Statements of Operations**

**For the Nine Months Ended September 30, 2025**

---

| | | | |
|:---|:---|:---|:---|
| *(in thousands of dollars)* | **339 Justabout**<br> **Land Company, LLC** | **Shepherd's**<br> **Finance, LLC** | **Total** |
| **Net Interest and Fee Income** |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest and fee income on loans | $– | $7879 | $7879 |
| &nbsp;&nbsp;&nbsp;Interest expense: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest related to secure borrowings |  | 1060 | 1060 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest related to unsecured borrowings | – | 2678 | 2678 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense |  | 3738 | 3738 |
| &nbsp;&nbsp;&nbsp;Net interest and fee income |  | 4141 | 4141 |
| &nbsp;&nbsp;&nbsp;Less: Provision for credit losses | – | 299 | 299 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net interest and fee income after provision for credit losses |  | 3842 | 3842 |
| **Non-Interest Income** |  |  |  |
| &nbsp;&nbsp;&nbsp;Revenue from the sale of land parcels | 2805 |  | 2805 |
| &nbsp;&nbsp;&nbsp;Option fee income | 314 |  | 314 |
| &nbsp;&nbsp;&nbsp;Gain on sale of 339 Justabout Land Company | 193 |  | 193 |
| &nbsp;&nbsp;&nbsp;Other income | – | 153 | 153 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total non-interest income | 3312 | 153 | 3465 |
| &nbsp;&nbsp;&nbsp;Income before non-interest expense | 3312 | 3995 | 7307 |
| **Non-Interest Expense** |  |  |  |
| &nbsp;&nbsp;&nbsp;Cost on the sale of land parcels | 2805 |  | 2805 |
| &nbsp;&nbsp;&nbsp;Selling, general and administrative |  | 2957 | 2957 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization |  | 56 | 56 |
| &nbsp;&nbsp;&nbsp;Loss on foreclosed assets | – | 104 | 104 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total non-interest expense | 2805 | 3117 | 5922 |
| **Net income** | $507 | $878 | $1385 |
| **Net income attributable to preferred equity holders** | – | – | 720 |
| **Net income attributable to common equity holders** | $– | $– | $665 |

---

**Shepherd's Finance, LLC**

**Interim Consolidated Statements of Operations**

**For the Nine Months Ended September 30, 2024**

---

| | | | |
|:---|:---|:---|:---|
| *(in thousands of dollars)* | **339 Justabout**<br> **Land Company, LLC** | **Shepherd's**<br> **Finance, LLC** | **Total** |
| **Net Interest and Fee Income** |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest and fee income on loans | $– | $7665 | $7665 |
| &nbsp;&nbsp;&nbsp;Interest expense: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest related to secure borrowings |  | 1066 | 1066 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest related to unsecured borrowings | – | 2676 | 2676 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense |  | 3742 | 3742 |
| &nbsp;&nbsp;&nbsp;Net interest and fee income |  | 3923 | 3923 |
| &nbsp;&nbsp;&nbsp;Less: Provision for credit losses | – | 719 | 719 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net interest and fee income after provision for credit losses |  | 3204 | 3204 |
| **Non-Interest Income** |  |  |  |
| &nbsp;&nbsp;&nbsp;Revenue from the sale of land parcels | 1601 |  | 1601 |
| &nbsp;&nbsp;&nbsp;Option fee income | 594 |  | 594 |
| &nbsp;&nbsp;&nbsp;Other income |  | 40 | 40 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total non-interest income | 2195 | 40 | 2235 |
| &nbsp;&nbsp;&nbsp;Income before non-interest expense | 2195 | 3244 | 5439 |
| **Non-Interest Expense** |  |  |  |
| &nbsp;&nbsp;&nbsp;Cost on the sale of land parcels | 1601 |  | 1601 |
| &nbsp;&nbsp;&nbsp;Selling, general and administrative |  | 2129 | 2129 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization |  | 61 | 61 |
| &nbsp;&nbsp;&nbsp;Loss on foreclosed assets | – | 477 | 477 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total non-interest expense | 1601 | 2667 | $4268 |
| **Net income** | $594 | $577 | $1171 |
| **Net income attributable to preferred equity holders** | – | – | 513 |
| **Net income attributable to common equity holders** | $– | $– | $658 |

---

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

---

| | | | |
|:---|:---|:---|:---|
| *(in thousands of dollars)* | **339 Justabout**<br> **Land Company,**<br> **LLC** | **Shepherd's Finance,**<br> **LLC** | **Total** |
| Total assets as of September 30, 2025 | $**–** | $69875 | $69875 |
| Total assets as of December 31, 2024 | $11977 | $58253 | $70230 |

---

**4. Real Estate Investment Assets**

During February 2025, the Company charged an option fee to Benjamin Marcus Homes ("BMH") for the right to buy the additional lots owned by 339 during February 2025 of $479. There was no deferred revenue real estate investment related to 339 as of September 30, 2025, as all remaining deferred revenue was recognized in conjunction with the sale of 339 discussed in Note 3.

During the nine months ended September 30, 2025, the Company sold eight lots for both revenue and cost of land parcels sold of $2,805, which is included within non-interest income and non-interest expense, respectively, on the interim consolidated statements of operations. No gains or losses were recognized in these sales. There were no lot sales during the most recent quarter through the date of the sale of 339.

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

Schedule of Roll Forward of Real Estate Investment Assets

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| | | | |
|:---|:---|:---|:---|
|  | **Nine Months**<br> **Ended**<br> **September 30, 2025** | **Year Ended**<br> **December 31, 2024** | **Nine Months**<br> **Ended**<br> **September 30, 2024** |
| Beginning balance | $13529 | $435 | $435 |
| &nbsp;&nbsp;&nbsp;Additions from 339 acquisition |  | 11330 | 11330 |
| &nbsp;&nbsp;&nbsp;Investments in real estate assets |  | 330 | 330 |
| &nbsp;&nbsp;&nbsp;Proceeds from the sale of real estate investments | (2805) | (2998) | (1601) |
| &nbsp;&nbsp;&nbsp;Additions for construction/development | 940 | 4432 | 3544 |
| &nbsp;&nbsp;&nbsp;Disposal of 339 | (9683) | – | – |
| Ending balance | $1981 | $13529 | $14038 |

---

**Capitalized Interest Activity**

The following table shows interest capitalized during the nine months ended September 30, 2025 and 2024, and the cost of funds percentage as of September 30, 2025 and 2024:

Schedule of Capitalized Interest for Real Estate Investment Assets

---

| | | |
|:---|:---|:---|
|  | **September 30,**<br> **2025** | **September 30,**<br> **2024** |
| Capitalized interest | $489 | $799 |
| Cost of funds | 9.35% | 10.18% |

---

The capitalized interest is included within real estate investment assets on the consolidated balance sheet. In connection with the sale of 339, the Company sold assets that included $1,657 of interest previously capitalized.

**5. Loans Receivables, net**

Financing receivables are comprised of the following:

Schedule of Financing Receivables

---

| | | |
|:---|:---|:---|
|  | **September 30,**<br> **2025** | **December 31,**<br> **2024** |
| Loans receivable, gross | $61130 | $51138 |
| Less: Deferred loan fees | (1705) | (1273) |
| Plus: Deferred origination costs | 205 | 257 |
| Less: Allowance for credit losses | (341) | (868) |
| Loans receivable, net | $59289 | $49254 |

---

**Commercial Construction and Development Loans**

As of September 30, 2025, the Company's portfolio consisted of 151 construction loans with 52 borrowers and 13 development loans with 12 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 September 30, 2025 and December 31, 2024:

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>(1)</sup>** |
| 2025 | 20 | 52 | 151 | $61181 | $43128 | 69%<sup>(2)</sup> |
| 2024 | 20 | 63 | 177 | $67391 | $48004 | 68%<sup>(2)</sup> |

---

<sup>(1)</sup> The loan to value ratio is calculated by taking the commitment amount and dividing by the appraised value at the time of loan origination or modification.

<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 September 30, 2025 and December 31, 2024:

Schedule of Commercial Loans - Real Estate Development Loan Portfolio Summary

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **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>(1)</sup>** |
| 2025 | 9 | 12 | 13 | $19199 | $18002 | 48%<sup>(2)</sup> |
| 2024 | 5 | 6 | 6 | $6262 | $3134 | 42%<sup>(2)</sup> |

---

---

| | |
|:---|:---|
| <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 our loans receivable, net:

Schedule of Construction and Development Loan Portfolio

---

| | | | |
|:---|:---|:---|:---|
|  | **September 30,**<br> **2025** | **December 31,**<br> **2024** | **September 30,**<br> **2024** |
| Beginning balance | $49254 | $59186 | $59186 |
| &nbsp;&nbsp;&nbsp;Originations and modifications | 51325 | 40729 | 37089 |
| &nbsp;&nbsp;&nbsp;Principal collections | (40424) | (48578) | (37659) |
| &nbsp;&nbsp;&nbsp;Transferred from loans receivables, net | (909) | (2306) | (8428) |
| &nbsp;&nbsp;&nbsp;Change in allowance for credit losses | 527 | (173) | 115 |
| &nbsp;&nbsp;&nbsp;Change in loan fees, net | (484) | 396 | (184) |
| Ending balance | $59289 | $49254 | $50119 |

---

**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 September 30, 2025:

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

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| | | | |
|:---|:---|:---|:---|
|  | **Loans**<br> **Receivable Gross** | **Commitment**<br> **Value** | **ACL** |
| **Construction Loans:** |  |  |  |
| A Credit Risk | $28356 | $40116 | $103 |
| B Credit Risk | 12201 | 16336 | 139 |
| C Credit Risk | 644 | 1099 | 9 |
| Nonaccrual Loans Individually Evaluated | 1926 | 3630  | 3 |
| **Development Loans:** |  |  |  |
| A Credit Risk | $3607 | $4547 | $2 |
| B Credit Risk | 13806 | 14066 | 83 |
| C Credit Risk | 99 | 100 | 2 |
| Nonaccrual Loans Individually Evaluated | 491 | 487 | - |
| Total | $61130 | $80381 | $341 |

---

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, 2024.

---

| | | | |
|:---|:---|:---|:---|
|  | **Loans**<br> **Receivable Gross** | **Commitment**<br> **Value** | **ACL** |
| **Construction Loans:** |  |  |  |
| A Credit Risk | $39277 | $55872 | $140 |
| B Credit Risk | 2817 | 3883 | 40 |
| C Credit Risk | 939 | 1851 | 10 |
| Nonaccrual Loans Individually Evaluated | 4971 | 5785 | 658 |
| **Development Loans:** |  |  |  |
| A Credit Risk | $2485 | $5500 | $2 |
| B Credit Risk | 160 | 275 |  |
| C Credit Risk | 489 | 487 | 18 |
| Nonaccrual Loans Individually Evaluated | - | - | - |
| Total | $51138 | $73653 | $868 |

---

The following table presents the amortized cost basis of loans on nonaccrual status and loans past due over 89 days still accruing as of September 30, 2025:

Schedule of Amortized Cost Basis of Loans on Nonaccrual Status and Loans

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| | | | |
|:---|:---|:---|:---|
|  | **Nonaccrual**<br> **without ACL** | **Nonaccrual**<br> **with ACL** | **Accrual**<br> **Loans Past**<br> **Due Over**<br> **90 Days** |
| **Construction Loans:** |  |  |  |
| Nonaccrual Loans Individually Evaluated | $1735 | $191 | $– |
| **Development Loans:** |  |  |  |
| Nonaccrual Loans Individually Evaluated | $491 | $- | $- |

---

The following table presents the amortized cost basis of loans on nonaccrual status and loans past due over 89 days still accruing as of December 31, 2024:

---

| | | | |
|:---|:---|:---|:---|
|  | **Nonaccrual**<br> **without ACL** | **Nonaccrual**<br> **with ACL** | **Accrual**<br> **Loans Past**<br> **Due Over**<br> **90 Days** |
| **Construction Loans:** |  |  |  |
| Nonaccrual Loans Individually Evaluated | $1427 | $3544 | $– |
| **Development Loans:** |  |  |  |
| Nonaccrual Loans Individually Evaluated | $- | $- | $- |

---

The following is an aging of our gross loan portfolio as of September 30, 2025:

Schedule of Aging of Gross Loan Portfolio

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  | **Gross Loan**<br>**Value** |  | **Current**<br>**0 - 59** | **Past**<br> **Due**<br>**60 - 89** | **Past Due**<br>**90 - 179** | **Past Due**<br>**180 - 269** | **Past Due**<br>**>270** |
| **Construction Loans:** |  |  |  |  |  |  |  |  |
| A Credit Risk |  | $28356 |  | $28356 | $– | $– | $– | $– |
| B Credit Risk |  | 12201 |  | 11943 |  | 258 |  |  |
| C Credit Risk |  | 644 |  | 644 |  |  |  |  |
| Nonaccrual Loans Individually Evaluated | 1926.0 | 962 | 638.0 |  |  |  |  |  |
| **Development Loans:** |  |  |  |  |  |  |  |  |
| A Credit Risk |  | 3607 |  | 3607 |  |  |  |  |
| B Credit Risk |  | 13806 |  | 13806 |  |  |  |  |
| C Credit Risk |  | 99 |  | 99 |  |  |  |  |
| Nonaccrual Loans Individually Evaluated |  | 491 |  | 491 | – | – | – | – |
| Total |  | $61130 |  | $59272 | $– | $1220 | $– | $638 |

