ACRES Commercial Realty (NYSE: ACR) to acquire manager, sell $200M 8.625% notes

Rhea-AI Filing Summary

ACRES Commercial Realty Corp. expects to complete its previously disclosed merger with ACRES Capital Corp. and the related internalization of management on August 6, 2026. ACRES Capital will merge into a wholly owned subsidiary, the company will acquire its external manager ACRES Capital LLC, terminate the existing management agreement for no additional consideration, and become internally managed. Each outstanding ACC common share will be converted into 2.61882 shares of ACRES Commercial Realty common stock, and the company expects to issue 7,478,994 shares as merger consideration. The company will also assume an ACC credit facility with capacity of $250 million, of which approximately $185.0 million is expected to be outstanding at closing.

On the same expected closing date, the company plans a private placement of $200 million of 8.625% Senior Secured Notes due July 31, 2031. A portion of the proceeds will be used to repay in full $150 million of 5.75% Senior Unsecured Notes maturing in August 2026, with the balance for general corporate purposes. The notes will be secured by first-lien pledges over certain subsidiary equity, residual interests in securitized vehicles and other CRE assets, and guaranteed by specified subsidiaries, and include covenants such as minimum liquidity of $20 million, net debt-to-equity and EBITDA-to-interest tests, and a collateral coverage ratio of at least 200%. Audited financials for ACRES Capital Corp. show 2025 net income attributable to common shares of $8.0 million after a 2024 net loss of $6.7 million, on total assets of $2.17 billion including $2.02 billion of investments held in a consolidated fund.

8-K Event Classification

2 items: 8.01, 9.01

2 items

Item 8.01 Other Events Other

Voluntary disclosure of events the company deems important to shareholders but not covered by other items.

Item 9.01 Financial Statements and Exhibits Exhibits

Financial statements, pro forma financial information, and exhibit attachments filed with this report.

Key Figures

Merger share consideration: 7,478,994 shares of ACR Common Stock ACC exchange ratio: 2.61882 shares of ACR Common Stock per ACC common share ACC credit facility capacity: $250 million +5 more

8 metrics

Merger share consideration 7,478,994 shares of ACR Common Stock Shares ACRES Commercial Realty expects to issue for the ACC merger on the Expected Closing Date

ACC exchange ratio 2.61882 shares of ACR Common Stock per ACC common share Conversion rate for each outstanding ACC common share at merger closing

ACC credit facility capacity $250 million Borrowing capacity of ACC credit facility ACR will assume, with approximately $185.0 million expected outstanding at closing

Outstanding under ACC facility at closing $185.0 million Amount expected to be drawn on the assumed ACC credit facility on the Expected Closing Date

New Senior Secured Notes $200 million 8.625% Senior Secured Notes due 2031 Private placement expected to be completed on the Expected Closing Date

Notes coupon 8.625% per annum Interest rate on the Senior Secured Notes, payable semi-annually beginning January 31, 2027

Refinanced unsecured notes $150 million 5.75% Senior Unsecured Notes Existing notes scheduled to be repaid at August 2026 maturity using a portion of new note proceeds

Minimum liquidity covenant $20,000,000 Minimum liquidity required as of the last day of any fiscal quarter under the Senior Secured Notes covenants

Key Terms

Internalization, Senior Secured Notes, make-whole premium, collateral coverage ratio, +1 more

5 terms

Internalization financial

"the Company will become internally managed (the “Internalization”)"

Internalization is when a broker or trading firm fills a client’s buy or sell order using its own inventory or by matching it with another client, instead of sending the order out to public exchanges. For investors this matters because it can make trades faster or cheaper but may reduce price transparency and raise potential conflicts, like getting a different price than would be available in the open market — similar to a shopkeeper selling from their own shelf rather than checking the wider market for the best deal.

Senior Secured Notes financial

"$200 million of 8.625% Senior Secured Notes due 2031"

Senior secured notes are loans a company sells to investors that are backed by specific assets and given first priority for repayment if the company defaults. Because they have a claim on collateral and are paid before other debts, they usually offer lower risk and correspondingly lower interest than unsecured debt; investors use them to judge how safe repayment and recovery of principal might be, like holding a mortgage instead of an unsecured credit card balance.

make-whole premium financial

"redeemable at 100% of the principal amount plus a “make-whole” premium"

A make-whole premium is an extra payment a borrower must give bondholders when repaying debt early to compensate them for lost future interest; think of it as a lump-sum “catch-up” to leave lenders financially where they would have been if the loan had run its full term. It matters to investors because it affects how much they receive on early redemption and influences a company’s decision to refinance or repay debt, altering bond value and expected returns.

collateral coverage ratio financial

"a collateral coverage ratio of at least 200% as of the last day"

Collateral coverage ratio measures how much value of pledged assets (collateral) exists relative to the outstanding debt they secure, usually expressed as a multiple or percentage (collateral value ÷ loan amount). It matters to investors because it signals how protected a lender or creditor is if a borrower defaults — like seeing whether the house fully covers a mortgage — and influences credit risk, loan terms, margin calls and recovery prospects.

variable interest entities financial

"variable interest entities (“VIEs”) for which the Company is considered"

A variable interest entity (VIE) is a business that a company controls through contracts or special arrangements instead of owning a majority of its shares, like steering a puppet without holding its ticket. Investors care because these arrangements can hide who really bears the financial risks and rewards, affect how assets and liabilities appear on financial statements, and create extra legal or enforcement uncertainty that can change the value and risk of an investment.

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

See more from StockTitan in Google Search and AI answers. Adds StockTitan as a preferred source · opens Google

Add on Google Not now

Understanding 8-K Material Events →

Available on EDGAR 08/04/2026 - 06:42 AM Accepted by SEC EDGAR 08/04/2026 - 06:42 AM Learn about SEC filing dates

FAQ

What merger did ACRES Commercial Realty (ACR) report and when is it expected to close?

ACRES Commercial Realty reported a merger where ACRES Capital Corp. will merge into a subsidiary, and the company will acquire its external manager. The transactions, including internalization of management, are expected to close on August 6, 2026, subject to the Merger Agreement terms.

How many ACR shares will be issued in the ACRES Capital Corp. merger and what is the exchange ratio?

Each ACRES Capital Corp. common share will convert into 2.61882 shares of ACRES Commercial Realty common stock. The company expects to issue 7,478,994 ACR common shares as merger consideration on the expected August 6, 2026 closing date.

What credit facility will ACRES Commercial Realty (ACR) assume in connection with the merger?

In connection with the merger and internalization, ACRES Commercial Realty will assume an existing ACRES Capital Corp. credit facility with borrowing capacity of up to $250 million, of which approximately $185.0 million is expected to be outstanding on the expected closing date.

What are the key terms of ACRES Commercial Realty’s new 8.625% Senior Secured Notes due 2031?

The company plans a private placement of $200 million of 8.625% Senior Secured Notes due July 31, 2031. Interest will be paid semi-annually starting January 31, 2027, the notes are secured by specified collateral, and a rating downgrade or lack of rating would increase the coupon by 1.00%.

How will ACRES Commercial Realty (ACR) use the proceeds from the new senior secured notes?

ACRES Commercial Realty intends to use part of the $200 million notes proceeds to repay in full its $150 million 5.75% Senior Unsecured Notes maturing in August 2026. Remaining proceeds are planned for general corporate purposes, consistent with the disclosed financing strategy.

What financial covenants will apply to ACRES Commercial Realty’s new notes?

The notes are expected to require minimum liquidity of at least $20,000,000, a net debt-to-equity ratio not exceeding 5.0 to 1.00, a recourse net debt-to-equity ratio not exceeding 2.25 to 1.00, specified EBITDA-to-interest ratios, and a collateral coverage ratio of at least 200% each quarter.

What recent results did ACRES Capital Corp., the manager being acquired by ACR, report?

For 2025, ACRES Capital Corp. reported net income attributable to common shares of $8,022,185, compared with a net loss of $6,652,797 in 2024. Total assets were $2,168,589,040 at December 31, 2025, including $2,016,918,819 of investments held in a consolidated fund.

0001332551false0001332551us-gaap:CommonStockMember2026-08-042026-08-040001332551us-gaap:SeriesCPreferredStockMember2026-08-042026-08-040001332551us-gaap:SeriesDPreferredStockMember2026-08-042026-08-0400013325512026-08-042026-08-04

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 04, 2026

ACRES Commercial Realty Corp.

(Exact name of Registrant as Specified in Its Charter)

Maryland			1-32733	20-2287134
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
390 RXR Plaza
Uniondale, New York				11556
(Address of Principal Executive Offices)				(Zip Code)

Registrant’s Telephone Number, Including Area Code: 516 535-0015

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.001 par value per share		ACR		New York Stock Exchange
8.625% Fixed-to-Floating Series C Cumulative Redeemable Preferred Stock		ACRPrC		New York Stock Exchange
7.875% Series D Cumulative Redeemable Preferred Stock		ACRPrD		New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

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. ☐

Item 8.01 Other Events.

Expected Completion of Merger and Internalization

ACRES Commercial Realty Corp. (the “Company”) expects to complete its previously disclosed Merger (as defined below) and Internalization (as defined below) transactions on August 6, 2026 (the “Expected Closing Date”). On April 29, 2026, the Company and ACRES Holdings Sub LLC (“Merger Sub”), a subsidiary of the Company, on the one hand, and ACRES Capital Corp (“ACC”) and ACRES Capital LLC, a subsidiary of ACC and the external manager of the Company (the “Manager”), on the other hand, entered into an Agreement and Plan of Merger (the “Merger Agreement”). On the Expected Closing Date, pursuant to the terms of the Merger Agreement, ACC will merge with and into Merger Sub, with Merger Sub continuing as the surviving company and a wholly-owned subsidiary of the Company (the “Merger”). As a result of the Merger, among other things, (i) the Company will acquire the Manager, (ii) the Manager will cease to perform any outside management services for the Company, (iii) the Company and the Manager will terminate the existing Fourth Amended and Restated Management Agreement, dated as of July 31, 2020, as amended, by and among the Company, the Manager and ACC, for no additional consideration, and (iv) the Company will become internally managed (the “Internalization”).

On the Expected Closing Date, each outstanding share of ACC common stock, par value $0.0001 per share, will be converted into the right to receive 2.61882 shares of Company common stock, par value $0.001 per share (the “ACR Common Stock”). As a result, the Company expects to issue 7,478,994 shares of ACR Common Stock as consideration for the Merger on the Expected Closing Date.

The foregoing description of the Merger Agreement and the transactions contemplated thereby, including the Merger and Internalization, does not purport to be complete and is qualified entirely by reference to the Merger Agreement, a copy of which was previously included as Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission (the “SEC”) on April 30, 2026, and is incorporated herein by reference.

Assumption of ACC Credit Facility in connection with Merger and Internalization

In connection with the Merger and Internalization, the Company will assume an existing ACC credit facility with borrowing capacity of up to $250 million, of which approximately $185.0 million is expected to be outstanding on the Expected Closing Date (as reflected in the pro forma financial information attached as Exhibit 99.1).

Private Offering of Senior Secured Notes

On the Expected Closing Date, the Company expects to complete a private placement, pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), of $200 million of 8.625% Senior Secured Notes due 2031 (the “Notes”), pursuant to a Note Purchase Agreement to be entered into by and between the Company, the Purchasers party thereto and a collateral agent (the “Collateral Agent”). The Company intends to use a portion of the proceeds from the sale of the Notes to repay in full its $150 million of 5.75% Senior Unsecured Notes upon their maturity in August 2026, with the remaining portion used for general corporate purposes. The Company anticipates the Notes will receive an investment grade rating from a nationally recognized ratings agency.

The Company expects that the Notes will mature on July 31, 2031 and will be secured on a first lien basis by the pledge of certain capital stock in its subsidiaries, residual equity interests in securitized financing vehicles and certain other CRE assets (the “Collateral”), and guaranteed by certain subsidiaries of the Company that granted security interests in the Collateral in favor of the Collateral Agent.

The Company expects that the Notes will have the following general terms:

•The Notes will bear interest at a rate of 8.625% per annum, payable semi-annually on each January 31 and July 31, commencing January 31, 2027.

•Upon the occurrence of a rating downgrade that results in the Notes no longer having investment grade rating or the Company fails to receive and deliver to holders an annual credit rating from at least one nationally recognized ratings agency, the interest rate on the Notes will be increase by 1.00%.

•Prior to July 31, 2028, the Notes will be redeemable at 100% of the principal amount plus a “make-whole” premium, plus any accrued and unpaid interest on the principal amount being redeemed, fees, expenses, indemnities and other amounts to, but excluding, the redemption date.

•On or after July 31, 2028, the Notes will be redeemable at the following prepayment prices (expressed as a percentage of the principal amount of the Notes redeemed), plus any accrued and unpaid interest on the principal amount being redeemed, fees, expenses, indemnities and other amounts to, but excluding, the redemption date), if redeemed during the twelve-month period beginning on July 31 of the year set forth below:

Year	Redemption Price
2028	104.3125%
2029	102.15625%
2030	100.000%

•The Notes are expected to contain customary affirmative and negative covenants, including limitations on incurrence of debt, sale of and liens on the Collateral, restricted payments and certain other activities.

•The Notes are expected to include covenants requiring maintenance of certain financial ratios, including (i) minimum liquidity of not less than $20,000,000 as of the last day of any fiscal quarter, (ii) minimum tangible net worth of not less than the sum of (1) $175.0 million and (2) 50% of net equity capital activity as of the last day of any fiscal quarter, (iii) a net debt to equity ratio not to exceed 5.0 to 1.00 as of the last day of any fiscal quarter, (iv) a recourse net debt to equity ratio not to exceed 2.25 to 1.00 as of the last day of any fiscal quarter, (v) an EBITDA to interest expense ratio of (A) not less than 1.25 to 1.00 as of December 31, 2026 and (B) not less than 1.35 to 1.00 calculated for the trailing four fiscal quarters beginning after December 31, 2026 provided, that (w) for the fiscal quarter ending on December 31, 2026, will be calculated for such fiscal quarter, (x) for fiscal quarter ending on March 31, 2027, will be calculated for the period from October 1, 2026 through the end of such fiscal quarter, (y) for the fiscal quarter ending on June 30, 2027, will be calculated for the period from October 1, 2026 through the end of such fiscal quarter, and (z) for any fiscal quarter ending on or after September 30, 2027, will be calculated based on the preceding four fiscal quarters then ended, and (vi) a collateral coverage ratio of at least 200% as of the last day of any fiscal quarter.

•The Notes will also contain customary events of default, including, among others, failure to pay principal or interest when due, a cross default to the Company’s other material indebtedness, breach of covenants or representations and warranties under the Notes.

•Upon the occurrence of an event of default, subject to certain qualifications and cure periods, the Notes and any accrued and unpaid interest on the Notes will become due and payable immediately.

•Upon the occurrence of certain changes in control of the Company, the Company will be required to offer to repurchase all of the Notes at a purchase price in cash equal to 101% of the principal amount of the Notes, plus accrued and unpaid interest thereon to the date of purchase.

•In addition, upon the receipt of net proceeds from issuance of debt not permitted under the negative covenants, the Company will be required to repurchase the Notes equal to such net proceeds.

The foregoing summary does not purport to be a complete description of the anticipated terms of the Notes, and is subject to the completion of the offering and issuance of the Notes. The disclosure above regarding the Notes does not constitute an offer to sell or the solicitation of an offer to buy the Notes. The Notes have not been and will not be registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act.

Cautionary Statement regarding Forward-Looking Statements

This Current Report on Form 8-K contains certain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements can generally be identified by the use of forward-looking terminology such as “may,” “will,” “continue,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “pro forma,” “look forward” or other similar words or terms. Because such statements include risks, uncertainties and contingencies, actual results may differ materially from the expectations, intentions, beliefs, plans or predictions of the future expressed or implied by such forward-looking statements. Factors that can affect future results are discussed in the documents filed by the Company from time to time with the SEC, including, without limitation, factors impacting whether the Merger and Internalization will close on the expected timeline, whether the transactions described herein will be able to be completed on the expected terms and expected timeline, whether the Company will be able to maintain its sources of liquidity and whether it will be able to identify sufficient suitable investments to increase our originations. The Company undertakes no obligation to update or revise any forward-looking statement to reflect new or changing information or events after the date hereof or to reflect the occurrence of unanticipated events, except as may be required by law.

Item 9.01 Financial Statements and Exhibits.

(a) Financial Statements of Business to be Acquired.

In connection with the expected closing of the Merger and Internalization, (i) the audited consolidated financial statements of ACC as of and for the years ended December 31, 2025 and 2024, together with the accompanying notes thereto and the report thereon of Ernst and Young LLP, are filed as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference; and (ii) the unaudited consolidated financial statements of ACC as of and for the three and six months ended June 30, 2026, together with the accompanying notes thereto, are filed as Exhibit 99.2 to this Current Report on Form 8-K and incorporated herein by reference.

(b) Pro Forma Financial Information.

In connection with the expected closing of the Merger and Internalization, the unaudited pro forma condensed combined consolidated financial information of the Company as of June 30, 2026 and for the six months ended June 30, 2026 and for the year ended December 31, 2025 (the “unaudited pro forma financial information”), is filed as Exhibit 99.3 to this Current Report on Form 8-K and incorporated herein by reference.

The unaudited pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the results of operations or financial condition had the Merger and Internalization been completed on the dates described above, nor is it necessarily indicative of the results of operations in future periods or the future financial condition of the combined entities following the expected closing of the Merger and Internalization.

(d) Exhibits.

Exhibit No.		Description
23.1		Consent of Ernst & Young LLP
99.1		Audited consolidated financial statements of ACC as of and for the years ended December 31, 2025 and 2024 and the report of Ernst & Young LLP, independent auditors.
99.2		Unaudited consolidated financial statements of ACC as of and for the three and six months ended June 30, 2026.
99.3		Unaudited pro forma condensed combined financial information of the ACRES Commercial Realty Corp. as of June 30, 2026 and for the year ended December 31, 2025 and the six months ended June 30, 2026.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

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 hereunto duly authorized.

			ACRES COMMERCIAL REALTY CORP.
Date:	August 4, 2026	By:	/s/ Jaclyn Jesberger
			Jaclyn Jesberger Senior Vice President, Chief Legal Officer and Secretary

Table of Contents

Exhibit 99.1

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
ACRES Capital Corp.
Report of Independent Auditors	F-2
Consolidated Financial Statements as of and for the years ended December 31, 2025 and 2024:
Consolidated Balance Sheets	F-4
Consolidated Statements of Income	F-6
Consolidated Statements of Changes in Equity	F-7
Consolidated Statements of Cash Flows	F-8
Notes to Consolidated Financial Statements	F-9

F-1

Table of Contents

Report of Independent Auditors

The Shareholders of

ACRES Capital Corp.

Opinion

We have audited the consolidated financial statements of ACRES Capital Corp. (the Company), which comprise the consolidated balance sheets as of December 31, 2025 and 2024, and the related consolidated statements of income, changes in equity and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free of material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date that the financial statements are available to be issued.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free of material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS, we:

•Exercise professional judgment and maintain professional skepticism throughout the audit.

•Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

•Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, no such opinion is expressed.

F-2

Table of Contents

•Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

•Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

/s/ Ernst & Young LLP

New York, New York

March 31, 2026

F-3

Table of Contents

ACRES CAPITAL CORP.

CONSOLIDATED BALANCE SHEETS

		As of December 31,
		2025				2024
ASSETS (1)
Cash and cash equivalents		$	5,438,038			$	6,404,487
Restricted cash			1,313,332				812,622
Capitalized mortgage servicing rights, net			—				136,163
Goodwill			35,000,000				35,000,000
Accounts receivable			803,840				257,482
Investments in equity affiliate, at fair value - related party			14,296,031				7,204,635
Due from related parties			1,884,699				3,641,726
Right-of-use assets			6,971,903				3,041,900
Other assets, net of depreciation			1,150,067				1,117,441
Assets of Consolidated Fund:
Investments, at fair value			2,016,918,819				1,168,593,933
Cash and cash equivalents			17,824,819				57,489,876
Restricted cash			28,478,347				—
Accrued interest, servicing receivables and other assets			38,509,145				30,132,034
Total assets		$	2,168,589,040			$	1,313,832,299
LIABILITIES (2)
Borrowings		$	147,319,367			$	179,072,927
Borrowings - related party			10,375,000				10,675,000
Accrued interest, accounts payable, and other liabilities			5,605,251				9,583,110
Derivative liabilities			9,240,299				—
Operating lease liabilities			7,756,825				3,350,580
Liabilities of Consolidated Fund:
Borrowings			1,283,957,379				568,780,118
Accrued interest, accounts payable and other liabilities			31,370,008				4,845,502
Total liabilities			1,495,624,129				776,307,237
REDEEMABLE INTEREST IN CONSOLIDATED COMPANY ENTITIES			33,960,107				—
NON-CONTROLLING INTERESTS IN CONSOLIDATED FUND (3)			676,389,618				571,514,996
STOCKHOLDERS' DEFICIT
Common stock, $0.0001 par value; 3,000,000 shares authorized and 1,695,731 shares outstanding at December 31, 2025 and 2024			170				170
Additional paid-in capital			10,178,636				21,595,701
Accumulated deficit			(47,563,620	)			(55,585,805	)
TOTAL STOCKHOLDERS' DEFICIT			(37,384,814	)			(33,989,934	)
TOTAL EQUITY			639,004,804				537,525,062
TOTAL LIABILITIES, REDEEMABLE INTEREST, NON-CONTROLLING INTERESTS, AND EQUITY		$	2,168,589,040			$	1,313,832,299

Note: The consolidated balance sheets include assets and liabilities of consolidated variable interest entities, or VIEs, as ACRES Capital Corp. is the primary beneficiary of these VIEs. ACRES Capital Corp. holds substantially all of its assets and liabilities through ACRES Holdings, LLC, a consolidated variable interest entity. The Consolidated Fund also represents a VIE which is consolidated by ACRES Capital Corp. See Note 3 for discussion of VIEs.

The accompanying notes are an integral part of these statements.

F-4

Table of Contents

ACRES CAPITAL CORP.

CONSOLIDATED BALANCE SHEETS (cont.)

		As of December 31,
		2025				2024
(1) Assets of Consolidated Fund VIE included in total assets above:
Investments, at fair value		$	2,016,918,819			$	1,168,593,933
Cash and cash equivalents			17,824,819				57,489,876
Restricted cash			28,478,347				—
Accrued interest, servicing receivables and other assets			38,509,145				30,132,034
Total assets of Consolidated Fund VIE		$	2,101,731,130			$	1,256,215,843
(2) Liabilities of Consolidated Fund VIE included in total liabilities above:
Borrowings		$	1,283,957,379			$	568,780,118
Accrued interest, accounts payable and other liabilities			31,370,008				4,845,502
Total liabilities of Consolidated Fund VIE		$	1,315,327,387			$	573,625,620
(3) Non-controlling interests of Consolidated Fund VIE:
Non-controlling interest in Consolidated Fund		$	676,389,618			$	571,514,996

The accompanying notes are an integral part of these statements.

F-5

Table of Contents

ACRES CAPITAL CORP.

CONSOLIDATED STATEMENTS OF INCOME

		Years Ended December 31,
		2025				2024
REVENUES
Management and servicing fees, net		$	666,798			$	437,958
Management and servicing fees, net - related party			6,379,323				6,874,962
Origination fees			9,941,306				1,507,281
Incentive fees			—				530,273
Incentive fees - related party			2,530,732				2,843,369
Application fees and other income			2,115,853				380,318
Interest income			—				208,038
Reimbursable compensation and benefits - related party			4,292,397				3,887,299
Other reimbursable expenses			623,019				683,450
Other reimbursable expenses - related party			762,846				678,777
Total revenues			27,312,274				18,031,725
OPERATING EXPENSES
Compensation and benefits			13,293,326				12,559,317
Equity compensation - related party			1,822,494				1,542,091
General, administrative and other expenses			9,661,404				7,185,438
Interest expense			18,296,890				22,066,450
Interest expense - related party			320,496				330,533
Other reimbursable expenses			623,019				683,450
Other reimbursable expenses - related party			762,846				678,777
Expenses of Consolidated Fund			2,885,014				1,816,291
Total operating expenses			47,665,489				46,862,347
			(20,353,215	)			(28,830,622	)
OTHER INCOME (EXPENSE)
Income from investments in equity affiliates - related party			3,475,527				2,389,184
Net realized and unrealized gains on investments of Consolidated Fund			11,485,716				10,459,420
Interest income of Consolidated Fund			116,692,452				116,717,656
Interest expense of Consolidated Fund			(73,069,749	)			(58,052,325	)
Gain on extinguishment of debt			3,602,197				—
Impairment loss on fees and other receivables - related party			—				(565,104	)
Derivative gain			3,084,289				—
Total other income			65,270,432				70,948,831
INCOME BEFORE TAXES			44,917,217				42,118,209
Provision for income taxes			(541,679	)			(1,391,261	)
NET INCOME			44,375,538				40,726,948
Less: Net income attributable to non-controlling interest in Consolidated Fund			(34,113,246	)			(47,379,745	)
Less: Net income attributable to redeemable interest in Consolidated Company Entities			(2,240,107	)			—
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHARES		$	8,022,185			$	(6,652,797	)

The accompanying notes are an integral part of these statements.

F-6

Table of Contents

ACRES CAPITAL CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

		Common Stock
		Common Stock Shares				Common Stock Amount				Additional Paid-In Capital				Accumulated Deficit				Non-controlling interest in Consolidated Fund				Total Equity
Balance - December 31, 2023			1,695,731			$	170			$	20,053,610			$	(48,933,008	)		$	536,756,780			$	507,877,552
Contributions - noncontrolling interest			—				—				—				—				58,276,681				58,276,681
Equity compensation			—				—				1,542,091				—				—				1,542,091
Dividends/distributions			—				—				—				—				(70,898,210	)			(70,898,210	)
Net income (loss)			—				—				—				(6,652,797	)			47,379,745				40,726,948
Balance - December 31, 2024			1,695,731				170				21,595,701				(55,585,805	)			571,514,996				537,525,062
Contributions - noncontrolling interest			—				—				—				—				167,605,932				167,605,932
Equity compensation			—				—				1,822,494				—				—				1,822,494
Decrease (increase) in redemption value of redeemable interest			—				—				(13,239,559	)			—				—				(13,239,559	)
Dividends/distributions			—				—				—				—				(96,844,556	)			(96,844,556	)
Consolidated net income, excluding amounts attributable to redeemable interest			—				—				—				8,022,185				34,113,246				42,135,431
Balance - December 31, 2025			1,695,731			$	170			$	10,178,636			$	(47,563,620	)		$	676,389,618			$	639,004,804

The accompanying notes are an integral part of these statements.

F-7

Table of Contents

ACRES CAPITAL CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

		Years Ended December 31,
		2025				2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income		$	44,375,538			$	40,726,948
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation			120,084				130,681
Equity compensation - related party			1,822,494				1,542,091
Amortization of debt acquisition costs			622,548				496,982
Amortization of capitalized mortgage servicing rights			136,163				394,848
Non-cash interest expense			3,795,816				7,850,637
Gain on extinguishment of debt			(3,602,197	)			—
Income from investments in equity affiliate - related party			(3,475,527	)			(2,389,184	)
Provision for income taxes			541,679				—
Derivative gain			(3,084,289	)			—
Satisfaction of incentive fees in stock			(3,615,868	)			(1,985,266	)
Impairment loss on fees and other receivables			—				565,104
Adjustments to reconcile net income to net cash (used in) provided by operating activities allocable to non-controlling interests in Consolidated Fund:
Net realized (gain) loss from investments			(387,001	)			535,644
Net change in unrealized gains on investments			(11,098,715	)			(10,995,064	)
Purchase and funding of loan notes, participations and equity interests			(1,149,910,966	)			(466,597,000	)
Sales proceeds and principal payments received on loan notes and participations			312,642,708				496,438,000
Distribution from investments in equity interests			352,854				—
Amortization of debt issuance costs			5,304,788				2,980,714
Deferred fees			5,057,023				8,099,750
Amortization of deferred fees			(5,646,716	)			(6,982,771	)
Cash flows due to changes in operating assets and liabilities:
Accounts receivable			(546,358	)			391,285
Other assets, net of depreciation			(152,714	)			62,564
Due from related parties			1,742,145				28,283
Right-of-use assets			(3,930,003	)			339,208
Operating lease liabilities			4,406,245				(330,893	)
Accrued interest, accounts payable, and other liabilities			(2,419,538	)			(2,685,908	)
Cash flows due to changes in operating assets and liabilities allocable to non-controlling interest in Consolidated Fund:
Change in cash and cash equivalents held at Consolidated Fund			11,186,710				(32,316,092	)
Change in other assets and receivables held at Consolidated Fund			(8,377,111	)			16,178,555
Change in other liabilities and payables held at Consolidated Fund			2,131,314				1,063,362
Net cash (used in) provided by operating activities			(802,008,894	)			53,542,478
CASH FLOWS FROM INVESTING ACTIVITIES:
Payoffs, paydowns and sales of mortgage loans			—				3,715,814
Net cash provided by investing activities			—				3,715,814
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from credit facilities and notes payable			130,000,000				—
Paydowns of credit facilities and notes payable			(155,616,554	)			(9,900	)
Paydowns of loan payable - related party			(300,000	)			(300,000	)
Proceeds from issuance of redeemable interests			33,000,000				—
Payment of redeemable interest issuance costs			(2,194,971	)			—
Payment of debt acquisitons costs			(6,896,192	)			—
Transaction costs incurred in debt restructuring			(2,156,982	)			—
Allocable to non-controlling interests in Consolidated Fund:
Contributions from non-controlling interests in Consolidated Fund			167,605,932				58,276,681
Distributions to non-controlling interests in Consolidated Fund			(73,621,142	)			(70,898,211	)
Borrowings under loan obligations by Consolidated Fund			1,142,325,016				211,148,207
Repayments under loan obligations by Consolidated Fund			(419,800,058	)			(252,714,525	)
Payment of debt acquisition costs by Consolidated Fund			(10,801,894	)			(698,653	)
Net cash provided by (used in) financing activities			801,543,155				(55,196,401	)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH			(465,739	)			2,061,891
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD			7,217,109				5,155,218
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD		$	6,751,370			$	7,217,109

The accompanying notes are an integral part of these statements.

