Sunrise Realty Trust, Inc. and Southern Realty Trust Inc., Tannenbaum Capital Group Affiliates, Complete Merger

Former SRT stockholders now own approximately 38.5% of SUNS, while pre-merger SUNS stockholders own approximately 61.5%.

Rhea-AI Summary

Sunrise Realty Trust (Nasdaq: SUNS) completed its merger with Southern Realty Trust, combining their commercial real estate lending portfolios. Each SRT share converted into 1.45 SUNS shares plus $0.05 in cash from SUNS’ external manager. SUNS issued 8,464,975 shares, bringing outstanding shares to 21,980,826; former SRT holders own approximately 38.5% and pre-merger SUNS holders approximately 61.5%.

Pro forma as of June 30, 2026, the combined company had approximately $285 million in book value after transaction-cost adjustments, $534 million in assets and $604 million in loan commitments across 14 loans. SUNS expects lower combined operating costs and broader access to capital. The amended management agreement cuts the incentive fee from 20% to 17.5%, lowers its annual hurdle from 8.0% to 7.0%, and reduces base fees by $1.0 million across the first four full fiscal quarters after closing, starting in 2027.

8 points · 1 major

MixediHow this balance works

How this balance works

Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.

It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.

Rhea-AI Sentiment measures something else, the tone of the wording.

How the balance worksHow Sentiment works

1 major · 2 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Major pointCompleted SRT merger consolidates the companies’ co-investments onto one balance sheet.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Operating costs and capital access are expected by SUNS to improve on a combined basis.
• Moderate pointIncentive fee rate reduced from 20% to 17.5% under the amended management agreement.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Base management fees reduced $250,000 quarterly for four full fiscal quarters, starting first-quarter 2027; $1.0 million aggregate. 1.1% of market cap
• Minor pointPro forma book value was approximately $285 million after transaction-cost adjustments as of June 30, 2026.

3 minor points

• Minor pointPro forma total assets were approximately $534 million as of June 30, 2026.
• Minor pointPro forma loan commitments totaled approximately $604 million across 14 portfolio loans as of June 30, 2026.
• Minor point. Forward-looking: it has not happened yet and may not happen.Prorated dividend of $0.09 per share is payable November 5, 2026, for the fourth-quarter period before closing.

Negative

• Major point8,464,975 new SUNS shares issued at 1.45 per SRT share dilute pre-merger holders to approximately 61.5% ownership.
• Moderate pointAnnual incentive-fee hurdle lowered from 8.0% to 7.0%, reducing the threshold for incentive fees.

News Explained

Former SRT holders representing about 32 percent of SRT at signing face 120-day lockups; merger shares are unregistered and have resale restrictions.

With the merger closed, SUNS expanded its board by one seat and appointed Howard Sudnow, an independent director designated by SRT.

Former SRT stockholders who collectively owned or controlled about 32% of SRT when the merger agreement was signed accepted 120-day lockups on the SUNS shares they received. The merger shares were not registered, and resale is permitted only under an effective registration statement or an available exemption.

The $0.09-per-share stub-period dividend is payable on November 5, 2026, to stockholders of record on November 2, 2026.

Key Figures

SRT share consideration: 1.45 SUNS shares plus $0.05 in cash per SRT share New SUNS shares issued: 8,464,975 shares Pro forma book value: Approximately $285 million +5 more

SRT share consideration

1.45 SUNS shares plus $0.05 in cash per SRT share

Merger terms

New SUNS shares issued

8,464,975 shares

Issued in connection with the merger

Pro forma book value

Approximately $285 million

Combined company as of June 30, 2026, after transaction-cost adjustments

Pro forma total assets

Approximately $534 million

Combined company as of June 30, 2026

Loan commitments

Approximately $604 million

Combined company across 14 portfolio loans

Incentive fee rate

Reduced from 20% to 17.5%

Amended management agreement

Hurdle rate

Reduced from 8.0% to 7.0% per annum

Amended management agreement

Base management fee reduction

$250,000 per quarter for four quarters; $1.0 million aggregate

Beginning with the first quarter of 2027

Previous Acquisition Reports

1 past event · Latest: Aug 06

Same Type 1 event

1. Aug 06

   Merger agreement

   24h Move

   +1.7%

   Announced the same merger exchange ratio and management-fee reductions now implemented at closing.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

pro forma, hurdle rate, lock-up restrictions

3 terms

pro forma financial

"On a pro forma basis as of June 30, 2026"