---

The following is an aging of our gross loan portfolio as of December 31, 2024:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Gross Loan**<br>**Value** | **Current**<br>**0 - 59** | **Past**<br> **Due**<br>**60 - 89** | **Past Due**<br>**90 - 179** | **Past Due**<br>**180 - 269** | **Past Due**<br>**>270** |
| **Construction Loans:**  |  |  |  |  |  |  |
| A Credit Risk | $39277 | $39277 | $– | $– | $– | $– |
| B Credit Risk | 2817 | 2817 |  |  |  |  |
| C Credit Risk | 939 | 939 |  |  |  |  |
| Nonaccrual Loans Individually Evaluated | 4971 |  |  | 1057 |  | 3914 |
| **Development Loans:** |  |  |  |  |  |  |
| A Credit Risk | 2485 | 2485 |  |  |  |  |
| B Credit Risk | 160 | 160 | – | – | – | – |
| C Credit Risk | 489 | 489 |  |  |  |  |
| Nonaccrual Loans Individually Evaluated | – | – | – | – | – | – |
| Total | $51138 | $46167 | $– | $1057 | $– | $3914 |

---

Below is an aging schedule of loans receivable as of September 30, 2025, on a recency basis:

Summary of Aging Schedule of Loans Receivables on a Recency Basis

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| | | | |
|:---|:---|:---|:---|
|  | **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) | 146 | $59272 | 97.0% |
| 60-89 days |  |  | –% |
| 90-179 days | 5 | 1220 | 2.0% |
| 180-269 days |  | –% |  |
| >270 days | 13 | 638 | 1.0% |
| Subtotal | 164 | $61130 | 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 | $61130 | 100.0% |

---

Below is an aging schedule of loans receivable as of December 31, 2024, 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) | 162 | $46168 | 90.2% |
| 60-89 days |  |  | –% |
| 90-179 days | 5 | 1057 | 2.1% |
| 180-269 days |  |  | –% |
| >270 days | 16 | 3913 | 7.7% |
| Subtotal | 183 | $51138 | 100.00% |
| 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 | 183 | $51138 | 100.00% |

---

Below is an aging schedule of loans receivable as of September 30, 2025, 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.) | 146 | $59272 | 97.0% |
| 60-89 days |  |  | –% |
| 90-179 days | 5 | 1220 | 2.0% |
| 180-269 days |  |  | –% |
| >270 days | 13 | 638 | 1.0% |
| Subtotal | 164 | $61130 | 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 | $61130 | 100.0% |

---

Below is an aging schedule of loans receivable as of December 31, 2024, 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 due date.) | 162 | $46168 | 90.2% |
| 60-89 days |  |  | –% |
| 90-179 days | 5 | 1057 | 2.1% |
| 180-269 days |  |  | –% |
| >270 days | 16 | 3913 | 7.7% |
| Subtotal | 183 | $51138 | 100.00% |
| 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 | 183 | $51138 | 100.00% |

---

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 give the builder a specific period of time to not pay interest while the home is either completed or marketed. Typically, those interest amounts are collected at final payoff of the loan. As of September 30, 2025, we had one loan with a commitment and loan balance of $258 currently not paying interest under a forbearance agreement. The amount of interest unpaid under the forbearance agreement is $27 and is included in our interest receivable. Also as of September 30, 2025, we had two loans with one builder with a commitment of $597 and a balance of $602 which had not paid interest under a forbearance agreement but were currently paying interest after the agreement had expired. The amount of interest unpaid under this forbearance agreement is $32 and is not included in interest receivable as of September 30, 2025.

**Allowance for Credit Losses on Loans**

The following table provides a roll forward of the allowance for credit losses and unfunded commitments for the three months September 30, 2025:

Schedule of Allowance for Credit Losses

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| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Construction** | **Construction** | **Construction** | **Construction** | **Development** | **Development** | **Development** | **Development** | |
|  | **A<br> Credit Risk** | **B<br> Credit Risk** | **C<br> Credit Risk** | **Nonaccrual Loans** | **A<br> Credit Risk** | **B<br> Credit Risk** | **C<br> Credit Risk** | **Nonaccrual Loans** |<br>**Total** |
| Allowance for credit losses as of June 30, 2025 | $(145) | $(27) | $(10) | $– | $(1) | $– | $– | $– | $(183) |
| Charge-offs |  |  |  |  |  |  |  |  |  |
| Recoveries |  |  |  | (4) |  |  |  |  | (4) |
| Provision for credit losses on funded balances | 42 | (112) | 1 | 1 | (1) | (83) | (2) | – | (154) |
| Allowance for credit losses as of September 30, 2025 | $(103) | $(139) | $(9) | $(3) | $(2) | $(83) | $(2) | $– | $(341) |
| Reserve for unfunded commitments as of June 30, 2025 | $(52) | $(14) | $(7) | $– | $(1) | $– | $– | $– | $(74) |
| Provision for credit losses on unfunded commitments | 9 | (33) | – | – | 1 | – | (2) | – | (25) |
| Reserve for unfunded commitments as of September 30, 2025 | $(43) | $(47) | $(7) | $– | $– | $– | $(2) | $– | $(99) |

---

The following table provides a roll forward of the allowance for credit losses and unfunded commitments for the nine months ended September 30, 2025:

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Construction** | **Construction** | **Construction** | **Construction** | **Development** | **Development** | **Development** | **Development** | |
|  | **A<br> Credit Risk** | **B<br> Credit Risk** | **C<br> Credit Risk** | **Nonaccrual Loans** | **A<br> Credit Risk** | **B<br> Credit Risk** | **C<br> Credit Risk** | **Nonaccrual Loans** |<br>**Total** |
| Allowance for credit losses as of December 31, 2024 | $(150) | $(28) | $(13) | $(658) | $(1) | $– | $(18) | $– | $(868) |
| Charge-offs |  |  |  | 822 |  |  |  |  | 822 |
| Recoveries |  |  |  | (7) |  |  |  |  | (7) |
| Provision for credit losses on funded balances | 47 | (111) | 4 | (160) | (1) | (83) | 16 | – | (288) |
| Allowance for credit losses as of September 30, 2025 | $(103) | $(139) | $(9) | $(3) | $(2) | $(83) | $(2) | $– | $(341) |
| Reserve for unfunded commitments as of December 31, 2024 | $(65) | $(10) | $(12) | $– | $(1) | $– | $– | $– | $(88) |
| Provision for credit losses on unfunded commitments | 22 | (37) | 5 | – | 1 | – | (2) | – | (11) |
| Reserve for unfunded commitments as of September 30, 2025 | $(43) | $(47) | $(7) | $– | $– | $– | $(2) | $– | $(99) |

---

The following table provides a roll forward of the allowance for credit losses and unfunded commitments as of December 31, 2024:

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Construction** | **Construction** | **Construction** | **Construction** | **Development** | **Development** | **Development** | **Development** | |
|  | **A<br> Credit Risk** | **B<br> Credit Risk** | **C<br> Credit Risk** | **Nonaccrual Loans** | **A<br> Credit Risk** | **B<br> Credit Risk** | **C<br> Credit Risk** | **Nonaccrual Loans** |<br>**Total** |
| Allowance for credit losses as of December 31, 2023 | $(211) | $(32) | $– | $(437) | $(5) | $– | $(10) | $– | $(695) |
| Reclassification of ACL on unfunded commitments | 59 | 19 |  |  |  |  |  |  | 78 |
| Charge-offs |  |  |  | 506 |  |  |  |  | 506 |
| Recoveries |  |  |  | (6) |  |  |  |  | (6) |
| Provision for credit losses on funded balances | 2 | (15) | (13) | (721) | 4 | – | (8) | – | (751) |
| Allowance for credit losses as of December 31, 2024 | $(150) | $(28) | $(13) | $(658) | $(1) | $– | $(18) | $– | $(868) |
| Reserve for unfunded commitments as of December 31, 2023 | $— | $— | $— | $— | $— | $— | $— | $— | $— |
| Reclassification of ACL on unfunded commitmentss | (59) | (19) |  |  |  |  |  |  | (78) |
| Provision for credit losses on unfunded commitments | (6) | 9 | (12) | – | (1) | – | – | – | (10) |
| Reserve for unfunded commitments as of December 31, 2024 | $(65) | $(10) | $(12) | $– | $(1) | $– | $– | $– | $(88) |

---

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 $19,250 and $22,515 as of September 30, 2025 and December 31, 2024, 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 September 30, 2025, and December 31, 2024, the ACL for unfunded commitments was $99 and $88, respectively, and we had no additional off-balance sheet transactions, nor do we currently have any such arrangements or obligations.

Concentration of Risk

Financial instruments that potentially subject the Company to concentration on 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:

Summary of Concentration Risks

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | **December 31, 2024** | **December 31, 2024** |
|  | **Borrower <br> City** | **Percent of <br> Loan <br> Commitments** | **Borrower <br> City** | **Percent of <br> Loan <br> Commitments** |
| Highest concentration risk | Pittsburgh, PA | 34.5% | Pittsburgh, PA | 28.9% |
| Second highest concentration risk | Central and Southwest FL | 7.8% | Central and Southwest FL | 5.7% |
| Third highest concentration risk | Greenville, SC | 5.0% | Greenville, SC | 4.9% |

---

6. Foreclosed Assets

The following table is our roll forward of foreclosed assets:

---

| | | | |
|:---|:---|:---|:---|
|  | **Nine Months <br> Ended <br> September 30, 2025** | **Year Ended <br> December 31, 2024** | **Nine Months <br> Ended <br> September 30, 2024** |
| Beginning balance | $1356 | $130 | $130 |
| &nbsp;&nbsp;&nbsp;Transferred from loans receivables, net | 909 | 2306 | 2306 |
| &nbsp;&nbsp;&nbsp;Additions for construction in foreclosed assets | 83 | 507 | 541 |
| &nbsp;&nbsp;&nbsp;Sale proceeds | (921) | (992) | (659) |
| &nbsp;&nbsp;&nbsp;Loss on foreclosed assets | (104) | (595) | (477) |
| Ending balance | $1323 | $1356 | $1841 |

---

7. Borrowings

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

---

| | | |
|:---|:---|:---|
|  | **September 30, 2025** | **December 31, 2024** |
| Borrowing Source |  |  |
| &nbsp;&nbsp;&nbsp;Purchase and sale agreements and other secured borrowings | $18775 | $20359 |
| &nbsp;&nbsp;&nbsp;Secured line of credit from affiliates | 22 | 743 |
| &nbsp;&nbsp;&nbsp;Less: deferred financing fees | (13) | - |
| Notes payable secured, net | 18784 | 21102 |
| &nbsp;&nbsp;&nbsp;Unsecured line of credit (senior) | 750 | 750 |
| &nbsp;&nbsp;&nbsp;Other unsecured debt (senior subordinated) | 1824 | 1812 |
| &nbsp;&nbsp;&nbsp;Unsecured Notes through our public offering, gross | 21882 | 19968 |
| &nbsp;&nbsp;&nbsp;Other unsecured debt (subordinated) | 11152 | 11707 |
| &nbsp;&nbsp;&nbsp;Other unsecured debt (junior subordinated) | 1126 | 1126 |
| &nbsp;&nbsp;&nbsp;Less: deferred financing fees | (185) | (150) |
| Notes payable unsecured, net | 36549 | 35213 |
| Total Borrowings | $55333 | $56315 |

---

The following table shows the maturity of outstanding debt as of September 30, 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Year Maturing** | **Total Amount Maturing** | **Public Offering** | **Other Unsecured** | **Secured Borrowings** |
| 2025 | $18762 | $986 | $281 | $17495 |
| 2026 | 7238 | 1733 | 5505 |  |
| 2027 | 10261 | 6588 | 2370 | 1303 |
| 2028 | 14049 | 10870 | 3179 |  |
| 2029 | 5221 | 1705 | 3516 |  |
| 2030 and thereafter | – | – | – | – |
| Total | $55531 | $21882 | $14851 | $18798 |

---

Borrowings that are secured by the Company's loans receivable are listed as maturing in the current year to align with the expected maturities of the attached collateral. The Company expects to extend a substantial portion of these borrowings by replacing collateral with new loans receivable as the existing collateral is paid down.

Secured Borrowings

Lines of Credit

As of September 30, 2025 and December 31, 2024, the Company had $22 and $743 borrowed against its lines of credit from affiliates, respectively, which have a total limit of $1,500 and $2,500 as of September 30, 2025 and December 31, 2024, respectively. During the three months ended September 30, 2025, the Company paid $400 towards the balance of a line of credit with Daniel M. Wallach (our Chief Executive Officer and Chairman of the Board of Managers).

None of our lines of credit have given us notice of nonrenewal as of September 30, 2025. The lines will continue to automatically renew unless notice of nonrenewal is given by a lender.

Loan with Hanna Holdings, Inc.

During the nine months ended September 30, 2025, the Company paid off the loan with Hanna Holdings Inc. through the sale of 339 land parcels. As of December 31, 2024, the secured note payable to Hanna Holdings, Inc., was $350.

United Lines of Credit

On January 10, 2025, the Company entered into a revolving line of credit with United Bank for $2,275, maturing January 10, 2027. The interest rate on this line of credit is 5.5%. As of September 30, 2025, the amount due on the revolving line of credit was $1,303. The line is collateralized by an investment of $2,275 in certificates of deposit, including $1,303 classified as restricted in the consolidated balance sheets, which corresponds directly with the amount drawn on this line of credit.

On January 2, 2025, the Company entered into a revolving line of credit with United Bank for $725 with an expiration date of January 2, 2040. The interest rate on this line of credit is 7.5%. As of September 30, 2025, there was no amount outstanding on this revolving line of credit. The Company's office in Jacksonville, FL, is collateral for this line of credit.

