DALLAS--(BUSINESS WIRE)--CMCT declares preferred stock dividends. ...

Core Viewpoint - CMCT has successfully completed the development of 1915 Park, a 36-unit apartment building located in the Echo Park neighborhood of Los Angeles, which is recognized as a desirable area for residential living [1][9]. Group 1: Project Details - The six-story building was constructed on a former surface parking lot adjacent to an office tower, owned by a joint venture between CMCT and an international pension fund [2]. - 1915 Park offers studio, one-bedroom, and two-bedroom floor plans featuring contemporary fixtures and finishes that align with current rental market demands [2]. - The building includes amenities such as a rooftop deck with city views, on-site underground parking, and bicycle parking [2]. Group 2: Location Attributes - 1915 Park is situated in a highly walkable neighborhood with access to boutique shops, art studios, galleries, and diverse dining options [3]. - The property is conveniently located near Dodger Stadium, which is one mile away, and Echo Park Lake, a cultural historic monument offering recreational activities [3]. - The building has excellent access to public transportation, including a nearby Metro Line bus stop, and is close to major freeways such as the Hollywood (101), Pasadena (110), Glendale (2), and Golden State (5) [4]. Group 3: Company Overview - CMCT is a real estate investment trust that focuses on owning, operating, and developing multifamily and creative office assets across the United States [6]. - The company specializes in properties catering to rapidly growing industries, including technology, media, and entertainment, leveraging the expertise of CIM Group for its operations [6].

Real Estate Portfolio - As of September 30, 2025, the real estate portfolio consisted of 27 assets, with 12 office properties totaling approximately 1.3 million rentable square feet at 69.8% occupancy[221] - The four multifamily properties were 85.3% occupied as of September 30, 2025[221] - The company intends to increase focus on premier multifamily properties while maintaining a presence in creative office assets[222] - CIM Group's operations emphasize local market knowledge to mitigate risks associated with real estate acquisitions[226] Financial Performance - Total revenues for the three months ended September 30, 2025, were $26.234 million, a decrease of 8.3% compared to $28.616 million for the same period in 2024[247] - Net loss for the three months ended September 30, 2025, was $12.586 million, an increase of 19.0% from a net loss of $10.576 million in 2024[247] - Funds from Operations (FFO) attributable to common stockholders for the three months ended September 30, 2025, was $(11.124) million, an improvement of approximately $17.3 million compared to $(28.420) million in 2024[251] - Total revenues for the nine months ended September 30, 2025, were $88.2 million, a decrease of $8.8 million or 9.1% compared to $97.1 million for the same period in 2024[275] - Net loss for the nine months ended September 30, 2025, was $28.0 million, compared to a net loss of $15.3 million for the same period in 2024, an increase of 82.7%[275] - FFO attributable to common stockholders was $(24.4) million for the nine months ended September 30, 2025, an improvement of $13.2 million compared to $(37.6) million for the same period in 2024[279] Revenue Breakdown - Office revenue decreased to $12.5 million for the three months ended September 30, 2025, down from $13.8 million for the same period in 2024, a decline of 9.4%[255] - Hotel revenue increased to $7.6 million for the three months ended September 30, 2025, compared to $7.1 million for the same period in 2024, an increase of 7.0%[256] - Multifamily revenue decreased to $3.9 million for the three months ended September 30, 2025, down from $4.8 million for the same period in 2024, a decline of 18.8%[257] - Lending revenue was $2.2 million for the three months ended September 30, 2025, compared to $2.7 million for the same period in 2024, a decrease of 18.5%[259] - Office revenue decreased to $37.4 million for the nine months ended September 30, 2025, down 12.1% from $42.5 million in the same period of 2024[283] - Hotel revenue increased to $31.9 million for the nine months ended September 30, 2025, up 2.4% from $31.2 million in the same period of 2024[284] - Multifamily revenue decreased to $11.9 million for the nine months ended September 30, 2025, down 20.4% from $15.0 million in the same period of 2024[286] - Lending revenue decreased to $6.7 million for the nine months ended September 30, 2025, down 15.7% from $7.9 million in the same period of 2024[287] Occupancy and Rent Metrics - Occupancy rate for the multifamily portfolio as of September 30, 2025, was 85.3%, down from 92.0% in 2024[237] - Monthly rent per occupied unit in the multifamily portfolio was $2,508 as of September 30, 2025, compared to $2,555 in 2024[237] - Hotel occupancy for the nine months ended September 30, 2025, was 75.7%, an increase from 71.4% in 2024[238] - Average Daily Rate (ADR) for the hotel was $209.93 for the nine months ended September 30, 2025, compared to $203.98 in 2024[238] Cash Flow and Expenses - Net cash provided by operating activities was $2.5 million for the nine months ended September 30, 2025, a decrease from $15.9 million in the same period of 2024[304] - Net cash used in investing activities decreased to $9.3 million for the nine months ended September 30, 2025, compared to $14.7 million in the same period of 2024[305] - Net cash provided by financing activities was $2.2 million for the nine months ended September 30, 2025, compared to net cash used of $9.4 million in the same period of 2024[306] - Total expenses increased to $114.3 million for the nine months ended September 30, 2025, up from $111.4 million for the same period in 2024, an increase of 2.6%[275] Debt and Financing - As of September 30, 2025, the company had mortgage loan agreements with outstanding balances of $475.8 million, maturing between June 7, 2026, and January 11, 2030[319] - The company executed a one-year extension on the $66.3 million 1150 Clay Mortgage, maturing on June 7, 2026, and intends to refinance it[320] - The Channel House Mortgage was extended through January 31, 2027, after a repayment of $6.0 million, reducing its balance from $87.0 million to $81.0 million[321] - The Lending Division Revolving Credit Facility has an outstanding debt of $9.3 million as of September 30, 2025, with an effective interest rate of 7.19%[325] - As of September 30, 2025, 82.3% of the company's debt, amounting to $439.5 million, was fixed rate borrowings, while 17.7%, or $94.4 million, was floating rate borrowings[343] Preferred Stock and Dividends - As of September 30, 2025, the company issued a total of 12,040,878 shares of Series A1 Preferred Stock, 8,251,657 shares of Series A Preferred Stock, and 56,857 shares of Series D Preferred Stock, raising aggregate net proceeds of $459.1 million after commissions, fees, and allocated costs[330] - The company redeemed 4,799,446 shares of Series A Preferred Stock, 3,148,815 shares of Series A1 Preferred Stock, and 8,410 shares of Series D Preferred Stock as of September 30, 2025[333] - Cumulative cash dividends for Series A1 Preferred Stock are set at an annual rate of 6.0%, while Series A Preferred Stock and Series D Preferred Stock have rates of 5.50% and 5.65%, respectively[331] - The company expects to pay dividends on Preferred Stock in arrears on a monthly basis, subject to operational results and other factors[332] - The company plans to continue satisfying some or all redemption requests for Preferred Stock in shares of Common Stock during 2025, when legally permitted[333] - The company has suspended its offering of Series A1 Preferred Stock as of September 30, 2025[329] Asset Management and Strategy - The strategy includes leveraging investor relationships to execute on the investment pipeline using an asset-light approach[223] - The company regularly evaluates each asset within its portfolio for potential dispositions to redeploy proceeds into higher-return assets[224] - The company entered into an agreement to sell its lending business for approximately $44 million, expecting net proceeds of about $31 million upon closing[243] Renovation and Development Projects - The 1910 Sunset Joint Venture, in which the company holds a 44% interest, is nearing completion of a project to build 36 multifamily units at an estimated cost of $14.7 million, with the company's share expected to be $6.5 million[310] - The 4750 Wilshire Joint Venture, with a 20% ownership interest, has incurred total costs of $28.6 million for converting an office property into 68 multifamily units, with an expected total completion cost of $31.4 million[311] - Total costs incurred for the Rooms Renovation Project at the Sheraton Grand Hotel reached $21.5 million as of September 30, 2025, with an additional $11.6 million estimated for the Lobby Renovation Project[312]

Group 1 - The earnings conference call for Creative Media and Community Trust (CMCT) for the third quarter of 2025 is being conducted, with key executives present [1][2]. - The call is being recorded and will be available for later access on the company's Investor Relations website, along with the earnings release [3]. - The earnings release includes a reconciliation of non-GAAP financial measures that will be discussed during the call [3]. Group 2 - Forward-looking statements will be made during the call, based on the company's beliefs and current information, but actual results may differ due to various risks and uncertainties [4][5]. - The company acknowledges that while assumptions made are considered reasonable, they are not guarantees of future performance, and actual results may vary significantly [5].