Pro forma refers to financial information that is prepared based on estimates or adjustments to show what a company's results might look like under certain scenarios, such as new projects or acquisitions. It helps investors understand the potential impact of future events by providing a clear, hypothetical view of financial performance, much like a weather forecast shows possible future conditions.

hurdle rate financial

"reduces the hurdle rate from 8.0% to 7.0% per annum"

The hurdle rate is the minimum annual return an investment must be expected to deliver before it is considered worthwhile. Think of it as the height of a jump: if a project or asset can’t clear that height, capital is kept elsewhere. For investors, the hurdle rate acts as a simple pass/fail benchmark that guides buy/sell decisions, risk assessment and how future cash flows are valued.

lock-up restrictions financial

"have agreed to customary lock-up restrictions for a period of 120 days"

A lock-up restriction is a temporary rule that prevents company insiders, early investors and employees from selling their shares for a set period after a public offering. It matters to investors because it limits how many shares can enter the market immediately—like a cooling-off period after a big sale—and when the restriction ends a large increase in available shares can put downward pressure on the stock price or reveal insiders’ confidence in the company.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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WEST PALM BEACH, Fla., Nov. 05, 2026 (GLOBE NEWSWIRE) -- Sunrise Realty Trust, Inc. (Nasdaq: SUNS) (“SUNS” or the “Company”) and Southern Realty Trust Inc. (“SRT”), two commercial real estate lenders on the Tannenbaum Capital Group (“TCG”) Real Estate platform, today announced the completion of the previously announced merger of SRT with and into a wholly owned subsidiary of SUNS (the “Merger”). The Merger consolidates the two companies’ co-investments into a single, larger Nasdaq-listed commercial real estate lending platform. On a pro forma basis as of June 30, 2026, the combined company had approximately $285 million of book value (after transaction-cost adjustments), approximately $534 million of total assets and approximately $604 million of total loan commitments across 14 portfolio loans collateralized by assets located predominantly in core Southern U.S. markets. The combined company will continue to operate as Sunrise Realty Trust, Inc., and its common stock will continue to trade on Nasdaq under the ticker symbol “SUNS.”

“The completion of this Merger is a transformative milestone in SUNS’ evolution as a public company,” said Leonard Tannenbaum, Executive Chairman. “By combining two complementary portfolios built on the same disciplined investment philosophy, we have created a larger, more efficient lending platform with an expanded equity base and a broader stockholder base, which we believe positions us to continue to generate attractive risk-adjusted returns and build long-term stockholder value. We are pleased to welcome former SRT stockholders to SUNS.”

“Upon closing of the Merger, our co-investments now sit on a single balance sheet, which we expect will lower our operating costs on a combined basis and broaden our access to capital,” said Brian Sedrish, Chief Executive Officer. “We remain focused on constructing a portfolio of attractive, risk-adjusted loans to high-quality sponsors with assets primarily located in established and rapidly expanding Southern markets.”

Under the terms of the Agreement and Plan of Merger relating to the Merger (the “Merger Agreement”), each outstanding share of SRT common stock was converted into the right to receive (i) 1.45 shares of SUNS common stock and (ii) from Sunrise Manager LLC, SUNS’ external manager (“SUNS Manager”), $0.05 per share in cash. In connection with the Merger, SUNS issued 8,464,975 shares of common stock, resulting in 21,980,826 shares of SUNS common stock issued and outstanding as of the effective time of the Merger. No fractional shares of SUNS common stock were issued in the Merger. As a result, former SRT stockholders own approximately 38.5% of the combined company’s outstanding common stock and pre-Merger SUNS stockholders own approximately 61.5%. Certain former SRT stockholders who collectively owned or controlled approximately 32% of SRT’s outstanding common stock when the Merger Agreement was signed have agreed to customary lock-up restrictions for a period of 120 days following the closing with respect to the shares of SUNS common stock received in the Merger. The SUNS shares issued in the Merger were not registered under the federal securities laws and may be resold only pursuant to an effective registration statement or an available exemption from registration.

At the closing, SUNS and SUNS Manager entered into an amended and restated management agreement that, among other things, (i) reduces the incentive fee rate from 20% to 17.5%, (ii) reduces the hurdle rate from 8.0% to 7.0% per annum, and (iii) provides for a reduction in the base management fee by $250,000 per quarter for each of the first four full fiscal quarters following the closing, beginning with the first quarter of 2027, or $1.0 million in the aggregate, for the benefit of all SUNS’ stockholders.