F-8

Table of Contents

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION

ACRES Capital Corp., a Delaware corporation, along with its subsidiaries (collectively, the “Company”), is a private lender dedicated to nationwide middle-market commercial real estate (“CRE”) lending in the United States (“U.S.”). The Company conducts its operations through the use of subsidiaries that it consolidates into its financial statements. Substantially all of the Company’s operations are conducted through ACRES Capital LLC (the “Operating Subsidiary”), a wholly owned subsidiary that is registered with the Securities and Exchange Commission as an investment adviser. The Operating Subsidiary serves as the investment manager of ACRES Mortgage Fund, Ltd. (“AMF”), an exempted company under the laws of the Cayman Islands formed for the purpose of investing in CRE mortgage loans. The Operating Subsidiary also serves as the manager of ACRES Commercial Realty Corp. (“ACR”), a Maryland corporation. ACR is a real estate investment trust (“REIT”) that is primarily focused on originating, holding, and managing CRE mortgage loans and other commercial real estate related debt investments.

On July 23, 2025, the Company contributed substantially all of its assets, including its interests in the Operating Subsidiary, and liabilities to ACRES Holdings, LLC, a wholly-owned subsidiary, in exchange for membership interests in ACRES Holdings, LLC. Contemporaneously with this contribution, ACRES Holdings, LLC issued preferred equity securities to a third party. As a result, the Company holds substantially all of its assets and liabilities through ACRES Holdings, LLC, a consolidated variable interest entity. See Note 3.

The Company consolidates AMF in the accompanying financial statements (the “Consolidated Fund”) (the Company, excluding the Consolidated Fund, the “Consolidated Company Entities”). Including the results of the Consolidated Fund significantly increases the reported amounts of the assets, liabilities, revenues, expenses and cash flows within the accompanying consolidated financial statements; however, the Consolidated Fund results included herein have no direct effect on the net income attributable to ACRES Capital Corp. or to its stockholders’ deficit. Instead, economic ownership interests of the third-party investors in the Consolidated Fund are reflected as non-controlling interests in the Consolidated Fund. Further, cash flows allocable to non-controlling interests in Consolidated Fund are specifically identifiable within the consolidated statements of cash flows.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the U.S. (“GAAP”). The Company’s Consolidated Fund is an investment company under GAAP based on the following characteristics: the Consolidated Fund obtains funds from one or more investors and the Consolidated Fund’s business purpose and substantive activities are investing funds for returns from investment income. Therefore, investments of the Consolidated Fund are recorded at fair value and the unrealized gain (loss) in an investment’s fair value is recognized on a current basis within the consolidated statements of income. In the preparation of these consolidated financial statements, the Company has retained the investment company accounting for the Consolidated Fund under GAAP.

All of the investments held by the Consolidated Fund are presented at their estimated fair values within the Company’s consolidated balance sheets. Net income attributable to the economic ownership interest of the third-party investors in the Consolidated Fund are presented within net income attributable to non-controlling interest in Consolidated Fund within the consolidated statements of income.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company, majority-owned or controlled subsidiaries and variable interest entities (“VIEs”) for which the Company is considered the primary beneficiary. All inter-company transactions and balances have been eliminated in consolidation.

F-9

Table of Contents

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Variable Interest Entities

A VIE is defined as an entity in which equity investors (i) do not have a controlling financial interest and/or (ii) do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. A VIE is required to be consolidated by its primary beneficiary, which is defined as the party that (a) has the power to control the activities that most significantly impact the VIE’s economic performance and (b) has the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

The Company considers the following criteria in determining whether an entity is a VIE:

1.The equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support provided by any parties, including the equity holders; or

2.The equity investors lack one or more of the following essential characteristics of a controlling financial interest:

a.The direct ability to make decisions about the entity’s activities through voting rights or similar rights;

b.The obligation to absorb the expected losses of the entity; or

c.The right to receive the expected residual returns of the entity. The equity investors have voting rights that are not proportionate to their economic interests, and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest.

In determining whether the Company is the primary beneficiary of a VIE, the Company reviews governing contracts, formation documents and any other contractual arrangements to determine the activities that have the most significant impact on the VIE and which entity has the power to direct those activities. The Company also looks for kick-out rights, protective rights, and participating rights as well as any financial or other support provided to the VIE and the reason for that support, and the terms of any explicit or implicit arrangements that may require the Company to provide future support. The Company then makes a determination based on its power to direct the most significant activities of the VIE and/or a financial interest that is potentially significant. In instances when a VIE is owned by both the Company and related parties, the Company considers whether there is a single party in the related party group that meets both the power and losses or benefits criteria on its own as though no related party relationship existed. If one party within the related party group meets both these criteria, such reporting entity is the primary beneficiary of the VIE. If no party within the related party group on its own meets both the power and losses or benefits criteria, but the related party group as a whole meets these two criteria, the determination of primary beneficiary within the related party group is based upon an analysis of the facts and circumstances with the objective of determining which party is most closely associated with the VIE. Determining the primary beneficiary requires significant judgment. The Company continuously analyzes entities in which it holds variable interests to identify reconsideration events and determine whether such entities are VIEs and whether such potential VIEs should be consolidated or deconsolidated.

Voting Interest Entities

A voting interest entity is an entity in which the total equity investment at risk is sufficient to enable it to finance its activities independently and the equity holders have the power to direct the activities of the entity that most significantly impact its economic performance, the obligation to absorb the losses of the entity and the right to receive the residual returns of the entity. The usual condition for a controlling financial interest in a voting interest entity is ownership of a majority voting interest. If the Company has a majority voting interest in a voting interest entity, the entity will generally be consolidated.

F-10

Table of Contents

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The Company performs on-going reassessments of whether entities previously evaluated under the voting interest framework have become VIEs, based on certain events, and therefore subject to the VIE consolidation framework.

Use of Estimates

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

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand and all highly liquid investments with original maturities of three months or less at the time of purchase. Cash and cash equivalents held at the Consolidated Fund represents cash that, although not legally restricted, is not available to support the general liquidity needs of the Company, as the use of such amounts is generally limited to the activities of the Consolidated Fund.

As of December 31, 2025 and 2024, the Company had cash balances with financial institutions in excess of Federal Deposit Insurance Corporation insured limits. The Company monitors the credit standing of these financial institutions.

Restricted Cash

Restricted cash consists of deposits received from potential new borrowers. The Company maintains loan expense deposits collected from prospective borrowers used to offset underwriting expenses associated with originating loans.

Redeemable Interest

Redeemable interest in the Company represents preferred equity securities issued by a subsidiary of the Company to a third party. Income (loss) is allocated based on the preferred return attributable to the redeemable interest. At each balance sheet date, the carrying value of the redeemable interest is presented at the redemption amount, to the extent that the redemption amount exceeds the initial measurement on the date of issuance. The Company recognizes changes in the redemption amount with corresponding adjustments against retained earnings, or additional paid-in-capital in the absence of retained earnings, within stockholders’ deficit within the consolidated balance sheets.

Derivative Instruments

Derivative financial instruments are recorded in the accompanying balance sheets at fair value in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 815. When the Company enters into a financial instrument such as a debt or equity agreement (the “host contract”), the Company assesses whether the economic characteristics of any embedded features are clearly and closely related to the primary economic characteristics of the remainder of the host contract. When it is determined that (i) an embedded feature possesses economic characteristics that are not clearly and closely related to the primary economic characteristics of the host contract, and (ii) a separate, stand-alone instrument with the same terms would meet the definition of a financial derivative instrument, then the embedded feature is bifurcated from the host contract and accounted for as a derivative instrument. The estimated fair value of the derivative feature is recorded in the accompanying balance sheets separately from the carrying value of the host contract. Subsequent changes in the estimated fair value of derivatives are recorded as a gain or loss in the Company’s statements of income.

The Company concluded the redeemable interest preferred equity securities host contract contained features that required bifurcation and separate accounting under ASC 815.

F-11

Table of Contents

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Warrants

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480 and ASC 815. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each consolidated balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a gain or loss on the consolidated statements of income.

The Company determined that upon further review of the warrant agreements, the Company concluded that its warrants qualify for liability accounting treatment.

Issuance Costs Related to Equity and Debt

The Company allocates issuance costs between the individual freestanding instruments identified on the same basis as proceeds were allocated. Issuance costs associated with the issuance of redeemable interests (i.e., temporary equity-classified stock) are recorded as a charge against the gross proceeds of the offering and amortized over the earliest estimable redemption date. Any issuance costs associated with the issuance of liability-classified warrants are expensed as incurred. Issuance costs associated with the issuance of debt are recorded as a direct reduction of the carrying amount of the debt liability. The Company accounts for debt as liabilities measured at amortized cost and amortizes the resulting debt discount to interest expense using the effective interest method over the expected term of the notes pursuant to ASC 835.

Non-Controlling Interests

The non-controlling interests in Consolidated Fund represents a component of equity and net income attributable to ownership interests that third-party investors hold in the Consolidated Fund.

Troubled Debt Restructuring

When the Company modifies or extinguishes debt, it first evaluates whether the modification qualifies as a troubled debt restructuring (“TDR”) under ASC 470-60. As per ASC 470-60, a TDR refers to a situation where the creditor grants concessions to a borrower experiencing financial difficulties. A lender is deemed to have granted a concession if the borrower’s effective interest rate on the restructured debt is less than the effective interest rate of the old debt immediately before the restructuring. Such restructuring is done with the intent to provide relief to the borrower and to maximize the potential for payable recovery by the lender.

In accordance with ASC 470-60, when the total future cash payments under the new terms are less than the carrying amount of the payable at the date of restructuring, the difference between the carrying amount and the total future cash payments is recognized as a gain on extinguishment of debt in the consolidated financial statements. This gain is recorded immediately in the period the restructuring occurs. If the total future cash payments under the new terms exceed the carrying amount of the debt at the date of restructuring, no adjustment to the carrying amount of the debt is made. Instead, the Company calculates a new effective interest rate (“EIR”) based on the revised terms of the restructured debt. The debt is then amortized over the remaining term of the debt using the new EIR, with interest expense recognized based on such rate in future periods.

F-12

Table of Contents

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

If a TDR is determined not to have occurred, the Company evaluates the modification in accordance with ASC 470-50-40, which requires modification to debt instruments to be evaluated to assess whether the modifications are considered “substantial modifications”. A substantial modification of terms is accounted for like an extinguishment.

Income Earned from Fee-Based Services

Income from fee-based services includes asset management fees, development fees, ACR management fees, servicing fees, and incentive fees. Asset management fees, development fees, and servicing fees are included in management and servicing fees, net on the consolidated statements of income. ACR management fees are included in management and servicing fees, net – related party on the consolidated statements of income. Incentive fees are included in incentive fees on the consolidated statements of income. Incentive fees are earned when specified financial hurdles are met for certain separately managed accounts and ACR. Revenues from fee-based services that the Company provides are recognized as earned over time in accordance with contractual agreements. The services the Company provides represent performance obligations that are satisfied over time.

ACR management fees

The Company earns a monthly base management fee equal to 1/12th of the amount of ACR’s equity (as defined in the management agreement) multiplied by 1.50%. Such base management fees are included in management and servicing fees, net - related party on the consolidated statements of income.

The Company may terminate the management agreement at its option: (A) in the event that ACR defaults in the performance or observance of any material term, condition or covenant contained in the management agreement and such default continues for a period of 30 days after written notice thereof, or (B) without payment of a termination fee by ACR, if ACR becomes regulated as an investment company under the Investment Company Act, with such termination deemed to occur immediately before such event.

The ACR management agreement’s current contract term ends on July 31, 2026, and the agreement provides for automatic one-year renewals on such date and on each July 31 thereafter until terminated. The management agreement may be terminated upon the affirmative vote of at least two-thirds of ACR’s independent directors, or by the affirmative vote of the holders of at least a majority of the outstanding shares of ACR’s common stock, based upon unsatisfactory performance that is materially detrimental to ACR or a determination by ACR’s independent directors that the management fees payable to the Company are not fair, subject to the Company’s right to prevent such a compensation termination by accepting a mutually acceptable reduction of management fees. ACR’s Board must provide 180 days’ prior notice of any such termination. If ACR terminates the management agreement, the Company is entitled to a termination fee equal to four times the sum of the average annual base management fee and the average annual incentive compensation earned by the Company during the two 12-month periods immediately preceding the date of termination, calculated as of the end of the most recently completed fiscal quarter before the date of termination. ACR may also terminate the management agreement for cause with 30 days’ prior written notice from ACR’s Board. No termination fee is payable in the event of a termination for cause (as defined in the management agreement).

ACR incentive fees (management agreement)

The Company earns an incentive fee calculated and payable in arrears in an amount, not less than zero, equal to the excess of (1) the product of (a) 20% and (b) the excess of (i) Earnings Available for Distribution (“EAD”) (as defined in the management agreement) of ACR for the previous 12-month period, over (ii) the product of (A) ACR’s book value equity in the previous 12-month period, and (B) 7% per annum, over (2) the sum of any incentive compensation paid to the Company with respect to the first three calendar quarters of such previous 12-month period; provided, however, that no incentive compensation shall be payable with respect to any calendar quarter unless EAD for the 12 most recently completed calendar quarters (or such lesser number of completed calendar quarters from September 30, 2022) in the aggregate is greater than zero.

F-13

Table of Contents

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Incentive compensation is calculated and payable quarterly to the Company to the extent it is earned. Up to 75% of the incentive compensation is payable in cash and at least 25% is payable in the form of an award of common stock of ACR. The Company may elect to receive more than 25% of its incentive compensation in common stock. All shares are fully vested upon issuance; however, the Company may not sell such shares for one year after the incentive compensation becomes due and payable unless the management agreement is terminated.

ACR incentive fees (Manager Incentive Plan)

In June 2021, the shareholders of ACR approved the ACR Manager Incentive Plan (“MIP”). The MIP provides for the issuance of ACR equity-based awards to the Company when certain ACR book value targets are met. Such awards vest over four years. The Company initially measures such grants at fair value on the grant date and recognizes income monthly on a straight-line basis over the service period to Incentive fees – related party on the consolidated statements of income.

Reimbursable Compensation and Benefits

Reimbursable compensation and benefits include reimbursements, at cost, which arise primarily from the services employees of the Company provide pursuant to the ACR management agreement that are charged to ACR. The Company recognizes the revenue for reimbursements when the Company incurs the related reimbursable compensation and benefits and other costs on behalf of ACR.

Other Reimbursable Expenses

Other reimbursable expenses include reimbursements that arise from out-of-pocket expenses and certain other costs incurred by the Company that related directly to ACR’s operations or other reimbursable activity. The Company has determined that it controls the services provided by third parties for ACR and therefore the Company accounts for the cost of these services and the related reimbursement revenue on a gross basis.

Income Taxes

The Company accounts for its income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities by using the enacted tax rates in effect for the year in which differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers material positive and negative evidence, including results of recent operations, income in the carryback period, future reversals of existing taxable temporary differences, tax-planning strategies, and projected future taxable income. A valuation allowance is recorded to the extent the more-likely-than-not threshold is not met. If a valuation allowance is recorded and it is subsequently determined that the Company would be able to realize any portion of its deferred tax assets in the future in excess of their net recorded amount, an adjustment would be made to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. Uncertain tax positions are recorded in accordance with ASC 740 on the basis of a two-step process in which (1) it is determined whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the largest amount of tax benefit.

Investments in Equity Affiliate

The Company utilizes the equity method to account for investments when it possesses the ability to exercise significant influence, but not control, over the operating and financial policies of the investee. The ability to exercise significant influence is presumed when the investor possesses more than 20% of the voting interests of the investee. This presumption may be overcome based on specific facts and circumstances that demonstrate that the ability to

F-14

Table of Contents

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

exercise significant influence is restricted. The Company elected the fair value option for its equity method investment and determines fair value using the closing price of common shares as of the end of the period. The Company recognizes the unrealized and realized gains and losses on equity investments on the consolidated statements of income as income from investments in equity affiliate - related party.

Goodwill

Goodwill represents the costs of business acquisitions in excess of the fair value of identifiable net assets acquired. The Company evaluates the recoverability of goodwill annually on the first day of the Company’s fiscal fourth quarter of each fiscal year, or more frequently, if events or changes in circumstances indicate that goodwill might be impaired. If the Company’s review indicates that the carrying amount of goodwill exceeds its fair value, the Company will reduce the carrying amount of goodwill to fair value. Based on the impairment tests performed as of October 1, 2025, there were no indications that goodwill was impaired and nor were there events or changes in circumstances indicating impairment at December 31, 2025.

Leases

Arrangements are evaluated to identify leases at inception. The right to use an underlying asset for the lease term is recorded as operating lease right-of-use ("ROU") assets and obligations to make lease payments arising from the lease are recorded as lease liabilities. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. At the adoption date, the Company made an accounting policy election to exclude leases with an initial term of twelve months or less.

Stock-Based Compensation

Issuances of options to purchase shares of the Company’s common stock are initially measured at fair value on the grant date and expensed monthly on a straight-line basis over the service period to equity compensation expense on the consolidated statements of income, with a corresponding entry to additional paid-in capital on the consolidated balance sheets. In accordance with GAAP, the fair value of all unvested issuances of restricted stock and options is not remeasured after the initial grant date. The Company accounts for forfeitures of employee awards as they occur. As a result, the Company records compensation cost assuming all option holders will complete the requisite service period. If an employee forfeits an award because they fail to complete the requisite service period, the Company will reverse compensation cost previously recognized in the period the award is forfeited.

Reclassifications

Certain reclassifications have been made to prior year’s financial information to conform to the December 31, 2025 presentation. These reclassifications had no effect on net loss or total equity.

Recent accounting pronouncements

Accounting Standards Adopted in 2025

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"). ASU 2023-09 requires enhanced disclosures in connection with an entity's effective tax rate reconciliation and additional disclosures about income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2025. The Company has adopted this guidance prospectively which did not have a material impact to its consolidated financial statements or financial statement disclosures. See Note 13 - Income Taxes for further information.

F-15

Table of Contents

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 3 - CONSOLIDATION

The Company has evaluated its loans, investments in unconsolidated entities, guarantees and other financial contracts in order to determine if they are variable interests in VIEs. The Company regularly monitors these legal interests and contracts and, to the extent it has determined that it has a variable interest, analyzes the related entity for potential consolidation.

Investments in Consolidated Variable Interest Entities

The Company consolidates entities in which the Company has a variable interest and, as the investment manager, has both the power to direct the most significant activities and a potentially significant economic interest. Investments in the consolidated VIEs are reported at fair value and represent the Company’s maximum exposure to loss.

ACRES Holdings, LLC is considered and treated as a VIE because the Company directs the significant activities of the entity and not the holders of equity at risk. The Company concluded its interest in ACRES Holdings, LLC represented a potentially significant economic interest and the Company represented the primary beneficiary of ACRES Holdings, LLC. As a result, the Company consolidated ACRES Holdings, LLC as of July 23, 2025 and continues to be consolidated as of December 31, 2025.

AMF is considered and treated as a VIE because the investors of AMF, who are unaffiliated with the Company, do not have substantive rights to impact the ongoing governance and operating activities of AMF, including the ability to remove the Company as the investment manager without cause. The Company concluded its interest in AMF represented a potentially significant economic interest and the Company represented the primary beneficiary of AMF. As a result, the Company consolidated AMF as of and for the years ended December 31, 2025 and 2024.

Investments in Non-Consolidated Variable Interest Entities (the Company is not the primary beneficiary, but has a variable interest)

Based on management’s analysis, the Company is not the primary beneficiary of the VIEs discussed below since it does not have both (i) the power to direct the activities that most significantly impact the VIEs’ economic performance and (ii) the obligation to absorb the losses of the VIEs or the right to receive the benefits from the VIEs, which could be significant to the VIEs. Accordingly, the following VIEs are not consolidated in the Company’s financial statements at December 31, 2025. The Company continuously reassesses whether it is deemed to be the primary beneficiary of its unconsolidated VIEs.

The Company completed a qualitative analysis to determine whether it is the primary beneficiary of ACRES SPV LLC, a wholly owned subsidiary of the Company, and determined that it was not the primary beneficiary as of December 31, 2025 and 2024. ACRES SPV LLC is considered and treated as a VIE due to a lack of sufficient equity. The Company (including related parties) are not deemed to be the primary beneficiary of the VIE as the Company does not have the power to direct the activities most significant to ACRES SPV LLC which include the management of current investments and operating activity. Accordingly, ACRES SPV LLC is not consolidated into the Company’s consolidated financial statements as of December 31, 2025 and 2024. The Company has no investment at risk as of December 31, 2025 and 2024.

F-16

Table of Contents

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Consolidating Schedules

The following supplemental financial information illustrates the consolidating effects of the Consolidated Fund on the Company’s balance sheet, results from operations and cash flows:

		As of December 31, 2025
		Consolidated Company Entities				Consolidated Fund				Eliminations				Consolidated
ASSETS
Cash and cash equivalents		$	5,438,038			$	—			$	—			$	5,438,038
Restricted cash			1,313,332				—				—				1,313,332
Goodwill			35,000,000				—				—				35,000,000
Accounts receivable			803,840				—				—				803,840
Investments in equity affiliate, at fair value - related party			121,295,369				—				(106,999,338	)			14,296,031
Due from related parties			4,899,486				—				(3,014,787	)			1,884,699
Right-of-use assets			6,971,903				—				—				6,971,903
Other assets, net of depreciation			1,150,067				—				—				1,150,067
Assets of Consolidated Fund:
Investments, at fair value			—				2,016,918,819				—				2,016,918,819
Cash and cash equivalents			—				17,824,819				—				17,824,819
Restricted cash			—				28,478,347				—				28,478,347
Accrued interest, servicing receivables and other assets			—				38,509,145				—				38,509,145
Total assets		$	176,872,035			$	2,101,731,130			$	(110,014,125	)		$	2,168,589,040
LIABILITIES (2)
Borrowings		$	147,319,367			$	—			$	—			$	147,319,367
Borrowings - related party			10,375,000				—				—				10,375,000
Accrued interest, accounts payable, and other liabilities			5,605,251				—				—				5,605,251
Derivative liabilities			9,240,299				—				—				9,240,299
Operating lease liabilities			7,756,825				—				—				7,756,825
Liabilities of Consolidated Fund:
Borrowings							1,283,957,379				—				1,283,957,379
Accrued interest, accounts payable and other liabilities							31,370,008				—				31,370,008
Due to related party							3,014,787				(3,014,787	)			—
Total liabilities			180,296,742				1,318,342,174				(3,014,787	)			1,495,624,129
REDEEMABLE INTEREST IN CONSOLIDATED COMPANY ENTITIES			33,960,107				—				—				33,960,107
NON-CONTROLLING INTERESTS IN CONSOLIDATED FUND (3)			—				783,388,956				(106,999,338	)			676,389,618
STOCKHOLDERS' DEFICIT
Common stock, $0.0001 par value; 3,000,000 shares authorized and 1,695,731 shares outstanding at December 31, 2025			170				—				—				170
Additional paid-in capital			10,178,636				—				—				10,178,636
Accumulated deficit			(47,563,620	)			—				—				(47,563,620	)
TOTAL STOCKHOLDERS' DEFICIT			(37,384,814	)			—				—				(37,384,814	)
TOTAL EQUITY			(37,384,814	)			783,388,956				(106,999,338	)			639,004,804
TOTAL LIABILITIES, REDEEMABLE INTEREST, NON-CONTROLLING INTERESTS, AND EQUITY		$	176,872,035			$	2,101,731,130			$	(110,014,125	)		$	2,168,589,040

F-17

Table of Contents

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

		As of December 31, 2024
		Consolidated Company Entities				Consolidated Fund				Eliminations				Consolidated
ASSETS
Cash and cash equivalents		$	6,404,487			$	—			$	—			$	6,404,487
Restricted cash			812,622				—				—				812,622
Capitalized mortgage servicing rights, net			136,163				—				—				136,163
Goodwill			35,000,000				—				—				35,000,000
Accounts receivable			257,482				—				—				257,482
Investments in equity affiliates, at fair value - related party			115,940,133				—				(108,735,498	)			7,204,635
Due from related parties			5,981,455				—				(2,339,729	)			3,641,726
Right-of-use assets			3,041,900				—				—				3,041,900
Other assets, net of depreciation			1,117,441				—				—				1,117,441
Assets of Consolidated Fund:
Investments, at fair value			—				1,168,593,933				—				1,168,593,933
Cash and cash equivalents			—				57,489,876				—				57,489,876
Accrued interest, servicing receivables and other assets			—				30,132,034				—				30,132,034
Total assets		$	168,691,683			$	1,256,215,843			$	(111,075,227	)		$	1,313,832,299
LIABILITIES
Borrowings		$	179,072,927			$	—			$	—			$	179,072,927
Borrowings - related party			10,675,000				—				—				10,675,000
Accrued interest, accounts payable, and other liabilities			9,583,110				—				—				9,583,110
Operating lease liabilities			3,350,580				—				—				3,350,580
Liabilities of Consolidated Fund:
Borrowings			—				568,780,118				—				568,780,118
Accrued interest, accounts payable and other liabilities			—				4,845,502				—				4,845,502
Due to related party			—				2,339,729				(2,339,729	)			—
Total liabilities			202,681,617				575,965,349				(2,339,729	)			776,307,237
NON-CONTROLLING INTEREST IN CONSOLIDATED FUND			—				680,250,494				(108,735,498	)			571,514,996
STOCKHOLDERS' DEFICIT
Common stock, $0.0001 par value; 3,000,000 shares authorized and 1,695,731 shares outstanding at December 31, 2024			170				—				—				170
Additional paid-in capital			21,595,701												21,595,701
Accumulated deficit			(55,585,805	)			—				—				(55,585,805	)
TOTAL STOCKHOLDERS' DEFICIT			(33,989,934	)			—				—				(33,989,934	)
TOTAL EQUITY			(33,989,934	)			680,250,494				(108,735,498	)			537,525,062
TOTAL LIABILITIES, NON-CONTROLLING INTEREST AND EQUITY		$	168,691,683			$	1,256,215,843			$	(111,075,227	)		$	1,313,832,299

F-18

Table of Contents

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

		Year ended December 31, 2025
		Consolidated Company Entities				Consolidated Fund				Eliminations				Consolidated
REVENUES
Management and servicing fees, net		$	666,798			$	—			$	—			$	666,798
Management and servicing fees, net - related party			16,842,620				—				(10,463,297	)			6,379,323
Origination fees			9,941,306				—				—				9,941,306
Incentive fees - related party			2,530,732				—				—				2,530,732
Application fees and other income			2,115,853				—				—				2,115,853
Reimbursable compensation and benefits - related party			4,292,397				—				—				4,292,397
Other reimbursable expenses			623,019				—				—				623,019
Other reimbursable expenses - related party			1,281,145								(518,299	)			762,846
Total revenues			38,293,870				—				(10,981,596	)			27,312,274
OPERATING EXPENSES
Compensation and benefits			13,293,326				—				—				13,293,326
Equity compensation - related party			1,822,494				—				—				1,822,494
General, administrative and other expenses			9,661,404				—				—				9,661,404
Interest expense			18,296,890				—				—				18,296,890
Interest expense - related party			320,496				—				—				320,496
Other reimbursable expenses			623,019				—				—				623,019
Other reimbursable expenses - related party			1,281,145				—				(518,299	)			762,846
Expenses of Consolidated Fund			—				13,348,311				(10,463,297	)			2,885,014
Total operating expenses			45,298,774				13,348,311				(10,981,596	)			47,665,489
			(7,004,904	)			(13,348,311	)			—				(20,353,215	)
OTHER INCOME (EXPENSE)															—
Income from investments in equity affiliates - related party			11,122,389				—				(7,646,862	)			3,475,527
Net realized and unrealized gains on investments of Consolidated Fund			—				11,485,716				—				11,485,716
Interest income of Consolidated Fund			—				116,692,452				—				116,692,452
Interest expense of Consolidated Fund			—				(73,069,749	)			—				(73,069,749	)
Gain on extinguishment of debt			3,602,197				—				—				3,602,197
Derivative gain			3,084,289				—				—				3,084,289
Total other income			17,808,875				55,108,419				(7,646,862	)			65,270,432
INCOME BEFORE TAXES			10,803,971				41,760,108				(7,646,862	)			44,917,217
Provision for income taxes			(541,679	)			—				—				(541,679	)
NET INCOME			10,262,292				41,760,108				(7,646,862	)			44,375,538
Less: Net income attributable to non-controlling interest in Consolidated Fund			—				—				(34,113,246	)			(34,113,246	)
Less: Net income attributable to redeemable interest in Consolidated Company Entities			(2,240,107	)			—				—				(2,240,107	)
NET INCOME ATTRIBUTABLE TO COMMON SHARES		$	8,022,185			$	41,760,108			$	(41,760,108	)		$	8,022,185

F-19

Table of Contents

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

		Year ended December 31, 2024
		Consolidated Company Entities				Consolidated Fund				Eliminations				Consolidated
REVENUES
Management and servicing fees, net		$	437,958			$	—			$	—			$	437,958
Management and servicing fees, net - related party			15,330,687				—				(8,455,725	)			6,874,962
Origination fees			1,507,281				—				—				1,507,281
Incentive fees			530,273				—				—				530,273
Incentive fees - related party			2,843,369				—				—				2,843,369
Application fees and other income			380,318				—				—				380,318
Interest income			208,038				—				—				208,038
Reimbursable compensation and benefits - related party			3,887,299				—				—				3,887,299
Other reimbursable expenses			683,450				—				—				683,450
Other reimbursable expenses - related party			1,198,386				—				(519,609	)			678,777
Total revenues			27,007,059				—				(8,975,334	)			18,031,725
OPERATING EXPENSES
Compensation and benefits			12,559,317				—				—				12,559,317
Equity compensation - related party			1,542,091				—				—				1,542,091
General, administrative and other expenses			7,185,438				—				—				7,185,438
Interest expense			22,066,450				—				—				22,066,450
Interest expense - related party			330,533				—				—				330,533
Other reimbursable expenses			683,450				—				—				683,450
Other reimbursable expenses - related party			1,198,386				—				(519,609	)			678,777
Expenses of Consolidated Fund			—				10,272,016				(8,455,725	)			1,816,291
Total operating expenses			45,565,665				10,272,016				(8,975,334	)			46,862,347
			(18,558,606	)			(10,272,016	)			—				(28,830,622	)
OTHER INCOME (EXPENSE)
Income from investments in equity affiliates - related party			13,862,174				—				(11,472,990	)			2,389,184
Net realized and unrealized gains on investments of Consolidated Fund			—				10,459,420				—				10,459,420
Interest income of Consolidated Fund			—				116,717,656				—				116,717,656
Interest expense of Consolidated Fund			—				(58,052,325	)			—				(58,052,325	)
Impairment loss on fees and other receivables - related party			(565,104	)			—				—				(565,104	)
Total other income (expense)			13,297,070				69,124,751				(11,472,990	)			70,948,831
INCOME (LOSS) BEFORE TAXES			(5,261,536	)			58,852,735				(11,472,990	)			42,118,209
Provision for income taxes			(1,391,261	)											(1,391,261	)
NET INCOME (LOSS)			(6,652,797	)			58,852,735				(11,472,990	)			40,726,948
Less: Net income attributable to non-controlling interest in Consolidated Fund			—				—				(47,379,745	)			(47,379,745	)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHARES		$	(6,652,797	)		$	58,852,735			$	(58,852,735	)		$	(6,652,797	)