Secured Deferred Financing Costs

The Company had secured deferred financing costs of $13 as of September 30, 2025. There were no deferred financing costs related to secured borrowings as of December 31, 2024.

Secured Borrowings Secured by Loan Assets

As of September 30, 2025, the Company pledged $41,062 of loans receivable as collateral on $17,473 of secured notes payable. As of December 31, 2024, the Company pledged $32,614 of loans receivable as collateral on $20,009 of secured notes payable.

Unsecured Borrowings

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

The effective interest rate on borrowings through our Notes Program as of September 30, 2025 and December 31, 2024 was 9.59% and 10.08%, respectively.

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

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

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| | | | |
|:---|:---|:---|:---|
|  | Nine Months<br> Ended<br> September 30, 2025 | Year Ended<br> December 31, 2024 | Nine Months<br> Ended<br> September 30, 2024 |
| Gross Notes outstanding, beginning of period | $19968 | $20854 | $20854 |
| Notes issued | 6300 | 5257 | 2511 |
| Note repayments / redemptions | (4386) | (6143) | (4163) |
| Gross Notes outstanding, end of period | $21882 | $19968 | $19202 |
| &nbsp;&nbsp;&nbsp;Less deferred financing costs, net | (185) | (150) | (167) |
| Notes outstanding, net | $21697 | $19818 | $19035 |

---

The following is a roll forward of deferred financing costs related to unsecured borrowings:

---

| | | | |
|:---|:---|:---|:---|
|  | Nine Months<br> Ended<br> September 30, 2025 | Year Ended<br> December 31, 2024 | Nine Months<br> Ended<br> September 30, 2024 |
| Deferred financing costs, beginning balance | $1060 | $939 | $939 |
| &nbsp;&nbsp;&nbsp;Additions | 172 | 121 | 90 |
| Deferred financing costs, ending balance | 1232 | 1060 | 1029 |
| &nbsp;&nbsp;&nbsp;Less accumulated amortization | (1047) | (910) | (862) |
| Deferred financing costs, net | $185 | $150 | $167 |

---

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

---

| | | | |
|:---|:---|:---|:---|
|  | Nine Months<br> Ended<br> September 30, 2025 | Year Ended<br> December 31, 2024 | Nine Months<br> Ended<br> September 30, 2024 |
| Accumulated amortization, beginning balance | $910 | $703 | $703 |
| &nbsp;&nbsp;&nbsp;Additions | 137 | 207 | 159 |
| Accumulated amortization, ending balance | $1047 | $910 | $862 |

---

Other Unsecured Debts

Our other unsecured debts are detailed below:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Loan** | Maturity<br> Date | Interest<br> Rate(1) | September 30,<br> 2025 | December 31,<br> 2024 |
| Unsecured Line of Credit | March 2026 | 10.0% | $910 | $1000 |
| Unsecured Line of Credit | April 2026 | 10.0% | 500 | 500 |
| Unsecured Line of Credit - Senior Subordinated | January 2026 | 10.0% | 750 | 750 |
| Subordinated Promissory Note | February 2027 | 9.0% | 600 | 600 |
| Subordinated Promissory Note | March 2026 | 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 |  |
| Subordinated Promissory Note | April 2025 | 10.0% |  | 202 |
| Subordinated Promissory Note | July 2025 | 8.0% | 100 | 100 |
| Subordinated Promissory Note | September 2027 | 10% | 108 | 108 |
| Subordinated Promissory Note | October 2025 | 8.0% |  | 100 |
| Subordinated Promissory Note | July, 2028 | 8.5% | 100 |  |
| Subordinated Promissory Note | December 2025 | 8.0% | 180 | 180 |
| Subordinated Promissory Note | August 2026 | 8.0% | 291 | 291 |
| Senior Subordinated Promissory Note | July 2026(2) | 1.0% | 740 | 740 |
| Junior Subordinated Promissory Note | July 2026(2) | 20.0% | 460 | 460 |
| Senior Subordinated Promissory Note | October 2028(2) | 1.0% | 1072 | 1072 |
| Junior Subordinated Promissory Note | October 2028(2) | 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 | June 2025 | 10.0% |  | 1000 |
| Subordinated Promissory Note | April 2028 | 10.0% | 149 | 149 |
| Subordinated Promissory Note | April 2029 | 11.0% | 2000 | 2000 |
| Subordinated Promissory Note | January 2025 | 11.0% |  | 1007 |
| Subordinated Promissory Note | October 2027 | 8.50% | 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 |  |
| Subordinated Promissory Note | April 2029 | 9.0% | 301 |  |
| Unsecured Note - Senior Subordinated | Demand(4) | 9.5% | 12 |  |
| Subordinated Promissory Note | Varies (3) | 10.0% | - | 700 |
| Total Other Unsecured Debt |  |  | $14851 | $15395 |

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(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.

(3) Lender
 may elect to terminate, effective semi-annually as of August 16 and/or February 16 of any given year. As of December 31, 2024 the
 rate was Prime + 1.5%.

(4) Due
 six months after lender gives notice.

8. Refundable Prepaid Interest

Below is a roll forward of refundable prepaid interest:

---

| | | | |
|:---|:---|:---|:---|
|  | Nine Months<br> Ended<br> September 30, 2025 | Year Ended<br> December 31, 2024 | Nine Months<br> Ended<br> September 30, 2024 |
| Beginning balance | $353 | $292 | $292 |
| &nbsp;&nbsp;&nbsp;Additions from Pennsylvania loans | 1060 | 907 | 668 |
| &nbsp;&nbsp;&nbsp;Additions from other loans | 1066 | 701 | 604 |
| &nbsp;&nbsp;&nbsp;Interest, fees, principal or repaid to borrower | (1120) | (1547) | (1133) |
| Ending balance | $1359 | $353 | $431 |

---

9. Series C Preferred Equity

The Series C Preferred Units have a fixed value of $1 per unit in addition to preferred liquidation and distribution rights. The Company makes distributions to preferred members at a fixed rate, currently 12% of the Series C Preferred Units' undiscounted value, in quarterly installments as a distribution of income.

Roll forward of Series C Preferred Equity:

---

| | | | |
|:---|:---|:---|:---|
|  | Nine Months<br> Ended<br> September 30, 2025 | Year Ended<br> December 31, 2024 | Nine Months<br> Ended<br> September 30, 2024 |
| Beginning balance | $6430 | $4773 | $4773 |
| &nbsp;&nbsp;&nbsp;Additions from new investment |  | 1200 | 1200 |
| &nbsp;&nbsp;&nbsp;Additions from exchange of Class A common equity | 2330 |  |  |
| &nbsp;&nbsp;&nbsp;Discount on exchange of Class A common equity | (2043) |  |  |
| &nbsp;&nbsp;&nbsp;Distributions | (529) | (245) | (178) |
| &nbsp;&nbsp;&nbsp;Additions from net income and reinvestments | 720 | 702 | 513 |
| Ending balance | $6908 | $6430 | $6308 |

---

All distributions, liquidation rights and conversion features are determined based on the undiscounted value of the Series C preferred equity units, which was $8,951 and $6,430 as of September 30, 2025 and December 31, 2024, respectively.

On March 31, 2025, the Company terminated its relationship with a member who owned 2,969 units of Class A common equity. Effective April 1, 2025, the Company executed a unit exchange agreement with the respective member where all 2,969 units of common equity with a carrying value of $287 were exchanged for 2,329.533 units of Series C preferred equity with a fixed value of $2,330. The difference between the carrying value of the Class A common units and the fixed value of the Series C preferred units of $2,043 is reflected as a discount on preferred equity.

On May 30, 2025, the Company redeemed 251.10821 of the Series C preferred equity beneficially owned by the Company's CEO and his wife, at a redemption price of $251.

On April 19, 2024, the Company entered into Amendment No. 4 to the Second Amended and Restated Limited Liability Company Agreement ("Fourth Amendment") with an effective date of March 31, 2024. Pursuant to the Fourth Amendment, after six years from the date of investment, instead of being entitled to the right of redemption, the holders of Series C Preferred Units will be entitled to convert all or a portion of the Series C Preferred Units to the common units of the Registrant, on a 1 for 1 basis, after a 12-month waiting period after the notice of conversion is given.

In addition, the Fourth Amendment restricted the right to require the Company to redeem the Series C Preferred Units for cash; therefore, the units were reclassified from mezzanine equity to Members' Capital.

The following table shows the earliest conversion options for investors in Series C Preferred Equity as of September 30, 2025:

---

| | |
|:---|:---|
| **Year Convertible** | Total Amount<br> Convertible |
| Currently eligible to request conversion | $3056 |
| 2025 | 203 |
| 2026 | 309 |
| 2027 | 1342 |
| 2028 | 206 |
| 2029 and thereafter | 3835 |
| Total | $8951 |

---

10. Related Party Transactions

As of September 30, 2025, the Company had $1,228 and $250 available to borrow against the line of credit from Daniel M. Wallach (our Chief Executive Officer and Chairman of the Board of Managers) and his wife, and the line of credit from the 2007 Daniel M. Wallach Legacy Trust, respectively.

During the nine months ended September 30, 2025, the Company paid off its $700 subordinated promissory note with Sheldon Investment, LLC, which is related to Gregory Sheldon who is a member of our Board of Managers.

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 "2024 Financial Statements") included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024. 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

Unfunded commitments to extend credit, which have similar collateral, credit risk, and market risk to our outstanding loans, were $19,250 and $22,515 as of September 30, 2025 and December 31, 2024, respectively. There were no additional off-balance sheet arrangements as of September 30, 2025 or December 31, 2024.

12. Non-Interest Expense Detail

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

---

| | | |
|:---|:---|:---|
|  | Nine Months Ended<br> September 30, 2025 | **Nine Months Ended <br> September 30, 2024** |
| Selling, general and administrative expenses |  |  |
| Legal and accounting | $294 | $224 |
| Salaries and related expenses | 1850 | 1359 |
| Board related expenses | 81 | 81 |
| Advertising | 87 | 45 |
| Rent and utilities | 62 | 64 |
| Loan and foreclosed asset expenses | 94 | 101 |
| Travel | 188 | 128 |
| Other | 301 | 127 |
| Total SG&A | $2957 | $2129 |

---

Other expenses were $301 and $127 for the nine months ended September 30, 2025 and 2024, respectively. This increase of $174 in the current year is driven by higher insurance costs, state tax and licensing expenses, including penalties and interest, technology related expenses and higher bank fees.

13. Subsequent Events

Management of the Company has evaluated subsequent events through November 14, 2025, the date these interim consolidated financial statements were issued.

On November 3, 2025, the Company redeemed an investment in a real estate investment fund for $338. The carrying value of the fund at the time of redemption was $330 and was included in real estate investments in the accompanying balance sheet. The Company recognized a gain on the redemption of $38. Also on November 3, 2025, the Company invested $1M in the same real estate investment fund. Both of these transactions occurred subsequent to the September 30, 2025, reporting period and did not impact the financial position or results of operations presented in these financial statements.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(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 contained elsewhere in this report and with our audited annual consolidated financial statements and related notes and other consolidated financial data (the "2024 Financial Statements") included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 (the "2024 Form 10-K"). See also "Cautionary Note Regarding Forward-Looking Statements" preceding Part I.

Overview

During the quarter ended September 30, 2025, the Company continued to focus on the reduction of non-interest earning assets through proactive risk management and timely intervention. As of September 30, 2025, the Company had 22 loans classified as nonaccrual with gross loan values of $2,417 compared to 21 loans with gross loan values of $4,971 as of December 31, 2024. In addition, as of September 30, 2025, we had three or $1,323 foreclosed assets, net compared to four or $1,356 as of December 31, 2024.

The estimated loss on interest income resulting from non-interest earning assets for the quarter and nine months ended September 30, 2025 was $108 and $453 compared to $280 and $840 for the same periods of 2024. Looking ahead, we expect the balance of non-interest earning assets to remain somewhat constant.

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 2025 and the beginning of 2026:

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

2. Control
 SG&A expenses.

3. Maintain
 gross margin prior to credit losses.

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

5. Manage
 the impact of credit losses and impairment expenses through proactive risk management and timely intervention.

6. Reduce
 our cost of funds, which in turn reduces our interest rate charged to our customers.

7. Expand
 our customer base and increase revenues in the Builder's Assistance program.

8. Increase
 loan balances and originations.

There is still a housing shortage, and many homeowners are not moving out of their sub 3% interest rates. The tariff situation is providing some general uncertainty nationwide, but from a cost perspective to our homebuilder customers, this is not a major factor for them today (though it may be more significant in the future). The National Association of Homebuilders has a very low estimate of the cost of the tariffs for builders. The larger risk to our builders is a risk of the sales market due to general uncertainty of their customers. We have not seen a slowdown in payoffs from our customers. Home prices in many markets are falling. In particular, home prices in the "move up" market are dropping. These are homes being sold in the mid-price range, not the starter homes or the high end homes. These drops may eventually cause more builder failures and losses. We believe that long term interest rates for our builders' customers will be lower by fall of 2026 than they are today, so we don't intend to curtail lending today. At the Federal Open Market Committee meeting in October, the U.S. Federal Reserve ("Fed") decided to continue allowing the runoff of their home mortgage portion of their balance sheet. This runoff is increasing mortgage rates nationwide. The Fed is using the funds obtained from the runoff to stop the runoff of their treasury security portfolio, which might have the impact of decreasing new mortgage rates (historical data on this situation is limited).