In addition, as previously disclosed, effective upon the closing, the SUNS’ Board of Directors was expanded by one seat, and Howard Sudnow, an independent director designated by SRT, was appointed to the SUNS’ Board of Directors.

Additional information regarding the Merger is included in a Current Report on Form 8-K filed today by SUNS with the U.S. Securities and Exchange Commission (the “SEC”).

As previously announced, pursuant to the Merger Agreement, SUNS’ Board of Directors declared a prorated cash dividend of $0.09 per share of SUNS common stock (the “Stub Period Dividend”) for the fourth quarter through the day prior to the closing of the Merger. The Stub Period Dividend is payable today, November 5, 2026, to the stockholders of record on November 2, 2026.

Advisors

Oppenheimer & Co. Inc. served as financial advisor and Venable LLP served as legal counsel to the Special Committee of the SUNS’ Board of Directors. Hunton Andrews Kurth LLP served as legal counsel to SUNS.

Keefe, Bruyette & Woods, Inc., A Stifel Company, served as financial advisor to the Special Committee of the SRT Board of Directors, and Vinson & Elkins LLP served as legal counsel to SRT and the Special Committee of the SRT Board of Directors.

About Sunrise Realty Trust, Inc.

Sunrise Realty Trust, Inc. (Nasdaq: SUNS) (“SUNS” or the “Company”) is an institutional commercial real estate (“CRE”) lender providing flexible financing solutions to sponsors of CRE projects located primarily in the Southern United States. SUNS focuses on transitional CRE business plans with the potential for near-term value creation, collateralized by top-tier assets predominantly located in established and rapidly expanding Southern markets. For additional information regarding the Company, please visit www.sunriserealtytrust.com.

About TCG Real Estate

TCG Real Estate refers to the family office sponsor of an affiliated CRE-focused debt vehicle, Sunrise Realty Trust, Inc. (Nasdaq: SUNS), a Nasdaq-listed mortgage real estate investment trust. The platform provides flexible financing on transitional CRE properties that present opportunities for near-term value creation, with a focus on top-tier CRE assets located primarily within markets in the Southern U.S. benefiting from economic tailwinds with growth potential. For additional information regarding TCG Real Estate, please visit www.theTCG.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the anticipated benefits of the Merger, including with respect to the generation of attractive risk-adjusted returns, building long-term stockholder value, expected operating expense savings, and improved access to capital. Words such as “believes,” “expects,” “will,” “intends,” “plans,” “estimates,” “projects,” “may,” “anticipates,” and “future” or similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions and are not guarantees of future performance, conditions or results. Certain factors could cause actual results and performance to differ materially from those projected in these forward-looking statements, including the failure to realize the anticipated benefits of the Merger, including expected operating expense savings and improved access to capital; the risk that the businesses of SUNS and SRT will not be integrated successfully or that such integration may be more difficult, time-consuming or costly than expected; significant transaction costs; the effect of the consummation of the Merger on the parties’ business relationships and operating results; the risk of stockholder litigation in connection with the Merger; risks related to diverting the attention of management from ongoing business operations; the effect of the consummation of the Merger on the market price of SUNS common stock, including potential sales of shares issued in the Merger pursuant to an available exemption from registration or upon expiration of applicable lock-up restrictions; and the other factors described in SUNS’ filings with the SEC, including in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of SUNS’ Annual Report on Form 10-K filed on March 12, 2026, and subsequently filed Quarterly Reports on Form 10-Q. New risks and uncertainties arise over time, and it is not possible to predict those events or how they may affect SUNS. We do not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Investor Relations Contacts

Robyn Tannenbaum // Will Rotatori
561-510-2293 // 561-510-6109
ir@thetcg.com

Media Contact

Jim Velgot
561-510-1416
ir@thetcg.com

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What did SRT shareholders receive in the Sunrise Realty Trust merger?

Each outstanding SRT common share converted into the right to receive 1.45 SUNS common shares and $0.05 in cash from Sunrise Manager, SUNS’ external manager. Former SRT shareholders own approximately 38.5% of the combined company’s outstanding common stock.

When is SUNS paying its merger-related prorated dividend?

The $0.09-per-share prorated cash dividend is payable November 5, 2026, to shareholders of record on November 2, 2026. It covers the fourth quarter through the day before the merger closed.