F-20

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

		Year Ended December 31, 2025
		Consolidated Company Entities				Consolidated Fund				Eliminations				Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)		$	10,262,292			$	41,760,108			$	(7,646,862	)		$	44,375,538
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation			120,084				—				—				120,084
Equity compensation - related party			1,822,494				—				—				1,822,494
Amortization of debt acquisition costs			622,548				—				—				622,548
Amortization of capitalized mortgage servicing rights			136,163				—				—				136,163
Non-cash interest expense			3,795,816				—				—				3,795,816
Gain on extinguishment of debt			(3,602,197	)			—				—				(3,602,197	)
Income from investments in equity affiliates - related party			(11,122,389	)			—				7,646,862				(3,475,527	)
Provision for income taxes			541,679				—				—				541,679
Derivative gain			(3,084,289	)			—								(3,084,289	)
Distributions from equity affiliates - related party			9,383,026				—				(9,383,026	)			—
Satisfaction of incentive fees in stock			(3,615,868	)			—				—				(3,615,868	)
Adjustments to reconcile net income to net cash (used in) provided by operating activities allocable to non-controlling interests in Consolidated Fund:
Net realized gain from investments			—				(387,001	)			—				(387,001	)
Net change in unrealized gains on investments			—				(11,098,715	)			—				(11,098,715	)
Purchase and funding of loan notes, participations and equity interests			—				(1,149,910,966	)			—				(1,149,910,966	)
Sales proceeds and principal payments received on loan notes and participations			—				312,642,708				—				312,642,708
Distribution from investments in equity interests			—				352,854				—				352,854
Amortization of debt issuance costs			—				5,304,788				—				5,304,788
Deferred fees			—				5,057,023				—				5,057,023
Amortization of deferred fees			—				(5,646,716	)			—				(5,646,716	)
Cash flows due to changes in operating assets and liabilities:															—
Accounts receivable			(546,358	)			—				—				(546,358	)
Other assets, net of depreciation			(152,714	)			—				—				(152,714	)
Due from related parties			1,081,969				—				660,176				1,742,145
Right-of-use assets			(3,930,003	)			—				—				(3,930,003	)
Operating lease liabilities			4,406,245				—				—				4,406,245
Accrued interest, accounts payable, and other liabilities			(2,419,538	)			—				—				(2,419,538	)
Cash flows due to changes in operating assets and liabilities allocable to non-controlling interest in Consolidated Fund:
Change in cash and cash equivalents held at Consolidated Fund			—				—				11,186,710				11,186,710
Change in other assets and receivables held at Consolidated Fund			—				(8,377,111	)			—				(8,377,111	)
Change in other liabilities and payables held at Consolidated Fund			—				2,791,490				(660,176	)			2,131,314
Net cash provided by (used in) operating activities			3,698,960				(807,511,538	)			1,803,684				(802,008,894	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from credit facilities and notes payable			130,000,000				—				—				130,000,000
Paydowns of credit facilities and notes payable			(155,616,554	)			—				—				(155,616,554	)
Paydowns of loan payable - related party			(300,000	)			—				—				(300,000	)
Proceeds from issuance of redeemable interests			33,000,000				—				—				33,000,000
Payment of redeemable interest issuance costs			(2,194,971	)			—				—				(2,194,971	)
Payment of debt acquisitons costs			(6,896,192	)											(6,896,192	)
Transaction costs incurred in debt restructuring			(2,156,982	)			—				—				(2,156,982	)
Allocable to non-controlling interests in Consolidated Fund:
Contributions from non-controlling interests in Consolidated Fund			—				167,605,932				—				167,605,932
Distributions to non-controlling interests in Consolidated Fund			—				(83,004,168	)			9,383,026				(73,621,142	)
Borrowings under loan obligations by Consolidated Fund			—				1,142,325,016				—				1,142,325,016
Repayments under loan obligations by Consolidated Fund			—				(419,800,058	)			—				(419,800,058	)
Payment of debt acquisition costs by Consolidated Fund			—				(10,801,894	)			—				(10,801,894	)
Net cash (used in) provided by financing activities			(4,164,699	)			796,324,828				9,383,026				801,543,155
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH			(465,739	)			(11,186,710	)			11,186,710				(465,739	)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD			7,217,109				57,489,876				(57,489,876	)			7,217,109
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD		$	6,751,370			$	46,303,166			$	(46,303,166	)		$	6,751,370

F-21

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

		Year Ended December 31, 2024
		Consolidated Company Entities				Consolidated Fund				Eliminations				Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)		$	(6,652,797	)		$	58,852,735			$	(11,472,990	)		$	40,726,948
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation			130,681				—				—				130,681
Equity compensation - related party			1,542,091				—				—				1,542,091
Amortization of debt acquisition costs			496,982				—				—				496,982
Amortization of capitalized mortgage servicing rights			394,848				—				—				394,848
Non-cash interest expense			7,850,637				—				—				7,850,637
Income from investments in equity affiliates -related party			(13,862,174	)			—				11,472,990				(2,389,184	)
Distributions from equity affiliates - related party			10,346,770				—				(10,346,770	)			—
Satisfaction of incentive fees in stock			(1,985,266	)			—				—				(1,985,266	)
Impairment loss on fees and other receivables			565,104				—				—				565,104
Adjustments to reconcile net income to net cash (used in) provided by operating activities allocable to non-controlling interests in Consolidated Fund:
Net realized loss from investments			—				535,644				—				535,644
Net change in unrealized gains on investments			—				(10,995,064	)			—				(10,995,064	)
Purchase and funding of loan notes and participations			—				(466,597,000	)			—				(466,597,000	)
Sales proceeds and principal payments received on loan notes and participations			—				496,438,000				—				496,438,000
Amortization of debt issuance costs			—				2,980,714				—				2,980,714
Deferred fees			—				8,099,750				—				8,099,750
Amortization of deferred fees			—				(6,982,771	)			—				(6,982,771	)
Cash flows due to changes in operating assets and liabilities:
Accounts receivable			391,285				—				—				391,285
Other assets, net of depreciation			62,564				—				—				62,564
Due from related parties			2,052,845				—				(2,024,562	)			28,283
Right-of-use assets			339,208				—				—				339,208
Operating lease liabilities			(330,893	)			—				—				(330,893	)
Accrued interest, accounts payable, and other liabilities			(2,685,908	)			—				—				(2,685,908	)
Cash flows due to changes in operating assets and liabilities allocable to non-controlling interest in Consolidated Fund:
Change in cash and cash equivalents held at Consolidated Fund			—				—				(32,316,092	)			(32,316,092	)
Change in other assets and receivables held at Consolidated Fund			—				16,178,555				—				16,178,555
Change in other liabilities and payables held at Consolidated Fund			—				(961,200	)			2,024,562				1,063,362
Net cash (used in) provided by operating activities			(1,344,023	)			97,549,363				(42,662,862	)			53,542,478
CASH FLOWS FROM INVESTING ACTIVITIES:
Payoffs, paydowns and sales of mortgage loans			3,715,814				—				—				3,715,814
Net cash provided by investing activities			3,715,814				—				—				3,715,814
CASH FLOWS FROM FINANCING ACTIVITIES:
Paydowns of credit facilities and notes payable			(9,900	)			—				—				(9,900	)
Paydowns of loan payable - related party			(300,000	)			—				—				(300,000	)
Allocable to non-controlling interests in Consolidated Fund:
Contributions from non-controlling interests in Consolidated Fund			—				58,276,681				—				58,276,681
Distributions to non-controlling interests in Consolidated Fund			—				(81,244,981	)			10,346,770				(70,898,211	)
Borrowings under loan obligations by Consolidated Fund			—				211,148,207				—				211,148,207
Repayments under loan obligations by Consolidated Fund			—				(252,714,525	)			—				(252,714,525	)
Payment of debt acquisition costs by Consolidated Fund			—				(698,653	)			—				(698,653	)
Net cash (used in) provided by financing activities			(309,900	)			(65,233,271	)			10,346,770				(55,196,401	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH			2,061,891				32,316,092				(32,316,092	)			2,061,891
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD			5,155,218				25,172,980				(25,172,980	)			5,155,218
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD		$	7,217,109			$	57,489,072			$	(57,489,072	)		$	7,217,109

F-22

Table of Contents

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 4 – SUPPLEMENTAL CASH FLOW INFORMATION

The following table provides a reconciliation of cash, cash equivalents and restricted cash on the consolidated balance sheets to the total amount shown on the consolidated statements of cash flows:

		December 31, 2025				December 31, 2024
Cash and cash equivalents		$	5,438,038			$	6,404,487
Restricted cash			1,313,332				812,622
Total cash, cash equivalents and restricted cash shown on the    Company's consolidated statement of cash flows		$	6,751,370			$	7,217,109

The following table summarizes the Company’s supplemental disclosure of cash flow information:

		Years ended December 31,
		2025				2024
Supplemental cash flows:
Interest expense paid in cash		$	10,832,066			$	15,116,973
Income taxes paid in cash			943,717				243,170
Non-cash operating activities include the following:
Derivative liabilities recognized at issuance of redeemable interests		$	12,324,588			$	—
Accretion of redeemable interest to redemption value			13,239,559				—

NOTE 5 – RESTRICTED CASH

The Company maintains loan expense deposits collected from prospective borrowers used to offset underwriting expenses associated with originating loans. As of December 31, 2025 and 2024, loan expense deposits amounted to $1.3 million and $0.8 million, respectively. Loan escrow and expense deposits are segregated in bank accounts held outside of corporate assets and are reflected as restricted cash on the consolidated balance sheets.

The Company is required to maintain certain deposits in escrow for, among other purposes, interest, taxes, insurance, and construction reserves under the underlying mortgage loan agreements serviced by the Company. As of December 31, 2025 and 2024, the Company held total escrow balances of approximately $35.8 million and $15.0 million, respectively, which are not included on the Company’s consolidated balance sheets. These escrows are maintained in separate accounts at federally insured depository institutions, which may exceed FDIC insured limits.

NOTE 6 – INVESTMENTS OF THE CONSOLIDATED FUND

The following tables summarizes investments held in the Consolidated Fund:

				December 31, 2025
Asset Type		Asset Location		Fair Value				Percentage of Total Investments
First mortgage loan
Various		Various		$	1,539,203,250				76.3	%
Equity Investments
ACRES SPE 2025-1 LLC		Various			127,411,735				6.3	%
Various		Various			350,303,834				17.4	%
Total investments, at fair value				$	2,016,918,819				100.0	%

F-23

Table of Contents

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

				December 31, 2024
Asset Type		Asset Location		Fair Value				Percentage of Total Investments
First mortgage loan
Multifamily / Housing		Frederick, MD		$	76,884,095				6.6	%
Various		Various			798,461,722				68.3	%
Equity Investments
Various		Various			293,248,116				25.1	%
Total investments, at fair value				$	1,168,593,933				100.0	%

NOTE 7 – INVESTMENTS IN EQUITY AFFILIATE

Investments in equity affiliate - related party are summarized as follows:

		Cost Basis				Net Gains (Losses)				Fair Value
December 31, 2025
ACR (669,917 common stock shares)		$	8,034,812			$	6,261,219			$	14,296,031
December 31, 2024
ACR (446,107 common stock shares)		$	4,418,944			$	2,785,691			$	7,204,635

The MIP provides for the issuance of ACR equity-based awards to the Company when each of the following book value targets are met: $21.00, $24.00, $27.00, $30.00, $33.00 and $36.00. Such grants are subject to a four-year vesting period. On June 14, 2021 and May 6, 2022, the $21.00 and $24.00 book value targets, respectively, were met and ACRES Share Holdings, LLC, a wholly owned subsidiary of the Company, was granted 299,999 shares for each of the years ended December 31, 2022 and 2021, which vest 25% for four years, on each anniversary of the issuance date. On May 7, 2024, the $27.00 book value target was met and ACRES Share Holdings, LLC was granted 295,237 shares for the year ended December 31, 2024, which will vest 25% for four years, on each anniversary of the issuance date. For the years ended December 31, 2025 and 2024, 223,810 and 149,998 shares of ACR were vested, respectively.

Under the ACR management agreement, the Company is entitled to receive incentive compensation, payable quarterly, based on ACR’s performance. No such incentive compensation was earned by the Company for the years ended December 31, 2025 and 2024. ACR issued 1,911 shares of common stock to the Company for the year ended December 31, 2024, pertaining to the portion of fourth quarter 2023 incentive compensation that was payable in shares. Shares of common stock issued under ACR’s management agreement for incentive compensation vest immediately upon issuance.

The following table summarizes the Company’s restricted common stock transactions under the MIP and ACR’s management agreement:

		Shares
Unvested shares at January 1, 2024			375,001
Issued			297,148
Vested			(151,909	)
Unvested shares at December 31, 2024			520,240
Issued			—
Vested			(223,810	)
Unvested shares at December 31, 2025			296,430

The unvested shares of restricted common stock that are expected to vest during the following years:

		Shares
2026			148,811
2027			73,809
2028			73,810
Total			296,430

F-24

Table of Contents

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The aggregate market value of the Company’s investment in ACR as of December 31, 2025 and 2024, based on quoted market prices, was $14.3 million and $7.2 million respectively. The Company possesses the ability to exercise significant influence, but not control, over the operating and financial policies of ACR and, therefore, accounts for its investment in ACR using the equity method of accounting. The Company elected the fair value option for its equity method investment in ACR and determines the fair value of its equity investment using the closing price of ACR’s common shares as of the end of the period, which was a Level 1 fair value input, and recorded changes in fair value in earnings on the Company’s consolidated statement of income. The unrealized gains on the Company’s consolidated statements of income related to the Company’s investment in ACR was $3.5 million and $2.4 million for the years ended December 31, 2025 and 2024, respectively. During the years ended December 31, 2025 and 2024 the Company received no distributions from ACR.

The condensed balance sheets for the Company’s unconsolidated investments in equity affiliate are as follows (in thousands):

		December 31, 2025				December 31, 2024
Condensed Balance Sheets:		ACR				ACR
Assets:
Cash and cash equivalents		$	83,768			$	56,713
Real estate assets			2,016,821				1,775,910
Other assets			61,775				48,844
Total assets			2,162,364				1,881,467
Liabilities:
Notes payable			1,544,938				1,360,371
Other liabilities			66,834				70,894
Due to related party			—				540
Total liabilities			1,611,772				1,431,805
Stockholders' equity			420,796				439,128
Non-controlling interests			129,796				10,534
Total stockholders' equity			550,592				449,662
Total liabilities and equity		$	2,162,364			$	1,881,467

F-25

Table of Contents

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The condensed statements of income for the Company’s unconsolidated investments in equity affiliate are as follows (in thousands):

		Year ended December 31, 2025				Year ended December 31, 2024
Condensed Statements of Income:		ACR				ACR
Revenue:
Real estate income		$	46,606			$	42,170
Interest income			119,149				157,262
Other income			133				148
Total revenues			165,888				199,580
Expenses:
Interest expense			85,942				116,092
Management and servicing fees - related party			6,411				6,498
Equity compensation - related party			2,147				2,957
General and administrative			11,304				10,691
Real estate expense			51,325				46,896
Other expenses			(7,671	)			4,847
Total expenses			149,458				187,981
Other Income (Expense):
Total other income			11,463				17,222
Income tax benefit (expense)			83				(126	)
Net income		$	27,976			$	28,695
Net income allocated to preferred shares			(21,077	)			(20,386	)
Carrying value in excess of consideration paid for preferred shares			—				242
Net (income) loss allocable to non-controlling interests, net of taxes			(6,660	)			572
Net income allocable to common shares			239				9,123
Company's share of income (1)		$	3,475			$	2,389

(1)Includes unrealized gains recorded as income from equity investments – related party on the consolidated statements of income.

NOTE 8 - LEASES

The Company has operating leases for office space and office equipment. The leases have terms that expire between December 2027 and June 2032. The leases on the office space and office equipment contain options for early termination granted to the Company and the lessor. Lease payments are determined as follows:

•Office space: payments are made on a fixed schedule, escalating annually, and include the Company’s responsibility for a percentage of increases in the building’s property taxes and operating expenses over the base year.

•Office equipment: payments are made on a fixed schedule.

The following table summarizes the Company’s operating leases:

		December 31, 2025				December 31, 2024
Operating Leases:
Right of use assets		$	6,971,903			$	3,041,900
Lease liabilities			(7,756,825	)			(3,350,580	)
Weighted average remaining lease term:		6.21 years				7.39 years
Weighted average discount rate (1):			8.21	%			5.47	%

(1) The market discount rate is used, when readily determinable, in calculating the present value of lease payments for the operating lease liability. Otherwise, the incremental borrowing rate at the beginning of the period of adoption (January 1, 2022) or on the commencement date is used.

F-26

Table of Contents

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table summarizes the Company’s operating lease costs and cash payments during the periods indicated:

		Years ended December 31,
		2025				2024
Lease Cost:
Operating lease cost		$	1,184,984			$	427,622
Short-term lease cost		$	14,116			$	19,686
Other Information:
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases		$	708,743			$	419,306

The following table summarizes the Company’s operating leases cash flow obligations on an undiscounted, annual basis:

		Operating Leases
2026		$	1,275,044
2027			1,287,268
2028			1,329,372
2029			1,371,757
2030			1,410,176
Thereafter			1,773,455
Subtotal			8,447,072
Less: impact of discount			(690,247	)
Total		$	7,756,825

NOTE 9 - FAIR VALUE

The Company uses valuation techniques that are consistent with the market approach, the income approach and/or the cost approach to measure assets and liabilities that are measured at fair value. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity's own assumptions about the inputs market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. In that regard, accounting standards establish a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.

The fair value hierarchy is as follows:

•Level 1 - Assets and liabilities whose values are based on unadjusted quoted prices in active markets for identical assets and liabilities that the Company has the ability to access.

•Level 2 - Assets and liabilities whose values are based on inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means.

•Level 3 - Assets and liabilities whose values are based on inputs that are both unobservable and significant to the overall valuation.

F-27

Table of Contents

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the Company categorizes such financial asset or liability based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability that a market participant would use.

The following is a description of the valuation methodologies used to measure fair value, as well as the general classification of such instruments pursuant to the fair value hierarchy:

Investments in equity affiliate related to ACR. Investments in equity affiliate, at fair value – related party includes ACR common shares held by the Company that are estimated using the closing price of ACR common shares, a Level 1 fair value input, as of the reporting period end date. The Company’s equity method investment in ACR is classified within Level 1 of the valuation hierarchy.

Derivative liabilities. Derivative liabilities are recorded at fair value and classified as Level 3 in the fair value hierarchy. The fair value of derivative liabilities are comprised of the fair value of common stock warrant liabilities and the fair value of embedded derivatives. The fair value of common stock warrant liabilities and embedded derivatives are determined using valuations obtained from a third party that specializes in providing valuations of such financial liabilities. The third party utilized the Black-Scholes-Merton multiple option approach to determine the fair value of the common stock warrant liabilities and the discounted cash flow approach to determine the fair value of the embedded derivatives.

The fair values of the Company’s short-term financial instruments, such as (i) cash and cash equivalents, (ii) restricted cash, (iii) accrued interest, servicing receivables and other assets, (iv) due from related parties, (v) accrued interest, accounts payable and other liabilities, and (vi) due to related parties approximate their carrying values on the consolidated balance sheet due to their terms, liquidity, or short-term nature.

The following tables summarizes financial assets and financial liabilities measured at fair value for the Company and the Consolidated Fund as of December 31, 2025 and 2024:

		Fair Value Measurements Using Fair Value Hierarchy
Financial Instruments of the Company		Level 1				Level 2				Level 3
At December 31, 2025
Financial assets:
Equity method investment in ACR		$	14,296,031			$	—			$	—
Financial liabilities:
Derivative liabilities		$	—			$	—			$	9,240,299
At December 31, 2024
Financial assets:
Equity method investment in ACR		$	7,204,635			$	—			$	—

		Fair Value Measurements Using Fair Value Hierarchy
Financial Instruments of the Consolidated Fund		Level 1				Level 2				Level 3
At December 31, 2025
Financial assets:
Investments, at fair value		$	—			$	—			$	2,016,918,819
At December 31, 2024
Financial assets:
Investments, at fair value		$	—			$	—			$	1,168,593,933

F-28

Table of Contents

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following tables summarize the quantitative inputs and assumptions used for the Company’s and the Consolidated Fund’s Level 3 measurements as of December 31, 2025:

Fair Value Measurements Using Fair Value Hierarchy
Level 3 Measurements of the Company		Fair Value				Valuation Techniques		Unobservable Inputs		Range (Weighted Average)
Financial liabilities:
Embedded derivatives		$	1,280,000			Discount cash flow		Discount rate		22.86%
Freestanding warrants			7,960,299			Black-Scholes- Merton multiple option approach		Expected volatility Expected life Risk-free interest rate		70.0% 8 years 3.90%

As of December 31, 2025
Level 3 Measurements of the Consolidated Fund		Fair Value				Valuation Techniques		Unobservable Inputs		Range (Weighted Average)
Financial assets:
First mortgage loans		$	1,539,203,250			Discounted cash flow		Discount rate		6.73% - 8.38% (7.01%)
						Comparable sales		Sales price per key/unit		$0.5 million - $1.3 million ($1.0 million)
Equity investments			477,715,569			Discounted cash flow		Discount rate		3.60% - 10.25% (6.85%)
								Capitalization rate		4.70% - 7.50% (6.21%)
						Comparable sales		Sales price per square foot		$473 / sq. ft.
						Comparable sales		Sales price per key/unit		$72,267 / key
						Income capitalization analysis		Capitalization rate		5.75%

The following tables summarize the quantitative inputs and assumptions used for the Consolidated Fund’s Level 3 measurements as of December 31, 2024:

As of December 31, 2024
Level 3 Measurements of the Consolidated Fund		Fair Value				Valuation Techniques		Unobservable Inputs		Range (Weighted Average)
Financial assets:
First mortgage loans		$	1,039,685,095			Discounted cash flow		Discount rate		7.20% - 12.30% (8.20%)
						Comparable sales		Sales price per key/unit		$0.5 million - $1.2 million ($0.9 million)
Equity investments			128,908,838			Discounted cash flow		Discount rate		6.00% - 14.50% (6.29%)
								Capitalization rate		4.90% - 8.00% (5.04%)
						Comparable sales		Sales price per square foot		$474 / sq. ft.
						Comparable sales		Sales price per key/unit		$0.1 million - $0.4 million ($0.2 million)
						Income capitalization analysis		Capitalization rate		8.00%

F-29

Table of Contents

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following tables set forth a summary of changes in the fair value of the Level 3 measurements:

Level 3 Assets and Liabilities of the Company		Derivative liabilities
Balance as of December 31, 2024		$	—
Established in connection with equity issuance (see Note 15)			(12,324,588	)
Change in fair value (1)			3,084,289
Balance as of December 31, 2025		$	(9,240,299	)

(1)Changes in fair value are included in earnings and relate to financial liabilities still held at the reporting date.

Level 3 Assets of the Consolidated Fund		Investments, at fair value
Balance as of December 31, 2024		$	1,168,593,933
Purchases (1)			1,149,910,966
Sales/settlements (2)			(313,071,796	)
Realized and unrealized appreciation, net (3)			11,485,716
Balance as of December 31, 2025		$	2,016,918,819

(1)Purchases include purchases and fundings of loan notes, participations and equity interests.

(2)Sales/settlements include sales proceeds and principal payments received on loan notes and participations.

(3)Changes in net realized and unrealized appreciation are included in earnings and relate to financial assets still held at the reporting date.

Level 3 Assets of the Consolidated Fund		Investments, at fair value
Balance as of December 31, 2023		$	1,179,876,841
Purchases (1)			474,695,672
Sales/settlements (2)			(496,438,000	)
Realized and unrealized appreciation, net (3)			10,459,420
Balance as of December 31, 2024		$	1,168,593,933
Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date		$	11,065,038

(1)Purchases include purchases and fundings of loan notes, participations and equity interests.

(2)Sales/settlements include sales proceeds and principal payments received on loan notes and participations.

(3)Changes in net realized and unrealized appreciation are included in earnings and relate to financial assets still held at the reporting date.

There were no transfers between any of the levels within the fair value hierarchy during the years ended December 31, 2025 and 2024.

NOTE 10 - BORROWINGS

Certain information with respect to the Company’s borrowings is summarized in the following table:

		Principal Outstanding				Unamortized Issuance Costs				Outstanding Borrowings				Borrowing Rate		Maturity
At December 31, 2025
$130 million credit facility		$	130,000,000			$	(6,513,966	)		$	123,486,034			8.63%		June 23, 2033
$26 million earnout liability			23,833,333				—				23,833,333			0%		Until paid in full
Total		$	153,833,333			$	(6,513,966	)		$	147,319,367
At December 31, 2024
$163 million credit facility		$	179,163,249			$	(240,322	)		$	178,922,927			12.25%		June 26, 2025
EIDL			150,000				—				150,000			3.75%		June 19, 2050
Total		$	179,313,249			$	(240,322	)		$	179,072,927

The Company entered into a credit agreement, dated June 26, 2018, with several investment management firms to provide a maximum credit facility of $140.0 million. On July 1, 2020, this facility was amended to increase

F-30

Table of Contents

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

the maximum borrowings to $163.0 million. As of December 31, 2024, advances on the facility aggregated $163.0 million. During the period of January 1, 2025 to July 23, 2025 and the year ended December 31, 2024, interest was paid on a quarterly basis on the outstanding principal amount of the advances at a rate per annum equal to a cash interest rate ranging from 8.00% to 10.00% depending on certain covenant requirements. The capitalized (paid-in-kind) interest rate ranged from 4.25% to 4.75% depending on certain covenant requirements. At December 31, 2024, the cash and capitalized (paid-in-kind) interest rate was 8.00% and 4.25%. For the period of January 1, 2025 to July 23, 2025 and the year ended December 31, 2024, total cash interest incurred on advances amounted to $8.3 million and $14.1 million, respectively, of which $3.3 million is payable to the Lenders and recorded as accrued interest, accounts payable and other liabilities on the consolidated balance sheets as of December 31, 2024. No such amounts were payable as of December 31, 2025. As of December 31, 2024, total capitalized interest of $7.9 million was added to the outstanding debt balance. The lenders on the facility were entitled to receive warrants to purchase common stock of the Company as advances were issued under the facility or under anti-dilution protection provisions. As of December 31, 2024, warrants to purchase 190,801 shares of common stock at an exercise price of $0.01 per share and 177,120 shares of common stock at an exercise price of $15.80 per share were outstanding. The credit facility matured on June 26, 2025. On July 23, 2025, the Company entered into the following transactions:

•A subsidiary of the Company issued $33.0 million of preferred equity securities to a third party. The preferred equity securities contained certain embedded features that are not clearly and closely related to the host instrument and accounted for as a derivative liability (see Note 15 and 16). In connection with the subsidiary’s issuance of preferred equity securities, the Company issued warrants to purchase 312,524 shares of common stock of the Company at an exercise price of $0.01 to the third party. The Company accounted for the issuance of preferred equity securities as a redeemable interest with embedded derivatives accounted for as a derivative liability with an initial fair value of $1.4 million as of July 23, 2025. The Company accounted for the issuance of warrants as a derivative liability with an initial fair value of $10.9 million as of July 23, 2025. See Note 15 and 16.

•The Company entered into a credit agreement with an insurance company to provide a $130.0 million credit facility. The Company drew upon the full credit facility and received $130.0 million of proceeds on July 23, 2025.

•The proceeds of the $33.0 million preferred equity issuance and $130.0 million credit facility were utilized to partially paydown the $163.0 million credit facility. At July 23, 2025, prior to the partial paydown, the $163.0 million credit facility had an outstanding principal balance of $183.0 million inclusive of capitalized interest and an interest payable balance of $5.0 million. In connection with the paydown, a wholly-owned subsidiary of the Company entered into an earnout agreement with the existing lenders on the $163.0 million credit facility whereby the remaining outstanding balance of the $163.0 million credit facility and all warrants to purchase common stock of the Company held by the existing lenders, which were initially accounted for within the Company’s equity, were discharged/forfeited in exchange for the subsidiary’s agreement to pay the existing lenders an aggregate amount equal to $26.0 million, the earnout liability. The Company has accounted for this transaction as a troubled debt restructuring under ASC 470-60 and Company recorded a $3.6 million net gain on extinguishment of debt in the consolidated statements of income for the year ended December 31, 2025.

As of December 31, 2025, the Company has drawn $130.0 million on the $130.0 million credit facility. During 2025, interest was paid on a quarterly basis on the outstanding principal amount of the advances at the interest rate of 8.625%. For the year ended December 31, 2025, interest incurred on advances amounted to $5.0 million. No interest was payable as of December 31, 2025.

As of December 31, 2025, the earnout liability had an outstanding balance of $23.8 million and is recorded as borrowings on the consolidated balance sheet as of December 31, 2025. The earnout liability does not accrue interest and has no set maturity date.

On June 18, 2020, the Company also received a $159,900 Economic Injury Disaster (EIDL) loan from the SBA. The annual interest rate is 3.75%, The payment term is 30 years, and the monthly payment of principal and interest is $731 starting December 18, 2022. The EIDL was fully paid off on February 26, 2025.