Financial Data and Key Metrics Changes - The company's core FFO was negative $10.5 million for Q3 2025, compared to negative $11.5 million in the prior year, indicating a slight improvement [17] - Overall net operating income (NOI) was $7 million, down from $9.8 million in the previous quarter [6][7] - The company reported a negative FFO of $11.1 million, or negative $14.75 per diluted share, compared to negative $28.4 million in the prior year [17] Business Line Data and Key Metrics Changes - Office segment NOI decreased to $5 million in Q3 2025 from $5.4 million in Q3 2024, primarily due to lower rental revenues and occupancy declines [14][15] - Hotel NOI was $850,000 in Q3 2025, down from $1 million in the prior year, impacted by renovation disruptions [16] - Multifamily segment NOI increased to $792,000 in Q3 2025 from $508,000 in the prior year, driven by lower real estate taxes [16] Market Data and Key Metrics Changes - Multifamily occupancy at 701 South Hudson improved to approximately 81% from 68% at the end of the second quarter [9] - San Francisco experienced a third-quarter rent growth of 5.2%, the strongest year-over-year growth rate since 2015 [11] - The office portfolio was 73.6% leased at the end of Q3 2025, with a notable increase to 86.6% when excluding one Oakland property [12] Company Strategy and Development Direction - The company is focused on strengthening liquidity and balance sheet while growing its multifamily business [4] - A definitive agreement was made to sell the lending business for approximately $44 million, considered a non-core asset [5] - The company aims to benefit from a recovering commercial real estate market, supported by lower interest rates and increased office leasing activity [6] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about improving cash flow in 2026, driven by office leasing activity, hotel renovations, and multifamily performance [8] - The company believes headwinds from COVID are largely behind, with return-to-office trends creating positive momentum [12] - Management anticipates meaningful opportunities for multifamily NOI growth through rising rents and improved occupancy [11] Other Important Information - Barry Berlin, the CFO, will step down following the sale of the lending division, with Brandon Hill set to assume the role [8] - The company is nearing completion of an $11 million renovation at the Sheraton Grand Sacramento, funded through various sources [12] Q&A Session Summary - There were no questions during the Q&A session, leading to the conclusion of the conference [21]

Core Insights - Creative Media & Community Trust Corporation reported a net loss of $17.7 million for Q3 2025, a significant improvement from a net loss of $34.8 million in Q3 2024, primarily due to reduced preferred stock redemptions and dividends [9][10][45] - The company is focusing on enhancing its multifamily asset portfolio, improving liquidity, and evaluating additional asset sales, including a recent agreement to sell its lending business for approximately $44 million [2][3][4] Real Estate Portfolio - As of September 30, 2025, the real estate portfolio comprised 27 assets, including 12 office properties totaling approximately 1.3 million rentable square feet and four multifamily properties totaling 696 units [8] - The office portfolio was 73.6% leased, an increase from 81.7% at the end of 2024, while the occupancy rate was 69.8%, a decrease of 240 basis points year-over-year [6][14] Financial Results - Total revenues for Q3 2025 were $26.2 million, down from $28.6 million in Q3 2024, with rental and other property income decreasing from $18.2 million to $16.2 million [44] - Funds from operations (FFO) attributable to common stockholders were $(11.1) million, compared to $(28.4) million in the same period last year [10][46] Segment Information - The office segment reported a same-store net operating income (NOI) of $5.0 million for Q3 2025, down from $5.4 million in Q3 2024, primarily due to decreased rental revenues [12][13] - The hotel segment's NOI decreased to $850,000 from $1.0 million, impacted by renovations, while occupancy improved to 68.9% from 55.5% [18] - The multifamily segment's NOI increased to $792,000 from $508,000, driven by lower real estate taxes despite decreased revenues due to lower occupancy [20] Debt and Equity - The company refinanced an $81.0 million mortgage loan at a multifamily property, extending the maturity date to January 2027 [22] - As of September 30, 2025, total assets were $871.8 million, down from $889.6 million at the end of 2024, with total liabilities increasing to $588.9 million from $562.5 million [43][44]