We had $59,289 and $49,254 in loan receivables, net as of September 30, 2025 and December 31, 2024, respectively. Loans receivable increased $10,218 as of September 30, 2025 compared to December 31, 2024 due primarily to a new loan to our largest customer initiated concurrent with the sale of 339 Justabout Land Company, LLC ("339"). As of September 30, 2025, the Company's portfolio consisted of 151 construction loans with 52 borrowers and 13 development loans with 12 borrowers in 21 states.

In addition, during the nine months ended September 30, 2025, the Company sold eight 339 lots for both revenue and cost of land parcels sold of $2,805. No gains or losses were recognized from the sale of the land parcels during the nine months ended September 30, 2025. During the nine months ended September 30, 2024, the Company sold five 339 lots for both revenue and costs of land parcels sold of $1,601. No gains or losses were recognized from the sale of the land parcels during the nine months ended September 30, 2024.

Net cash provided by operations increased by $1,071 to $6,491 for the nine months ended September 30, 2025 compared to the same period of 2024. The increase in operating cash flow was due primarily to proceeds received from the sale of real estate investments.

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 2024 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, 2024, unless listed below.

Credit Losses

Fair value of collateral has the potential to impact the calculation of the provision for credit losses (the amount we have expensed over time in anticipation of credit losses we have not yet realized). Specifically, relevant to the allowance for credit losses 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** | **September 30, 2025 <br> Provision for Credit Losses<br> Higher/(Lower)** |
| Increasing fair value of the real estate collateral by 35%\* | $&nbsp;&nbsp;&nbsp;&nbsp; 2 |
| Decreasing fair value of the real estate collateral by 35%\*\* | $(5515) |

---

\* Increases in the fair value of the real estate collateral do not impact the provision for credit losses, as the value generally is not "written up" except to the extent that previously recognized allowance for credit losses may be reduced or eliminated if the fair value of collateral increases on loans that are individually evaluated.

\*\* Assumes the loans were non-performing and a carrying amount of the loans outstanding of $59,289.

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** | September 30, 2025<br> Foreclosed<br> Assets<br> Higher/(Lower) |
| Increasing fair value of the foreclosed asset by 35%\* | $&nbsp;&nbsp;&nbsp;&nbsp; 194 |
| Decreasing fair value of the foreclosed asset by 35%\*\* | $(463) |

---

\* Increases in the fair value of the foreclosed assets do not impact the carrying value, as the value generally is not "written up" except to the extent that we remove previously established reserves if the fair value of the property increases after initial impairment. All other gains would be recognized upon asset disposal.

\*\* Assumes a book amount of the foreclosed assets of $1,323.

Results of Operations

Interest Spread

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

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Three Months Ended | Three Months Ended | Three Months Ended | Three Months Ended | Nine Months Ended | Nine Months Ended | Nine Months Ended | Nine Months Ended |
|  | September 30, | September 30, | September 30, | September 30, | September 30, | September 30, | September 30, | September 30, |
|  | 2025 | 2025 | 2024 | 2024 | 2025 | 2025 | 2024 | 2024 |
| &nbsp;&nbsp;&nbsp;Interest Income |  | \* |  | \* |  | \* |  | \* |
| &nbsp;&nbsp;&nbsp;Interest income on loans | $2273 | 17% | $1852 | 14% | $6059 | 16% | $5938 | 14% |
| &nbsp;&nbsp;&nbsp;Fee income on loans | 767 | 6% | 798 | 6% | 2249 | 5% | 2240 | 5% |
| &nbsp;&nbsp;&nbsp;Deferred loan fees | (126) | (1)% | (174) | (1)% | (429) | (1)% | (513) | (1)% |
| &nbsp;&nbsp;&nbsp;Fee income on loans, net | 641 | 5% | 624 | 5% | 1820 | 4% | 1727 | 4% |
| &nbsp;&nbsp;&nbsp;Interest and fee income on loans | 2914 | 22% | 2476 | 18% | 7879 | 20% | 7665 | 18% |
| &nbsp;&nbsp;&nbsp;Interest expense unsecured | 864 | 7% | 850 | 6% | 2541 | 7% | 2519 | 6% |
| &nbsp;&nbsp;&nbsp;Interest expense secured | 450 | 3% | 318 | 3% | 1060 | 3% | 1066 | 3% |
| &nbsp;&nbsp;&nbsp;Amortization offering costs | 25 | –% | 50 | –% | 137 | –% | 157 | –% |
| &nbsp;&nbsp;&nbsp;Interest expense | 1339 | 10% | 1218 | 9% | 3738 | 10% | 3742 | 9% |
| &nbsp;&nbsp;&nbsp;Net interest and fee income (spread) | $1575 | 12% | $1258 | 9% | $4141 | 10% | $3923 | 9% |
| Weighted average outstanding loan asset balance \*\* | $54269 |  | $54081 |  | $51433 |  | $56553 |  |

---

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

\*\*The weighted average outstanding loan balance decreased due to the reclass of our 339 development loan to real estate investments during February 2024. The weighted average outstanding loan balance increased due to the reclass of the 339 assets back to a loan upon sale in August 2025.

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 the quarter ended September 30, 2025, interest income on loans was 17% compared to 14% for the same period of 2024. For the nine months ended September 30, 2025, interest income on loans was 16% compared to 14% for the same period of 2024.

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 3.5% 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. During 2022, we started charging an annual fee on most of our development loans which varies.

Fee income on loans before deferred loan fee adjustments was 5% for both the three and nine months ended September 30, 2025 compared to 5% and 4% for the three and nine ended September 30, 2024.

&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 September 30, 2025 and December 31, 2024, foreclosed assets were $1,323 and $1,356, respectively, which resulted in a negative impact to our interest spread.

Provision for Credit Losses

Provision for credit losses (expense throughout the period) was $299 and $719 for the nine months ended September 30, 2025 and 2024, respectively.

The allowance for credit losses as of September 30, 2025 and December 31, 2024, was $341 and $868, respectively. The decrease in the allowance for credit losses is due to the reduction of certain individually evaluated loan assets. As of September 30, 2025 the outstanding balance of nonaccrual loans, net, decreased to $2,417 from 22 loans compared $4,313 from 21 loans as of December 31, 2024. The decrease is a result of several payoffs in 2025 of loans with substantial reserves as of December 31, 2024. The Company believes it has properly reserved for all foreclosed and individually evaluated loans.

Non-Interest Income

Revenue from the Sale of Land Parcels

During the nine months ended September 30, 2025, the Company sold eight 339 land parcels for a total of $2,805. No gain or loss was recognized in the sale of the lots. There were no 339 land parcel sales during the quarter ended September 30, 2025. During both the quarter and nine months ended September 30, 2024, the Company sold five 339 land parcels for a total of $1,601. No gain or loss was recognized on the sale of the lots.

Option Fee Income

During the quarter and nine months ended September 30, 2025, the Company recognized 339 option fee income of $40 and $314, respectively. During the quarter and nine months ended September 30, 2024, the Company recognized 339 option fee income of $223 and $594, respectively.

Other Income

On August 6, 2025, we completed the sale of all assets owned by 339, a business segment. We recognized a gain on this sale of $193 during both the quarter and nine months ended September 30, 2025.

During the nine months ended September 30, 2025 and 2024, we consulted for three and two of our construction and development loan customers; respectively, which included accounting guidance. Other income related to our consulting fees were $153 and $40 for the nine month periods ended September 30, 2025 and 2024, respectively. We plan to continue providing consulting services to our customers as we focus on growing this business during the remainder of 2025 and throughout 2026.

Non-Interest Expense

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

The following table displays SG&A expenses:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Three Months Ended<br> September 30, | Three Months Ended<br> September 30, | Nine Months Ended<br> September 30, | Nine Months Ended<br> September 30, |
|  | 2025 | 2024 | 2025 | 2024 |
| Legal and accounting | $54 | $39 | $294 | $224 |
| Salaries and related expenses | 714 | 467 | 1850 | 1359 |
| Board related expenses | 27 | 27 | 81 | 81 |
| Advertising | 18 | 15 | 87 | 45 |
| Rent and utilities | 21 | 20 | 62 | 64 |
| Loan and foreclosed asset expenses | 65 | 49 | 94 | 101 |
| Travel | 65 | 48 | 188 | 128 |
| Other | 97 | 49 | 301 | 127 |
| Total SG&A | $1061 | $714 | $2957 | $2129 |

---

Our SG&A expense increased $347 to $1,061 during the quarter ended September 30, 2025 compared to the same period of 2024. This increase was primarily due to $714 in salaries and related expenses during the quarter ended September 30, 2025, compared to $467 for the same period in 2024, an increase of $247. The increase in salaries and related expenses resulted from hiring additional employees during the nine months ended September 30, 2025, to expand our marketing efforts and support the growth of our accounting services business.

Other expenses were $301 and $127 for the nine months ended September 30, 2025 and 2024, respectively. This increase of $174 in the current year is driven by higher insurance costs, state tax and licensing expenses, including penalties and interest, technology related expenses and higher bank fees.

Loss on Foreclosed Assets

During the nine months ended September 30, 2025, we transferred two loan receivable assets to foreclosed assets, which resulted in a net gain of $90. During the nine months ended September 30, 2024, we transferred six loan receivable assets to foreclosed assets, which resulted in a loss on foreclosure of $159.

Cost of Land Parcels Sold

During the quarter and nine months ended September 30, 2025, the Company sold eight 339 land parcels and recognized both revenue and cost on land parcels sold of $2,805. During the quarter and nine months ended September 30, 2024, the Company sold five 339 land parcels and recognized both revenue and cost of land parcels sold of $1,601.

Consolidated Financial Position

Loans Receivables, net

The loans receivable balance is comprised of the following, gross to net:

---

| | | |
|:---|:---|:---|
|  | September 30, 2025 | December 31, 2024 |
| Loans receivable, gross | $61130 | $51138 |
| Less: Deferred loan fees | (1705) | (1273) |
| Plus: Deferred origination costs | 205 | 257 |
| Less: Allowance for credit losses | (341) | (868) |
| Loans receivable, net | $59289 | $49254 |

---

Commercial Loans – Construction Loan Portfolio Summary

We anticipate that the aggregate balance of our construction loan portfolio will increase as built homes take longer to sell.

The following is a summary of our loan portfolio to builders for home construction loans as of September 30, 2025:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| State | Number<br> of<br> Borrowers |  | Number<br> of<br> Loans | Value of<br> Collateral(1) | Commitment<br> Amount | Gross<br> Amount<br> Outstanding | Loan<br> to<br> Value<br> Ratio(2) |
| Arizona | 2 |  | 4 | $1719 | $1126 | $1069 | 66% |
| California | 1 |  | 1 | 3210 | 1750 | 1412 | 55% |
| Connecticut | 1 |  | 3 | 1630 | 1115 | 777 | 68% |
| Florida | 8 |  | 49 | 18448 | 13101 | 11005 | 71% |
| Georgia | 7 |  | 9 | 5617 | 3750 | 2533 | 67% |
| Idaho | 1 |  | 2 | 3521 | 1963 | 1273 | 56% |
| Illinois | 1 |  | 1 | 1500 | 815 | 470 | 54% |
| Louisiana | 2 |  | 3 | 809 | 623 | 576 | 77% |
| Michigan | 1 |  | 1 | 489 | 342 | 217 | 70% |
| Missouri | 1 |  | 1 | 675 | 473 | 473 | 70 |
| Mississippi | 1 |  | 1 | 369 | 258 | 258 | 70% |
| New Jersey | 2 |  | 5 | 2133 | 1766 | 1394 | 83% |
| New York | 1 |  | 5 | 2248 | 1345 | 403 | 60% |
| North Carolina | 8 |  | 14 | 6415 | 4177 | 2152 | 65% |
| Ohio | 1 |  | 1 | 400 | 280 | 280 | 70% |
| Pennsylvania | 2 |  | 15 | 17008 | 13889 | 10899 | 82% |
| South Carolina | 9 |  | 29 | 15220 | 9470 | 5868 | 62% |
| Tennessee | 2 |  | 3 | 1061 | 743 | 473 | 70% |
| Utah | 2 |  | 2 | 5310 | 3833 | 1360 | 72% |
| Virginia | 1 |  | 2 | 592 | 362 | 236 | 61% |
| Total | 54 | (4) | 151 | $88374 | $61181 | $43128 | 69%(3) |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) The
 value is determined by the appraised value at the time of origination.

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

(3) Represents
 the weighted average loan to value ratio of the loans.

(4) One
 borrower has loans in three states – Georgia, North Carolina and South Carolina.

The following is a summary of our loan portfolio to builders for home construction loans as of December 31, 2024:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **State** | Number<br> of<br> Borrowers | Number<br> of<br> Loans | Value of<br> Collateral(1) | Commitment<br> Amount | Gross<br> Amount<br> Outstanding | Loan<br> to<br> Value<br> Ratio(2) |
| Arizona | 1 | 2 | $890 | $634 | $633 | 71% |
| California | 1 | 1 | 3210 | 1750 | 1346 | 55% |
| Connecticut | 1 | 2 | 1040 | 728 | 389 | 70% |
| Florida | 10 | 42 | 16089 | 11081 | 6874 | 69% |
| Georgia | 3 | 6 | 3301 | 2037 | 878 | 62% |
| Idaho | 1 | 4 | 1462 | 1060 | 661 | 73% |
| Illinois | 1 | 1 | 1727 | 992 | 1781 | 57% |
| Louisiana | 4 | 6 | 1613 | 1169 | 1031 | 72% |
| Michigan | 1 | 1 | 890 | 481 | 27 | 54% |
| Mississippi | 1 | 1 | 369 | 258 | 258 | 70% |
| New Jersey | 2 | 4 | 1585 | 1362 | 1122 | 86% |
| New York | 1 | 1 | 650 | 455 | 105 | 70% |
| North Carolina | 9 | 18 | 10737 | 6642 | 4786 | 62% |
| Ohio | 3 | 3 | 1275 | 857 | 1074 | 67% |
| Pennsylvania | 2 | 22 | 24449 | 18065 | 15192 | 74% |
| South Carolina | 13 | 49 | 22057 | 14309 | 7438 | 65% |
| Tennessee | 3 | 4 | 1334 | 893 | 748 | 67% |
| Texas | 2 | 3 | 2320 | 1844 | 1567 | 79% |
| Utah | 1 | 3 | 2918 | 1792 | 1422 | 61% |
| Virginia | 3 | 4 | 1546 | 982 | 672 | 64% |
| **Total** | 63 | 177 | $99462 | $67391 | $48004 | 68%(3) |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) The
 value is determined by the appraised value at the time of origination.