F-31

Table of Contents

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Borrowings – related party

Related party borrowings are as follows:

		Principal Outstanding				Unamortized Issuance Costs				Outstanding Borrowings				Borrowing Rate		Maturity
At December 31, 2025
Loan Payable		$	10,375,000			$	—			$	10,375,000			3.00%		July 31, 2026
At December 31, 2024
Loan Payable		$	10,675,000			$	—			$	10,675,000			3.00%		July 31, 2026

In conjunction with the 2020 acquisition of the ACR management agreement, a wholly owned subsidiary of ACR, a related party, provided a $12.0 million loan to the Company (“Loan Payable”). The Loan Payable accrues interest at 3.00% per annum, payable monthly. The monthly amortization payment is $25,000. The Loan Payable matures in July 2026, subject to two one-year extensions, at the Company’s option subject to the payment of a 0.5% extension fee to ACR on the outstanding principal amount of the Loan Payable. During the years ended December 31, 2025 and 2024, the Company recorded interest expense of $0.3 million, respectively, on the Loan Payable. At December 31, 2025 and 2024, the Loan Payable had an outstanding principal balance of $10.4 million and $10.7 million, respectively. At December 31, 2025 and 2024, the Loan Payable had no interest payable.

The maturity dates on debt obligations are as follows:

Year Ending December 31,		Outstanding Debt at December 31, 2025
2026		$	10,375,000
2027			—
2028			—
2029			—
2030 and thereafter			153,833,333
Total		$	164,208,333

As of December 31, 2025 and 2024, the Company is in compliance with all material covenants contained in the relevant agreements of the Company’s debt obligations.

Borrowings of the Consolidated Fund

The Consolidated Fund finances the acquisition of its investments through the use of secured borrowings. The facility providers maintain security interests in the investments that serve as collateral under the facility. Certain facilities bear a commitment fee based on unfunded commitments, a facility servicing fee based on average advances outstanding, agent fees, and/or commitment unused line fees. The facilities contain various affirmative and negative covenants and reporting obligations. As of December 31, 2025 and 2024, the Consolidated Fund was in compliance with all covenants under such borrowings.

F-32

Table of Contents

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The Consolidated Fund had the following borrowings outstanding (in thousands):

At December 31, 2025:		Principal Outstanding				Unamortized Issuance Costs and Discounts				Outstanding Borrowings				Average Borrowings				Borrowing Rate		Maturity		Wtd. Avg. Rate		Fair Value of Collateral
AMFL II First Lien Facility		$	209,200			$	5,870			$	203,330			$	187,426			Greater of (i) 1M TERM SOFR or (ii) 1.00%, plus 3.15%		August 21, 2028		7.55%		$	203,330
AMFL II Junior Facility			80,000				2,440				77,560				80,000			Greater of (i) 1M TERM SOFR + 0.11448% or (ii) 1.00%, plus 7.05%		August 21, 2028		11.59%			539,834
AMFE Facility			174,400				1,334				173,066				214,181			1M TERM SOFR + 2.50%		October 2, 2033		6.88%			314,769
AMF Levered 3 Facility			19,225				4,030				15,195				19,812			1M TERM SOFR plus range of 2.25% - 3.00% (varies by asset type)		December 18, 2028		6.66%			27,464
ACRES 2025-FL3 Senior Notes			819,600				4,794				814,806				819,600			Class A - 1M TERM SOFR + 1.619% Class AS - 1M TERM SOFR + 2.042% Class B - 1M TERM SOFR + 2.492% Class C - 1M TERM SOFR + 3.041% Class D - 1M TERM SOFR + 3.690% Class E - 1M TERM SOFR + 4.439%		August 20, 2040		6.18%			931,522
Total		$	1,302,425			$	18,468			$	1,283,957			$	1,321,019									$	2,016,919

At December 31, 2024:		Principal Outstanding				Unamortized Issuance Costs and Discounts				Outstanding Borrowings				Average Borrowings				Borrowing Rate		Maturity		Wtd. Avg. Rate		Fair Value of Collateral
AMFL Facility		$	31,800			$	107			$	31,693			$	32,509			Greater of (i) 3M TERM SOFR + 0.2661% or (ii) zero, plus 3%		May 8, 2025		8.41%		$	62,234
AMFL II First Lien Facility			218,100				6,236				211,864				306,545			Greater of (i) 1M TERM SOFR + 0.11448% or (ii) 1.00%, plus 3.75%		August 21, 2028		9.22%			211,864
AMFL II Junior Facility			80,000				3,279				76,721				70,383			Greater of (i) 1M TERM SOFR + 0.11448% or (ii) 1.00%, plus 7.05%		August 21, 2028		12.52%			487,753
AMFE Facility			250,000				1,498				248,502				150,185			1M TERM SOFR + 2.50%		October 2, 2033		7.82%			406,743
		$	579,900			$	11,120			$	568,780			$	559,622									$	1,168,594

NOTE 11 - EMPLOYEE BENEFIT PLANS

401k Plan

The Company’s employees participate in the 401(k)-plan sponsored by ACRES Capital LLC. All eligible employees may elect to contribute to the plan. Participants are entitled, upon termination or retirement, to their vested portions of the assets held by a trustee. The Company matches a portion of the employees’ 401(k)-plan contributions, which vests immediately. For the years ended December 31, 2025 and 2024, the plan expense for the Company was $0.4 million and $0.5 million, respectively, and is recorded in compensation and benefits on the consolidated statements of income.

Equity Compensation Plan

In June 2018, the Company’s shareholders approved the ACRES Capital Corp. 2018 Equity Incentive Plan (the “Plan”), an equity compensation plan that provides for the issuance of options to purchase shares of common stock of the Company. The options vest on the fourth anniversary and expire on the tenth anniversary of the grant date. In December 2023, the Company’s shareholders approved an amendment to the Plan to increase the number of shares of common stock authorized for issuance by an additional 100,000 shares. In July 2025, as a result of unanimous written consent of the Board of Directors of the Company, the Company increased the number of shares of common stock authorized for issuance by an additional 388,609 shares. The maximum number of shares that may be subject to awards granted under the Plan will be 991,745 shares of common stock.

The Company recognized stock-based compensation expense of $1.8 million and $1.5 million during the years ended December 31, 2025 and 2024, respectively, related to stock options.

F-33

Table of Contents

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table summarizes the Company’s stock option activity under the Plan:

		Stock Option Shares				Weighted average exercise price per share
Outstanding at December 31, 2023			478,250			$	18.40
Granted in 2024			90,500				44.36
Forfeited in 2024			(2,500	)			27.42
Outstanding at December 31, 2024			566,250			$	22.51
Granted in 2025			37,750				44.36
Forfeited in 2025			(3,250	)			16.34
Outstanding at December 31, 2025			600,750			$	23.91

		2025				2024
Shares exercisable, end of year			404,000				295,000

The Company estimates the fair value of each stock option granted on the date of grant using the Black-Scholes-Merton multiple option approach. The following table presents the weighted-average assumptions used in the valuation models:

		Year ended
		December 31, 2025
Expected volatility			60	%
Expected life (in years)			9
Risk-free interest rate			4.3	%

The weighted-average fair value of options at their grant date was $21.26 and $22.94 for 2025 and 2024, respectively.

The following table summarizes information about stock options outstanding and exercisable at December 31, 2025:

Options Outstanding						Options Exercisable
Exercise price per share		Stock Option Shares		Weighted-average remaining contractual life (Years)		Stock Option shares exercisable
$2.00		56,500		3.0		56,500
$7.00		62,500		3.0		62,500
$16.50		175,000		4.8		175,000
$20.00		110,000		6.1		110,000
$44.36		196,750		8.1		—

NOTE 12 - COMMITMENTS AND CONTINGENCIES

The Company may become involved in litigation on various matters due to the nature of its business activities. The resolution of these matters may result in adverse judgments, fines, penalties, injunctions, and other relief against the Company as well as monetary payments or other agreements and obligations. In addition, the Company may enter into settlements on certain matters in order to avoid the additional costs of engaging in litigation. The Company is unaware of any contingencies arising from such litigation that would require accrual or disclosure in the financial statements at December 31, 2025 and 2024.

Purchase Obligations

The Company entered into a takeout commitment and agreement with an affiliate of the lender on the Company’s $130.0 million credit facility whereby the Company, or an affiliate of the Company, commits to purchase loans that were previously brokered by an affiliate of the Company and originated by an affiliate of the lender. The Company, or an affiliate of the Company, may be required to purchase such loans at specified dates subsequent to the closing date of the loan. For the years ended December 31, 2025 and 2024, the lender originated loans with total

F-34

Table of Contents

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

commitments of $662.2 million and $320.8 million, respectively, that were brokered by an affiliate of the Company. For the years ended December 31, 2025 and 2024, the Consolidated Fund purchased $712.6 million and $270.4 million, respectively, of such loans, based on commitments, from the affiliate of the lender. As of December 31, 2024, the Company had $50.4 million of commitments to purchase loans that were previously brokered by an affiliate of the Company and originated by an affiliate of the lender. As of December 31, 2025, the Company had no such commitments. The takeout commitment and agreement was terminated on December 19, 2025.

NOTE 13 - INCOME TAXES

The following table details the components of the Company's income taxes:

		Years ended December 31,
		2025				2024
Income tax expense:
Current:
Federal		$	681,983			$	255,823
State			57,550				16,230
Total current			739,533				272,053
Deferred:
Federal		$	(197,854	)		$	1,119,208
State			—				—
Total deferred		$	(197,854	)		$	1,119,208
Total		$	541,679			$	1,391,261

A reconciliation of the income tax expense based upon the statutory tax rate to the effective income tax rate was as follows of the Company for the year presented:

		Years ended December 31, 2025
Income tax (benefit) expense:
U.S. Federal statutory tax rate		$	(492,045	)			21.00	%
State and local taxes, net of federal benefit			45,465				-1.94	%
Nontaxable or nondeductible items			79,248				-3.38	%
Changes in valuation allowances			926,141				-39.53	%
Other adjustments			(17,130	)			0.73	%
Total		$	541,679				-23.12	%

The components of the Company's deferred tax assets and liabilities were as follows:

		Years ended December 31,
		2025				2024
Deferred tax assets related to:
Expenses not currently deductible		$	32,126			$	34,921
Net operating and capital loss carryforwards			6,232,129				7,758,575
Interest limitation carryover			17,707,978				14,964,430
Other			2,344,954				1,052,543
Total deferred tax assets			26,317,187				23,810,469
Valuation allowance			(14,729,657	)			(12,943,154	)
Total deferred tax assets, net of valuation allowance		$	11,587,530			$	10,867,315
Deferred tax liabilities related to:
Intangibles		$	—			$	2,491,908
Equity investment			12,508,885			-
Other			—				9,494,614
Deferred tax liabilities, net		$	12,508,885			$	11,986,522
Deferred tax (liabilities) assets, net		$	(921,355	)		$	(1,119,207	)

F-35

Table of Contents

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

As of December 31, 2025 and 2024, total gross deferred tax assets, net of deferred tax liabilities and prior to valuation allowances amounted to $13.8 million and $11.8 million, respectively, and primarily related to tax timing differences associated with basis differences in equity investment assets, net operating loss carryforward, and interest expenses disallowed under Section 163(j).

At December 31, 2025, the Company had $27.8 million of total gross federal and $0.5 million of total gross state and local net operating and capital tax loss carryforwards. At December 31, 2024, the Company had $35.6 million of total gross federal and $0.4 million of total gross state and local net operating tax loss carryforwards. Federal net operating tax loss carryforwards have an indefinite expiration date.

The Company assessed all available evidence, both positive and negative, to determine whether, based on the weight of that evidence, a valuation allowance for deferred tax assets is needed. On the basis of this evaluation, a valuation allowance of $14.7 million and $12.9 million has been recorded against the deferred tax assets at December 31, 2025 and 2024, respectively, as it is not more likely than not that these assets would be realized. Management will continue to assess the realization of the amount of deferred tax assets and related valuation allowance based on all available information.

The Company is subject to examination by the Internal Revenue Service for calendar years including and subsequent to 2022 and is subject to examination by state and local jurisdictions for calendar years including and subsequent to 2022.

The Company evaluates its tax positions to evaluate whether it is more likely than not that such positions would be sustained upon examination upon by a tax authority for all open tax years, as defined by the statute of limitations, based on their technical merits. As of December 31, 2025 and 2024, the Company has not established a liability for uncertain tax positions.

NOTE 14 - RELATED PARTY TRANSACTIONS

Due from Related Parties

The Company has the following receivables from related parties which are recorded as due from related parties on the consolidated balance sheets:

		December 31,
		2025				2024
Due from ACRES Commercial Realty Corp. (1)		$	1,884,699			$	3,566,461
Due from ACRES SPV LLC (2)			—				85,265
Total		$	1,884,699			$	3,641,726

(1)The Company earns base management and incentive fees for providing the day-to-day management of ACR’s operations. The Company also receives incentive fees from ACR in connection with the MIP. ACR also reimburses out-of-pocket expenses and certain other costs incurred by the Company that relate directly to ACR’s operations.

For the years ended December 31, 2025 and 2024, the Company recorded $6.4 million and $6.8 million, respectively, of management fees in management and servicing fees on the consolidated statements of income. At December 31 2024, $0.5 million of management fees are recorded as due from related parties on the consolidated balance sheets. There were no management fees due as of December 31, 2025.

For the years ended December 31, 2025 and 2024, the Company recorded $4.3 million and $3.9 million, respectively, of reimbursable compensation and benefits in reimbursable compensation and benefits on the consolidated statements of income. For the years ended December 31, 2025 and 2024, the Company recorded $0.8 million and $0.7 million, respectively, of other reimbursable expenses in other reimbursable expenses on the consolidated statements of

F-36

Table of Contents

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

income. At December 31, 2025 and 2024, $0.5 million of reimbursable expenses paid by the Company on behalf of ACR are recorded as due from related parties on the consolidated balance sheets.

For the years ended December 31, 2025 and 2024, the Company recorded $2.5 million and $2.8 million, respectively, of incentive fees in incentive fees – related party on the consolidated statements of income. At December 31, 2025 and 2024, $1.4 million and $2.5 million, respectively, of incentive fees are recorded as due from related parties on the consolidated balance sheets.

(2)A wholly owned subsidiary of the Company earns servicing fees from ACRES SPV LLC. For the year ended December 31 2024, the Company earned $0.1 million of management and servicing fees on the consolidated statements of income. No such fees were earned for the year ended December 31, 2025. At December 31, 2024, less than $0.1 million of such fees, and less than $0.1 million of certain reimbursable expenses paid by the Company on behalf of ACRES SPV LLC, are recorded as due from related parties on the consolidated balance sheets. There were no such fees due as of December 31, 2025.

The Company earns fees which are eliminated in consolidation for performing certain asset management and loan servicing functions on behalf of AMF. For the years ended December 31, 2025 and 2024, the Company earned $10.5 million and $8.5 million of such fees in management and servicing fees which are eliminated in consolidation.

ACRES Insurance Agency, LLC (“AIA”) is a wholly owned subsidiary of the Company. AIA receives referral fees for promoting and marketing insurance products and services to borrowers and sponsors under investments held directly, or indirectly, by AMF and ACR. For the year ended December 31, 2025, the company earned $0.7 million of such fees on the consolidated statement of income. No such fees were earned by AIA for the years ended December 31, 2024.

Borrowings – related party

In 2020, in conjunction with the closing of the acquisition of the ACR management agreement, a wholly owned subsidiary of ACR, a related party, provided a $12.0 million loan to the Company. See Note 10.

Other Related Party Transactions

ACRES Capital Servicing LLC, a wholly owned subsidiary of the Company, serves as the portfolio servicer for ACR’s $250.0 million loan and servicing agreement with an insurance company and other lenders. Additionally, ACRES Capital Servicing LLC serves as special servicer of commercial real estate debt securitizations ACR 2021-FL1 and ACR 2021-FL2. During the years ended December 31, 2025 and 2024, ACRES Capital Servicing LLC earned no portfolio servicing fees. During the years ended December 31, 2025 and 2024, ACRES Capital Servicing LLC earned $0.2 million and $0.1 million, respectively, in special servicing fees recorded in management and servicing fees – related party on the consolidated statements of income.

ACRES Collateral Manager, LLC, a wholly owned subsidiary of the Company, serves as the collateral manager of ACR 2021-FL1 and ACR 2021-FL2, a role for which it waived its fee.

The Company has equity investments in ACR (see Note 7).

NOTE 15 – REDEEMABLE INTEREST

Redeemable interest in the Company represents preferred equity securities issued by a subsidiary of the Company to a third party and is presented at the redemption amount within temporary equity within the consolidated balance sheets. The following table summarizes the activities associated with the redeemable interest:

F-37

Table of Contents

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

		Total
Balance as of December 31, 2024		$	—
Gross proceeds from subsidiary’s issuance of preferred equity securities			33,000,000
Issuance costs			(2,194,971	)
Reclassification of derivative liabilities			(12,324,588	)
Accretion of redeemable interest to redemption value			13,239,559
Net income attributable to redeemable interest			2,240,107
Balance as of December 31, 2025		$	33,960,107

NOTE 16 - DERIVATIVE INSTRUMENTS

The Company recognizes derivative instruments as either assets or liabilities on the balance sheet and measures them at fair value in accordance with applicable accounting guidance. The Company evaluates its financing arrangements to determine whether certain arrangements contain features that qualify as embedded derivatives requiring bifurcation in accordance with ASC 815. Embedded derivatives that are required to be bifurcated from the host instrument or arrangement are accounted for and valued as separate financial instruments.

The Company’s derivative liabilities consists of freestanding warrants and certain embedded features that are not clearly and closely related to the host instrument to be bifurcated and recorded at the fair value as derivative liabilities.

The fair value of derivative liabilities are measured at each reporting date, with changes in fair value recorded in the consolidated statements of income as a derivative gain (loss). The Company engaged an independent financial advisory firm to estimate the fair value of derivative liabilities using valuation methodologies that incorporate both observable and unobservable inputs.

As of December 31, 2025, the fair value of derivative liabilities are $9.2 million as compared to $12.3 million as of July 23, 2025 (initial date of recognition). For the year ended December 31, 2025, the Company recognized a gain of $3.1 million related to the change in fair value of derivative liabilities.

The following table summarizes the activities associated with the derivative liabilities:

		Embedded Derivatives				Freestanding Warrants				Total
Balance as of December 31, 2024		$	—			$	—			$	—
Fair value of derivative liabilities at issuance as of July 23, 2025			1,410,000				10,914,588				12,324,588
Derivative gain			(130,000	)			(2,954,289	)			(3,084,289	)
Balance as of December 31, 2025		$	1,280,000			$	7,960,299			$	9,240,299

The following tables summarize the quantitative inputs and assumptions used for the Company’s Level 3 measurements of derivative liabilities as of July 23, 2025 (initial date of recognition):

As of July 23, 2025
Level 3 Measurements of the Company		Fair Value				Valuation Techniques		Unobservable Inputs		Range (Weighted Average)
Financial liabilities:
Embedded derivatives		$	1,410,000			Discount cash flow		Discount rate		23.59%
Freestanding warrants			10,914,588			Black-Scholes-Merton multiple option approach		Expected volatility Expected life Risk-free interest rate		70.0% 8 years 3.90%

NOTE 17 - SUBSEQUENT EVENTS

F-38

Table of Contents

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The Company has evaluated events and transactions subsequent to the balance sheet date through March 31, 2026, the date the financial statements were available to be issued and determined that there have not been any events that have occurred that would require adjustments to or disclosures in the consolidated financial statements except for those referenced below.

On March 4, 2026, non-vesting options to purchase 250,000 shares of common stock of the Company were issued at a strike price of $15.00. The Company also modified existing options to purchase 479,750 shares of common stock of the Company to revise the strike price to $15.00 and designate the options as immediately exercisable.

On March 4, 2026, the Company provided loans of $11.2 million to existing shareholders and certain members of management of the Company to finance the acquisition of common stock of the Company under option agreements.

On March 4, 2026, options to purchase 843,750 shares of common stock of the Company were exercised resulting in the issuance of 843,750 shares of common stock of the Company to option holders.

On March 5, 2026, the $30.00 ACR book value target as met and, accordingly, under the MIP; ACRES Share Holdings, LLC, a wholly owned subsidiary of the Company was granted 204,765 shares which vest 25% for four years, on each anniversary of the issuance date.

Subsequent Events of the Consolidated Fund

On February 2, 2026, the Fund distributed $11.2 million to its shareholders which represented the Fund’s net income for the quarter ended December 31, 2025. Of the total distribution, $1.8 million was distributed to shareholders that elected reinvestment and received shares of the Fund in lieu of a cash distribution.

For the period of January 1, 2026 to March 31, 2026, the Fund received capital contributions totaling $21.8 million.

For the period of January 1, 2026 to March 31, 2026, the Fund received redemption requests totaling 10,349.34 shares. Each redeemed share will be transferred to a redemption reserve share class and redemption proceeds will be paid on a pro-rata share basis as investments are realized and cash is available.

F-39

Exhibit 99.2

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
ACRES Capital Corp.
Financial Statements
Consolidated Balance Sheets (unaudited) - June 30, 2026 and December 31, 2025	G-2
Consolidated Statements of Operations (unaudited) for the Three and Six Months Ended June 30, 2026 and 2025	G-4
Consolidated Statements of Changes in Equity (unaudited) for the Three Months Ended March 31, 2026 and 2025 and June 30, 2026 and 2025	G-5
Consolidated Statements of Cash Flows (unaudited) for the Six Months Ended June 30, 2026 and 2025	G-6
Notes to Consolidated Financial Statements - June 30, 2026 (unaudited)	G-7

ACRES CAPITAL CORP.

CONSOLIDATED BALANCE SHEETS

		June 30, 2026				December 31, 2025
		(unaudited)
ASSETS (1)
Cash and cash equivalents		$	1,831,859			$	5,438,038
Restricted cash			837,594				1,313,332
Goodwill			35,000,000				35,000,000
Accounts receivable			716,426				803,840
Investments in equity affiliate, at fair value - related party			20,834,030				14,296,031
Due from related parties			1,698,037				1,884,699
Right-of-use assets			5,471,030				6,971,903
Other assets, net of depreciation			1,359,811				1,150,067
Assets of Consolidated Fund:
Investments, at fair value			2,025,830,311				2,016,918,819
Cash and cash equivalents			54,578,489				17,824,819
Restricted cash			9,999,992				28,478,347
Accrued interest, servicing receivables and other assets			16,089,608				38,509,145
Total assets		$	2,174,247,187			$	2,168,589,040
LIABILITIES (2)
Borrowings		$	147,246,398			$	147,319,367
Borrowings - related party			10,250,000				10,375,000
Accrued interest, accounts payable, and other liabilities			5,791,410				5,605,251
Derivative liabilities			24,034,846				9,240,299
Operating lease liabilities			6,177,369				7,756,825
Liabilities of Consolidated Fund:
Borrowings			1,268,252,935				1,283,957,379
Accrued interest, accounts payable and other liabilities			26,401,349				31,370,008
Total liabilities			1,488,154,307				1,495,624,129
REDEEMABLE INTEREST IN CONSOLIDATED COMPANY ENTITIES			36,279,758				33,960,107
NON-CONTROLLING INTERESTS IN CONSOLIDATED FUND (3)			701,668,271				676,389,618
STOCKHOLDERS' DEFICIT
Common stock, $0.0001 par value; 3,000,000 shares authorized - 2,539,481 and 1,695,731 shares issued and outstanding			255				170
Additional paid-in capital			17,769,351				10,178,636
Accumulated deficit			(69,624,755	)			(47,563,620	)
TOTAL STOCKHOLDERS' DEFICIT			(51,855,149	)			(37,384,814	)
TOTAL EQUITY			649,813,122				639,004,804
TOTAL LIABILITIES, REDEEMABLE INTEREST, NON-CONTROLLING INTERESTS, AND EQUITY		$	2,174,247,187			$	2,168,589,040

Note: The consolidated balance sheets include assets and liabilities of consolidated variable interest entities, or VIEs, as ACRES Capital Corp. is the primary beneficiary of these VIEs. ACRES Capital Corp. holds substantially all of its assets and liabilities through ACRES Holdings, LLC, a consolidated variable interest entity. The Consolidated Fund also represents a VIE which is consolidated by ACRES Capital Corp. See Note 3 for discussion of VIEs.

The accompanying notes are an integral part of these statements.

G-2

ACRES CAPITAL CORP.

CONSOLIDATED BALANCE SHEETS (cont.)

		June 30, 2026				December 31, 2025
		(unaudited)
(1) Assets of Consolidated Fund VIE included in total assets above:
Investments, at fair value		$	2,025,830,311			$	2,016,918,819
Cash and cash equivalents			54,578,489				17,824,819
Restricted cash			9,999,992				28,478,347
Accrued interest, servicing receivables and other assets			16,089,608				38,509,145
Total assets of Consolidated Fund VIE		$	2,106,498,400			$	2,101,731,130
(2) Liabilities of Consolidated Fund VIE included in total liabilities above:
Borrowings		$	1,268,252,935			$	1,283,957,379
Accrued interest, accounts payable and other liabilities			26,401,349				31,370,008
Total liabilities of Consolidated Fund VIE		$	1,294,654,284			$	1,315,327,387
(3) Non-controlling interests of Consolidated Fund VIE:
Non-controlling interest in Consolidated Fund		$	701,668,271			$	676,389,618

The accompanying notes are an integral part of these statements.

G-3

ACRES CAPITAL CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

		For the Three Months Ended June 30,								For the Six Months Ended June 30,
		2026				2025				2026				2025
REVENUES
Management and servicing fees, net		$	183,667			$	142,443			$	395,183			$	300,878
Management and servicing fees, net - related party			1,563,814				1,660,889				3,123,304				3,251,468
Origination fees			917,500				2,739,200				917,500				4,050,856
Incentive fees - related party			6,198,506				795,034				6,731,593				1,581,330
Application fees and other income			230,369				332,371				913,920				504,486
Reimbursable compensation and benefits - related party			897,428				904,236				2,082,298				2,185,056
Other reimbursable expenses			94,587				192,269				323,081				362,705
Other reimbursable expenses - related party			280,319				177,789				550,122				303,036
Total revenues			10,366,190				6,944,231				15,037,001				12,539,815
OPERATING EXPENSES
Compensation and benefits			3,616,229				3,193,620				7,875,347				6,467,218
Equity compensation - related party			—				465,955				7,240,715				890,625
General, administrative and other expenses			2,818,251				2,741,390				5,701,603				4,625,412
Interest expense			3,063,753				5,683,232				6,093,839				11,251,307
Interest expense - related party			77,919				80,194				155,544				160,069
Other reimbursable expenses			94,587				192,269				323,081				362,705
Other reimbursable expenses - related party			280,319				177,789				550,122				303,036
Expenses of Consolidated Fund			902,799				602,395				1,804,069				970,913
Total operating expenses			10,853,857				13,136,844				29,744,320				25,031,285
			(487,667	)			(6,192,613	)			(14,707,319	)			(12,491,470	)
OTHER INCOME (EXPENSE)
(Loss) income from investments in equity affiliates - related party			(259,305	)			(1,264,693	)			(1,612,537	)			1,197,814
Net realized and unrealized gains on investments of Consolidated Fund			7,919,828				(28,985	)			15,455,180				(28,985	)
Interest income of Consolidated Fund			28,950,881				27,792,156				60,087,546				53,098,250
Interest expense of Consolidated Fund			(21,262,695	)			(13,739,704	)			(44,323,261	)			(26,273,947	)
Derivative gain (loss)			(17,220,073	)			—				(14,794,547	)			—
Total other income			(1,871,364	)			12,758,774				14,812,381				27,993,132
(LOSS) INCOME BEFORE TAXES			(2,359,031	)			6,566,161				105,062				15,501,662
Provision for income taxes			—				—				—				—
NET (LOSS) INCOME			(2,359,031	)			6,566,161				105,062				15,501,662
Less: Net income attributable to non-controlling interest in Consolidated Fund			(9,691,005	)			(9,030,096	)			(19,496,546	)			(17,058,875	)
Less: Net income attributable to redeemable interest in Consolidated Company Entities			(1,366,249	)			—				(2,669,650	)			—
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON SHARES		$	(13,416,285	)		$	(2,463,935	)		$	(22,061,134	)		$	(1,557,213	)

The accompanying notes are an integral part of these statements.

G-4

ACRES CAPITAL CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(unaudited)

		Common Stock
		Common Stock Shares				Common Stock Amount				Additional Paid-In Capital				Accumulated Deficit				Non-controlling interest in Consolidated Fund				Total Equity
Balance - December 31, 2025			1,695,731			$	170			$	10,178,636			$	(47,563,620	)		$	676,389,618			$	639,004,804
Contributions - noncontrolling interest			—				—				—				—				21,758,725				21,758,725
Equity compensation			843,750				85				7,240,715				—				—				7,240,800
Dividends/distributions			—				—				—				—				(9,584,628	)			(9,584,628	)
Net (loss) income			—				—				—				(8,644,850	)			9,805,541				1,160,691
Decrease (increase) in redemption value of redeemable interest			—				—				350,000								—				350,000
Balance - March 31, 2026			2,539,481			$	255			$	17,769,351			$	(56,208,470	)		$	698,369,256			$	659,930,392
Contributions - noncontrolling interest			—				—				—				—				5,678,383				5,678,383
Dividends/distributions			—				—				—				—				(12,070,374	)			(12,070,374	)
Net (loss) income			—				—				—				(13,416,285	)			9,691,006				(3,725,279	)
Balance - June 30, 2026			2,539,481			$	255			$	17,769,351			$	(69,624,755	)		$	701,668,271			$	649,813,122

		Common Stock
		Common Stock Shares				Common Stock Amount				Additional Paid-In Capital				Accumulated Deficit				Non-controlling interest in Consolidated Fund				Total Equity
Balance - December 31, 2024			1,695,731			$	170			$	21,595,701			$	(55,585,805	)		$	571,514,996			$	537,525,062
Contributions - noncontrolling interest			—				—				—				—				45,995,778				45,995,778
Equity compensation			—				—				424,670				—				—				424,670
Dividends/distributions			—				—				—				—				(21,529,083	)			(21,529,083	)
Net income			—				—				—				906,720				8,028,779				8,935,499
Balance - March 31, 2025			1,695,731			$	170			$	22,020,371			$	(54,679,085	)		$	604,010,470			$	571,351,926
Contributions - noncontrolling interest			—				—				—				—				13,289,096				13,289,096
Equity compensation			—				—				465,955				—				—				465,955
Dividends/distributions			—				—				—				—				(9,512,574	)			(9,512,574	)
Net income			—				—				—				(2,463,933	)			9,030,096				6,566,163
Balance - June 30, 2025			1,695,731			$	170			$	22,486,326			$	(57,143,018	)		$	616,817,088			$	582,160,566

The accompanying notes are an integral part of these statements.