Group 1: Leap Therapeutics, Inc. (LPTX) - Leap Therapeutics, Inc. experienced a significant stock price surge of approximately 441.49%, closing at $2.36 [1][2] - The company traded an unusually high volume of 610,713,569 shares, indicating strong news flow or shifting expectations around its pipelines and partnerships [2] - The rise in stock price is often associated with developments such as trial readouts, regulatory milestones, or strategic collaborations that can reshape investor outlook [2] Group 2: Quhuo Limited (QH) - Quhuo Limited's stock price increased by 68.01% to $1.39, with a trading volume of 31,416,317 shares [1][3] - The rally may reflect renewed confidence in the company's growth prospects, particularly following a collaboration with the "Better Life No.1 Collective Fund Trust Plan" [3] - The company's wide 52-week price range, from $0.735 to $169.11, highlights the potential for price volatility driven by sentiment shifts in smaller-cap stocks [3] Group 3: Creative Media & Community Trust Corporation (CMCT) - Creative Media & Community Trust Corporation's stock climbed 61.48% to $8.09, with 46,202,384 shares traded [1][4] - Investor enthusiasm is attributed to the company's definitive agreement to sell its lending division, indicating a focus on core real estate operations and potential balance-sheet flexibility [4] Group 4: Spruce Power Holding Corporation (SPRU) - Spruce Power Holding Corporation's stock rose 45.98% to $4.45, supported by a trading volume of 6,006,670 shares [1][5] - The company reported third-quarter 2025 revenue of $30.7 million, a 44% year-over-year increase, and a cash balance of $98.8 million, reflecting improving scale and liquidity [5] Group 5: Market Trends - The sharp advances across biotechnology, real estate, and clean energy sectors highlight the convergence of sector-specific catalysts, capital strategy decisions, and improving fundamentals [6] - Market participants are expected to monitor for follow-through events such as additional clinical data, deal closings, or sustained cash-flow trends to assess the durability of these gains [6]

Core Insights - Shares of Creative Media & Community Trust (NASDAQ: CMCT) nearly doubled following the announcement of the sale of its lending division to PG FR Holding [1] Company Summary - Creative Media & Community Trust is a real estate investment trust (REIT) that has made a strategic decision to divest its lending division [1] - The sale to PG FR Holding is expected to significantly impact the company's stock performance, as evidenced by the nearly doubling of its shares [1]

PART I. Financial Information This section provides comprehensive unaudited financial statements, management's discussion and analysis, and disclosures on market risk and internal controls [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements of Creative Media & Community Trust Corporation, including balance sheets, statements of operations, equity, and cash flows, along with detailed notes [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing its assets, liabilities, and equity at specific reporting dates Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$885,024** | **$889,555** | | Investments in real estate, net | $704,775 | $709,194 | | Cash and cash equivalents | $27,769 | $20,262 | | **Total Liabilities** | **$584,250** | **$562,492** | | Debt, net | $535,605 | $505,732 | | **Total Equity** | **$288,270** | **$306,264** | - Total assets slightly decreased to **$885.0 million** as of June 30, 2025, from **$889.6 million** at the end of 2024, accompanied by an increase in total liabilities to **$584.3 million** and a decrease in total equity to **$288.3 million**[10](index=10&type=chunk) [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) This section details the company's financial performance over specific periods, outlining revenues, expenses, and net loss Consolidated Statements of Operations Highlights (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | **$29,689** | **$34,439** | **$61,984** | **$68,437** | | **Total Expenses** | **$38,245** | **$36,126** | **$75,540** | **$73,433** | | **Net Loss** | **$(9,151)** | **$(852)** | **$(15,423)** | **$(4,757)** | | Net Loss Attributable to Common Stockholders | $(14,279) | $(9,667) | $(26,177) | $(21,962) | | Basic and Diluted EPS | $(18.94) | $(98.64) | $(39.36) | $(224.10) | - The