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

(3) 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 September 30, 2025:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| States | Number<br> of Borrowers | Number<br> of<br> Loans | Value of Collateral(1) | Commitment Amount | Gross <br> Amount<br> Outstanding(4) | Loan<br> to<br> Value Ratio(2) | Interest<br> Spread(5) |
| Florida | 3 | 3 | 10032 | 930 | 642 | 6% | 7% |
| Georgia | 1 | 1 | 490 | 100 | 99 | 20% | 7% |
| Louisiana | 1 | 1 | 150 | 88 | 88 | 59% | 7% |
| New Jersey | 1 | 1 | 88 | 56 | 56 | 64% | 7% |
| North Carolina | 2 | 2 | 2290 | 538 | 537 | 23% | 7% |
| Pennsylvania | 1 | 2 | 17802 | 14065 | 13806 | 78% | varies |
| South Carolina | 1 | 1 | 1656 | 487 | 490 | 30% | 7% |
| Utah | 1 | 1 | 2491 | 1300 | 650 | 26% | 7% |
| Wyoming | 1 | 1 | 2749 | 1635 | 1634 | 59% | 7% |
| Total | 12 | 13 | $37748 | $19199 | $18002 | 48%(3) | 7% |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) 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.

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

(3) Represents
 the weighted average loan to value ratio of the loans.

(4) Gross
 Amount Outstanding credit balances are due to deposits on account.

(5) 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, 2024:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **States** | Number<br> of Borrowers | Number<br> of<br> Loans | **Value of Collateral(1)** | **Commitment Amount** | Gross <br> Amount<br> Outstanding(4) | Loan<br> to<br> Value Ratio(2) | Interest<br> Spread(5) |
| Florida | &nbsp;&nbsp;&nbsp;&nbsp; 2 | 2 | 2469 | 1500 | 268 | 11% | 7% |
| Georgia | 1 | 1 | 346 | 275 | 159 | 46% | 7% |
| New York | 1 | 1 | 300 | 300 | 300 | 100% | 7% |
| Pennsylvania | 1 | 1 | 2484 | 3700 | 1919 | 77% | varies |
| South Carolina | 1 | 1 | 1860 | 487 | 488 | 26% | 7% |
| **Total** | 6 | 6 | $7459 | $6262 | $3134 | 42%(3) | 7% |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) 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.

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

(3) Represents
 the weighted average loan to value ratio of the loans.

(4) Gross
 Amount Outstanding credit balances are due to deposits on account.

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

The following is a roll forward of our loans receivable, net:

---

| | | | |
|:---|:---|:---|:---|
|  | September 30,<br> 2025 | December 31,<br> 2024 | September 30,<br> 2024 |
| Beginning balance | $49254 | $59186 | $59186 |
| &nbsp;&nbsp;&nbsp;Originations and modifications | 51325 | 40729 | 37089 |
| &nbsp;&nbsp;&nbsp;Principal collections | (40424) | (48578) | (37659) |
| &nbsp;&nbsp;&nbsp;Transferred from loans receivables, net | (909) | (2306) | (8428) |
| &nbsp;&nbsp;&nbsp;Change in allowance for credit losses | 527 | (173) | 115 |
| &nbsp;&nbsp;&nbsp;Change in loan fees, net | (484) | 396 | (184) |
| Ending balance | $59289 | $49254 | $50119 |

---

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 September 30, 2025:

---

| | | | |
|:---|:---|:---|:---|
|  | Loans<br> Receivable Gross | Commitment<br> Value | **ACL** |
| **Construction Loans:** |  |  |  |
| A Credit Risk | $28356 | $40116 | $103 |
| B Credit Risk | 12201 | 16336 | 139 |
| C Credit Risk | 644 | 1099 | 9 |
| Nonaccrual Loans Individually Evaluated | 1926 | 3630 | 3 |
| **Development Loans:** |  |  |  |
| A Credit Risk | $3607 | $4547 | $2 |
| B Credit Risk | 13806 | 14066 | 83 |
| C Credit Risk | 99 | 100 | 2 |
| Nonaccrual Loans Individually Evaluated | 491 | 487 | - |
| Total | $61130 | $80381 | $341 |

---

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, 2024.

---

| | | | |
|:---|:---|:---|:---|
|  | Loans<br> Receivable Gross | Commitment<br> Value | **ACL** |
| **Construction Loans:** |  |  |  |
| A Credit Risk | $39277 | $55872 | $140 |
| B Credit Risk | 2817 | 3883 | 40 |
| C Credit Risk | 939 | 1851 | 10 |
| Nonaccrual Loans Individually Evaluated | 4971 | 5785 | 658 |
| **Development Loans:** |  |  |  |
| A Credit Risk | $2485 | $5500 | $2 |
| B Credit Risk | 160 | 275 |  |
| C Credit Risk | 489 | 487 | 18 |
| Nonaccrual Loans Individually Evaluated | - | - | - |
| Total | $51138 | $73653 | $868 |

---

The following table presents the amortized cost basis of loans on nonaccrual status and loans past due over 89 days still accruing as of September 30, 2025:

---

| | | | |
|:---|:---|:---|:---|
|  | Nonaccrual<br> without ACL | Nonaccrual<br> with ACL | Accrual<br> Loans Past<br> Due Over<br> 90 Days |
| **Construction Loans:** |  |  |  |
| Nonaccrual Loans Individually Evaluated | $1735 | $191 | $&nbsp;&nbsp;&nbsp;&nbsp;– |
| **Development Loans:** |  |  |  |
| Nonaccrual Loans Individually Evaluated | $491 | $- | $- |

---

The following table presents the amortized cost basis of loans on nonaccrual status and loans past due over 89 days still accruing as of December 31, 2024:

---

| | | | |
|:---|:---|:---|:---|
|  | Nonaccrual<br> without ACL | Nonaccrual<br> with ACL | Accrual<br> Loans Past<br> Due Over<br> 90 Days |
| **Construction Loans:** |  |  |  |
| Nonaccrual Loans Individually Evaluated | $1427 | $3544 | $&nbsp;&nbsp;&nbsp;&nbsp; – |
| **Development Loans:** |  |  |  |
| Nonaccrual Loans Individually Evaluated | $- | $- | $- |

---

For loans greater than 12 months in age that are individually evaluated, appraisals are ordered and prepared if the current appraisal is greater than 13 months old and construction is greater than 90% complete. If construction is less than 90% complete the Company uses the latest appraisal on file. At certain times the Company may choose to use a broker's opinions of value ("BOV") as a replacement for an appraisal if deemed more efficient by management. Appraised values are adjusted down for estimated costs associated with asset disposal. Broker's opinion of selling price, use currently valid sales contracts on the subject property, or representative recent actual closings by the builder on similar properties may be used in place of a broker's opinion of value.

In addition, our loan portfolio includes performing, forbearance and nonaccrual loans. The Company's policies with respect to placing loans on nonaccrual and individually evaluated if they are past due greater than 90 days unless management deems the loan an exception. A fair market value analysis is performed and an allowance for credit loss is established based on the results of the analysis.

The following is an aging of our gross loan portfolio as of September 30, 2025:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Gross Loan**<br>**Value** | **Current**<br>**0 - 59** | Past<br> Due<br>**60 - 89** | **Past Due**<br>**90 - 179** | **Past Due**<br>**180 - 269** | **Past Due**<br>**>270** |
| **Construction Loans:** |  |  |  |  |  |  |
| A Credit Risk | $28356 | $28356 | $– | $– | $– | $– |
| B Credit Risk | 12201 | 11943 |  | 258 |  |  |
| C Credit Risk | 644 | 644 |  |  |  |  |
| Nonaccrual Loans Individually Evaluated | 1926 | 326 |  | 962 |  | 638 |
| **Development Loans:** |  |  |  |  |  |  |
| A Credit Risk | 3607 | 3607 |  |  |  |  |
| B Credit Risk | 13806 | 13806 |  |  |  |  |
| C Credit Risk | 99 | 99 |  |  |  |  |
| Nonaccrual Loans Individually Evaluated | 491 | 491 | – | – | – | – |
| Total | $61130 | $59272 | $– | $1220 | $– | $638 |

---

The following is an aging of our gross loan portfolio as of December 31, 2024:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Gross Loan**<br>**Value** | **Current**<br>**0 - 59** | Past<br> Due<br>**60 - 89** | **Past Due**<br>**90 - 179** | **Past Due**<br>**180 - 269** | **Past Due**<br>**>270** |
| **Construction Loans:** |  |  |  |  |  |  |
| A Credit Risk | $39277 | $39277 | $– | $– | $– | $– |
| B Credit Risk | 2817 | 2817 |  |  |  |  |
| C Credit Risk | 939 | 939 |  |  |  |  |
| Nonaccrual Loans Individually Evaluated | 4971 |  |  | 1057 |  | 3914 |
| **Development Loans:** |  |  |  |  |  |  |
| A Credit Risk | 2485 | 2485– |  |  |  |  |
| B Credit Risk | 160 | 160 |  |  |  |  |
| C Credit Risk | 489 | 489 |  |  |  |  |
| Nonaccrual Loans Individually Evaluated | – | – | – | – | – | – |
| Total | $51138 | $46167 | $– | $1057 | $– | $3914 |

---

Below is an aging schedule of loans receivable as of September 30, 2025, 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) | 146 | $59272 | 97.0% |
| 60-89 days |  |  | –% |
| 90-179 days | 5 | 1220 | 2.0% |
| 180-269 days |  | –% |  |
| >270 days | 13 | 638 | 1.0% |
| Subtotal | 164 | $61130 | 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 | $61130 | 100.0% |

---

Below is an aging schedule of loans receivable as of December 31, 2024, 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.) | 162 | $46168 | 90.2% |
| 60-89 days |  |  | –% |
| 90-179 days | 5 | 1057 | 2.1% |
| 180-269 days |  |  | –% |
| >270 days | 16 | 3913 | 7.7% |
| Subtotal | 183 | $51138 | 100.00% |
| 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 | 183 | $51138 | 100.00% |

---

Below is an aging schedule of loans receivable as of September 30, 2025, 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.) | 146 | $59272 | 97.0% |
| 60-89 days |  |  | –% |
| 90-179 days | 5 | 1220 | 2.0% |
| 180-269 days |  |  | –% |
| >270 days | 13 | 638 | 1.0% |
| Subtotal | 164 | $61130 | 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 | $61130 | 100.0% |

---

Below is an aging schedule of loans receivable as of December 31, 2024, 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.) | 162 | $46168 | 90.2% |
| 60-89 days |  |  | –% |
| 90-179 days | 5 | 1057 | 2.1% |
| 180-269 days |  |  | –% |
| >270 days | 16 | 3913 | 7.7% |
| Subtotal | 183 | $51138 | 100.00% |
| 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 | 183 | $51138 | 100.00% |

---

Allowance for Credit Losses on Loans

The following table provides a roll forward of the allowance for credit losses and unfunded commitments for the three months ended September 30, 2025:

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Construction** | **Construction** | **Construction** | **Construction** | **Development** | **Development** | **Development** | **Development** | |
|  | **A<br> Credit Risk** | **B<br> Credit Risk** | **C<br> Credit Risk** | **Nonaccrual Loans** | **A<br> Credit Risk** | **B<br> Credit Risk** | **C<br> Credit Risk** | **Nonaccrual Loans** |<br>**Total** |
| Allowance for credit losses as of June 30, 2025 | $(145) | $(27) | $(10) | $– | $(1) | $– | $– | $– | $(183) |
| Charge-offs |  |  |  |  |  |  |  |  |  |
| Recoveries |  |  |  | (4) |  |  |  |  | (4) |
| Provision for credit losses on funded balances | 42 | (112) | 1 | 1 | (1) | (83) | (2) | – | (154) |
| Allowance for credit losses as of September 30, 2025 | $(103) | $(139) | $(9) | $(3) | $(2) | $(83) | $(2) | $– | $(341) |
| Reserve for unfunded commitments as of June 30, 2025 | $(52) | $(14) | $(7) | $– | $(1) | $– | $– | $– | $(74) |
| Provision for credit losses on unfunded commitments | 9 | (33) | – | – | 1 | – | (2) | – | (25) |
| Reserve for unfunded commitments as of September 30, 2025 | $(43) | $(47) | $(7) | $– | $– | $– | $(2) | $– | $(99) |

---

The following table provides a roll forward of the allowance for credit losses and unfunded commitments for the nine months ended September 30, 2025:

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Construction** | **Construction** | **Construction** | **Construction** | **Development** | **Development** | **Development** | **Development** | |
|  | **A<br> Credit Risk** | **B<br> Credit Risk** | **C<br> Credit Risk** | **Nonaccrual Loans** | **A<br> Credit Risk** | **B<br> Credit Risk** | **C<br> Credit Risk** | **Nonaccrual Loans** |<br>**Total** |
| Allowance for credit losses as of December 31, 2024 | $(150) | $(28) | $(13) | $(658) | $(1) | $– | $(18) | $– | $(868) |
| Charge-offs |  |  |  | 822 |  |  |  | &nbsp;&nbsp;&nbsp;&nbsp; – | 822 |
| Recoveries |  |  |  | (7) |  |  |  |  | (7) |
| Provision for credit losses on funded balances | 47 | (111) | 4 | (160) | (1) | (83) | 16 | – | (288) |
| Allowance for credit losses as of September 30, 2025 | $(103) | $(139) | $(9) | $(3) | $(2) | $(83) | $(2) | $– | $(341) |
| Reserve for unfunded commitments as of December 31, 2024 | $(65) | $(10) | $(12) | $– | $(1) | $– | $– | $– | $(88) |
| Provision for credit losses on unfunded commitments | 22 | (37) | 5 | – | 1 | – | (2) | – | (11) |
| Reserve for unfunded commitments as of September 30, 2025 | $(43) | $(47) | $(7) | $– | $– | $– | $(2) | $– | $(99) |

---

The following table provides a roll forward of the allowance for credit losses and unfunded commitments as of December 31, 2024:

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Construction** | **Construction** | **Construction** | **Construction** | **Development** | **Development** | **Development** | **Development** | |
|  | **A<br> Credit Risk** | **B<br> Credit Risk** | **C<br> Credit Risk** | **Nonaccrual Loans** | **A<br> Credit Risk** | **B<br> Credit Risk** | **C<br> Credit Risk** | **Nonaccrual Loans** |<br>**Total** |
| Allowance for credit losses as of December 31, 2023 | $(211) | $(32) | $– | $(437) | $(5) | $– | $(10) | $– | $(695) |
| Reclassification of ACL on unfunded commitments | 59 | 19 |  |  |  |  |  |  | 78 |
| Charge-offs |  |  |  | 506 |  |  |  |  | 506 |
| Recoveries |  |  |  | (6) |  |  |  |  | (6) |
| Provision for credit losses on funded balances | 2 | (15) | (13) | (721) | 4 | – | (8) | – | (751) |
| Allowance for credit losses as of December 31, 2024 | $(150) | $(28) | $(13) | $(658) | $(1) | $– | $(18) | $– | $(868) |
| Reserve for unfunded commitments as of December 31, 2023 | $– | $– | $– | $– | $– | $– | $– | $– | $– |
| Reclassification of ACL on unfunded commitmentss | (59) | (19) |  |  |  |  |  |  | (78) |
| Provision for credit losses on unfunded commitments | (6) | 9 | (12) | – | (1) | – | – | – | (10) |
| Reserve for unfunded commitments as of December 31, 2024 | $(65) | $(10) | $(12) | $– | $(1) | $– | $– | $– | $(88) |

---

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 $19,250 and $22,515 as of September 30, 2025 and December 31, 2024, 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 September 30, 2025, and December 31, 2024, the ACL for unfunded commitments was $99 and $88, respectively, and we had no additional off-balance sheet transactions, nor do we currently have any such arrangements or obligations.

Concentration of Credit Risk

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:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | September 30, 2025 | September 30, 2025 | December 31, 2024 | December 31, 2024 |
|  | Borrower <br> City | Percent of <br> Loan <br> Commitments | Borrower <br> City | Percent of <br> Loan <br> Commitments |
| Highest concentration risk | Pittsburgh, PA | 34.5% | Pittsburgh, PA | 28.9% |
| Second highest concentration risk | Central and Southwest FL | 7.8% | Central and Southwest FL | 5.7% |
| Third highest concentration risk | Greenville, SC | 5.0% | Greenville, SC | 4.9% |

---

Foreclosed Assets

Below is a roll forward of foreclosed assets:

---

| | | | |
|:---|:---|:---|:---|
|  | Nine Months <br> Ended <br> September 30, 2025 | Year Ended <br> December 31, 2024 | Nine Months <br> Ended <br> September 30, 2024 |
| Beginning balance | $1356 | $130 | $130 |
| &nbsp;&nbsp;&nbsp;Transferred from loans receivables, net | 909 | 2306 | 2306 |
| &nbsp;&nbsp;&nbsp;Additions for construction in foreclosed assets | 83 | 507 | 541 |
| &nbsp;&nbsp;&nbsp;Sale proceeds | (921) | (992) | (659) |
| &nbsp;&nbsp;&nbsp;Loss on foreclosed assets | (104) | (595) | (477) |
| Ending balance | $1323 | $1356 | $1841 |

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Segment Reporting

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

Reconciliation of Consolidated Statements of Operations:

Shepherd's Finance, LLC

Interim Consolidated Statements of Operations

For the Nine Months Ended September 30, 2025

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| | | | |
|:---|:---|:---|:---|
| (in thousands of dollars) | 339 Justabout<br> Land Company, LLC | Shepherd's<br> Finance, LLC | Total |
| Net Interest and Fee Income |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest and fee income on loans | $– | $7879 | $7.879 |
| &nbsp;&nbsp;&nbsp;Interest expense: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest related to secure borrowings |  | 1060 | 1060 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest related to unsecured borrowings | – | 2678 | 2678 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense |  | 3738 | 3738 |
| &nbsp;&nbsp;&nbsp;Net interest and fee income |  | 4141 | 4141 |
| &nbsp;&nbsp;&nbsp;Less: Provision for credit losses | – | 299 | 299 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net interest and fee income after provision for credit losses |  | 3842 | 3842 |
| Non-Interest Income |  |  |  |
| &nbsp;&nbsp;&nbsp;Revenue from the sale of land parcels | 2805 |  | 2805 |
| &nbsp;&nbsp;&nbsp;Option fee income | 314 |  | 314 |
| &nbsp;&nbsp;&nbsp;Gain on sale of 339 Justabout Land Company | 193 |  | 193 |
| &nbsp;&nbsp;&nbsp;Other income | – | 153 | 153 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total non-interest income | 3312 | 153 | 3465 |
| &nbsp;&nbsp;&nbsp;Income before non-interest expense | 3312 | 3995 | 7307 |
| Non-Interest Expense |  |  |  |
| &nbsp;&nbsp;&nbsp;Cost on the sale of land parcels | 2805 |  | 2805 |
| &nbsp;&nbsp;&nbsp;Selling, general and administrative |  | 2957 | 2957 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization |  | 56 | 56 |
| &nbsp;&nbsp;&nbsp;Loss on foreclosed assets | – | 104 | 104 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total non-interest expense | 2805 | 3117 | 5922 |
| Net income | $507 | $878 | $1385 |
| Net income attributable to preferred equity holders | – | – | 720 |
| Net income attributable to common equity holders | $– | $– | $665 |

---

Shepherd's Finance, LLC

Interim Consolidated Statements of Operations

For the Nine Months Ended September 30, 2024

---

| | | | |
|:---|:---|:---|:---|
| (in thousands of dollars) | 339 Justabout<br> Land Company, LLC | Shepherd's<br> Finance, LLC | Total |
| Net Interest and Fee Income |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest and fee income on loans | $– | $7665 | $7665 |
| &nbsp;&nbsp;&nbsp;Interest expense: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest related to secure borrowings |  | 1066 | 1066 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest related to unsecured borrowings | – | 2676 | 2676 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense |  | 3742 | 3742 |
| &nbsp;&nbsp;&nbsp;Net interest and fee income |  | 3923 | 3923 |
| &nbsp;&nbsp;&nbsp;Less: Provision for credit losses | – | 719 | 719 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net interest and fee income after provision for credit losses |  | 3204 | 3204 |
| Non-Interest Income |  |  |  |
| &nbsp;&nbsp;&nbsp;Revenue from the sale of land parcels | 1601 |  | 1601 |
| &nbsp;&nbsp;&nbsp;Option fee income | 594 |  | 594 |
| &nbsp;&nbsp;&nbsp;Other income | – | 40 | 40 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total non-interest income | 2195 | 40 | 2235 |
| &nbsp;&nbsp;&nbsp;Income before non-interest expense | 2195 | 3244 | 5439 |
| Non-Interest Expense |  |  |  |
| &nbsp;&nbsp;&nbsp;Cost on the sale of land parcels | 1601 |  | 1601 |
| &nbsp;&nbsp;&nbsp;Selling, general and administrative |  | 2129 | 2129 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization |  | 61 | 61 |
| &nbsp;&nbsp;&nbsp;Loss on foreclosed assets | – | 477 | 477 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total non-interest expense | 1601 | 2667 | $4268 |
| Net income | $594 | $577 | $1171 |
| Net income attributable to preferred equity holders | – | – | 513 |
| Net income attributable to common equity holders | $– | $– | $658 |

---

Reconciliation of total assets:

---

| | | | |
|:---|:---|:---|:---|
| *(in thousands of dollars)* | 339 Justabout<br> Land Company, LLC | **Shepherd's Finance, LLC** | **Total** |
| Total assets as of September 30, 2025 | $– | $69191 | $69191 |
| Total assets as of December 31, 2024 | $11977 | $57386 | $69363 |

---

Real Estate Investment Assets

During February 2025, the Company charged an option fee to Benjamin Marcus Homes ("BMH") for the right to buy the additional lots owned by 339 during February 2025 of $479. There was no deferred revenue real estate investment related to 339 as of September 30, 2025.

During the nine months ended September 30, 2025, the Company sold eight lots for both revenue and cost of land parcels sold of $2,805, which is included within non-interest income and non-interest expense, respectively, on the interim consolidated statements of operations. No gains or losses were recognized in these sales. There were no lot sales during the most recent quarter through the date of the sale of 339.

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

---

| | | | |
|:---|:---|:---|:---|
|  | Nine Months<br> Ended<br> September 30, 2025 | Year Ended<br> December 31, 2024 | Nine Months<br> Ended<br> September 30, 2024 |
| Beginning balance | $13529 | $435 | $435 |
| &nbsp;&nbsp;&nbsp;Additions from 339 acquisition |  | 11330 | 11330 |
| &nbsp;&nbsp;&nbsp;Investments in real estate assets |  | 330 | 330 |
| &nbsp;&nbsp;&nbsp;Proceeds from the sale of real estate investments | (2805) | (2998) | (1601) |
| &nbsp;&nbsp;&nbsp;Additions for construction/development | 940 | 4432 | 3544 |
| &nbsp;&nbsp;&nbsp;Disposal of 339 | (9683) | – | – |
| Ending balance | $1981 | $13529 | $14038 |

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Capitalized Interest Activity

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

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| | | |
|:---|:---|:---|
|  | September 30,<br> 2025 | September 30,<br> 2024 |
| Capitalized interest | $489 | $799 |
| Cost of funds | 9.35% | 10.18% |

---

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:

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| | | | |
|:---|:---|:---|:---|
|  | Nine Months<br> Ended<br> September 30, 2025 | Year Ended<br> December 31, 2024 | Nine Months<br> Ended<br> September 30, 2024 |
| Beginning balance | $353 | $292 | $292 |
| &nbsp;&nbsp;&nbsp;Additions from Pennsylvania loans | 1060 | 907 | 668 |
| &nbsp;&nbsp;&nbsp;Additions from other loans | 1066 | 701 | 604 |
| &nbsp;&nbsp;&nbsp;Interest, fees, principal or repaid to borrower | (1120) | (1547) | (1133) |
| Ending balance | $1359 | $353 | $431 |

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Related Party Borrowings

As of September 30, 2025, the Company had $1,228 and $250 available to borrow against the line of credit from Daniel M. Wallach (our Chief Executive Officer and Chairman of the Board of Managers) and his wife, and the line of credit from the 2007 Daniel M. Wallach Legacy Trust, respectively.

During the nine months ended September 30, 2025, the Company paid off their $700 subordinated promissory note with Sheldon Investment, LLC, which is related to Gregory Sheldon who is a member of our Board of Managers.

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 "2024 Financial Statements") included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024. These borrowings are included in notes payable secured and unsecured, net of deferred financing costs on the interim consolidated balance sheet.

Secured Borrowings

As of September 30, 2025 and December 31, 2024, the Company had $22 and $743 borrowed against its lines of credit from affiliates, respectively, which have a total limit of $1,500 and $2,500 as of September 30, 2025 and December 31, 2024, respectively. During the three months ended September 30, 2025, the Company paid $400 towards the balance of a line of credit with Daniel M. Wallach (our Chief Executive Officer and Chairman of the Board of Managers).

None of our lines of credit have given us notice of nonrenewal as of September 30, 2025. The lines will continue to automatically renew unless notice of nonrenewal is given by a lender.

Loan with Hanna Holdings, Inc.

During the nine months ended September 30, 2025, the Company paid off the loan with Hanna Holdings Inc. through the sale of 339 land parcels. As of December 31, 2024, the secured note payable to Hanna Holdings, Inc. was $350.

United Lines of Credit

On January 10, 2025, the Company entered into a revolving line of credit with United Bank for $2,275, maturing January 10, 2027. The interest rate on this line of credit is 5.5%. As of September 30, 2025, the amount due on the revolving line of credit was $1,303. The line is collateralized by an investment of $2,275 in the certificate of deposit line on the consolidated balance sheets.

On January 2, 2025, the Company entered into a revolving line of credit with United Bank for $725 with an expiration date of January 2, 2040. The interest rate on this line of credit is 7.5%. As of September 30, 2025, there was no amount outstanding on this revolving line of credit. The Company's office in Jacksonville, FL, is collateral for this line of credit.

Secured Deferred Financing Costs

The Company had secured deferred financing costs of $13 as of September 30, 2025. There were no deferred financing costs related to secured borrowings as of December 31, 2024.