G-5

ACRES CAPITAL CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

		For the Six Months Ended June 30,
		2026				2025
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income		$	105,062			$	15,501,662
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation			59,322				59,550
Equity compensation - related party			7,240,715				890,625
Amortization of debt acquisition costs			427,031				240,344
Amortization of capitalized mortgage servicing rights			—				81,472
Non-cash interest expense			—				3,795,816
Loss (income) from investments in equity affiliate - related party			1,612,537				(1,197,814	)
Derivative loss (gain)			14,794,547				—
Satisfaction of incentive fees in stock			(8,150,536	)			(3,615,868	)
Adjustments to reconcile net income to net cash (used in) provided by operating activities allocable to controlling and non-controlling interests in Consolidated Fund:
Net realized gain from investments			(17,529,500	)			—
Net change in unrealized gains on investments			2,074,320				28,985
Purchase and funding of loan notes, participations and equity interests			(172,390,385	)			(265,989,351	)
Sales proceeds and principal payments received on loan notes and participations			139,864,692				85,389,152
Distribution from investments in equity interests			31,065,038				—
Amortization of debt issuance costs			3,630,384				1,815,570
Deferred fees			790,114				1,971,260
Amortization of deferred fees			(1,127,959	)			(2,515,818	)
Cash flows due to changes in operating assets and liabilities:
Accounts receivable			87,414				(19,615	)
Other assets, net of depreciation			(269,066	)			(1,096,199	)
Due from related parties			186,813				1,941,459
Right-of-use assets			1,500,873				(4,435,444	)
Operating lease liabilities			(1,579,456	)			4,779,661
Accrued interest, accounts payable, and other liabilities			(461,841	)			2,809,995
Cash flows due to changes in operating assets and liabilities allocable to controlling and non-controlling interest in Consolidated Fund:
Change in cash and cash equivalents held at Consolidated Fund			(18,275,315	)			46,591,469
Change in other assets and receivables held at Consolidated Fund			22,419,537				(2,681,500	)
Change in other liabilities and payables held at Consolidated Fund			3,373,378				(891,445	)
Net cash used in operating activities			9,447,719				(116,546,035	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Paydowns of credit facilities and notes payable			(500,000	)			(150,000	)
Paydowns of loan payable - related party			(125,000	)			(150,000	)
Exercise of stock options			648,085				—
Allocable to controlling and non-controlling interests in Consolidated Fund:
Contributions from non-controlling interests in Consolidated Fund			27,437,108				59,284,874
Distributions to non-controlling interests in Consolidated Fund			(21,655,001	)			(31,041,658	)
Borrowings under loan obligations by Consolidated Fund			503,111,067				157,601,000
Repayments under loan obligations by Consolidated Fund			(513,480,633	)			(61,452,000	)
Payment of debt acquisition costs by Consolidated Fund			(8,965,262	)			(3,688,049	)
Net cash provided by financing activities			(13,529,636	)			120,404,167
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH			(4,081,917	)			3,858,132
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD			6,751,370				7,217,108
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD		$	2,669,453			$	11,075,240

The accompanying notes are an integral part of these statements.

G-6

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2026

(unaudited)

NOTE 1 - ORGANIZATION

ACRES Capital Corp., a Delaware corporation, along with its subsidiaries (collectively, the “Company”), is a private lender dedicated to nationwide middle-market commercial real estate (“CRE”) lending in the United States (“U.S.”). The Company conducts its operations through the use of subsidiaries that it consolidates into its financial statements. Substantially all of the Company’s operations are conducted through ACRES Capital LLC (the “Operating Subsidiary”), a wholly owned subsidiary that is registered with the Securities and Exchange Commission as an investment adviser. The Operating Subsidiary serves as the investment manager of ACRES Mortgage Fund, Ltd. (“AMF”), an exempted company under the laws of the Cayman Islands formed for the purpose of investing in CRE mortgage loans. The Operating Subsidiary also serves as the manager of ACRES Commercial Realty Corp. (“ACR”), a Maryland corporation. ACR is a real estate investment trust (“REIT”) that is primarily focused on originating, holding, and managing CRE mortgage loans and other commercial real estate related debt investments.

On July 23, 2025, the Company contributed substantially all of its assets, including its interests in the Operating Subsidiary, and liabilities to ACRES Holdings, LLC, a wholly-owned subsidiary, in exchange for membership interests in ACRES Holdings, LLC. Contemporaneously with this contribution, ACRES Holdings, LLC issued preferred equity securities to a third party. As a result, the Company holds substantially all of its assets and liabilities through ACRES Holdings, LLC, a consolidated variable interest entity. See Note 3.

The Company consolidates AMF in the accompanying financial statements (the “Consolidated Fund”) (the Company, excluding the Consolidated Fund, the “Consolidated Company Entities”). Including the results of the Consolidated Fund significantly increases the reported amounts of the assets, liabilities, revenues, expenses and cash flows within the accompanying consolidated financial statements; however, the Consolidated Fund results included herein have no direct effect on the net income attributable to ACRES Capital Corp. or to its stockholders’ deficit. Instead, economic ownership interests of the third-party investors in the Consolidated Fund are reflected as non-controlling interests in the Consolidated Fund. Further, cash flows allocable to non-controlling interests in Consolidated Fund are specifically identifiable within the consolidated statements of cash flows.

On April 29, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with ACRES Holdings Sub LLC (“Merger Sub”), a subsidiary of ACR, pursuant to which the Company will be merged with and into Merger Sub, with Merger Sub surviving as a wholly-owned subsidiary of the Company (the “Merger”). As a result of the Merger, among other things, (i) ACR will acquire the Company, (ii) the Company will cease to perform any outside management services for ACR, (iii) the Company and ACR will terminate the existing management agreement between the parties (the acquisition of the management agreement in 2020 resulted in the initial recognition of the Company's goodwill asset), and (iv) ACR will become internally managed (the “Internalization”).

The closing of the Merger (the “Closing”) was approved by ACR’s shareholders at its annual meeting on June 22, 2026 and is expected to be completed in the third quarter 2026. In connection with the approval, and in accordance with the Merger Agreement, the unvested ACR equity-based awards were fully vested on June 22, 2026.

Pursuant to the Merger Agreement, at Closing, (i) each outstanding share of common stock, $0.0001 par value per share, of the Company (“ACC Common Stock”) will be converted into the right to receive 2.61882 shares of common stock, $0.001 par value per share, of ACR (the “ACR Common Stock”) and (ii) the Fourth Amended and Restated Management Agreement, dated as of July 31, 2020, as amended, by and among the Company and ACR will terminate for no additional consideration. ACR expects to issue a maximum of approximately 7.487 million shares of ACR Common Stock at Closing (the “Stock Issuance”), the exact number of which will be determined based on the number of outstanding shares of ACC Common Stock immediately prior to the Closing.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the U.S. (“GAAP”). The Company’s Consolidated Fund is an investment company under GAAP based on the following characteristics: the Consolidated Fund obtains funds from one or more investors and the Consolidated Fund’s business purpose and substantive activities are investing funds for returns from investment income. Therefore, investments of the Consolidated Fund are recorded at fair value and the unrealized gain (loss) in an investment’s fair value is recognized on a current basis within the consolidated statements of operations. In the preparation of these consolidated financial statements, the Company has retained the investment company accounting for the Consolidated Fund under GAAP.

G-7

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 30, 2026

(unaudited)

All of the investments held by the Consolidated Fund are presented at their estimated fair values within the Company’s consolidated balance sheets. Net income attributable to the economic ownership interest of the third-party investors in the Consolidated Fund are presented within net income attributable to non-controlling interest in Consolidated Fund within the consolidated statements of operations.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company, majority-owned or controlled subsidiaries and variable interest entities (“VIEs”) for which the Company is considered the primary beneficiary. All inter-company transactions and balances have been eliminated in consolidation.

Variable Interest Entities

A VIE is defined as an entity in which equity investors (i) do not have a controlling financial interest and/or (ii) do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. A VIE is required to be consolidated by its primary beneficiary, which is defined as the party that (a) has the power to control the activities that most significantly impact the VIE’s economic performance and (b) has the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

The Company considers the following criteria in determining whether an entity is a VIE:

1.The equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support provided by any parties, including the equity holders; or

2.The equity investors lack one or more of the following essential characteristics of a controlling financial interest:

a.The direct ability to make decisions about the entity’s activities through voting rights or similar rights;

b.The obligation to absorb the expected losses of the entity; or

c.The right to receive the expected residual returns of the entity. The equity investors have voting rights that are not proportionate to their economic interests, and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest.

In determining whether the Company is the primary beneficiary of a VIE, the Company reviews governing contracts, formation documents and any other contractual arrangements to determine the activities that have the most significant impact on the VIE and which entity has the power to direct those activities. The Company also looks for kick-out rights, protective rights, and participating rights as well as any financial or other support provided to the VIE and the reason for that support, and the terms of any explicit or implicit arrangements that may require the Company to provide future support. The Company then makes a determination based on its power to direct the most significant activities of the VIE and/or a financial interest that is potentially significant. In instances when a VIE is owned by both the Company and related parties, the Company considers whether there is a single party in the related party group that meets both the power and losses or benefits criteria on its own as though no related party relationship existed. If one party within the related party group meets both these criteria, such reporting entity is the primary beneficiary of the VIE. If no party within the related party group on its own meets both the power and losses or benefits criteria, but the related party group as a whole meets these two criteria, the determination of primary beneficiary within the related party group is based upon an analysis of the facts and circumstances with the objective of determining which party is most closely associated with the VIE. Determining the primary beneficiary requires significant judgment. The Company continuously analyzes entities in which it holds variable interests to identify reconsideration events and determine whether such entities are VIEs and whether such potential VIEs should be consolidated or deconsolidated.

Voting Interest Entities

A voting interest entity is an entity in which the total equity investment at risk is sufficient to enable it to finance its activities independently and the equity holders have the power to direct the activities of the entity that most significantly impact its economic

G-8

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 30, 2026

(unaudited)

performance, the obligation to absorb the losses of the entity and the right to receive the residual returns of the entity. The usual condition for a controlling financial interest in a voting interest entity is ownership of a majority voting interest. If the Company has a majority voting interest in a voting interest entity, the entity will generally be consolidated.

The Company performs on-going reassessments of whether entities previously evaluated under the voting interest framework have become VIEs, based on certain events, and therefore subject to the VIE consolidation framework.

Use of Estimates

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

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand and all highly liquid investments with original maturities of three months or less at the time of purchase. Cash and cash equivalents held at the Consolidated Fund represents cash that, although not legally restricted, is not available to support the general liquidity needs of the Company, as the use of such amounts is generally limited to the activities of the Consolidated Fund.

As of June 30, 2026 and December 31, 2025, the Company had cash balances with financial institutions in excess of Federal Deposit Insurance Corporation insured limits. The Company monitors the credit standing of these financial institutions.

Restricted Cash

Restricted cash of the Consolidated Company Entities consists of deposits received from potential new borrowers. The Company maintains loan expense deposits collected from prospective borrowers used to offset underwriting expenses associated with originating loans. Restricted cash of the Consolidated Fund consists of amounts that are held by commercial real estate debt securitizations.

Redeemable Interest

Redeemable interest in the Company represents preferred equity securities issued by a subsidiary of the Company to a third party. Income (loss) is allocated based on the preferred return attributable to the redeemable interest. At each balance sheet date, the carrying value of the redeemable interest is presented at the redemption amount, to the extent that the redemption amount exceeds the initial measurement on the date of issuance. The Company recognizes changes in the redemption amount with corresponding adjustments against retained earnings, or additional paid-in-capital in the absence of retained earnings, within stockholders’ deficit within the consolidated balance sheets.

Derivative Instruments

Derivative financial instruments are recorded in the accompanying balance sheets at fair value in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 815. When the Company enters into a financial instrument such as a debt or equity agreement (the “host contract”), the Company assesses whether the economic characteristics of any embedded features are clearly and closely related to the primary economic characteristics of the remainder of the host contract. When it is determined that (i) an embedded feature possesses economic characteristics that are not clearly and closely related to the primary economic characteristics of the host contract, and (ii) a separate, stand-alone instrument with the same terms would meet the definition of a financial derivative instrument, then the embedded feature is bifurcated from the host contract and accounted for as a derivative instrument. The estimated fair value of the derivative feature is recorded in the accompanying balance sheets separately from the carrying value of the host contract. Subsequent changes in the estimated fair value of derivatives are recorded as a gain or loss in the Company’s statements of operations.

The Company concluded the redeemable interest preferred equity securities host contract contained features that required bifurcation and separate accounting under ASC 815. See Note 16.

Warrants

G-9

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 30, 2026

(unaudited)

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480 and ASC 815. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each consolidated balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a gain or loss on the consolidated statements of operations.

The Company determined that upon further review of the warrant agreements, the Company concluded that its warrants qualify for liability accounting treatment.

Issuance Costs Related to Equity and Debt

The Company allocates issuance costs between the individual freestanding instruments identified on the same basis as proceeds were allocated. Issuance costs associated with the issuance of redeemable interests (i.e., temporary equity-classified stock) are recorded as a charge against the gross proceeds of the offering and amortized over the earliest estimable redemption date. Any issuance costs associated with the issuance of liability-classified warrants are expensed as incurred. Issuance costs associated with the issuance of debt are recorded as a direct reduction of the carrying amount of the debt liability. The Company accounts for debt as liabilities measured at amortized cost and amortizes the resulting debt discount to interest expense using the effective interest method over the expected term of the notes pursuant to ASC 835.

Non-Controlling Interests

The non-controlling interests in Consolidated Fund represents a component of equity and net income attributable to ownership interests that third-party investors hold in the Consolidated Fund.

Troubled Debt Restructuring

When the Company modifies or extinguishes debt, it first evaluates whether the modification qualifies as a troubled debt restructuring (“TDR”) under ASC 470-60. As per ASC 470-60, a TDR refers to a situation where the creditor grants concessions to a borrower experiencing financial difficulties. A lender is deemed to have granted a concession if the borrower’s effective interest rate on the restructured debt is less than the effective interest rate of the old debt immediately before the restructuring. Such restructuring is done with the intent to provide relief to the borrower and to maximize the potential for payable recovery by the lender.

In accordance with ASC 470-60, when the total future cash payments under the new terms are less than the carrying amount of the payable at the date of restructuring, the difference between the carrying amount and the total future cash payments is recognized as a gain on extinguishment of debt in the consolidated financial statements. This gain is recorded immediately in the period the restructuring occurs. If the total future cash payments under the new terms exceed the carrying amount of the debt at the date of restructuring, no adjustment to the carrying amount of the debt is made. Instead, the Company calculates a new effective interest rate (“EIR”) based on the revised terms of the restructured debt. The debt is then amortized over the remaining term of the debt using the new EIR, with interest expense recognized based on such rate in future periods.

If a TDR is determined not to have occurred, the Company evaluates the modification in accordance with ASC 470-50-40, which requires modification to debt instruments to be evaluated to assess whether the modifications are considered “substantial modifications”. A substantial modification of terms is accounted for like an extinguishment.

Income Earned from Fee-Based Services

G-10

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 30, 2026

(unaudited)

Income from fee-based services includes asset management fees, development fees, ACR management fees, servicing fees, and incentive fees. Asset management fees, development fees, and servicing fees are included in management and servicing fees, net on the consolidated statements of operations. ACR management fees are included in management and servicing fees, net – related party on the consolidated statements of operations. Incentive fees are included in incentive fees on the consolidated statements of operations. Incentive fees are earned when specified financial hurdles are met for certain separately managed accounts and ACR. Revenues from fee-based services that the Company provides are recognized as earned over time in accordance with contractual agreements. The services the Company provides represent performance obligations that are satisfied over time.

ACR management fees

The Company earns a monthly base management fee equal to 1/12th of the amount of ACR’s equity (as defined in the management agreement) multiplied by 1.50%. Such base management fees are included in management and servicing fees, net - related party on the consolidated statements of operations.

The Company may terminate the management agreement at its option: (A) in the event that ACR defaults in the performance or observance of any material term, condition or covenant contained in the management agreement and such default continues for a period of 30 days after written notice thereof, or (B) without payment of a termination fee by ACR, if ACR becomes regulated as an investment company under the Investment Company Act, with such termination deemed to occur immediately before such event.

The ACR management agreement’s current contract term ends on July 31, 2026, and the agreement provides for automatic one-year renewals on such date and on each July 31 thereafter until terminated. The management agreement may be terminated upon the affirmative vote of at least two-thirds of ACR’s independent directors, or by the affirmative vote of the holders of at least a majority of the outstanding shares of ACR’s common stock, based upon unsatisfactory performance that is materially detrimental to ACR or a determination by ACR’s independent directors that the management fees payable to the Company are not fair, subject to the Company’s right to prevent such a compensation termination by accepting a mutually acceptable reduction of management fees. ACR’s Board must provide 180 days’ prior notice of any such termination. If ACR terminates the management agreement, the Company is entitled to a termination fee equal to four times the sum of the average annual base management fee and the average annual incentive compensation earned by the Company during the two 12-month periods immediately preceding the date of termination, calculated as of the end of the most recently completed fiscal quarter before the date of termination. ACR may also terminate the management agreement for cause with 30 days’ prior written notice from ACR’s Board. No termination fee is payable in the event of a termination for cause (as defined in the management agreement).

ACR incentive fees (management agreement)

The Company earns an incentive fee calculated and payable in arrears in an amount, not less than zero, equal to the excess of (1) the product of (a) 20% and (b) the excess of (i) Earnings Available for Distribution (“EAD”) (as defined in the management agreement) of ACR for the previous 12-month period, over (ii) the product of (A) ACR’s book value equity in the previous 12-month period, and (B) 7% per annum, over (2) the sum of any incentive compensation paid to the Company with respect to the first three calendar quarters of such previous 12-month period; provided, however, that no incentive compensation shall be payable with respect to any calendar quarter unless EAD for the 12 most recently completed calendar quarters (or such lesser number of completed calendar quarters from September 30, 2022) in the aggregate is greater than zero.

Incentive compensation is calculated and payable quarterly to the Company to the extent it is earned. Up to 75% of the incentive compensation is payable in cash and at least 25% is payable in the form of an award of common stock of ACR. The Company may elect to receive more than 25% of its incentive compensation in common stock. All shares are fully vested upon issuance; however, the Company may not sell such shares for one year after the incentive compensation becomes due and payable unless the management agreement is terminated.

ACR incentive fees (Manager Incentive Plan)

In June 2021, the shareholders of ACR approved the ACR Manager Incentive Plan (“MIP”). The MIP provides for the issuance of ACR equity-based awards to the Company when certain ACR book value targets are met. Such awards vest over four years. The Company initially measures such grants at fair value on the grant date and recognizes income monthly on a straight-line basis over the service period to Incentive fees – related party on the consolidated statements of operations.

Reimbursable Compensation and Benefits

G-11

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 30, 2026

(unaudited)

Reimbursable compensation and benefits include reimbursements, at cost, which arise primarily from the services employees of the Company provide pursuant to the ACR management agreement that are charged to ACR. The Company recognizes the revenue for reimbursements when the Company incurs the related reimbursable compensation and benefits and other costs on behalf of ACR.

Other Reimbursable Expenses

Other reimbursable expenses include reimbursements that arise from out-of-pocket expenses and certain other costs incurred by the Company that related directly to ACR’s operations or other reimbursable activity. The Company has determined that it controls the services provided by third parties for ACR and therefore the Company accounts for the cost of these services and the related reimbursement revenue on a gross basis.

Income Taxes

The Company accounts for its income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities by using the enacted tax rates in effect for the year in which differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers material positive and negative evidence, including results of recent operations, income in the carryback period, future reversals of existing taxable temporary differences, tax-planning strategies, and projected future taxable income. A valuation allowance is recorded to the extent the more-likely-than-not threshold is not met. If a valuation allowance is recorded and it is subsequently determined that the Company would be able to realize any portion of its deferred tax assets in the future in excess of their net recorded amount, an adjustment would be made to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. Uncertain tax positions are recorded in accordance with ASC 740 on the basis of a two-step process in which (1) it is determined whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the largest amount of tax benefit.

Investments in Equity Affiliate

The Company utilizes the equity method to account for investments when it possesses the ability to exercise significant influence, but not control, over the operating and financial policies of the investee. The ability to exercise significant influence is presumed when the investor possesses more than 20% of the voting interests of the investee. This presumption may be overcome based on specific facts and circumstances that demonstrate that the ability to exercise significant influence is restricted. The Company elected the fair value option for its equity method investment and determines fair value using the closing price of common shares as of the end of the period. The Company recognizes the unrealized and realized gains and losses on equity investments on the consolidated statements of operations as income from investments in equity affiliate - related party.

Goodwill

Goodwill represents the costs of business acquisitions in excess of the fair value of identifiable net assets acquired. The Company evaluates the recoverability of goodwill annually on the first day of the Company’s fiscal fourth quarter of each fiscal year, or more frequently, if events or changes in circumstances indicate that goodwill might be impaired. If the Company’s review indicates that the carrying amount of goodwill exceeds its fair value, the Company will reduce the carrying amount of goodwill to fair value. Based on the impairment tests performed as of October 1, 2025, there were no indications that goodwill was impaired and nor were there events or changes in circumstances indicating impairment at June 30, 2026 and December 31, 2025.

Leases

Arrangements are evaluated to identify leases at inception. The right to use an underlying asset for the lease term is recorded as operating lease right-of-use ("ROU") assets and obligations to make lease payments arising from the lease are recorded as lease liabilities. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company

G-12

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 30, 2026

(unaudited)

will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. At the adoption date, the Company made an accounting policy election to exclude leases with an initial term of twelve months or less.

Stock-Based Compensation

Issuances of options to purchase shares of the Company’s common stock are initially measured at fair value on the grant date and expensed monthly on a straight-line basis over the service period to equity compensation expense on the consolidated statements of operations, with a corresponding entry to additional paid-in capital on the consolidated balance sheets. In accordance with GAAP, the fair value of all unvested issuances of restricted stock and options is not remeasured after the initial grant date. The Company accounts for forfeitures of employee awards as they occur. As a result, the Company records compensation cost assuming all option holders will complete the requisite service period. If an employee forfeits an award because they fail to complete the requisite service period, the Company will reverse compensation cost previously recognized in the period the award is forfeited.

Reclassifications

Certain reclassifications have been made to prior year’s financial information to conform to the June 30, 2026 presentation. These reclassifications had no effect on net loss or total equity.

NOTE 3 - CONSOLIDATION

The Company has evaluated its loans, investments in unconsolidated entities, guarantees and other financial contracts in order to determine if they are variable interests in VIEs. The Company regularly monitors these legal interests and contracts and, to the extent it has determined that it has a variable interest, analyzes the related entity for potential consolidation.

Investments in Consolidated Variable Interest Entities

The Company consolidates entities in which the Company has a variable interest and, as the investment manager, has both the power to direct the most significant activities and a potentially significant economic interest. Investments in the consolidated VIEs are reported at fair value and represent the Company’s maximum exposure to loss.

ACRES Holdings, LLC is considered and treated as a VIE because the Company directs the significant activities of the entity and not the holders of equity at risk. The Company concluded its interest in ACRES Holdings, LLC represented a potentially significant economic interest and the Company represented the primary beneficiary of ACRES Holdings, LLC. As a result, the Company consolidated ACRES Holdings, LLC as of July 23, 2025 and it continues to be consolidated as of June 30, 2026 and December 31, 2025.

AMF is considered and treated as a VIE because the investors of AMF, who are unaffiliated with the Company, do not have substantive rights to impact the ongoing governance and operating activities of AMF, including the ability to remove the Company as the investment manager without cause. The Company concluded its interest in AMF represented a potentially significant economic interest and the Company represented the primary beneficiary of AMF. As a result, the Company consolidated AMF as of June 30, 2026 and December 31, 2025 and for the three and six months ended June 30, 2026 and 2025.

Investments in Non-Consolidated Variable Interest Entities (the Company is not the primary beneficiary, but has a variable interest)

Based on management’s analysis, the Company is not the primary beneficiary of the VIEs discussed below since it does not have both (i) the power to direct the activities that most significantly impact the VIEs’ economic performance and (ii) the obligation to absorb the losses of the VIEs or the right to receive the benefits from the VIEs, which could be significant to the VIEs. Accordingly, the following VIEs are not consolidated in the Company’s financial statements at June 30, 2026. The Company continuously reassesses whether it is deemed to be the primary beneficiary of its unconsolidated VIEs.

The Company completed a qualitative analysis to determine whether it is the primary beneficiary of ACRES SPV LLC, a wholly owned subsidiary of the Company, and determined that it was not the primary beneficiary as of June 30, 2026 and December 31, 2025. ACRES SPV LLC is considered and treated as a VIE due to a lack of sufficient equity. The Company (including related parties) are not deemed to be the primary beneficiary of the VIE as the Company does not have the power to direct the activities most significant to ACRES SPV LLC which include the management of current investments and operating activity. Accordingly, ACRES SPV LLC is not consolidated into the Company’s consolidated financial statements as of June 30, 2026 and December 31, 2025. The Company has no investment at risk as of June 30, 2026 and December 31, 2025.

G-13

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 30, 2026

(unaudited)

Consolidating Schedules

The following supplemental financial information illustrates the consolidating effects of the Consolidated Fund on the Company’s balance sheet, results from operations and cash flows:

		As of June 30, 2026
		Consolidated Company Entities				Consolidated Fund				Eliminations				Consolidated
ASSETS
Cash and cash equivalents		$	1,831,859			$	—			$	—			$	1,831,859
Restricted cash			837,594				—				—				837,594
Goodwill			35,000,000				—				—				35,000,000
Accounts receivable			716,426				—				—				716,426
Investments in equity affiliates, at fair value - related party			127,908,705				—				(107,074,675	)			20,834,030
Due from related parties			4,799,207				—				(3,101,170	)			1,698,037
Right-of-use assets			5,471,030				—				—				5,471,030
Other assets, net of depreciation			1,359,811				—				—				1,359,811
Assets of Consolidated Fund:
Investments, at fair value			—				2,025,830,311				—				2,025,830,311
Cash and cash equivalents			—				54,578,489				—				54,578,489
Restricted cash			—				9,999,992				—				9,999,992
Accrued interest, servicing receivables and other assets			—				16,089,608				—				16,089,608
Total assets		$	177,924,632			$	2,106,498,400			$	(110,175,845	)		$	2,174,247,187
LIABILITIES
Borrowings		$	147,246,398			$	—			$	—			$	147,246,398
Borrowings - related party			10,250,000				—				—				10,250,000
Accrued interest, accounts payable, and other liabilities			5,791,410				—				—				5,791,410
Derivative liability			24,034,846				—				—				24,034,846
Operating lease liabilities			6,177,369				—				—				6,177,369
Liabilities of Consolidated Fund:
Borrowings			—				1,268,252,935				—				1,268,252,935
Accrued interest, accounts payable and other liabilities			—				26,401,349				—				26,401,349
Due to related party			—				3,101,170				(3,101,170	)			—
Total liabilities			193,500,023				1,297,755,454				(3,101,170	)			1,488,154,307
REDEEMABLE INTEREST IN CONSOLIDATED COMPANY ENTITIES			36,279,758				—				—				36,279,758
NON-CONTROLLING INTEREST IN CONSOLIDATED FUND			—				808,742,946				(107,074,675	)			701,668,271
STOCKHOLDERS' DEFICIT
Common stock, $0.0001 par value; 3,000,000 shares authorized and 2,539,481 shares outstanding at June 30, 2026			255				—				—				255
Additional paid-in capital			17,769,351				—				—				17,769,351
Accumulated deficit			(69,624,755	)			—				—				(69,624,755	)
TOTAL STOCKHOLDERS' DEFICIT			(51,855,149	)			—				—				(51,855,149	)
TOTAL EQUITY			(51,855,149	)			808,742,946				(107,074,675	)			649,813,122
TOTAL LIABILITIES, NON-CONTROLLING INTEREST AND EQUITY		$	177,924,632			$	2,106,498,400			$	(110,175,845	)		$	2,174,247,187

G-14

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 30, 2026

(unaudited)

		As of December 31, 2025
		Consolidated Company Entities				Consolidated Fund				Eliminations				Consolidated
ASSETS
Cash and cash equivalents		$	5,438,038			$	—			$	—			$	5,438,038
Restricted cash			1,313,332				—				—				1,313,332
Goodwill			35,000,000				—				—				35,000,000
Accounts receivable			803,840				—				—				803,840
Investments in equity affiliate, at fair value - related party			121,295,369				—				(106,999,338	)			14,296,031
Due from related parties			4,899,486				—				(3,014,787	)			1,884,699
Right-of-use assets			6,971,903				—				—				6,971,903
Other assets, net of depreciation			1,150,067				—				—				1,150,067
Assets of Consolidated Fund:
Investments, at fair value			—				2,016,918,819				—				2,016,918,819
Cash and cash equivalents			—				17,824,819				—				17,824,819
Restricted cash			—				28,478,347				—				28,478,347
Accrued interest, servicing receivables and other assets			—				38,509,145				—				38,509,145
Total assets		$	176,872,035			$	2,101,731,130			$	(110,014,125	)		$	2,168,589,040
LIABILITIES (2)
Borrowings		$	147,319,367			$	—			$	—			$	147,319,367
Borrowings - related party			10,375,000				—				—				10,375,000
Accrued interest, accounts payable, and other liabilities			5,605,251				—				—				5,605,251
Derivative liabilities			9,240,299				—				—				9,240,299
Operating lease liabilities			7,756,825				—				—				7,756,825
Liabilities of Consolidated Fund:
Borrowings			—				1,283,957,379				—				1,283,957,379
Accrued interest, accounts payable and other liabilities			—				31,370,008				—				31,370,008
Due to related party			—				3,014,787				(3,014,787	)			—
Total liabilities			180,296,742				1,318,342,174				(3,014,787	)			1,495,624,129
REDEEMABLE INTEREST IN CONSOLIDATED COMPANY ENTITIES			33,960,107				—				—				33,960,107
NON-CONTROLLING INTERESTS IN CONSOLIDATED FUND (3)							783,388,956				(106,999,338	)			676,389,618
STOCKHOLDERS' DEFICIT
Common stock, $0.0001 par value; 3,000,000 shares authorized and 1,695,731 shares outstanding at December 31, 2025			170				—				—				170
Additional paid-in capital			10,178,636				—				—				10,178,636
Accumulated deficit			(47,563,620	)			—				—				(47,563,620	)
TOTAL STOCKHOLDERS' DEFICIT			(37,384,814	)			—				—				(37,384,814	)
TOTAL EQUITY			(37,384,814	)			783,388,956				(106,999,338	)			639,004,804
TOTAL LIABILITIES, REDEEMABLE INTEREST, NON-CONTROLLING INTERESTS, AND EQUITY		$	176,872,035			$	2,101,731,130			$	(110,014,125	)		$	2,168,589,040