company's net loss widened significantly in Q2 2025 to **$9.2 million** from **$0.9 million** in Q2 2024, and for the first six months, the net loss grew to **$15.4 million** in 2025 from **$4.8 million** in 2024, driven by lower revenues and higher expenses[11](index=11&type=chunk) [Consolidated Statements of Equity](index=5&type=section&id=Consolidated%20Statements%20of%20Equity) This section presents the changes in the company's equity components, including net income, dividends, and stock transactions - Total equity decreased from **$306.3 million** at the end of 2024 to **$288.3 million** as of June 30, 2025, primarily driven by a net loss of **$9.15 million** and preferred stock dividends of **$5.3 million** in Q2 2025[12](index=12&type=chunk) - During the six months ended June 30, 2025, the company redeemed Series A1 and Series A Preferred Stock by issuing **96,283** and **192,144** shares of common stock, respectively[12](index=12&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section outlines the company's cash inflows and outflows from operating, investing, and financing activities over specific periods Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(1,271) | $5,540 | | Net cash used in investing activities | $(10,226) | $(1,388) | | Net cash provided by financing activities | $16,487 | $2,460 | | **Net Increase in Cash** | **$4,990** | **$6,612** | - For the first six months of 2025, the company experienced a net cash outflow from operations of **$1.3 million**, a significant reversal from a **$5.5 million** inflow in the same period of 2024, primarily due to a higher net loss[15](index=15&type=chunk) [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the figures presented in the consolidated financial statements - The company primarily acquires, develops, owns, and operates premier multifamily properties and Class A/creative office assets, also including a hotel and an SBA 7(a) loan origination platform[18](index=18&type=chunk) - The company effected two reverse stock splits in 2025: a **1-for-10** split in January and a **1-for-25** split in April, with all share and per-share amounts retroactively adjusted[20](index=20&type=chunk)[22](index=22&type=chunk) - During Q2 2025, the company recognized an impairment charge of **$0.221 million** on an office property in Austin, Texas, reducing its carrying value to an estimated fair value of **$1.9 million**[74](index=74&type=chunk) - As of June 30, 2025, the company had **$535.6 million** in net debt, an increase from **$505.7 million** at year-end 2024, and in April 2025, it repaid and terminated its 2022 Credit Facility, resulting in a loss on early extinguishment of debt of **$0.088 million**[100](index=100&type=chunk)[107](index=107&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=42&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition and operational results, highlighting increased net losses due to lower revenues and higher expenses, alongside strategic shifts towards multifamily properties and liquidity management efforts [Executive Summary](index=43&type=section&id=Executive%20Summary) This section provides an overview of the company's strategic focus on multifamily properties and a snapshot of its current portfolio performance - The company's strategy is to increase its focus on acquiring, developing, and operating premier multifamily properties, while opportunistically disposing of assets that do not fit this strategy[215](index=215&type=chunk)[217](index=217&type=chunk) Portfolio Snapshot as of June 30, 2025 | Segment | Metric | Value | | :--- | :--- | :--- | | Office Properties | Occupancy | 68.1% | | Multifamily Properties | Occupancy | 83.4% | | Hotel | RevPAR (H1 2025) | $171.63 | - The decrease in office portfolio occupancy to **68.1%** from **82.5%** a year prior was primarily due to a tenant exercising a partial termination option at an office property in Oakland, California[223](index=223&type=chunk)[229](index=229&type=chunk) [2025 Results of Operations (Comparison of the Three Months Ended June 30, 2025 to 2024)](index=47&type=section&id=2025%20Results%20of%20Operations%20%28Q2%20Comparison%29) This section analyzes the company's financial performance for the second quarter of 2025 compared to the same period in 2024, highlighting key revenue and expense trends Q2 2025 vs Q2 2024 Performance (in thousands) | Metric | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $29,689 | $34,439 | $(4,750) | (13.8)% | | Total Expenses | $38,245 | $36,126 | $2,119 | 5.9% | | **Net Loss** | **$(9,151)** | **$(852)** | **$(8,299)** | **NM** | - The increase in net loss for Q2 2025 was primarily due to a **$6.4 million** decrease in segment net operating income and a **$1.3 million** increase in interest expense[239](index=239&type=chunk) - FFO attributable to common stockholders decreased by **$4.6 million** to **$(7.9) million** in Q2 2025 from **$(3.3) million** in Q2 2024, mainly due to lower segment net operating income and higher interest expense[244](index=244&type=chunk) - Office revenue decreased by **15.8%** due to lower occupancy in an Oakland property, while multifamily revenue dropped **27.6%** due to lower occupancy and rents[249](index=249&type=chunk)[251](index=251&type=chunk) [2025 Results of Operations (Comparison of the Six Months Ended June 30, 2025 to 2024)](index=51&type=section&id=2025%20Results%20of%20Operations%20%28H1%20Comparison%29) This section analyzes the company's financial performance for the first half of 2025 compared to the same period in 2024, detailing revenue and expense trends H1 2025 vs H1 2024 Performance (in thousands) | Metric | H1 2025 | H1 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $61,984 | $68,437 | $(6,453) | (9.4)% | | Total Expenses | $75,540 | $73,433 | $2,107 | 2.9% | | **Net Loss** | **$(15,423)** | **$(4,757)** | **$(10,666)** | **224.2%** | - The increased net loss for the first half of 2025 was primarily driven by an **$8.3 million** decrease in segment net operating income and a **$2.4 million** increase in interest expense[268](index=268&type=chunk) - FFO attributable to common stockholders for H1 2025 was **$(13.3) million**, a decrease of **$4.1 million** from **$(9.2) million** in H1 2024, driven by lower segment operating income and higher interest expense, partially offset by lower preferred stock dividends and redemptions[272](index=272&type=chunk) [Cash Flow Analysis](index=55&type=section&id=Cash%20Flow%20Analysis) This section provides an analysis of the company's cash flow changes across operating, investing, and financing activities - Net cash used in operating activities was **$1.3 million** for H1 2025, a significant decrease from **$5.5 million** provided by operations in H1 2024, primarily due to a higher net loss[295](index=295&type=chunk) - Net cash used in investing activities increased to **$10.2 million** in H1 2025 from **$1.4 million** in H1 2024, mainly due to a **$9.0 million** increase in capital expenditures[296](index=296&type=chunk) - Net cash provided by financing activities increased to **$16.5 million** in H1 2025 from **$2.5 million** in H1 2024, driven by higher net proceeds from debt and lower cash redemptions and dividends for preferred stock[297](index=297&type=chunk) [Liquidity and Capital Resources](index=55&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's ability to meet its financial obligations and fund operations, including sources and uses of capital - The company's principal demands for funds include asset acquisitions, property development, debt service, and preferred stock distributions/redemptions[298](index=298&type=chunk) - The company plans to satisfy some or all redemption requests for its Preferred Stock with shares of Common Stock during 2025 to preserve liquidity[304](index=304&type=chunk) - In June 2025, a subsidiary entered into a new **$20.0 million** revolving credit facility secured by SBA 7(a) loans, with **$8.3 million** outstanding and no additional availability as of June 30, 2025[313](index=313&type=chunk) - The company regained compliance with the Nasdaq minimum bid price requirement in April 2025 but notes that maintaining compliance is not guaranteed[308](index=308&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=60&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details the company's exposure to market risks, primarily interest rate fluctuations, and its strategies for mitigation - As of June 30, 2025, **17.7%** (**$96.0 million**) of the company's debt was floating rate[331](index=331&type=chunk) - A **50 basis point** change in the SOFR interest rate would impact annual earnings by approximately **$0.48 million**[331](index=331&type=chunk) - The company utilizes interest rate cap agreements with a total notional amount of **$176.8 million** to manage its exposure to interest rate fluctuations[332](index=332&type=chunk) [Controls and Procedures](index=60&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal controls during the quarter - The Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[334](index=334&type=chunk) - No material changes were made to the company's internal control over financial reporting during the quarter ended June 30, 2025[335](index=335&type=chunk) PART II. Other Information This section provides additional information including legal proceedings, risk factors, equity sales, and other relevant disclosures [Legal Proceedings](index=61&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings beyond routine litigation arising in the ordinary course of business - The company states it is not currently involved in any material pending or threatened legal proceedings outside of routine litigation incidental to its business[337](index=337&type=chunk) [Risk Factors](index=61&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the company's 2024 Annual Report on Form 10-K were reported - No material changes to the risk factors disclosed in the 2024 Form 10-K were reported[338](index=338&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=61&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company made no common stock repurchases during the three and six months ended June 30, 2025, under its $10.0 million share repurchase program - No common stock repurchases were made during the three and six months ended June 30, 2025[339](index=339&type=chunk) - As of June 30, 2025, the company has repurchased a total of **2,650** shares for **$4.7 million** under its existing share repurchase program[339](index=339&type=chunk) [Other Information](index=61&type=section&id=Item%205.%20Other%20Information) The company plans to delist its Common Stock from the Tel Aviv Stock Exchange by August 15, 2025, while maintaining its Nasdaq Capital Market listing - The company has filed to voluntarily delist its Common Stock from the Tel Aviv Stock Exchange (TASE), with the delisting expected to be effective on **August 15, 2025**[344](index=344&type=chunk) - The company's common stock will continue to be listed for trading on the Nasdaq Capital Market[344](index=344&type=chunk)

Financial Data and Key Metrics Changes - The company's core FFO was negative $7,200,000, and overall net operating income decreased to $9,800,000 from $11,800,000 in the prior quarter [12][21] - The overall segment NOI was $9,800,000 in Q2 2025, compared to $16,200,000 in the prior year, a decrease of $6,400,000 [21] - FFO was negative $7,900,000 or negative $10.42 per diluted share compared to negative $3,300,000 or negative $33.46 per diluted share in the prior year [23] Business Line Data and Key Metrics Changes - The office segment NOI for Q2 2025 was $5,500,000, down from $8,900,000 in Q2 2024, primarily due to decreased rental revenue and occupancy [21][22] - Multifamily segment NOI was $189,000 in Q2 2025, compared to $2,300,000 in the prior year, driven by unrealized losses and decreased revenues [22] - Hotel segment NOI for Q2 2025 was $4,200,000, slightly down from $4,300,000 in the prior year, attributed to decreased food and beverage sales [22] Market Data and Key Metrics Changes - The company executed approximately 140,000 square feet of leases through July 2025, representing over a 55% increase from the prior year [5][6] - The office lease percentage was approximately 70% at the end of Q2 2025, and approximately 80% when excluding the Oakland office building [18] Company Strategy and Development Direction - The company is focused on improving its balance sheet and liquidity, enhancing property-level performance, and evaluating asset sales as part of its broader strategic plan [7][9] - Key areas of focus include growing the multifamily portion of the portfolio and executing renovations to improve asset performance [10][19] Management's Comments on Operating Environment and Future Outlook - Management believes there is a meaningful opportunity to grow NOI in 2026, supported by improved office leasing activity and completed renovations [14] - The company is encouraged by market improvements in the adjacent San Francisco market, which historically influences Oakland [6][11] Other Important Information - The company has successfully secured property-level financing on seven assets, allowing for the repayment of a recourse credit facility with a balance of approximately $169,000,000 at the end of 2024 [7][8] - A $20,000,000 revolving credit facility was closed to support lending division originations [8] Q&A Session Summary - No questions were raised during the Q&A session, and the call concluded without any inquiries [26]