Borrowings secured by loan assets are summarized below:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | **December 31, 2024** | **December 31, 2024** |
|  | **Book Value of Loans which Served as Collateral** | **Due from Shepherd's Finance to Loan Purchaser or Lender** | **Book Value of Loans which Served as Collateral** | **Due from Shepherd's Finance to Loan Purchaser or Lender** |
| Loan Purchaser |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Builder Finance | $2387 | $1792 | $7485 | $4418 |
| &nbsp;&nbsp;&nbsp;S.K. Funding | 16683 | 6500 | 8229 | 6500 |
| Lender |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Shuman | 380 | 125 | 236 | 125 |
| &nbsp;&nbsp;&nbsp;Jeff Eppinger | 5788 | 1500 | 4028 | 1500 |
| &nbsp;&nbsp;&nbsp;R. Scott Summers | 2740 | 903 | 1361 | 903 |
| &nbsp;&nbsp;&nbsp;John C. Solomon | 1008 | 563 | 649 | 563 |
| &nbsp;&nbsp;&nbsp;Judith Swanson | 12076 | 6090 | 10626 | 6000 |
| Total | $41062 | $17473 | $32614 | $20009 |

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Unsecured Borrowings

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

The effective interest rate on borrowings through our Notes Program as of September 30, 2025 and December 31, 2024 was 9.59% and 10.08%, respectively.

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

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

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| | | | |
|:---|:---|:---|:---|
|  | Nine Months<br> Ended<br> September 30, 2025 | Year Ended<br> December 31, 2024 | Nine Months<br> Ended<br> September 30, 2024 |
| Gross Notes outstanding, beginning of period | $19968 | $20854 | $20854 |
| Notes issued | 6300 | 5257 | 2511 |
| Note repayments / redemptions | (4386) | (6143) | (4163) |
| Gross Notes outstanding, end of period | $21882 | $19968 | $19202 |
| &nbsp;&nbsp;&nbsp;Less deferred financing costs, net | (185) | (150) | (167) |
| Notes outstanding, net | $21697 | $19818 | $19035 |

---

The following is a roll forward of deferred financing costs related to unsecured borrowings:

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| | | | |
|:---|:---|:---|:---|
|  | Nine Months<br> Ended<br> September 30, 2025 | Year Ended<br> December 31, 2024 | Nine Months<br> Ended<br> September 30, 2024 |
| Deferred financing costs, beginning balance | $1060 | $939 | $939 |
| &nbsp;&nbsp;&nbsp;Additions | 172 | 121 | 90 |
| Deferred financing costs, ending balance | 1232 | 1060 | 1029 |
| &nbsp;&nbsp;&nbsp;Less accumulated amortization | (1047) | (910) | (862) |
| Deferred financing costs, net | $185 | $150 | $167 |

---

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

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| | | | |
|:---|:---|:---|:---|
|  | Nine Months<br> Ended<br> September 30, 2025 | Year Ended<br> December 31, 2024 | Nine Months<br> Ended<br> September 30, 2024 |
| Accumulated amortization, beginning balance | $910 | $703 | $703 |
| &nbsp;&nbsp;&nbsp;Additions | 137 | 207 | 159 |
| Accumulated amortization, ending balance | $1047 | $910 | $862 |

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Other Unsecured Debts

Our other unsecured debts are detailed below:

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| | | | | |
|:---|:---|:---|:---|:---|
| **Loan** | Maturity<br> Date | Interest<br> Rate(1) | September 30,<br> 2025 | December 31,<br> 2024 |
| Unsecured Line of Credit | March 2026 | 10.0% | $910 | $1000 |
| Unsecured Line of Credit | April 2026 | 10.0% | 500 | 500 |
| Unsecured Line of Credit - Senior Subordinated | January 2026 | 10.0% | 750 | 750 |
| Subordinated Promissory Note | February 2027 | 9.0% | 600 | 600 |
| Subordinated Promissory Note | March 2026 | 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 |  |
| Subordinated Promissory Note | April 2025 | 10.0% |  | 202 |
| Subordinated Promissory Note | July 2025 | 8.0% | 100 | 100 |
| Subordinated Promissory Note | September 2027 | 10% | 108 | 108 |
| Subordinated Promissory Note | October 2025 | 8.0% |  | 100 |
| Subordinated Promissory Note | July, 2028 | 8.5% | 100 |  |
| Subordinated Promissory Note | December 2025 | 8.0% | 180 | 180 |
| Subordinated Promissory Note | August 2026 | 8.0% | 291 | 291 |
| Senior Subordinated Promissory Note | July 2026(2) | 1.0% | 740 | 740 |
| Junior Subordinated Promissory Note | July 2026(2) | 20.0% | 460 | 460 |
| Senior Subordinated Promissory Note | October 2028(2) | 1.0% | 1072 | 1072 |
| Junior Subordinated Promissory Note | October 2028(2) | 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 | June 2025 | 10.0% |  | 1000 |
| Subordinated Promissory Note | April 2028 | 10.0% | 149 | 149 |
| Subordinated Promissory Note | April 2029 | 11.0% | 2000 | 2000 |
| Subordinated Promissory Note | January 2025 | 11.0% |  | 1007 |
| Subordinated Promissory Note | October 2027 | 8.50% | 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 |  |
| Subordinated Promissory Note | April 2029 | 9.0% | 301 |  |
| Unsecured Note - Senior Subordinated | Demand(4) | 9.5% | 12 |  |
| Subordinated Promissory Note | Varies (3) | 10.0% | - | 700 |
|  |  |  | $14851 | $15395 |

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(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.

(3) Lender
 may elect to terminate, effective semi-annually as of August 16 and/or February 16 of any given year. As of December 31, 2024 the
 rate was Prime + 1.5%.

(4) Due
 six months after lender gives notice.

Preferred Equity and Members' Capital

The Series C Preferred Units have a fixed value of $1 per unit in addition to preferred liquidation and distribution rights. Yearly distributions are payable at a fixed rate, currently of 12% of the Series C Preferred Units' undiscounted value, and are made on a quarterly basis.

Roll forward of Series C Preferred Equity:

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| | | | |
|:---|:---|:---|:---|
|  | Nine Months<br> Ended<br> September 30, 2025 | Year Ended<br> December 31, 2024 | Nine Months<br> Ended<br> September 30, 2024 |
| Beginning balance | $6430 | $4773 | $4773 |
| &nbsp;&nbsp;&nbsp;Additions from new investment |  | 1200 | 1200 |
| &nbsp;&nbsp;&nbsp;Additions from exchange of Class A common equity | 2330 |  |  |
| &nbsp;&nbsp;&nbsp;Discount on exchange of Class A common equity | (2043) |  |  |
| &nbsp;&nbsp;&nbsp;Distributions | (529) | (245) | (178) |
| &nbsp;&nbsp;&nbsp;Additions from net income and reinvestments | 720 | 702 | 513 |
| Ending balance | $6908 | $6430 | $6308 |

---

All distributions, liquidation rights and conversion features are determined based on the undiscounted value of the Series C preferred equity units, which was $8,951 and $6,430 as of September 30, 2025 and December 31, 2024, respectively.

On March 31, 2025, the Company terminated its relationship with a member who owned 2,969 units of Class A common equity. Effective April 1, 2025, the Company executed a unit exchange agreement with the respective member where all 2,969 units of common equity with a carrying value of $287 were exchanged for 2,329.533 units of Series C preferred equity with a fixed value of $2,330. The difference between the carrying value of the Class A common units and the fixed value of the Series C preferred units of $2,043 is reflected as a discount on preferred equity.

On May 30, 2025, the Company redeemed 251.10821 of the Series C preferred equity beneficially owned by the Company's CEO and his wife, at a redemption price of $251.

On April 19, 2024, the Company entered into Amendment No. 4 to the Second Amended and Restated Limited Liability Company Agreement ("Fourth Amendment") with an effective date of March 31, 2024. Pursuant to the Fourth Amendment, after six years from the date of investment, instead of being entitled to the right of redemption, the holders of Series C Preferred Units will be entitled to convert all or a portion of the Series C Preferred Units to the common units of the Registrant, on a 1 for 1 basis, after a 12-month waiting period after the notice of conversion is given.

In addition, the Fourth Amendment restricted the right to require the Company to redeem the Series C Preferred Units for cash; therefore, the units were reclassified from mezzanine equity to Members' Capital.

The following table shows the earliest conversion options for investors in Series C Preferred Equity as of September 30, 2025:

---

| | |
|:---|:---|
| **Year Convertible** | Total Amount<br> Convertible |
| Currently eligible to request conversion | $3056 |
| 2025 | 203 |
| 2026 | 309 |
| 2027 | 1342 |
| 2028 | 206 |
| 2029 and thereafter | 3835 |
| Total | $8951 |

---

We strive to maintain a reasonable (about 15%) balance between (1) members' capital and (2) total assets. Using undiscounted Series C value, the ratio of preferred equity plus members' capital to total assets was 15.3% and 12.4% as of September 30, 2025 and December 31, 2024, respectively. Using the discounted Series C equity value, the ratio of preferred equity plus members' capital to total assets is 12.4% as of September 30, 2025. We anticipate members' capital to increase as more earnings are retained in 2026 and additional preferred equity may be added.

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** | **September 30, 2025** | **December 31, 2024** |
| Borrowing Source |  |  |  |
| &nbsp;&nbsp;&nbsp;Purchase and sale agreements and other secured borrowings | 1 | $18775 | $20359 |
| &nbsp;&nbsp;&nbsp;Secured line of credit from affiliates | 2 | 22 | 743 |
| &nbsp;&nbsp;&nbsp;Less: deferred financing fees |  | (13) | - |
| Notes payable secured, net |  | 18784 | 21102 |
| &nbsp;&nbsp;&nbsp;Unsecured line of credit (senior) | 3 | 750 | 750 |
| &nbsp;&nbsp;&nbsp;Other unsecured debt (senior subordinated) | 4 | 1824 | 1812 |
| &nbsp;&nbsp;&nbsp;Unsecured Notes through our public offering, gross | 5 | 21882 | 19968 |
| &nbsp;&nbsp;&nbsp;Other unsecured debt (subordinated) | 5 | 11152 | 11707 |
| &nbsp;&nbsp;&nbsp;Other unsecured debt (junior subordinated) | 6 | 1126 | 1126 |
| &nbsp;&nbsp;&nbsp;Less: deferred financing fees |  | (185) | (150) |
| Notes payable unsecured, net |  | 36549 | 35213 |
| Total |  | $55333 | $56315 |

---

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 September 30, 2025 and December 31, 2024, we had combined loans outstanding of 164 and 183, respectively. In addition, loans receivables were $61,130 and $51,138 as of September 30, 2025 and December 31, 2024, respectively.

Unfunded commitments to extend credit, which have similar collateral, credit and market risk to our outstanding loans, were $19,250 and $22,515 as of September 30, 2025, and December 31, 2024, 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 September 30, 2025. Other than unfunded commitments, we had no off-balance sheet transactions, nor do we currently have any such arrangements or obligations.

Originations and modifications for the nine months ended September 30, 2025 and 2024, were $40,911 and $37,089, respectively. We expect to continue to have stronger originations through the remainder of 2025.

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> September 30, 2025 | As of<br> December 31, 2024 |
| Secured debt, net of deferred financing costs | $18784 | $21102 |
| Unsecured debt, net of deferred financing costs | $36549 | $35213 |
| Cash and cash equivalents | $1575 | $3347 |

---

As of September 30, 2025 and December 31, 2024, cash and cash equivalents was $1,575 and $3,347, respectively.

Secured debt, net of deferred financing costs decreased $2,318 to 18,784 as of September 30, 2025, compared to $21,102 for the year ended December 31, 2024. The decrease in secured debt was due primarily to repayments to our loan purchase and sale agreements lenders in addition to repayments on promissory notes and lines of credit with affiliates.

Unsecured debt, net of deferred financing costs increased $1,336 to $36,549 as of September 30, 2025, compared to $35,213 as of December 31, 2024.

We anticipate equity to remain approximately the same and not change during the three months subsequent to September 30, 2025. 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 through the year ending December 31, 2025, is $18,762, which consists of secured borrowings of $17,495 and unsecured borrowings of $1,267.

Secured borrowings maturing through the year ending December 31, 2025, significantly consists of loan purchase and sale agreements with two loan purchasers (Builder Finance and S. K. Funding) and 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 with current maturity dates and renewal dates:

● Swanson – $6,090 with various due dates and automatically renews unless notice given;

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

● Solomon – $563 due upon 30 days notice; automatically renews every 30 days

● Eppinger – $1,500 due upon one month notice; automatically renews monthly

● 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 2026;

● Builder Finance, Inc – $1,792 with an expiration date of January 2026;

● Summers - $903 due January 2027 and automatically renews unless notice is given;

● United Bank - $1,303 due January 2027;

● Line of credits with affiliates - $22 and due upon demand

Unsecured borrowings due by December 31, 2025, consist of Notes issued pursuant to the Notes Program and other unsecured debt of $986 and $281, 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 76% of our Note holders reinvested upon maturity. The 36-month Note in our Notes program has a mandatory early redemption option, subject to certain conditions. Our other unsecured debt has historically 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.