G-15

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 30, 2026

(unaudited)

		For the Three Months Ended June 30, 2026
		Consolidated Company Entities				Consolidated Fund				Eliminations				Consolidated
REVENUES
Management and servicing fees, net		$	183,667			$	—			$	—			$	183,667
Management and servicing fees, net - related party			4,503,360				—				(2,939,546	)			1,563,814
Origination fees			917,500				—				—				917,500
Incentive fees - related party			6,198,506				—				—				6,198,506
Application fees and other income			230,369				—				—				230,369
Reimbursable compensation and benefits - related party			897,428				—				—				897,428
Other reimbursable expenses			94,587				—				—				94,587
Other reimbursable expenses - related party			432,093				—				(151,774	)			280,319
Total revenues			13,457,510				—				(3,091,320	)			10,366,190
OPERATING EXPENSES
Compensation and benefits			3,616,229				—				—				3,616,229
Equity compensation - related party			—				—				—				—
General, administrative and other expenses			2,818,251				—				—				2,818,251
Interest expense			3,063,753				—				—				3,063,753
Interest expense - related party			77,919				—				—				77,919
Other reimbursable expenses			94,587				—				—				94,587
Other reimbursable expenses - related party			432,093				—				(151,774	)			280,319
Expenses of Consolidated Fund			—				3,842,345				(2,939,546	)			902,799
Total operating expenses			10,102,832				3,842,345				(3,091,320	)			10,853,857
			3,354,678				(3,842,345	)			—				(487,667	)
OTHER INCOME (EXPENSE)															—
Income (loss) from investments in equity affiliates - related party			1,815,359				—				(2,074,664	)			(259,305	)
Net realized and unrealized gains on investments of Consolidated Fund			—				7,919,828				—				7,919,828
Interest income of Consolidated Fund			—				28,950,881				—				28,950,881
Interest expense of Consolidated Fund			—				(21,262,695	)			—				(21,262,695	)
Derivative gain (loss)			(17,220,073	)			—				—				(17,220,073	)
Total other income			(15,404,714	)			15,608,014				(2,074,664	)			(1,871,364	)
(LOSS) INCOME BEFORE TAXES			(12,050,036	)			11,765,669				(2,074,664	)			(2,359,031	)
Provision for income taxes			—				—				—				—
NET (LOSS) INCOME			(12,050,036	)			11,765,669				(2,074,664	)			(2,359,031	)
Less: Net income attributable to non-controlling interest in Consolidated Fund			—				—				(9,691,005	)			(9,691,005	)
Less: Net income attributable to redeemable interest in Consolidated Company Entities			(1,366,249	)			—				—				(1,366,249	)
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON SHARES		$	(13,416,285	)		$	11,765,669			$	(11,765,669	)		$	(13,416,285	)

G-16

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 30, 2026

(unaudited)

		For the Six Months Ended June 30, 2026
		Consolidated Company Entities				Consolidated Fund				Eliminations				Consolidated
REVENUES
Management and servicing fees, net		$	395,183			$	—			$	—			$	395,183
Management and servicing fees, net - related party			8,914,646				—				(5,791,342	)			3,123,304
Origination fees			917,500				—				—				917,500
Incentive fees - related party			6,731,593				—				—				6,731,593
Application fees and other income			913,920				—				—				913,920
Reimbursable compensation and benefits - related party			2,082,298				—				—				2,082,298
Other reimbursable expenses			323,081				—				—				323,081
Other reimbursable expenses - related party			881,597				—				(331,475	)			550,122
Total revenues			21,159,818				—				(6,122,817	)			15,037,001
OPERATING EXPENSES
Compensation and benefits			7,875,347				—				—				7,875,347
Equity compensation - related party			7,240,715				—				—				7,240,715
General, administrative and other expenses			5,701,603				—				—				5,701,603
Interest expense			6,093,839				—				—				6,093,839
Interest expense - related party			155,544				—				—				155,544
Other reimbursable expenses			323,081				—				—				323,081
Other reimbursable expenses - related party			881,597				—				(331,475	)			550,122
Expenses of Consolidated Fund			—				7,595,411				(5,791,342	)			1,804,069
Total operating expenses			28,271,726				7,595,411				(6,122,817	)			29,744,320
			(7,111,908	)			(7,595,411	)			—				(14,707,319	)
OTHER INCOME (EXPENSE)															—
Income (loss) from investments in equity affiliates - related party			2,514,971				—				(4,127,508	)			(1,612,537	)
Net realized and unrealized gains on investments of Consolidated Fund			—				15,455,180				—				15,455,180
Interest income of Consolidated Fund			—				60,087,546				—				60,087,546
Interest expense of Consolidated Fund			—				(44,323,261	)			—				(44,323,261	)
Derivative gain (loss)			(14,794,547	)			—				—				(14,794,547	)
Total other income			(12,279,576	)			31,219,465				(4,127,508	)			14,812,381
(LOSS) INCOME BEFORE TAXES			(19,391,484	)			23,624,054				(4,127,508	)			105,062
Provision for income taxes			—				—				—				—
NET (LOSS) INCOME			(19,391,484	)			23,624,054				(4,127,508	)			105,062
Less: Net income attributable to non-controlling interest in Consolidated Fund			—				—				(19,496,546	)			(19,496,546	)
Less: Net income attributable to redeemable interest in Consolidated Company Entities			(2,669,650	)			—				—				(2,669,650	)
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON SHARES		$	(22,061,134	)		$	23,624,054			$	(23,624,054	)		$	(22,061,134	)

G-17

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 30, 2026

(unaudited)

		For the Three Months Ended June 30, 2025
		Consolidated Company Entities				Consolidated Fund				Eliminations				Consolidated
REVENUES
Management and servicing fees, net		$	142,443			$	—			$	—			$	142,443
Management and servicing fees, net - related party			4,009,745				—				(2,348,856	)			1,660,889
Origination fees			2,739,200				—				—				2,739,200
Incentive fees - related party			795,034				—				—				795,034
Application fees and other income			332,371				—				—				332,371
Reimbursable compensation and benefits - related party			904,236				—				—				904,236
Other reimbursable expenses			192,269				—				—				192,269
Other reimbursable expenses - related party			298,918				—				(121,129	)			177,789
Total revenues			9,414,216				—				(2,469,985	)			6,944,231
OPERATING EXPENSES
Compensation and benefits			3,193,620				—				—				3,193,620
Equity compensation - related party			465,955				—				—				465,955
General, administrative and other expenses			2,741,390				—				—				2,741,390
Interest expense			5,683,232				—				—				5,683,232
Interest expense - related party			80,194				—				—				80,194
Other reimbursable expenses			192,269				—				—				192,269
Other reimbursable expenses - related party			298,918				—				(121,129	)			177,789
Expenses of Consolidated Fund			—				2,951,251				(2,348,856	)			602,395
Total operating expenses			12,655,578				2,951,251				(2,469,985	)			13,136,844
			(3,241,362	)			(2,951,251	)			—				(6,192,613	)
OTHER INCOME (EXPENSE)
Income from investments in equity affiliates - related party			777,427				—				(2,042,120	)			(1,264,693	)
Net realized and unrealized gains on investments of Consolidated Fund			—				(28,985	)			—				(28,985	)
Interest income of Consolidated Fund			—				27,792,156				—				27,792,156
Interest expense of Consolidated Fund			—				(13,739,704	)			—				(13,739,704	)
Total other income (expense)			777,427				14,023,467				(2,042,120	)			12,758,774
INCOME BEFORE TAXES			(2,463,935	)			11,072,216				(2,042,120	)			6,566,161
Provision for income taxes			—				—				—				—
NET INCOME			(2,463,935	)			11,072,216				(2,042,120	)			6,566,161
Less: Net income attributable to non-controlling interest in Consolidated Fund			—				—				(9,030,096	)			(9,030,096	)
NET INCOME ATTRIBUTABLE TO COMMON SHARES		$	(2,463,935	)		$	11,072,216			$	(11,072,216	)		$	(2,463,935	)

G-18

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 30, 2026

(unaudited)

		For the Six Months Ended June 30, 2025
		Consolidated Company Entities				Consolidated Fund				Eliminations				Consolidated
REVENUES
Management and servicing fees, net		$	300,878			$	—			$	—			$	300,878
Management and servicing fees, net - related party			7,973,826				—				(4,722,358	)			3,251,468
Origination fees			4,050,856				—				—				4,050,856
Incentive fees - related party			1,581,330				—				—				1,581,330
Application fees and other income			504,486				—				—				504,486
Reimbursable compensation and benefits - related party			2,185,056				—				—				2,185,056
Other reimbursable expenses			362,705				—				—				362,705
Other reimbursable expenses - related party			492,393				—				(189,357	)			303,036
Total revenues			17,451,530				—				(4,911,715	)			12,539,815
OPERATING EXPENSES
Compensation and benefits			6,467,218				—				—				6,467,218
Equity compensation - related party			890,625				—				—				890,625
General, administrative and other expenses			4,625,414				—				—				4,625,414
Interest expense			11,251,307				—				—				11,251,307
Interest expense - related party			160,069				—				—				160,069
Other reimbursable expenses			362,705				—				—				362,705
Other reimbursable expenses - related party			492,393				—				(189,357	)			303,036
Expenses of Consolidated Fund			—				5,693,271				(4,722,358	)			970,913
Total operating expenses			24,249,731				5,693,271				(4,911,715	)			25,031,287
			(6,798,201	)			(5,693,271	)			—				(12,491,472	)
OTHER INCOME (EXPENSE)
Income from investments in equity affiliates - related party			5,240,986				—				(4,043,172	)			1,197,814
Net realized and unrealized gains on investments of Consolidated Fund			—				(28,985	)			—				(28,985	)
Interest income of Consolidated Fund			—				53,098,250				—				53,098,250
Interest expense of Consolidated Fund			—				(26,273,947	)			—				(26,273,947	)
Total other income (expense)			5,240,986				26,795,318				(4,043,172	)			27,993,132
INCOME BEFORE TAXES			(1,557,215	)			21,102,047				(4,043,172	)			15,501,660
Provision for income taxes			—				—				—				—
NET INCOME			(1,557,215	)			21,102,047				(4,043,172	)			15,501,660
Less: Net income attributable to non-controlling interest in Consolidated Fund			—				—				(17,058,875	)			(17,058,875	)
NET INCOME ATTRIBUTABLE TO COMMON SHARES		$	(1,557,215	)		$	21,102,047			$	(21,102,047	)		$	(1,557,215	)

G-19

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 30, 2026

(unaudited)

		For the Six Months Ended June 30, 2026
		Consolidated Company Entities				Consolidated Fund				Eliminations				Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income		$	(19,391,484	)		$	23,624,054			$	(4,127,508	)		$	105,062
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation			59,322				—				—				59,322
Equity compensation - related party			7,240,715				—				—				7,240,715
Amortization of debt acquisition costs			427,031				—				—				427,031
Income from investments in equity affiliates - related party			(2,514,971	)			—				4,127,508				1,612,537
Derivative loss (gain)			14,794,547												14,794,547
Distributions from equity affiliates - related party			4,052,171				—				(4,052,171	)			—
Satisfaction of incentive fees in stock			(8,150,536	)			—				—				(8,150,536	)
Adjustments to reconcile net income to net cash (used in) provided by operating activities allocable to controlling and non-controlling interests in Consolidated Fund:															—
Net realized gain from investments			—				(17,529,500	)			—				(17,529,500	)
Net change in unrealized gains on investments			—				2,074,320				—				2,074,320
Purchase and funding of loan notes, participations and equity interests			—				(172,390,385	)			—				(172,390,385	)
Sales proceeds and principal payments received on loan notes and participations			—				139,864,692				—				139,864,692
Distribution from investments in equity interests			—				31,065,038				—				31,065,038
Amortization of debt issuance costs			—				3,630,384				—				3,630,384
Deferred fees			—				790,114				—				790,114
Amortization of deferred fees			—				(1,127,959	)			—				(1,127,959	)
Cash flows due to changes in operating assets and liabilities:
Accounts receivable			87,414				—				—				87,414
Other assets, net of depreciation			(269,066	)			—				—				(269,066	)
Due from related parties			100,279				—				86,534				186,813
Right-of-use assets			1,500,873				—				—				1,500,873
Operating lease liabilities			(1,579,456	)			—				—				(1,579,456	)
Accrued interest, accounts payable, and other liabilities			(461,841	)			—				—				(461,841	)
Cash flows due to changes in operating assets and liabilities allocable to controlling and non-controlling interest in Consolidated Fund:
Change in cash and cash equivalents held at Consolidated Fund			—				—				(18,275,315	)			(18,275,315	)
Change in other assets and receivables held at Consolidated Fund			—				22,419,537				—				22,419,537
Change in other liabilities and payables held at Consolidated Fund			—				3,459,912				(86,534	)			3,373,378
Net cash (used in) provided by operating activities			(4,105,002	)			35,880,207				(22,327,486	)			9,447,719
CASH FLOWS FROM FINANCING ACTIVITIES:
Paydowns of credit facilities and notes payable			(500,000	)			—				—				(500,000	)
Paydowns of loan payable - related party			(125,000	)			—				—				(125,000	)
Exercise of stock options			648,085												648,085
Allocable to controlling and non-controlling interests in Consolidated Fund:
Contributions from non-controlling interests in Consolidated Fund			—				27,437,108				—				27,437,108
Distributions to non-controlling interests in Consolidated Fund			—				(25,707,172	)			4,052,171				(21,655,001	)
Borrowings under loan obligations by Consolidated Fund			—				503,111,067				—				503,111,067
Repayments under loan obligations by Consolidated Fund			—				(513,480,633	)			—				(513,480,633	)
Payment of debt acquisition costs by Consolidated Fund			—				(8,965,262	)			—				(8,965,262	)
Net cash (used in) provided by financing activities			23,085				(17,604,892	)			4,052,171				(13,529,636	)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH			(4,081,917	)			18,275,315				(18,275,315	)			(4,081,917	)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD			6,751,370				46,303,166				(46,303,166	)			6,751,370
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD		$	2,669,453			$	64,578,481			$	(64,578,481	)		$	2,669,453

G-20

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 30, 2026

(unaudited)

		For the Six Months Ended June 30, 2025
		Consolidated Company Entities				Consolidated Fund				Eliminations				Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income		$	(1,557,213	)		$	21,102,047			$	(4,043,172	)		$	15,501,662
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation			59,550				—				—				59,550
Equity compensation - related party			890,625				—				—				890,625
Amortization of debt acquisition costs			240,344				—				—				240,344
Amortization of capitalized mortgage servicing rights			81,472				—				—				81,472
Non-cash interest expense			3,795,816				—				—				3,795,816
Income from investments in equity affiliates -related party			(5,240,986	)			—				4,043,172				(1,197,814	)
Distributions from equity affiliates - related party			5,736,538				—				(5,736,538	)			—
Satisfaction of incentive fees in stock			(3,615,868	)			—				—				(3,615,868	)
Adjustments to reconcile net income to net cash (used in) provided by operating activities allocable to controlling and non-controlling interests in Consolidated Fund:
Net change in unrealized gains on investments			—				28,985				—				28,985
Purchase and funding of loan notes and participations			—				(265,989,351	)			—				(265,989,351	)
Sales proceeds and principal payments received on loan notes and participations			—				85,389,152				—				85,389,152
Amortization of debt issuance costs			—				1,815,570				—				1,815,570
Deferred fees			—				1,971,260				—				1,971,260
Amortization of deferred fees			—				(2,515,818	)			—				(2,515,818	)
Cash flows due to changes in operating assets and liabilities:
Accounts receivable			(19,615	)			—				—				(19,615	)
Other assets, net of depreciation			(1,096,199	)			—				—				(1,096,199	)
Due from related parties			1,729,456				—				212,003				1,941,459
Right-of-use assets			(4,435,444	)			—				—				(4,435,444	)
Operating lease liabilities			4,779,661				—				—				4,779,661
Accrued interest, accounts payable, and other liabilities			2,809,995				—				—				2,809,995
Cash flows due to changes in operating assets and liabilities allocable to controlling and non-controlling interest in Consolidated Fund:
Change in cash and cash equivalents held at Consolidated Fund			—				—				46,591,469				46,591,469
Change in other assets and receivables held at Consolidated Fund			—				(2,681,500	)							(2,681,500	)
Change in other liabilities and payables held at Consolidated Fund			—				(679,442	)			(212,003	)			(891,445	)
Net cash provided by (used in) operating activities			4,158,132				(161,559,098	)			40,854,931				(116,546,035	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Paydowns of credit facilities and notes payable			(150,000	)			—				—				(150,000	)
Paydowns of loan payable - related party			(150,000	)			—				—				(150,000	)
Allocable to controlling and non-controlling interests in Consolidated Fund:
Contributions from non-controlling interests in Consolidated Fund			—				59,284,874				—				59,284,874
Distributions to non-controlling interests in Consolidated Fund			—				(36,778,196	)			5,736,538				(31,041,658	)
Borrowings under loan obligations by Consolidated Fund			—				157,601,000				—				157,601,000
Repayments under loan obligations by Consolidated Fund			—				(61,452,000	)			—				(61,452,000	)
Payment of debt acquisition costs by Consolidated Fund			—				(3,688,049	)			—				(3,688,049	)
Net cash (used in) provided by financing activities			(300,000	)			114,967,629				5,736,538				120,404,167
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH			3,858,132				(46,591,469	)			46,591,469				3,858,132
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD			7,217,108				57,490,000				(57,490,000	)			7,217,108
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD		$	11,075,240			$	10,898,531			$	(10,898,531	)		$	11,075,240

G-21

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 30, 2026

(unaudited)

NOTE 4 – SUPPLEMENTAL CASH FLOW INFORMATION

The following table provides a reconciliation of cash, cash equivalents and restricted cash on the consolidated balance sheets to the total amount shown on the consolidated statements of cash flows:

		June 30, 2026				June 30, 2025
Cash and cash equivalents		$	1,831,859			$	8,865,657
Restricted cash			837,594				2,209,582
Total cash, cash equivalents and restricted cash shown on the    Company's consolidated statement of cash flows		$	2,669,453			$	11,075,239

The following table summarizes the Company’s supplemental disclosure of cash flow information:

		For the Six Months Ended June 30,
		2026				2025
Supplemental cash flows:
Interest expense paid in cash		$	5,796,727			$	7,313,212
Income taxes paid in cash			791,427				826,622
Non-cash investing and financing activities include the following:
Purchase of derivative liability		$	(10,838,750	)		$	—
Exercise of stock options			10,838,750				—

NOTE 5 – RESTRICTED CASH

The Company maintains loan expense deposits collected from prospective borrowers used to offset underwriting expenses associated with originating loans. As of June 30, 2026 and December 31, 2025, loan expense deposits amounted to $0.8 million and $1.3 million, respectively. Loan escrow and expense deposits are segregated in bank accounts held outside of corporate assets and are reflected as restricted cash on the consolidated balance sheets.

The Company is required to maintain certain deposits in escrow for, among other purposes, interest, taxes, insurance, and construction reserves under the underlying mortgage loan agreements serviced by the Company. As of June 30, 2026 and December 31, 2025, the Company held total escrow balances of approximately $0.6 million and $35.8 million, respectively, which are not included on the Company’s consolidated balance sheets. These escrows are maintained in separate accounts at federally insured depository institutions, which may exceed FDIC insured limits.

NOTE 6 – INVESTMENTS OF THE CONSOLIDATED FUND

The following tables summarizes investments held in the Consolidated Fund:

				June 30, 2026
Asset Type		Asset Location		Fair Value				Percentage of Total Investments
First mortgage loan
Various		Various			1,505,994,434				74.3	%
Equity Investments
ACRES SPE 2025-1 LLC		Various			136,139,903				6.7	%
Various		Various			383,695,974				19.0	%
Total investments, at fair value				$	2,025,830,311				100.0	%

G-22

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 30, 2026

(unaudited)

				December 31, 2025
Asset Type		Asset Location		Fair Value				Percentage of Total Investments
First mortgage loan
Various		Various		$	1,539,203,250				76.3	%
Equity Investments
ACRES SPE 2025-1 LLC		Various			127,411,735				6.3	%
Various		Various			350,303,834				17.4	%
Total investments, at fair value				$	2,016,918,819				100.0	%

NOTE 7 – INVESTMENTS IN EQUITY AFFILIATE

Investments in equity affiliate - related party are summarized as follows:

		Cost Basis				Net Gains (Losses)				Fair Value
June 30, 2026
ACR (1,171,112 common stock shares)		$	16,185,349			$	4,648,681			$	20,834,030
December 31, 2025
ACR (669,917 common stock shares)		$	8,034,812			$	6,261,219			$	14,296,031

The MIP provides for the issuance of ACR equity-based awards to the Company when each of the following book value targets are met: $21.00, $24.00, $27.00, $30.00, $33.00 and $36.00. Such grants are subject to a four-year vesting period. On June 14, 2021 and May 6, 2022, the $21.00 and $24.00 book value targets, respectively, were met and ACRES Share Holdings, LLC, a wholly owned subsidiary of the Company, was granted 299,999 shares for each of the years ended December 31, 2022 and 2021, which vest 25% for four years, on each anniversary of the issuance date. On May 7, 2024, the $27.00 book value target was met and ACRES Share Holdings, LLC was granted 295,237 shares for the year ended December 31, 2024, which will vest 25% for four years, on each anniversary of the issuance date. On March 5, 2026, the $30.00 book value target was met and ACRES Share Holdings, LLC was granted 204,765 shares for the six months ended June 30, 2026, which will vest 25% for four years, on each anniversary of the issuance date. For each of the three and six months ended June 30, 2026 and 2025, 501,195 shares and 223,810 shares, respectively, of ACR were vested.

Under the ACR management agreement, the Company is entitled to receive incentive compensation, payable quarterly, based on ACR’s performance. No such incentive compensation was earned by the Company for the three and six months ended June 30, 2026 and 2025.

The following table summarizes the Company’s restricted common stock transactions under the MIP and ACR’s management agreement:

		Shares
Unvested shares at January 1, 2025			520,240
Issued			—
Vested			(223,810	)
Unvested shares at December 31, 2025			296,430
Issued			204,765
Vested			(501,195	)
Unvested shares at June 30, 2026			—

The aggregate market value of the Company’s investment in ACR as of June 30, 2026 and December 31, 2025, based on quoted market prices, was $20.8 million and $14.3 million, respectively. The Company possesses the ability to exercise significant influence, but not control, over the operating and financial policies of ACR and, therefore, accounts for its investment in ACR using the equity method of accounting. The Company elected the fair value option for its equity method investment in ACR and determines the fair value of its equity investment using the closing price of ACR’s common shares as of the end of the period, which was a Level 1 fair value input, and recorded changes in fair value in earnings on the Company’s consolidated statements of operations. The unrealized gains (losses) on the Company’s consolidated statements of operations related to the Company’s investment in ACR was ($0.3) million and ($1.3) million for the three months ended June 30, 2026 and 2025, respectively and ($1.6) million and $1.2 million for the six months ended June 30, 2026 and 2025, respectively. During the three and six months ended June 30, 2026 and 2025, the Company received no distributions from ACR.

G-23

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 30, 2026

(unaudited)

The condensed balance sheets for the Company’s unconsolidated investment in equity affiliate are as follows (in thousands):

		June 30, 2026				December 31, 2025
Condensed Balance Sheets:		ACR				ACR
Assets:
Cash and cash equivalents		$	41,098			$	83,768
Real estate assets			2,298,142				2,016,821
Other assets			67,438				61,775
Total assets			2,406,678				2,162,364
Liabilities:
Notes payable			1,783,346				1,544,938
Other liabilities			73,101				66,834
Total liabilities			1,856,447				1,611,772
Stockholders' equity			413,318				420,796
Non-controlling interests			136,913				129,796
Total stockholders' equity			550,231				550,592
Total liabilities and equity		$	2,406,678			$	2,162,364

The condensed statements of operations for the Company’s unconsolidated investments in equity affiliate are as follows (in thousands):

		For the Three Months Ended								For the Six Months Ended
		June 30, 2026				June 30, 2025				June 30, 2026				June 30, 2025
Condensed Statements of Operations:		ACR				ACR				ACR				ACR
Revenue:
Real estate income		$	10,430			$	13,273			$	18,977			$	24,639
Interest income			38,400				28,831				72,760				57,557
Other income			31				33				62				66
Total revenues			48,861				42,137				91,799				82,262
Expenses:
Interest expense			27,881				20,264				52,995				43,387
Management and servicing fees - related party			1,564				1,601				3,125				3,232
Equity compensation - related party			4,893				585				5,433				1,400
General and administrative			2,722				2,736				5,758				5,895
Real estate expense			10,523				13,349				20,233				26,691
Other expenses (income)			6,812				(760	)			5,864				(2,459	)
Total expenses			54,395				37,775				93,408				78,146
Other Income (Expense):
Total other income (expense)			512				(31	)			4,116				(439	)
Income tax benefit (expense)			-				(7	)			(1	)			(83	)
Net income (loss)		$	(5,022	)		$	4,324			$	2,506			$	3,594
Net income allocated to preferred shares			(5,096	)			(5,282	)			(10,210	)			(10,595	)
Net (income) loss allocable to non-controlling interests, net of taxes			(2,401	)			226				(5,838	)			410
Net loss allocable to common shares			(12,519	)			(732	)			(13,542	)			(6,591	)
Company's share of (loss) income (1)		$	(259	)		$	(1,265	)		$	(1,613	)		$	1,198

(1)Includes unrealized gains recorded as income from equity investments – related party on the consolidated statements of operations.

NOTE 8 - LEASES

The Company has operating leases for office space and office equipment. The leases have terms that expire between December 2027 and June 2032. The leases on the office space and office equipment contain options for early termination granted to the Company and the lessor. Lease payments are determined as follows:

•Office space: payments are made on a fixed schedule, escalating annually, and include the Company’s responsibility

G-24

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 30, 2026

(unaudited)

for a percentage of increases in the building’s property taxes and operating expenses over the base year.

•Office equipment: payments are made on a fixed schedule.

The following table summarizes the Company’s operating leases:

		June 30, 2026				December 31, 2025
Operating Leases:
Right of use assets		$	5,471,030			$	6,971,903
Lease liabilities			(6,177,369	)			(7,756,825	)
Weighted average remaining lease term:		5.71 years				6.21 years
Weighted average discount rate (1):			8.31	%			8.21	%

(1) The market discount rate is used, when readily determinable, in calculating the present value of lease payments for the operating lease liability. Otherwise, the incremental borrowing rate at the beginning of the period of adoption (January 1, 2022) or on the commencement date is used.

The following table summarizes the Company’s operating lease costs and cash payments during the periods indicated:

		For the Three Months Ended June 30,								For the Six Months Ended June 30,
		2026				2025				2026				2025
Lease Cost:
Operating lease cost		$	312,991			$	301,411			$	625,982			$	557,265
Short-term lease cost		$	3,529			$	3,947			$	7,058			$	7,894
Other Information:
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases		$	318,023			$	106,526			$	636,047			$	213,050

The following table summarizes the Company’s operating leases cash flow obligations on an undiscounted, annual basis:

		Operating Leases
Remainder of 2026		$	638,997
2027			1,287,268
2028			1,329,372
2029			1,371,757
2030			1,410,176
2031			1,450,775
Thereafter			322,680
Subtotal			7,811,025
Less: impact of discount			(1,633,656	)
Total		$	6,177,369

NOTE 9 - FAIR VALUE

The Company uses valuation techniques that are consistent with the market approach, the income approach and/or the cost approach to measure assets and liabilities that are measured at fair value. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity's own assumptions about the inputs market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. In that regard, accounting standards establish a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.

The fair value hierarchy is as follows:

•Level 1 - Assets and liabilities whose values are based on unadjusted quoted prices in active markets for identical assets and

G-25

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 30, 2026

(unaudited)

liabilities that the Company has the ability to access.

•Level 2 - Assets and liabilities whose values are based on inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means.

•Level 3 - Assets and liabilities whose values are based on inputs that are both unobservable and significant to the overall valuation.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the Company categorizes such financial asset or liability based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability that a market participant would use.

The following is a description of the valuation methodologies used to measure fair value, as well as the general classification of such instruments pursuant to the fair value hierarchy:

Investments, at fair value. Investments, at fair value, are recorded at fair value and classified as Level 3 in the fair value hierarchy. The fair value of investments, at fair value, are determined using valuations obtained from a third party that specializes in providing valuations of such financial assets.

Investments in equity affiliate related to ACR. Investments in equity affiliate, at fair value – related party includes ACR common shares held by the Company that are estimated using the closing price of ACR common shares, a Level 1 fair value input, as of the reporting period end date. The Company’s equity method investment in ACR is classified within Level 1 of the valuation hierarchy.

Derivative liabilities. Derivative liabilities are recorded at fair value and classified as Level 3 in the fair value hierarchy. The fair value of derivative liabilities are comprised of the fair value of common stock warrant liabilities and the fair value of embedded derivatives. The fair value of common stock warrant liabilities and embedded derivatives are determined using valuations obtained from a third party that specializes in providing valuations of such financial liabilities. The third party utilized the Black-Scholes-Merton multiple option approach to determine the fair value of the common stock warrant liabilities and the discounted cash flow approach to determine the fair value of the embedded derivatives.

The fair values of the Company’s short-term financial instruments, such as (i) cash and cash equivalents, (ii) restricted cash, (iii) accrued interest, servicing receivables and other assets, (iv) due from related parties, (v) accrued interest, accounts payable and other liabilities, and (vi) due to related parties approximate their carrying values on the consolidated balance sheet due to their terms, liquidity, or short-term nature.

The following tables summarizes financial assets and financial liabilities measured at fair value for the Company and the Consolidated Fund as of June 30, 2026 and December 31, 2025:

		Fair Value Measurements Using Fair Value Hierarchy
Financial Instruments of the Company		Level 1				Level 2				Level 3
At June 30, 2026
Financial assets:
Equity method investment in ACR		$	20,834,030			$	—			$	—
Financial liabilities:
Derivative liabilities		$	—			$	—			$	24,034,846
At December 31, 2025
Financial assets:
Equity method investment in ACR		$	14,296,031			$	—			$	—
Financial liabilities:
Derivative liabilities		$	—			$	—			$	9,240,299

G-26

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 30, 2026

(unaudited)

		Fair Value Measurements Using Fair Value Hierarchy
Financial Instruments of the Consolidated Fund		Level 1				Level 2				Level 3
At June 30, 2026
Financial assets:
Investments, at fair value		$	—			$	—			$	2,025,830,311
At December 31, 2025
Financial assets:
Investments, at fair value		$	—			$	—			$	2,016,918,819

The following tables summarize the quantitative inputs and assumptions used for the Company’s and the Consolidated Fund’s Level 3 measurements as of June 30, 2026:

As of June 30, 2026
Level 3 Measurements of the Company		Fair Value				Valuation Techniques		Unobservable Inputs		Range (Weighted Average)
Financial liabilities:
Embedded derivatives		$	1,630,000			Discounted cash flow		Discount rate		23.53%
Freestanding warrants			22,404,846			Discounted cash flow		Discount rate Terminal multiple		15.25% - 16.25% 10.0x - 11.0x

As of June 30, 2026
Level 3 Measurements of the Consolidated Fund		Fair Value				Valuation Techniques		Unobservable Inputs		Range (Weighted Average)
Financial assets:
First mortgage loans		$	1,505,994,434			Discounted cash flow		Discount rate		6.73% - 8.53% (7.05%)
						Comparable sales		Sales price per key/unit		$0.5 million - $1.1 million ($0.9 million)
Equity investments			519,835,877			Discounted cash flow		Discount rate		3.00% - 8.53% (6.74%)
								Capitalization rate		4.75% - 7.50% (6.31%)
						Comparable sales		Sales price per square foot		$474 / sq. ft.
						Comparable sales		Sales price per key/unit		$73,453 / key
						Net recovery analysis		Discount yield		22%
						Income capitalization analysis		Capitalization rate		5.00% - 5.75% (5.34%)

The following tables summarize the quantitative inputs and assumptions used for the Consolidated Fund’s Level 3 measurements as of December 31, 2025:

G-27

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 30, 2026

(unaudited)

As of December 31, 2025
Level 3 Measurements of the Company		Fair Value				Valuation Techniques		Unobservable Inputs		Range (Weighted Average)
Financial liabilities:
Embedded derivatives		$	1,280,000			Discount cash flow		Discount rate		22.86%
Freestanding warrants			7,960,299			Black-Scholes- Merton multiple option approach		Expected volatility Expected life Risk-free interest rate		70.0% 8 years 3.90%

As of December 31, 2025
Level 3 Measurements of the Consolidated Fund		Fair Value				Valuation Techniques		Unobservable Inputs		Range (Weighted Average)
Financial assets:
First mortgage loans		$	1,539,203,250			Discounted cash flow		Discount rate		6.73% - 8.38% (7.01%)
						Comparable sales		Sales price per key/unit		$0.5 million - $1.3 million ($1.0 million)
Equity investments			477,715,569			Discounted cash flow		Discount rate		3.60% - 10.25% (6.85%)
								Capitalization rate		4.70% - 7.50% (6.21%)
						Comparable sales		Sales price per square foot		$473 / sq. ft.
						Comparable sales		Sales price per key/unit		$72,267 / key
						Income capitalization analysis		Capitalization rate		5.75%

The following tables set forth a summary of changes in the fair value of the Level 3 measurements:

Level 3 Assets and Liabilities of the Company		Derivative liabilities
Balance as of December 31, 2025		$	(9,240,299	)
Change in fair value (1)			(14,794,547	)
Balance as of June 30, 2026		$	(24,034,846	)

(1) Changes in fair value are included in earnings and relate to financial liabilities.

Level 3 Assets and Liabilities of the Company		Derivative liabilities
Balance as of December 31, 2024		$	—
Established in connection with equity issuance (see Note 15)			(12,324,588	)
Change in fair value (1)			3,084,289
Balance as of December 31, 2025		$	(9,240,299	)

(1) Changes in fair value are included in earnings and relate to financial liabilities.

Level 3 Assets of the Consolidated Fund		Investments, at fair value
Balance as of December 31, 2025		$	2,016,918,819
Purchases (1)			172,390,385
Sales/settlements (2)			(178,934,073	)
Realized and unrealized appreciation, net (3)			15,455,180
Balance as of June 30, 2026		$	2,025,830,311

(1)Purchases include purchases and fundings of loan notes, participations and equity interests.

G-28

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 30, 2026

(unaudited)

(2)Sales/settlements include sales proceeds and principal payments received on loan notes and participations.

(3)Changes in net realized and unrealized appreciation are included in earnings and relate to financial assets.

Level 3 Assets of the Consolidated Fund		Investments, at fair value
Balance as of December 31, 2024		$	1,168,593,933
Purchases (1)			1,149,910,966
Sales/settlements (2)			(313,071,796	)
Realized and unrealized appreciation, net (3)			11,485,716
Balance as of December 31, 2025		$	2,016,918,819

(1)Purchases include purchases and fundings of loan notes, participations and equity interests.

(2)Sales/settlements include sales proceeds and principal payments received on loan notes and participations.

(3)Changes in net realized and unrealized appreciation are included in earnings and relate to financial assets.

There were no transfers between any of the levels within the fair value hierarchy during the three and six months ended June 30, 2026 and 2025.

NOTE 10 - BORROWINGS

Certain information with respect to the Company’s borrowings is summarized in the following table:

		Principal Outstanding				Unamortized Issuance Costs				Outstanding Borrowings				Borrowing Rate		Maturity
At June 30, 2026
$130 million credit facility		$	130,000,000			$	(6,086,935	)		$	123,913,065			8.625%		July 23, 2033
$26 million earnout liability			23,333,333				—				23,333,333			0%		Until paid in full
Total		$	153,333,333			$	(6,086,935	)		$	147,246,398
At December 31, 2025
$130 million credit facility		$	130,000,000			$	(6,513,966	)		$	123,486,034			8.625%		July 23, 2033
$26 million earnout liability			23,833,333				—				23,833,333			0%		Until paid in full
Total		$	153,833,333			$	(6,513,966	)		$	147,319,367

The Company entered into a credit agreement, dated June 26, 2018, with several investment management firms to provide a maximum credit facility of $140.0 million. On July 1, 2020, this facility was amended to increase the maximum borrowings to $163.0 million. During the period of January 1, 2025 to July 23, 2025, interest was paid on a quarterly basis on the outstanding principal amount of the advances at a rate per annum equal to a cash interest rate ranging from 8.00% to 10.00% depending on certain covenant requirements. The capitalized (paid-in-kind) interest rate ranged from 4.25% to 4.75% depending on certain covenant requirements. For the period of January 1, 2025 to July 23, 2025, total cash interest incurred on advances amounted to $8.3 million. The lenders on the facility were entitled to receive warrants to purchase common stock of the Company as advances were issued under the facility or under anti-dilution protection provisions. As of July 23, 2025, warrants to purchase 190,801 shares of common stock at an exercise price of $0.01 per share and 177,120 shares of common stock at an exercise price of $15.80 per share were outstanding. The credit facility matured on June 26, 2025. On July 23, 2025, the Company entered into the following transactions:

•A subsidiary of the Company issued $33.0 million of preferred equity securities to a third party. The preferred equity securities contained certain embedded features that are not clearly and closely related to the host instrument and accounted for as a derivative liability (see Note 15 and 16). In connection with the subsidiary’s issuance of preferred equity securities, the Company issued warrants to purchase 312,524 shares of common stock of the Company at an exercise price of $0.01 to the third party. The Company accounted for the issuance of preferred equity securities as a redeemable interest with embedded derivatives accounted for as a derivative liability with an initial fair value of $1.4 million as of July 23, 2025. The Company accounted for the issuance of warrants as a derivative liability with an initial fair value of $10.9 million as of July 23, 2025. See Note 15 and 16.

•The Company entered into a credit agreement with an insurance company to provide a $130.0 million credit facility. The Company drew upon the full credit facility and received $130.0 million of proceeds on July 23, 2025.

G-29

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 30, 2026

(unaudited)

•The proceeds of the $33.0 million preferred equity issuance and $130.0 million credit facility were utilized to partially paydown the $163.0 million credit facility. At July 23, 2025, prior to the partial paydown, the $163.0 million credit facility had an outstanding principal balance of $183.0 million inclusive of capitalized interest and an interest payable balance of $5.0 million. In connection with the paydown, a wholly-owned subsidiary of the Company entered into an earnout agreement with the existing lenders on the $163.0 million credit facility whereby the remaining outstanding balance of the $163.0 million credit facility and all warrants to purchase common stock of the Company held by the existing lenders, which were initially accounted for within the Company’s equity, were discharged/forfeited in exchange for the subsidiary’s agreement to pay the existing lenders an aggregate amount equal to $26.0 million, the earnout liability. The Company has accounted for this transaction as a troubled debt restructuring under ASC 470-60 and Company recorded a $3.6 million net gain on extinguishment of debt in the consolidated statements of operations for the year ended December 31, 2025.

As of June 30, 2026, the Company has fully drawn the $130.0 million credit facility. During the three and six months ended June 30, 2026, interest was paid on a quarterly basis on the outstanding principal amount of the advances at the interest rate of 8.625%. For the three and six months ended June 30, 2026, interest incurred on advances amounted to $2.8 million and $5.6 million, respectively. No interest was payable as of June 30, 2026.

As of June 30, 2026 and December 31, 2025, the earnout liability had an outstanding balance of $23.3 million and $23.8 million, respectively, and is recorded as borrowings on the consolidated balance sheets as of June 30, 2026 and December 31, 2025. The earnout liability does not accrue interest and has no set maturity date.

Borrowings – related party

Related party borrowings are as follows:

		Principal Outstanding				Unamortized Issuance Costs				Outstanding Borrowings				Borrowing Rate		Maturity
At June 30, 2026
Loan Payable		$	10,250,000			$	—			$	10,250,000			3.00%		July 31, 2026
At December 31, 2025
Loan Payable		$	10,375,000			$	—			$	10,375,000			3.00%		July 31, 2026

In conjunction with the 2020 acquisition of the ACR management agreement, a wholly owned subsidiary of ACR, a related party, provided a $12.0 million loan to the Company (“Loan Payable”). The Loan Payable accrues interest at 3.00% per annum, payable monthly. The monthly amortization payment is $25,000. The Loan Payable matures in July 2026, subject to two one-year extensions, at the Company’s option subject to the payment of a 0.5% extension fee to ACR on the outstanding principal amount of the Loan Payable. For each of the three months ended June 30, 2026 and 2025, the Company recorded interest expense of $0.1 million on the Loan Payable. For each of the six months ended June 30, 2026 and 2025, the Company recorded interest expense of $0.2 million on the Loan Payable. At June 30, 2026 and December 31, 2025, the Loan Payable had an outstanding principal balance of $10.3 million and $10.4 million, respectively. At June 30, 2026, the Loan Payable had less than $0.1 million interest payable. At December 31, 2025, the Loan Payable had no interest payable.

The maturity dates on debt obligations are as follows:

Year Ending December 31,		Outstanding Debt at June 30, 2026
2026		$	10,250,000
2027			—
2028			—
2029			—
2030 and thereafter			153,333,333
Total		$	163,583,333

As of June 30, 2026 and December 31, 2025, the Company is in compliance with all material covenants contained in the relevant agreements of the Company’s debt obligations.

G-30

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 30, 2026

(unaudited)

Borrowings of the Consolidated Fund

The Consolidated Fund finances the acquisition of its investments through the use of secured borrowings. The facility providers maintain security interests in the investments that serve as collateral under the facility. Certain facilities bear a commitment fee based on unfunded commitments, a facility servicing fee based on average advances outstanding, agent fees, and/or commitment unused line fees. The facilities contain various affirmative and negative covenants and reporting obligations. As of June 30, 2026 and December 31, 2025, the Consolidated Fund was in compliance with all covenants under such borrowings.

The Consolidated Fund had the following borrowings outstanding (in thousands):

At June 30, 2026:		Principal Outstanding				Unamortized Issuance Costs and Discounts				Outstanding Borrowings				Average Borrowings				Borrowing Rate		Maturity		Wtd. Avg. Rate		Fair Value of Collateral
AMFL II Facility			30,000				452				29,548				30,000			1M TERM SOFR + 0.11448% and 1.00%		June 25, 2027		10.82%			210,196
AMFE Facility			369,484				15,028				354,456				369,484			1M TERM SOFR plus range of 1.50% - 3.50% (varies)		May 26, 2030		6.04%			686,115
AMF Levered 3 Facility			102,852				4,727				98,125				56,706			1M TERM SOFR plus range of 2.25% - 3.00% (varies by asset type)		December 18, 2028		6.13%			194,242
ACRES 2025-FL3 Senior Notes			789,720				3,596				786,124				817,442			Class A - 1M TERM SOFR + 1.619% Class AS - 1M TERM SOFR + 2.042% Class B - 1M TERM SOFR + 2.492% Class C - 1M TERM SOFR + 3.041% Class D - 1M TERM SOFR + 3.690% Class E - 1M TERM SOFR + 4.439%		August 20, 2040		5.65%			920,120
Total		$	1,292,056			$	23,803			$	1,268,253			$	1,273,632									$	2,010,673

At December 31, 2025:		Principal Outstanding				Unamortized Issuance Costs and Discounts				Outstanding Borrowings				Average Borrowings				Borrowing Rate		Maturity		Wtd. Avg. Rate		Fair Value of Collateral
AMFL II First Lien Facility		$	209,200			$	5,870			$	203,330			$	187,426			Greater of (i) 1M TERM SOFR or (ii) 1.00%, plus 3.15%		August 21, 2028		7.55%		$	203,330
AMFL II Junior Facility			80,000				2,440				77,560				80,000			Greater of (i) 1M TERM SOFR + 0.11448% or (ii) 1.00%, plus 7.05%		August 21, 2028		11.59%			539,834
AMFE Facility			174,400				1,334				173,066				214,181			1M TERM SOFR + 2.50%		October 2, 2033		6.88%			314,769
AMF Levered 3 Facility			19,225				4,030				15,195				19,812			1M TERM SOFR plus range of 2.25% - 3.00% (varies by asset type)		December 18, 2028		6.66%			27,464
ACRES 2025-FL3 Senior Notes			819,600				4,794				814,806				819,600			Class A - 1M TERM SOFR + 1.619% Class AS - 1M TERM SOFR + 2.042% Class B - 1M TERM SOFR + 2.492% Class C - 1M TERM SOFR + 3.041% Class D - 1M TERM SOFR + 3.690% Class E - 1M TERM SOFR + 4.439%		August 20, 2040		6.18%			931,522
Total		$	1,302,425			$	18,468			$	1,283,957			$	1,321,019									$	2,016,919

G-31

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 30, 2026

(unaudited)

NOTE 11 - EMPLOYEE BENEFIT PLANS

401k Plan

The Company’s employees participate in the 401(k)-plan sponsored by ACRES Capital LLC. All eligible employees may elect to contribute to the plan. Participants are entitled, upon termination or retirement, to their vested portions of the assets held by a trustee. The Company matches a portion of the employees’ 401(k)-plan contributions, which vests immediately. For each of the three months ended June 30, 2026 and 2025, the plan expense for the Company was $0.1 million and is recorded in compensation and benefits on the consolidated statements of operations. For each of the six months ended June 30, 2026 and 2025, the plan expense for the Company was $0.1 million and $0.2 million, respectively, and is recorded in compensation and benefits on the consolidated statements of operations.

Equity Compensation Plan

In June 2018, the Company’s shareholders approved the ACRES Capital Corp. 2018 Equity Incentive Plan (the “Plan”), an equity compensation plan that provides for the issuance of options to purchase shares of common stock of the Company. The options vest on the fourth anniversary and expire on the tenth anniversary of the grant date. In December 2023, the Company’s shareholders approved an amendment to the Plan to increase the number of shares of common stock authorized for issuance by an additional 100,000 shares. In July 2025, as a result of unanimous written consent of the Board of Directors of the Company, the Company increased the number of shares of common stock authorized for issuance by an additional 388,609 shares. The maximum number of shares that may be subject to awards granted under the Plan will be 991,745 shares of common stock.

On March 4, 2026, non-vesting options to purchase 250,000 shares of common stock of the Company were issued at a strike price of $15.00. The Company also modified existing options to purchase 479,750 shares of common stock of the Company to revise the strike price to $15.00 and designate the options as immediately exercisable.

On March 4, 2026, options to purchase 843,750 shares of common stock of the Company were exercised resulting in the issuance of 843,750 shares of common stock of the Company to option holders. In connection with the exercise of the options, the Company provided loans of $11.2 million to existing shareholders and certain members of management of the Company to finance the acquisition of common stock of the Company under option agreements. Such loans were accounted for as stock options. The transactions resulted in the Company recognizing additional equity compensation expense of $7.2 million for the six months ended June 30, 2026. No such loans were provided or transactions occurred for the three months ended June 30, 2026 and for the three and six months ended June 30, 2025.

The Company recognized stock-based compensation expense of $0.5 million during the three months ended June 30, 2025. The Company did not recognize stock-based compensation expense during the three months ended June 30, 2026. The Company recognized stock-based compensation expense of $7.2 million and $0.9 million during the six months ended June 30, 2026 and 2025, respectively, related to stock options.

The following table summarizes the Company’s stock option activity under the Plan:

		Stock Option Shares				Weighted average exercise price per share
Outstanding at December 31, 2024			566,250			$	22.51
Granted in 2025			37,750				44.36
Forfeited in 2025			(3,250	)			16.34
Outstanding at December 31, 2025			600,750			$	23.91
Granted in 2026			250,000				15.00
Exercised in 2026			(843,750	)			13.61
Outstanding at June 30, 2026			7,000			$	7.14

		As of June 30, 2026				As of December 31, 2025
Shares exercisable, end of year			7,000				404,000

The Company estimates the fair value of each stock option granted on the date of grant using the Black-Scholes-Merton multiple option approach. The following table presents the weighted-average assumptions used in the valuation models:

G-32

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 30, 2026

(unaudited)

		As of
		June 30, 2026
Expected volatility			75.00	%
Expected life (in years)			6.39
Risk-free interest rate			3.77	%

The weighted-average fair value of options at their grant date was $15.00 and $21.26 for 2026 and 2025, respectively.

The following table summarizes information about stock options outstanding and exercisable at June 30, 2026:

Options Outstanding												Options Exercisable
Exercise price per share				Stock Option Shares				Weighted-average remaining contractual life (Years)				Stock Option shares exercisable
$	2.00				5,000				2.7				5,000
$	20.00				2,000				5.8				2,000

NOTE 12 - COMMITMENTS AND CONTINGENCIES

The Company may become involved in litigation on various matters due to the nature of its business activities. The resolution of these matters may result in adverse judgments, fines, penalties, injunctions, and other relief against the Company as well as monetary payments or other agreements and obligations. In addition, the Company may enter into settlements on certain matters in order to avoid the additional costs of engaging in litigation. The Company is unaware of any contingencies arising from such litigation that would require accrual or disclosure in the financial statements at June 30, 2026.

Purchase Obligations

The Company entered into a takeout commitment and agreement with an affiliate of the lender on the Company’s $130.0 million credit facility whereby the Company, or an affiliate of the Company, commits to purchase loans that were previously brokered by an affiliate of the Company and originated by an affiliate of the lender. The Company, or an affiliate of the Company, may be required to purchase such loans at specified dates subsequent to the closing date of the loan. For the year ended December 31, 2025, the lender originated loans with total commitments of $662.2 million that were brokered by an affiliate of the Company. No such activity occurred for the three and six months ended June 30, 2026. For the year ended December 31, 2025, the Consolidated Fund purchased $712.6 million of such loans, based on commitments, from the affiliate of the lender. For the three and six months ended June 30, 2026, the Consolidated Fund purchased $139.8 million and $190.2 million, respectively, of such loans, based on commitments, from the affiliate of the lender. As of June 30, 2026 and December 31, 2025, the Company had no commitments to purchase loans that were previously brokered by an affiliate of the Company and originated by an affiliate of the lender. The takeout commitment and agreement was terminated on December 19, 2025.

NOTE 13 - INCOME TAXES

The Company recorded a full valuation allowance against its net deferred tax assets at June 30, 2026, as the Company believes it is more likely than not that the deferred tax assets will not be realized.

NOTE 14 - RELATED PARTY TRANSACTIONS

Due from Related Parties

The Company has the following receivables from related parties which are recorded as due from related parties on the consolidated balance sheets:

		June 30, 2026				December 31, 2025
Due from ACRES Commercial Realty Corp. (1)		$	1,698,037			$	1,884,699
Total		$	1,698,037			$	1,884,699

G-33

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 30, 2026

(unaudited)

(1)The Company earns base management and incentive fees for providing the day-to-day management of ACR’s operations. The Company also receives incentive fees from ACR in connection with the MIP. ACR also reimburses out-of-pocket expenses and certain other costs incurred by the Company that relate directly to ACR’s operations.

The Company recorded $1.6 million and $3.1 million for the three and six months ended June 30, 2026 and $1.6 million and $3.2 million for the three and six months ended June 30, 2025, respectively, of management fees in management and servicing fees on the consolidated statements of operations. At June 30, 2026, $0.5 million of management fees are recorded as due from related parties on the consolidated balance sheets. There were no management fees due as of December 31, 2025.

The Company recorded $0.9 million and $2.1 million for the three and six months ended June 30, 2026 and $0.9 million and $2.2 million for the three and six months ended June 30, 2025, respectively, of reimbursable compensation and benefits in reimbursable compensation and benefits - related party on the consolidated statements of operations. The Company recorded $0.3 million and $0.5 million for the three and six months ended June 30, 2026 and $0.2 million and $0.3 million for the three and six months ended June 30, 2025, respectively, of other reimbursable expenses - related party in other reimbursable expenses on the consolidated statements of operations. At June 30, 2026 and December 31, 2025, $1.2 million and $0.5 million, respectively, of reimbursable expenses paid by the Company on behalf of ACR are recorded as due from related parties on the consolidated balance sheets.

The Company recorded $6.2 million and $6.7 million for the three and six months ended June 30, 2026 and $0.8 million and $1.6 million for the three and six months ended June 30, 2025, respectively, of incentive fees in incentive fees – related party on the consolidated statements of operations. At December 31, 2025, $1.4 million of incentive fees are recorded as due from related parties on the consolidated balance sheets. There were no incentive fees due as of June 30, 2026.

The Company earns fees which are eliminated in consolidation for performing certain asset management and loan servicing functions on behalf of AMF. The Company earned $2.9 million and $5.8 million for three and six months ended June 30, 2026 and $2.3 million and $4.7 million for three and six months ended June 30, 2025 of such fees in management and servicing fees which are eliminated in consolidation.

ACRES Insurance Agency, LLC (“AIA”) is a wholly owned subsidiary of the Company. AIA receives referral fees for promoting and marketing insurance products and services to borrowers and sponsors under investments held directly, or indirectly, by AMF and ACR. The Company earned $0.1 million and $0.2 million for the three and six months ended June 30, 2026, respectively of such fees on the consolidated statement of operations. No such fees were earned by AIA for the three and six months ended June 30, 2025.

Borrowings – related party

In 2020, in conjunction with the closing of the acquisition of the ACR management agreement, a wholly owned subsidiary of ACR, a related party, provided a $12.0 million loan to the Company. See Note 10.

Other Related Party Transactions

ACRES Capital Servicing LLC, a wholly owned subsidiary of the Company, serves as the portfolio servicer for ACR’s $250.0 million loan and servicing agreement with an insurance company and other lenders. During the three and six months ended June 30, 2026 and 2025, ACRES Capital Servicing LLC earned no portfolio servicing fees.

ACRES Capital Servicing LLC also served as special servicer of commercial real estate debt securitizations ACR 2021-FL1 and ACR 2021-FL2 prior to their liquidation in March 2025. In February 2026, ACR closed the 2026-FL4 securitization transaction and ACRES Capital Servicing LLC serves as special servicer. During the six months ended June 30, 2025, ACRES Capital Servicing LLC earned $0.2 million in special servicing fees recorded in management and servicing fees – related party on the consolidated statements of operations. No such fees were earned during the three and six months ended June 30, 2026 and the three months ended June 30, 2025.

G-34

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 30, 2026

(unaudited)

ACRES Collateral Manager, LLC, a wholly owned subsidiary of the Company, served as the collateral manager of ACR 2021-FL1 and ACR 2021-FL2, a role for which it waived its fee. In March 2025, ACR 2021-FL1 and ACR 2021-FL2 were liquidated. In February 2026, ACR closed the 2026-FL4 securitization transaction and ACRES Collateral Manager, LLC serves as collateral manager, a role for which it waived its fee.

The Company has equity investments in ACR (see Note 7).

NOTE 15 – REDEEMABLE INTEREST

Redeemable interest in the Company represents preferred equity securities issued by a subsidiary of the Company to a third party and is presented at the redemption amount within temporary equity within the consolidated balance sheets. The following table summarizes the activities associated with the redeemable interest:

		Total
Balance as of December 31, 2025		$	33,960,107
Accretion of redeemable interest to redemption value			(350,000	)
Net income attributable to redeemable interest			2,669,650
Balance as of June 30, 2026		$	36,279,757

		Total
Balance as of December 31, 2024		$	—
Gross proceeds from subsidiary’s issuance of preferred equity securities			33,000,000
Issuance costs			(2,194,971	)
Reclassification of derivative liabilities			(12,324,588	)
Accretion of redeemable interest to redemption value			13,239,559
Net income attributable to redeemable interest			2,240,107
Balance as of December 31, 2025		$	33,960,107

NOTE 16 - DERIVATIVE INSTRUMENTS

The Company recognizes derivative instruments as either assets or liabilities on the balance sheet and measures them at fair value in accordance with applicable accounting guidance. The Company evaluates its financing arrangements to determine whether certain arrangements contain features that qualify as embedded derivatives requiring bifurcation in accordance with ASC 815. Embedded derivatives that are required to be bifurcated from the host instrument or arrangement are accounted for and valued as separate financial instruments.

The Company’s derivative liabilities consists of freestanding warrants and certain embedded features that are not clearly and closely related to the host instrument to be bifurcated and recorded at the fair value as derivative liabilities.

The fair value of derivative liabilities are measured at each reporting date, with changes in fair value recorded in the consolidated statements of operations as a derivative gain (loss). The Company engaged an independent financial advisory firm to estimate the fair value of derivative liabilities using valuation methodologies that incorporate both observable and unobservable inputs.

As of June 30, 2026, the fair value of derivative liabilities are $24.0 million as compared to $9.2 million as of December 31, 2025. For the three and six months ended June 30, 2026, the Company recognized a loss of $17.2 million and $14.8 million, respectively, related to the change in fair value of derivative liabilities.

The following table summarizes the activities associated with the derivative liabilities:

		Embedded Derivatives				Freestanding Warrants				Total
Balance as of December 31, 2025		$	1,280,000			$	7,960,299			$	9,240,299
Derivative loss (gain)			350,000				14,444,547				14,794,547
Balance as of June 30, 2026		$	1,630,000			$	22,404,846			$	24,034,846

G-35

ACRES CAPITAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 30, 2026

(unaudited)

		Embedded Derivatives				Freestanding Warrants				Total
Balance as of December 31, 2024		$	—			$	—			$	—
Fair value of derivative liabilities at issuance as of July 23, 2025			1,410,000				10,914,588				12,324,588
Derivative gain			(130,000	)			(2,954,289	)			(3,084,289	)
Balance as of December 31, 2025		$	1,280,000			$	7,960,299			$	9,240,299

The following tables summarize the quantitative inputs and assumptions used for the Company’s Level 3 measurements of derivative liabilities as of July 23, 2025 (initial date of recognition):

As of July 23, 2025
Level 3 Measurements of the Company		Fair Value				Valuation Techniques		Unobservable Inputs		Range (Weighted Average)
Financial liabilities:
Embedded derivatives		$	1,410,000			Discount cash flow		Discount rate		23.59%
Freestanding warrants			10,914,588			Black-Scholes-Merton multiple option approach		Expected volatility Expected life Risk-free interest rate		70.0% 8 years 3.90%

NOTE 17 - SUBSEQUENT EVENTS

The Company has evaluated events and transactions subsequent to the balance sheet date through August 4, 2026, the date the financial statements were available to be issued and determined that there have not been any events that have occurred that would require adjustments to or disclosures in the consolidated financial statements except for those referenced below.

On July 31, 2026, a wholly owned subsidiary of ACR entered into a letter agreement with the Company (the “Letter Agreement”) in connection with the $12.0 million Loan Payable. The Letter Agreement extended the maturity date of the Loan Payable to August 30, 2026 and waived the extension fee.

G-36

Exhibit 99.3

UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED FINANCIAL INFORMATION

On April 29, 2026, ACRES Commercial Realty Corp. (“ACR”) and ACRES Holdings Sub LLC, a direct, wholly-owned subsidiary of ACR (“Merger Sub”), on the one hand, and ACRES Capital Corp., a Delaware corporation (“ACC”), and ACRES Capital, LLC, a New York limited liability company (“Manager”) and subsidiary of ACC, on the other hand, entered into an Agreement and Plan of Merger (“Agreement”). Subject to approval of ACR and ACC stockholders, which approval has been received, and the satisfaction or (to the extent permitted by law) waiver of certain other closing conditions, ACC shall merge with and into Merger Sub, with Merger Sub being the surviving entity (the “Internalization Merger”) and a direct, wholly-owned subsidiary of ACR.

The following unaudited pro forma condensed combined consolidated financial information and explanatory notes (“the unaudited pro forma financial information”) have been prepared to illustrate the effects of the Internalization Merger under the acquisition method of accounting, with ACR treated as the accounting acquirer. The unaudited pro forma financial information has been prepared by ACR in accordance with Article 11 of Regulation S-X promulgated by the Securities and Exchange Commission (“SEC”). The unaudited pro forma financial information gives effect to the Internalization Merger as follows:

•The unaudited pro forma condensed combined consolidated balance sheet, as of June 30, 2026, combines the historical consolidated balance sheets of both ACR and ACC, giving effect to the Internalization Merger as if the transaction had occurred on June 30, 2026.