Selected Quarterly Consolidated Financial Data

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Quarter 3**<br>**2025** | **Quarter 2**<br>**2025** | **Quarter 1**<br>**2025** | **Quarter 4**<br>**2024** | **Quarter 3**<br>**2024** | **Quarter 2**<br>**2024** | **Quarter 1**<br>**2024** |
| Net interest and fee income | $1575 | $1315 | $1251 | $1414 | $1258 | $1111 | $1553 |
| Provision for (recovery of) credit losses | 179 | (13) | 133 | 43 | 332 | 165 | 222 |
| Net interest income after provision for credit losses | 1396 | 1328 | 1118 | 1371 | 926 | 946 | 1331 |
| Gain on foreclosed assets\* |  | 107 |  |  | 2 |  |  |
| Revenue from the sale of land parcels |  | 968 | 1837 | 1397 | 1601 |  |  |
| Option fee income | 40 | 120 | 154 | 222 | 223 | 223 | 149 |
| Dividend or other income | 52 | 54 | 47 | 42 | 12 | 13 | 15 |
| Cost of land parcels sold |  | 968 | 1837 | 1397 | 1601 |  |  |
| Gain on sale of 339 | 193 |  |  |  |  |  |  |
| SG&A expense | 1061 | 957 | 939 | 932 | 714 | 586 | 829 |
| Depreciation and amortization | 16 | 20 | 20 | 19 | 20 | 20 | 21 |
| Loss on foreclosed assets\* | 85 | 111 | 15 | 118 | – | 278 | 201 |
| Net income | $519 | $521 | $345 | $566 | $429 | $298 | $444 |

---

\* Gains and losses on foreclosed assets are reported net in the Consolidated Statement of Operations.

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 2025 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 most 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. Specifically, we expect prices of mid-range homes are most likely to drop by the largest percentage, as those sales are mostly based on interest rate and price. The low-priced homes are based on rate and price, but also on trends in rent rates, and rent rates continue to rise. The high-end market is currently resilient, which seems to be based more on the economy and stock market. At the Federal Open Market Committee meeting in October, the U.S. Federal Reserve ("Fed") decided to continue allowing the runoff of their home mortgage portion of their balance sheet. This runoff is increasing mortgage rates nationwide. The Fed is using the funds obtained from the runoff to stop the runoff of their treasury security portfolio, which might have the impact of decreasing new mortgage rates (historical data on this situation is limited).

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. While we are currently in a time in which CD rates will be decreasing, and, accordingly, possibly in a time in which our interest rates that we pay new investors will be decreasing, we also note that the prime rate is decreasing, which may put pricing pressure on our lending rates. In addition, despite the Fed's actions on balance sheet adjustments mentioned earlier, interest rates for home buyers (end users) have been decreasing, which should increase demand for mid-market homes, new and used.

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 during the low mortgage rate period around the COVID-19 pandemic, foreclosures may not have as large of an impact.

The Company believes that mortgage rates for home buyers may decline to levels in the mid 5% range over the course of the upcoming 12 months, aiding the homebuilding industry and those financing the builders.

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, which we expect to continue falling throughout the fall of 2025 and into the first half of 2026. We expect this continued decrease in rates to be gradual.

![](chart_01.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):

![](chart_02.jpg)

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of the end of the period covered by this report, management, including our Chief Executive Officer (our principal executive officer) and Chief Financial Officer (our principal financial officer) evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based upon, and as of the date of, the evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of the end of the period covered by this report to ensure that information required to be disclosed in the reports we file and submit under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed, summarized and reported as and when required. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file and submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Internal Control over Financial Reporting

There has been no change in our internal controls over financial reporting during the quarter ended September 30, 2025 that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

Not applicable.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

---

| | |
|:---|:---|
| (a) | Reinvestments in Partial Series C Cumulative Preferred Units |
|  | Investors in the Series C cumulative preferred units ("Series C Preferred Units") may elect to reinvest their distributions in additional Series C Preferred Units (the "Series C Reinvestment Program"). Pursuant to the Series C Reinvestment Program, we issued the following Series C Preferred Units during the three months ended September 30, 2025: |

---

---

| | | |
|:---|:---|:---|
| ***(amounts in this table are not in thousands)*** | | |
| **Owner** |<br>**Units** |<br>**Amount** |
| Daniel M. and Joyce S. Wallach | 35.83155 | $35831.55 |
| Gregory L. Sheldon and Madeline M. Sheldon | 32.03096 | 32030.96 |
| Schultz Family Living Trust | 6.66992 | 6669.92 |
| Fernando Ascencio and Lorraine Carol Ascencio | 12.47948 | 12479.48 |
| Mark and Tris Ann Garboski | 42.18653 | 42186.53 |
| Total | 129.19844 | $129198.44 |

---

---

| | |
|:---|:---|
|  | The proceeds received from the sales of the partial Series C Preferred Units in these transactions were used for the funding of construction loans. The transactions in Series C Preferred Units described above were effected in private transactions exempt from the registration requirements of the Securities Act under Section 4(a)(2) of the Securities Act. The transactions described above did not involve any public offering, were made without general solicitation or advertising, and the buyer represented to us that he/she/it is an "accredited investor" within the meaning of Rule 501 of Regulation D promulgated under the Securities Act, with access to all relevant information necessary to evaluate the investment in the Series C Preferred Units. |
| (b) | We registered up to $70,000 in Fixed Rate Subordinated Notes ("Notes") in our current public offering, which is our fourth public offering of Notes (SEC File No. 333-263759, effective September 16, 2022). As of September 30, 2025, we issued $32,478 in Notes pursuant to our current public offering. As of September 30, 2025, we incurred expenses of $491 in connection with the issuance and distribution of the Notes in our current public offering, which were paid to third parties. These expenses were not for underwriters or discounts, but were for advertising, printing, and professional services. Net offering proceeds as of September 30, 2025 were $31,987 all of which was used to increase loan balances. |
| (c) | None. |

---

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) During
 the quarter ended September 30, 2025, there was no information required to be disclosed in a report on Form 8-K which was not disclosed
 in a report on Form 8-K.

(b) During
 the quarter ended September 30, 2025, there were no material changes to the procedures by which members may recommend nominees to
 our board of managers.

(c) During
 the quarter ended September 30, 2025, no director or officer (as defined in Rule 16a-1(f) under the Exchange Act) of the Company adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1
 trading arrangements (in each case, as defined in Item 408(a) of Regulation S-K).

ITEM 6. EXHIBITS

The exhibits required to be filed with this report are set forth on the Exhibit Index hereto and incorporated by reference herein.

EXHIBIT INDEX

The following exhibits are included in this report on Form 10-Q for the period ended September 30, 2025 (and are numbered in accordance with Item 601 of Regulation S-K).

---

| | |
|:---|:---|
| Exhibit<br> No. | Name of Exhibit |
| 3.1 | [Certificate of Conversion, incorporated by reference to Exhibit 3.1 to the Registrant's Registration Statement on Form S-1, filed on May 11, 2012, Commission File No. 333-181360](https://www.sec.gov/Archives/edgar/data/1544190/000119312512228466/d315903dex31.htm) |
| 3.2 | [Certificate of Formation, incorporated by reference to Exhibit 3.2 to the Registrant's Registration Statement on Form S-1, filed on May 11, 2012, Commission File No. 333-181360](https://www.sec.gov/Archives/edgar/data/1544190/000119312512228466/d315903dex32.htm) |
| 3.3 | [Second Amended and Restated Limited Liability Company Agreement of the Registrant, incorporated by reference to Exhibit 3.1 to the Registrant's Form 8-K, filed on November 13, 2017, Commission File No. 333-203707](https://www.sec.gov/Archives/edgar/data/1544190/000149315217012920/ex3-1.htm) |
| 3.4 | [Amendment No. 1 to Second Amended and Restated Limited Liability Company Agreement of the Registrant, incorporated by reference to Exhibit 3.4 to the Registrant's Quarterly Report on Form 10-Q, filed May 9, 2019, Commission File No. 333-203707](https://www.sec.gov/Archives/edgar/data/1544190/000149315219006650/ex3-4.htm) |
| 3.5 | [Amendment No. 2 to Second Amended and Restated Limited Liability Company Agreement of the Registrant, incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K, filed March 31, 2020, Commission File No. 333-224557](https://www.sec.gov/Archives/edgar/data/1544190/000149315220005511/ex3-1.htm) |
| 3.6 | [Amendment No. 3 to Second Amended and Restated Limited Liability Company Agreement of the Registrant, incorporated by reference to Exhibit 3.6 to the Registrant's Annual Report on Form 10-K, filed March 15, 2024, Commission File No. 333-224557.](https://www.sec.gov/Archives/edgar/data/1544190/000149315224010136/ex3-6.htm) |
| 3.7 | [Amendment No. 4 to the Second Amended and Restated Limited Liability Company Agreement of Shepherd's Finance, LLC , incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K, filed April 22, 2024, Commission File No. 333-224557.](https://www.sec.gov/Archives/edgar/data/1544190/000149315224015576/ex3-1.htm) |
| 4.1 | [Indenture Agreement (including Form of Note) dated September 16, 2022, incorporated by reference to Exhibit 4.1 to the Registrant's Post-Effective Amendment No. 1, filed on September 16, 2022, Commission File No. 333-263759](https://www.sec.gov/Archives/edgar/data/1544190/000149315222026096/ex4-1.htm) |
| 10.1 | [Membership Interest Purchase Agreement, dated August 6, 2025, by and among Shepherd's Finance, LLC, as seller, and Mark L. Hoskins and Barrett Hoskins, as buyers, incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K, filed on August 12, 2025, Commission File No. 333-224557](https://www.sec.gov/Archives/edgar/data/1544190/000164117225023247/ex10-1.htm) |
| 10.2 | [Third Amendment to Amended, Restated, and Consolidated Credit Agreement, dated August 6, 2025, by and among Benjamin Marcus Homes. L.L.C., Investor's Mark Acquisitions, LLC and 339 Justabout Land Co., LLC, as borrowers, and Shepherd's Finance, LLC, as lender, incorporated by reference to Exhibit 10.2 to the Registrant's Current Report on Form 8-K, filed on August 12, 2025, Commission File No. 333-224557](https://www.sec.gov/Archives/edgar/data/1544190/000164117225023247/ex10-2.htm) |
| 31.1\* | [Certification of Principal Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ex31-1.htm) |
| 31.2\* | [Certification of Principal Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ex31-2.htm) |

| 101.INS\* | Inline XBRL Instance Document |
| 101.SCH\* | Inline XBRL Schema Document |
| 101.CAL\* | Inline XBRL Calculation Linkbase Document |
| 101.DEF\* | Inline XBRL Definition Linkbase Document |
| 101.LAB\* | Inline XBRL Labels Linkbase Document |
| 101.PRE\* | Inline XBRL Presentation Linkbase Document |
| 104\* | Inline XBRL Cover Page Interactive Data File |

---

\* Filed herewith.

\*\* Furnished.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | SHEPHERD'S FINANCE, LLC<br> (Registrant) | SHEPHERD'S FINANCE, LLC<br> (Registrant) |
| Dated: November 14, 2025 | By: | /s/ Theodore Westwood |
|  |  | Theodore Westwood |
|  |  | Chief Financial Officer |

---

## Exhibit 31.1

**EXHIBIT 31.1**

**CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER**

**Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002**

I, Daniel M. Wallach, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I
 have reviewed this Quarterly Report on Form 10-Q of Shepherd's Finance, LLC;

2. Based
 on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
 to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
 the period covered by this report;

3. Based
 on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
 respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in
 this report;

4. The
 registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures
 (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange
 Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Designed
 such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
 to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others
 within those entities, particularly during the period in which this report is being prepared;

b. Designed
 such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
 supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
 for external purposes in accordance with generally accepted accounting principles;

c. Evaluated
 the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about
 the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
 and

d. Disclosed
 in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's
 most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected,
 or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The
 registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
 reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing
 the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. All
 significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
 reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information;
 and

b. Any
 fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's
 internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Dated: November 14, 2025 | By: | */s/ Daniel M. Wallach* |
|  |  | Daniel M. Wallach |
|  |  | Chief Executive Officer and Manager |
|  |  | (Principal Executive Officer) |

---

## Exhibit 31.2

**EXHIBIT 31.2**

**CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER**

**Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002**

I, Theodore Westwood, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I
 have reviewed this Quarterly Report on Form 10-Q of Shepherd's Finance, LLC;

2. Based
 on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
 to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
 the period covered by this report;

3. Based
 on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
 respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in
 this report;

4. The
 registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures
 (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange
 Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Designed
 such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
 to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others
 within those entities, particularly during the period in which this report is being prepared;

b. Designed
 such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
 supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
 for external purposes in accordance with generally accepted accounting principles;

c. Evaluated
 the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about
 the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
 and

d. Disclosed
 in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's
 most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected,
 or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The
 registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
 reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing
 the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. All
 significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
 reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information;
 and

b. Any
 fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's
 internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Dated: November 14, 2025 | By: | */s/ Theodore Westwood* |
|  |  | Theodore Westwood |
|  |  | Chief Financial Officer |
|  |  | (Principal Financial and Accounting Officer) |

---

## Exhibit 32.1

**EXHIBIT 32.1**

**CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER**

**Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the
 Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended;
 and

(ii) the
 information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
 of the Company.

---

| | | |
|:---|:---|:---|
| Dated: November 14, 2025 | By: | */s/ Daniel M. Wallach* |
|  |  | Daniel M. Wallach |
|  |  | Chief Executive Officer and Manager |
|  |  | (Principal Executive Officer) |

---

## Exhibit 32.2

**EXHIBIT 32.2**

**CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER**

**Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the
 Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended;
 and

(ii) the
 information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
 of the Company.

---

| | | |
|:---|:---|:---|
| Dated: November 14, 2025 | By: | */s/ Theodore Westwood* |
|  |  | Theodore Westwood |
|  |  | Chief Financial Officer |
|  |  | (Principal Financial and Accounting Officer) |

---