•The unaudited pro forma condensed combined consolidated statements of operations for the six months ended June 30, 2026, and for the year ended December 31, 2025, combines the historical operating results of ACR and ACC, giving effect to the Internalization Merger as if the transaction occurred on January 1, 2025. Certain reclassifications have been made to ACC’s historical financial information in order to conform to ACR’s presentation of financial information.

The unaudited pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the results of operations or financial condition had the Internalization Merger been completed on the dates described above, nor is it necessarily indicative of the results of operations in future periods or the future financial condition of the combined entities following the close of the Internalization Merger.

Acquisition accounting is dependent upon certain valuations and other studies that have yet to commence or progress to a state where there is sufficient information for the definitive measurement of such valuations and other studies. Accordingly, the unaudited pro forma financial information includes estimated adjustments, including adjustments to record assets and liabilities of ACC at their fair value, and represents the pro forma estimates by ACR, based on available fair value information. The unaudited pro forma financial information also does not reflect the benefits of expected cost savings or any potential impacts of potential revenue enhancements and, accordingly, does not attempt to predict or suggest future results.

The actual value of ACR common shares to be issued as consideration in the Internalization Merger will be based on the closing price of ACR’s common shares at the effective date of the Internalization Merger. The Internalization Merger is expected to be completed in the third quarter of 2026, but there can be no assurance that the Internalization Merger will be completed as anticipated. For purposes of the unaudited pro forma financial information, the fair value of ACR’s common shares to be issued in connection with the Internalization Merger is based on the closing price of ACR’s common shares as of July 31, 2026, which was $17.50.

The pro forma adjustments included in the unaudited pro forma financial information are subject to change depending on changes in the components of assets and liabilities, and as additional information becomes available and additional analyses are performed. The final allocation of the purchase price for the Internalization Merger will be determined after the Internalization Merger is completed. Differences between these preliminary estimates and adjustments and the final acquisition accounting will occur, and these differences could have a material impact on the unaudited pro forma financial information and ACR’s future results of operations and financial condition.

The unaudited pro forma financial information should be read in conjunction with (i) the accompanying notes to unaudited pro forma condensed combined consolidated financial information; (ii) ACR’s and ACC’s unaudited historical consolidated financial statements and accompanying notes as of and for the six months ended June 30, 2026; and (iii) ACR’s and ACC’s audited historical consolidated financial statements and accompanying notes as of and for the year ended December 31, 2025.

H-1

Unaudited Pro Forma Condensed Combined Consolidated Balance Sheet

At June 30, 2026

(in thousands)

	ACR Historical				ACC Historical						Transaction Accounting Adjustments			Notes		Pro Forma Combined
ASSETS
Cash and cash equivalents and restricted cash	$	41,947			$	2,670					$	—				$	44,617
Accrued interest receivable		33,636				—						—					33,636
CRE loans, net of allowance		2,107,765				—						—					2,107,765
Investments in real estate and properties held for sale		149,874				—						—					149,874
Loan receivable - due from Manager		10,250				—						(10,250	)	4(a)			—
Investments in unconsolidated entities		30,253				—						—					30,253
Investments in equity affiliates, at fair value - related party		—				20,834			—			(20,834	)	4(b)			—
Right of use assets		19,298				5,471						—					24,769
Intangible assets		5,778				—						—					5,778
Goodwill		—				35,000						151,876		4(c)			186,876
Due from related parties, accounts receivable and other assets		7,877				3,774						(3,084	)	4(d)			8,567
Assets of Consolidated Fund:
Investments, at fair value		—				2,025,830						(136,140	)	4(e)			1,889,690
Cash and cash equivalents and restricted cash		—				64,578						—					64,578
Accrued interest, servicing receivables and other assets		—				16,090						—					16,090
Total Assets	$	2,406,678			$	2,174,247					$	(18,432	)			$	4,562,493
LIABILITIES
Accounts payable, distribution payable and other liabilities	$	19,937			$	5,792					$	28,651		4(f)		$	54,380
Accrued interest payable		6,911				—						—					6,911
Borrowings		1,783,346				147,246						37,755		4(g)			1,968,347
Borrowings - related party		—				10,250						(10,250	)	4(a)			—
Lease liabilities		46,253				6,177						—					52,430
Derivative liability		—				24,035						(24,035	)	4(h)			—
Liabilities of Consolidated Fund:
Borrowings		—				1,268,253						—					1,268,253
Accrued interest, accounts payable and other liabilities		—				26,401						—					26,401
Total liabilities		1,856,447				1,488,154						32,121					3,376,722
REDEEMABLE INTEREST IN CONSOLIDATED COMPANY ENTITIES		—				36,280						(36,280	)	4(i)			-
STOCKHOLDERS’ EQUITY
Preferred and common stock		17				—						6		4(j)			23
Additional paid-in capital		1,147,836				17,770						92,612		4(j)			1,258,218
Accumulated other comprehensive loss		(965	)			—						—					(965	)
Distributions in excess of earnings		(733,570	)			(69,625	)					29,249		4(j)			(773,946	)
Total stockholders’ equity		413,318				(51,855	)					121,867					483,330
Non-controlling interests		136,913				701,668						(136,140	)	4(e)			702,441
Total equity		550,231				649,813						(14,273	)				1,185,771
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,406,678			$	2,174,247					$	(18,432	)			$	4,562,493

See accompanying Notes to the Unaudited Pro Forma Condensed Combined Consolidated Financial Information

H-2

Unaudited Pro Forma Condensed Combined Consolidated Statement of Operations

For the Six Months Ended June 30, 2026

(in thousands, except share and per share data)

	ACR Historical				ACC Historical				Transaction Accounting Adjustments			Notes	Pro Forma Combined
REVENUES
Interest income	$	72,760			$	—			$	—			$	72,760
Interest expense		52,995				—				—				52,995
Net interest income		19,765				—				—				19,765
Real estate income		18,977				—				—				18,977
Management and servicing fees, net		—				3,518				(3,123	)	5(a)		395
Origination fees		—				918				-				918
Incentive fees - related party		—				6,732				(6,732	)	5(b)		—
Reimbursable compensation, benefits and other- related party		—				2,632				(2,632	)	5(a)		—
Application fees, other reimbursable expenses and other income		62				1,237				—				1,299
Total revenues		38,804				15,037				(12,487	)			41,354
OPERATING EXPENSES
General and administrative		5,758				5,700				(2,632	)	5(c)		8,826
Compensation and benefits		—				7,875				—				7,875
Real estate expenses		20,233				—				—				20,233
Management fee - related party		3,125				—				(3,125	)	5(d)		—
Equity compensation expense - related party		5,433				7,241				(5,247	)	5(e)		7,427
Merger and internalization costs		5,111				—				—				5,111
Interest expense		—				6,094				2,385		5(f)		8,479
Reversal of credit losses, net		716				—				—				716
Other operating expenses		37				323				—				360
Other reimbursable expenses - related party		—				550				—				550
Expenses of the Consolidated Fund		—				1,804				—				1,804
Total operating expenses		40,413				29,587				(8,619	)			61,381
		(1,609	)			(14,550	)			(3,868	)			(20,027	)
OTHER INCOME (EXPENSE)
Equity in earnings (losses) of unconsolidated entities		675				(1,613	)			1,613		5(h)		675
Net realized and unrealized loss on derivatives		—				(14,795	)			—				(14,795	)
Gain on sales of investments in real estate, net		3,336				—				—				3,336
Net realized and unrealized gains on investments of Consolidated Fund		—				15,455				(7,676	)	5(i)		7,779
Interest income of Consolidated Fund		—				60,088				—				60,088
Interest expense of Consolidated Fund		—				(44,323	)			—				(44,323	)
Other income (expense)		105				(156	)			—				(51	)
Total other income		4,116				14,656				(6,063	)			12,709
Income (loss) before taxes		2,507				106				(9,931	)			(7,318	)
Income tax expense		(1	)			—				—				(1	)
CONSOLIDATED NET INCOME (LOSS)		2,506				106				(9,931	)			(7,319	)
Net income allocable to preferred shares		(10,210	)			—				—				(10,210	)
Net income allocable to redeemable interest		—				(2,670	)			2,670		5(j)		—
Net income allocable to non-controlling interest, net of taxes		(5,838	)			(19,497	)			5,963		5(i)		(19,372	)
NET LOSS ALLOCABLE TO COMMON SHARES	$	(13,542	)		$	(22,061	)		$	(1,298	)		$	(36,901	)
TOTAL NET LOSS PER COMMON SHARE - BASIC	$	(2.04	)										$	(2.76	)
NET LOSS PER COMMON SHARE – DILUTED	$	(2.04	)										$	(2.76	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC		6,626,763												13,372,682
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - DILUTED		6,626,763												13,372,682

See accompanying Notes to the Unaudited Pro Forma Condensed Combined Consolidated Financial Information

H-3

Unaudited Pro Forma Condensed Combined Consolidated Statement of Operations

For the Year Ended December 31, 2025

(in thousands, except share and per share data)

	ACR Historical						ACC Historical				Transaction Accounting Adjustments			Notes	Pro Forma Combined
REVENUES
Interest income	$	119,149					$	—			$	—			$	119,149
Interest expense		85,942						—				—				85,942
Net interest income		33,207						—				—				33,207
Real estate income		46,606						—				—				46,606
Management and servicing fees, net		—						7,046				(6,412	)	5(a)		634
Origination fees		—						9,941				—				9,941
Incentive fees - related party		—						2,531				(2,531	)	5(b)		—
Reimbursable compensation, benefits and other-related party		—						5,055				(5,055	)	5(a)		—
Application fees, other reimbursable expenses and other income		133						2,739				—				2,872
Total revenues		79,946						27,312				(13,998	)			93,260
OPERATING EXPENSES
General and administrative		11,304						9,662				(5,181	)	5(c)		15,785
Compensation and benefits		—						13,293				—				13,293
Real estate expenses		51,325						—				—				51,325
Management fee - related party		6,411						—				(6,411	)	5(d)		—
Equity compensation expense - related party		2,147						1,822				(1,941	)	5(e)		2,028
Interest expense		—						18,297				4,810		5(f)		23,107
Reversal of credit losses, net		(7,749	)					—				—				(7,749	)
Merger and internalization costs		—			-			—				40,376		5(g)		40,376
Other operating expenses		78						623				—				701
Other reimbursable expenses - related party		—						763				—				763
Expenses of the Consolidated Fund		—						2,885				—				2,885
Total operating expenses		63,516						47,345				31,653				142,514
		16,430						(20,033	)			(45,651	)			(49,254	)
OTHER INCOME (EXPENSE)
Equity in earnings (losses) of unconsolidated entities		(1,727	)					3,476				(3,476	)	5(h)		(1,727	)
Net realized and unrealized gain on derivatives		—						3,084				—				3,084
Gain on sales of investments in real estate, net		11,674						—				—				11,674
Gain on extinguishment of debt		—						3,602				—				3,602
Net realized and unrealized gains on investments of Consolidated Fund		—						11,486				(2,765	)	5(i)		8,721
Interest income of Consolidated Fund		—						116,692				—				116,692
Interest expense of Consolidated Fund		—						(73,070	)			—				(73,070	)
Other income (expense)		1,516						(320	)			—				1,196
Total other income		11,463						64,950				(6,241	)			70,172
Income before taxes		27,893						44,917				(51,892	)			20,918
Income tax benefit (expense)		83						(542	)			—				(459	)
CONSOLIDATED NET INCOME		27,976						44,375				(51,892	)			20,459
Net income allocable to preferred shares		(21,077	)					—				—				(21,077	)
Net income allocable to redeemable interest		—						(2,240	)			2,240		5(j)		—
Net income allocable to non-controlling interest, net of taxes		(6,660	)					(34,113	)			4,046		5(i)		(36,727	)
NET INCOME (LOSS) ALLOCABLE TO COMMON SHARES	$	239					$	8,022			$	(45,606	)		$	(37,345	)
TOTAL NET INCOME (LOSS) PER COMMON SHARE - BASIC	$	0.03													$	(2.66	)
NET INCOME (LOSS) PER COMMON SHARE – DILUTED	$	0.03													$	(2.66	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC		7,129,163														14,031,328
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - DILUTED		7,412,911														14,031,328

See accompanying Notes to the Unaudited Pro Forma Condensed Combined Consolidated Financial Information

H-4

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED FINANCIAL INFORMATION

(in thousands, except share data)

Note 1 - Description of Transaction

On April 29, 2026, ACR, ACC, Manager and the Merger Sub entered into a merger agreement that provides for the acquisition of ACC and the Manager by ACR. Subject to approval of ACR and ACC stockholders, which approval has been received, and the satisfaction or (to the extent permitted by law) waiver of certain other closing conditions, ACR will acquire ACC through the merger of ACC with and into Merger Sub, with Merger Sub being the surviving entity and a direct, wholly-owned subsidiary of ACR. Under the Agreement, each outstanding share of ACC common stock, par value $0.0001 per share (the “ACC Common Stock”), will be converted into the right to receive 2.61882 shares of ACR common stock, par value $0.001 per share (the “ACR Common Stock”), subject to the terms and conditions set forth in the Agreement. The existing management agreement between ACR, the Manager and ACC will be terminated upon closing of the Internalization Merger and ACR will no longer be externally managed.

Note 2 - Basis of Presentation

The unaudited pro forma financial information was prepared using the acquisition method of accounting in accordance with Financial Accounting Standards Board ASC Topic 805, Business Combinations, and was derived from ACR’s and ACC’s historical unaudited financial statements for the six months ended June 30, 2026 and ACR’s and ACC’s historical audited financial statements for the year ended December 31, 2025. ACR has been determined to be the accounting acquirer in the Internalization Merger and has preliminarily estimated the fair value of the assets acquired and liabilities assumed from ACC. Applying the acquisition method includes recording the identifiable assets acquired and liabilities assumed at their fair values, and recording goodwill for the excess of the purchase price over the aggregate fair value of the identifiable assets acquired and liabilities assumed in the Internalization Merger. Additionally, the accompanying unaudited pro forma financial information was prepared in accordance with Article 11 of the Regulation S-X.

Historical transactions between ACR and ACC during the periods presented in the unaudited pro forma financial information have been eliminated. The unaudited pro forma condensed combined consolidated financial statements do not necessarily reflect what the combined company’s financial condition or results of operations would have been had the Internalization Merger occurred on the dates indicated nor do they reflect the realization of any expected cost savings or other synergies from the acquisition of ACC and other planned cost saving initiatives following the completion of the Internalization Merger. They also may not be useful in predicting the future financial condition and results of operations of the combined company. ACR’s actual financial condition and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.

At this time, ACR is not aware of any material differences in accounting policies and financial statement classifications that would have a material impact on the pro forma financial information. ACR is still in the process of performing its full review of ACC's accounting policies to determine whether there are material differences that require modification or reclassification of ACC’s revenues, expenses, assets or liabilities to conform to ACR’s accounting policies and classifications; and as a result of that review, ACR may identify differences between the accounting policies of ACR and ACC that when conformed, could have a material impact on the pro forma financial information.

Note 3 - Consideration Transferred and Preliminary Purchase Price Allocation

The Internalization Merger was approved by ACR’s shareholders at its annual meeting on June 22, 2026 and is expected to be completed in the third quarter 2026. In connection with the Internalization Merger, ACR expects to issue approximately 7.5 million shares of ACR’s common stock in exchange for all of the outstanding shares of ACC. In connection with the Internalization Merger, ACC is also expected to increase its borrowings in order to extinguish its pre-existing earnout liability and redeemable interest with a third-party investor. The upsized borrowing balance will be assumed by ACR on the closing date of the Internalization Merger. ACC is also expected to settle its derivative liability with that same investor with ACR Common Stock received as consideration for the Internalization Merger. The final purchase price allocation will be determined when ACR completes the valuation analyses of the assets to be acquired and liabilities to be assumed in connection with the Internalization Merger and other necessary calculations.

H-5

The calculation of the estimated preliminary purchase price related to the Internalization Merger is as follows (in thousands, except share and per share data):

Outstanding shares of ACC Common Stock (1)		2,855,864
Exchange ratio		2.61882
Shares of ACR Common Stock issued		7,478,994
Closing price of ACR Common Stock on July 31, 2026	$	17.50
Estimated fair value of ACR Common Stock to be issued to the former holders of ACC Common Stock		130,882
Settlement of preexisting relationships		8,578
Purchase of non-controlling interest		(18,079	)
Purchase of ACR’s shares held by ACC prior to the close of transaction (1,171,112 shares at $17.50)		(20,494	)
Less estimated fair value of ACC stock options attributable to post-combination costs		(14,640	)
Total estimated preliminary purchase price	$	86,247

(1)Includes 2,539,481 shares of ACC Common Stock outstanding as of June 30, 2026 and 312,524 outstanding warrants and 7,000 options that are expected to be exercised prior to the close of the Internalization Merger. The consideration assumes the net settlement of the outstanding options.

The fair value of the ACR Common Stock to be issued as part of the purchase price will depend on the market price of the ACR Common Stock when the Internalization Merger is consummated. ACR believes that a 10% fluctuation in the market price of ACR Common Stock is reasonably possible based on historical volatility, and the potential effect on purchase price would be (in thousands, expect per share data):

	ACR Common Stock share price			Estimated fair value of ACR Common Stock			Purchase of the ACR Common Stock held by ACC			Non-equity consideration			Total estimated preliminary purchase price
As presented	$	17.50		$	130,882		$	(20,494	)	$	(24,141	)	$	86,247
10% increase		19.25			143,971			(22,544	)		(24,141	)		97,286
10% decrease		15.75			117,794			(18,445	)		(24,141	)		75,208

H-6

The following table summarizes the allocation of the preliminary purchase price for purposes of the unaudited pro forma condensed combined consolidated financial statements as if the Internalization Merger had occurred on June 30, 2026 (in thousands):

Preliminary Purchase Price Allocation As of June 30, 2026:
		Amount
Total estimated preliminary purchase price		$	86,247
Assets:
Cash and cash equivalents and restricted cash		$	2,670
Right of use assets			5,471
Accounts receivable			716
Assets of the Consolidated fund:
Investments, at fair value			1,889,690
Cash and cash equivalents and restricted cash			64,578
Accrued interest, servicing receivables and other assets			16,090
Total assets acquired		$	1,979,215
Liabilities:
Borrowings		$	185,000
Lease intangible liabilities			6,177
Accounts payable, distribution payable and other liabilities			10,405
Liabilities of the Consolidated fund:
Borrowings			1,268,253
Accrued interest, accounts payable and other liabilities			26,401
Total liabilities assumed		$	1,496,236
Equity:
Non-controlling interest			583,608
Total liabilities and equity assumed		$	2,079,844
Estimated preliminary fair value of net liabilities acquired		$	(100,629	)
Goodwill		$	186,876

This preliminary purchase price allocation has been used to prepare pro forma adjustments in the pro forma condensed combined consolidated balance sheet and statement of operations. The final purchase price allocation will be determined once ACR has completed its valuation analyses and necessary calculations. The final allocation may include (1) changes in fair values of equity securities, investments in real estate debt, investments in equity method investees, and changes to the fair value of non-controlling interests, (2) changes in the fair value allocation to intangible assets and goodwill, (3) other changes to assets and liabilities and (4) changes to deferred tax assets and liabilities.

Note 4 - Pro Forma Adjustments – Unaudited Condensed Combined Consolidated Balance Sheet

(a) To eliminate the related-party promissory note between ACR and ACC, impacting “Loans receivable- due from Manager” and “Borrowings-related party.” The associated interest income and interest expense offset each other in “Other income/expense” line item on the Unaudited Pro Forma Condensed Combined Consolidated Statement of Operations.

(b)To retire the vested shares of ACR Common Stock granted to the Manager under the terms of the management agreement and the manager incentive plan for performance in its role as ACR’s Manager and are included in the consideration transferred noted above in Note 3. The total consideration, including the retirement of these shares, is recorded in ACR’s additional paid-in capital.

(c)To record the estimated goodwill based on the preliminary estimated fair values of ACC’s assets to be acquired and liabilities to be assumed and the related allocation of the purchase price, as described in Note 3 – Preliminary Purchase Price Allocation. Goodwill is calculated as the difference between the acquisition date fair value of the consideration expected to be transferred and the fair values assigned to the assets acquired and the liabilities assumed. Goodwill is not amortized.

1

H-7

Pro forma adjustment to goodwill	$	151,876
ACC historical goodwill		35,000
Estimated Goodwill per the Preliminary Purchase Price Allocation	$	186,876

1

(d)To record the settlement of both the reimbursable expenses payable to ACC and a receivable for unvested incentive shares owed by ACR to ACC as incentive compensation (included in the consideration transferred discussed in Note 3) and to reduce ACC’s other assets to their estimated fair value.

Settlement of outstanding ACC receivables from ACR	$	(1,698	)
Settlement of ACR accrued interest receivable for the related party promissory note		(26	)
Fair value adjustment to ACC other assets		(1,360	)
	$	(3,084	)

(e)To reduce the fair value of the investments and acquired non-controlling interest of ACRES Mortgage Fund, Ltd. (“AMF”), a subsidiary of ACC, for the portion of the non-controlling interest already held by ACR for its investment in ACRES SPE 2025-1, LLC.

(f)To record the estimated accrual of $25.7 million in transaction expenses related to the Internalization Merger that will be settled in cash and are not currently reflected in ACR’s historical consolidated financial statements, approximately $4.6 million increase in accounts payable for the estimated payment for the payoff of ACC obligations associated with the upsize in borrowings discussed in Note 3 and Note 4(g) and (i) offset by the settlement of the management fees and reimbursable expenses payable to ACC (see Note 4(d)). The amount of estimated transaction expenses related to the Internalization Merger is based on information known as of the date of this filing and final amounts may be different from the amounts presented herein. These costs are included in accounts payable on the unaudited pro forma condensed combined consolidated balance sheet and in merger and internalization costs on the unaudited pro forma condensed combined consolidated statement of operations.

Increase in Borrowings credit facility	$	55,000
Payments of existing obligation and redeemable interest (see Note 4(g) and (i))		(59,613	)
Balance to be paid	$	(4,613	)
Estimated payment for settlement of ACC existing obligations	$	4,613
Estimated payroll taxes associated with post-combination compensation expense		23,808
Estimated Internalization Merger costs		1,928
Settlement of management fees and reimbursable expenses payable to ACC		(1,698	)
	$	28,651

1

(g)To record the estimated increase in borrowings for ACC to redeem its obligation of an equity interest held by a third-party investor and to pay off an existing obligation on the date of close of the Internalization Merger. This increase in borrowings is included in the preliminary purchase price allocation. See Note 3 for further details. Borrowings are further impacted by the fair value adjustment of the ACC’s historical deferred debt issuance costs, resulting from the fair valuation of ACC’s historical borrowings.

Increase in Borrowings credit facility	$	55,000
Payment of existing obligation		(23,333	)
Net increase in Borrowings		31,667
Fair value adjustment of ACC’s deferred debt issuance costs		6,088
	$	37,755

(h)To record the settlement of ACC’s historical derivative liability, which pertains to warrants issued by ACC and expected to be exercised prior to the close of the Internalization Merger and will be exchanged as part of the consideration at the close of the Internalization Merger. See Note 3 above.

(i)To record the expected pay off of the redeemable interest from the proceeds from the upsize of Borrowings noted in Note 3 and Note 4(g).

(j)To record the expected impact to equity for the issuance of the ACR Common Stock, resulting from the Internalization Merger, and the concurrent retirement of ACR Common Stock held by ACC at the acquisition date, to eliminate ACC’s historical equity

H-8

balances in additional paid-in capital and distributions in excess of earnings, and to recognize income statement impact of the transaction costs to complete the Internalization Merger.

	Preferred and common stock, at par value of $0.001				Additional paid-in capital				Distributions in excess of earnings
Issuance of estimated 7.5 million shares of ACR Common Stock	$	7			$	130,875			$	—
Retirement of 1.2 million shares of ACR Common Stock, held by ACC		(1	)			(20,493	)			—
Estimated Internalization Merger transaction costs and post-combination expense		—				—				(40,376	)
Elimination of ACC's historical equity balances		—				(17,770	)			69,625
	$	6			$	92,612			$	29,249

1

Note 5 - Pro Forma Adjustments – Unaudited Condensed Combined Consolidated Statement of Operations

(a)To eliminate the revenue earned by ACC for management fees and reimbursable compensation, benefits and other miscellaneous expenses in accordance with the management agreement.

(b)To eliminate incentive compensation revenue recognized by ACC related to the vesting of ACR Common Stock granted under the manager incentive plan (See Note 5(e)). ACC recognizes share-based incentive compensation over the four-year vesting period on a straight-line basis. Any differences in the eliminations between the companies are due to differences in the recognition of revenue for ACC and the recognition of expense for ACR in accordance with generally accepted accounting principles or US GAAP.

(c)To eliminate reimbursable expenses ACR paid to ACC in accordance with the management agreement.

(d)To eliminate management fees ACR paid to ACC in accordance with the management agreement.

(e)To eliminate the amortization of equity compensation recognized by ACR for shares of ACR Common Stock issued to ACC under the manager incentive plan (See Note 5(b)). ACR recognizes the equity compensation expense for these grants over the four-year vesting period on a graded basis. Any differences in the eliminations between ACR and ACC are due to differences in the recognition of revenue for ACC and the recognition of expense for ACR in accordance with generally accepted accounting principles or US GAAP. The remaining equity compensation expense pertains to equity compensation expenses related to ACR’s directors and share-based compensation expense recognized at ACC that do not eliminate in consolidation.

(f)To recognize the estimated interest expense for the increase in the credit facility discussed in Note 4(g). ACC’s current interest rate of 8.625% was used to calculate the estimated interest expense.

(g)To recognize one-time transaction costs associated with the Internalization Merger which are estimated at approximately $40.4 million for the year ended December 31, 2025, comprised of additional post-combination compensation expense of $14.6 million associated with the fair value ACC’s stock options, payroll taxes of $23.8 million associated with the previously existing stock options to ACC executives and estimated transaction costs of $1.9 million that are not currently reflected in ACR’s historical consolidated financial statements. The pro forma adjustments related to ACC’s stock options and associated payroll taxes do not purport to be indicative of the expected change in compensation expense of the combined company in any future periods. These expenses are required to be treated as a post combination expense of ACR rather than as a part of the net assets acquired of ACC. It is assumed that these costs will not affect the combined statements of operations beyond six months after the closing date of the Internalization Merger.

(h)To eliminate unrealized gains recognized on vested shares of ACR Common Stock held by ACC that were granted under the terms of the management agreement and the management incentive plan.

(i)To eliminate the unrealized gains and losses AMF recognized for its investment in ACRES SPE 2025-1, LLC and the net income ACRES SPE 2025-1, LLC allocated to AMF for its investment (See Note 4(e)).

(j)To eliminate the income allocated to the third-party investor that holds a redeemable interest in ACC. As discussed in Note 3, this redeemable interest will be paid off prior to the close of the Internalization Merger.

H-9

Note 6 - Earnings Per Share

The following table summarizes the unaudited pro forma net income allocable to shares of ACR Common Stock for the six months ended June 30, 2026 and the year ended December 31, 2025, as if the Internalization Merger occurred on January 1, 2025 (in thousands, except per share data):

	For the Six Months Ended				For the Year Ended
Numerator	June 30, 2026				December 31, 2025
Pro forma net loss available to shares of ACR Common Stock	$	(36,901	)		$	(37,345	)
Denominator
ACR historical weighted average common shares outstanding		6,626,763				7,129,163
Shares of ACR Common Stock expected to be issued to ACC shareholders		7,478,994				7,478,994
Retirement of weighted average of the vested shares issued to ACC through the periods presented (1)		(733,075	)			(585,054	)
Pro forma weighted average common shares - basic		13,372,682				14,023,103
Pro forma effect of dilutive unvested restricted stock		-				-
Pro forma weighted average common shares - diluted (2)		13,372,682				14,023,103
Net loss per common share - basic	$	(2.76	)		$	(2.66	)
Net loss per common share - dilutive	$	(2.76	)		$	(2.66	)

(1)For the six months ended June 30, 2026, composed of 669,917 shares of ACR Common Stock vested prior to January 1, 2026 and the weighted average of 501,195 shares that vested during the six months ended June 30, 2026 that were previously granted to the Manager. For the year ended December 31, 2025, composed of 446,107 shares of ACR Common Stock vested prior to January 1, 2025 and the weighted average of the 223,810 shares that vested during the year-ended December 31, 2025 that were previously granted to the Manager.

(2)Excludes 23,666 and 27,087 weighted average shares of unvested restricted ACR Common Stock issued to ACR’s directors as they were anti-dilutive for the six months ended June 30, 2026 and year-ended December 31, 2025, respectively.

The historical earnings per share amounts are the amounts reported in ACR’s Quarterly Report on Form 10-Q for the six months ended June 30, 2026 and Annual Report on Form 10-K for the year ended December 31, 2025. As the Internalization Merger is being reflected as if it had occurred on January 1, 2025, in the condensed combined consolidated statement of operations, the calculation of weighted average shares outstanding for basic and diluted earnings per share assumes that the shares of ACR Common Stock issuable in connection with the closing of the Internalization Merger have been outstanding and the vested shares previously issued to the Manager have been retired for the entire period presented.

Note 7 - ACR Refinancing Transaction

As noted in ACR’s Form 10-Q filed August 4, 2026, ACR’s existing $150.0 million 5.75% senior unsecured notes (“5.75% Notes”) mature on August 15, 2026. In contemplation of this maturity, ACR expects to refinance the 5.75% Notes through the private issuance of $200.0 million 8.625% senior secured notes that are expected to mature in five years. This refinancing transaction is expected to close prior to maturity of the 5.75% Notes. This refinance transaction is unrelated to the Internalization Merger and therefore, the impact is not reflected in the unaudited pro forma financial information.

H-10

Filing Exhibits & Attachments

5 documents

Press Releases

• EX-99.1 EX-99.1 3.3 MB
• EX-99.2 EX-99.2 3.7 MB
• EX-99.3 EX-99.3 1.0 MB

Financial & Certifications

• EX-23.1 EX-23.1 8.0 KB

Other Documents

• EX-101 XBRL TAXONOMY EXTENSION SCHEMA WITH EMBEDDED LINKBASES DOCUMENT 45.3 KB