Stewards acquires Envy Pompano Beach in $90M deal
Escrowed shares are tied to recurring $3.0 million seller payments, alongside a $47.7 million property-level mortgage.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Filing Summary
Stewards, Inc. acquired 100% of the membership interests in the entities owning Envy Pompano Beach on September 23, 2026. The property includes 214 apartments, a 26-slip marina and a three-story community center. The $90.0 million contractual price, subject to credits, prorations and closing adjustments, included 14,263,025 shares at a $3.00 contractual value used solely to calculate the share count, a $2.0 million unsecured note and refinancing of $44,557,435.93 of existing property debt. LoanCore provided a $47.7 million mortgage.
Of the shares, 7,000,000 were escrowed. The company generally must pay sellers $3.0 million in cash on the fifth of each month from October 5, 2026 through April 5, 2027, with 1,000,000 escrowed shares cancelled per payment; it funds shortfalls after permitted share sales or borrowings. The seller note is due October 5, 2026. The interest-only mortgage matures October 9, 2028.
For the six months ended June 30, 2026, rental and other property revenues were $2.861 million versus $2.459 million for the same period in 2025. The historical Rule 3-14 statements exclude mortgage interest, depreciation, amortization, management fees and income taxes.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Hollow bars mark forward-looking points. How the balance works
Positive
- Major pointEnvy acquisition: 214 apartments and 26 marina slips acquired.
- Minor pointSix-month property revenue: $2.861 million versus $2.459 million in 2025.
Negative
- Moderate point. Forward-looking: it has not happened yet and may not happen.Escrow schedule: seven monthly gross cash payments of $3.0 million begin October 5, 2026.
- Moderate point. Forward-looking: it has not happened yet and may not happen.Delisting condition: 120-day failure to relist triggers $5.5 million payments, capped at $33.0 million. 6.6% of market cap
Insights
Analyzing...
8-K Event Classification
Key Figures
Key Terms
asset acquisition technical
Term SOFR financial
debt yield financial
liquidated damages financial
springing cash-management arrangements technical
FAQ
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What did SWRD acquire in the Envy Pompano Beach deal?
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
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Registrant’s telephone number, including area code: 1.
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Not Applicable (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 (17CFR 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 |
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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 1.01 Entry into a Material Definitive Agreement
On September 21, 2026, Stewards, Inc. (the “Company”) and its wholly owned subsidiary, SRC Envy Holdco LLC (the “Purchaser”), entered into a Membership Interests Purchase and Sale Agreement (the “Purchase Agreement”) with Envy Development PB, LLC, HSU Gamma Investments LP, Michael Hsiao, the Estate of Christopher Longsworth, The Myelin Group, LLC, Envy Development DE, LLC and Envy Recreational, LLC. The Purchase Agreement provided for the Purchaser to acquire all of the outstanding membership interests of Envy Development DE, LLC and Envy Recreational, LLC, which own the real estate and related assets comprising Envy Pompano Beach. The acquisition closed on September 23, 2026. The information set forth under Item 2.01 of this Current Report on Form 8-K is incorporated into this Item 1.01 by reference.
Purchase Consideration and Escrowed Shares
The Purchase Agreement provides for an aggregate contractual purchase price of $90.0 million, subject to credits, prorations and closing adjustments. The consideration included a credit for the Company’s acquisition deposit, the refinancing of $44,557,435.93 of existing property-level indebtedness, the issuance of 14,263,025 shares of the Company’s common stock, par value $0.0001 per share (“Common Stock”), calculated at the contractual price of $3.00 per share and having an aggregate contractual value of $42,789,075, and a $2.0 million unsecured promissory note made by the Company in favor of Envy Development PB, LLC. Of those shares, 13,788,066 were issued to Envy Development PB, LLC and 474,959 were issued to The Myelin Group, LLC. The $3.00 per-share figure is the negotiated contractual value used solely to determine the number of shares issued. It is not the Nasdaq closing price and is not the fair value of the shares for accounting purposes under ASC 805-50.
In connection with the closing, the Company, Envy Development PB, LLC, The Myelin Group, LLC and ClearTrust, LLC entered into an Escrow Agreement effective as of September 23, 2026. Under the Escrow Agreement, 7,000,000 of the issued shares, having an agreed contractual value of $21.0 million, were deposited with ClearTrust, LLC as escrow agent. Beginning October 5, 2026, and generally on the fifth day of each month thereafter through April 5, 2027, the Company is required to make a cash payment of $3.0 million to the sellers and, concurrently with each payment, 1,000,000 escrowed shares are to be cancelled. The parties are required to pursue registered sales, privately negotiated sales and borrowings against the escrowed shares as potential sources of liquidity. If those measures generate less than the required cash payment, the Company must fund the shortfall. The Company is obligated to pay daily liquidated damages for late redemption payments, initially at $1,000 per day for each outstanding redemption and increasing to $2,000 per day after the first calendar month.
If any redemption payment, related late-payment damages, delisting liquidated damages or extension fee remains unpaid one year after closing, the sellers may direct a sale of the property or extend the payment period month to month for a fee equal to 2% of the then-outstanding unpaid amount per month. The sellers also have a payment-priority right, subject to the LoanCore financing described below, and may record a vendee’s lien against the property while an unpaid obligation remains outstanding. Stewards International Funds PCC, on behalf of the Stewards Private Credit Fund, guarantees the Company’s redemption-payment obligations, related late-payment damages and certain other payment obligations under the Purchase Agreement. Glen Steward, the Company’s Chairman of the Board and a director, and Shaun Quin, the Company’s Chief Executive Officer and a director, guarantee the late-payment damages and compliance with specified payment-priority and distribution covenants.
The Purchase Agreement also provides that if the Common Stock is delisted from Nasdaq and is not relisted within 120 days, the Company must pay the sellers $5.5 million within ten days after the cure period and on each of the first five anniversaries of the delisting while the delisting continues, subject to an aggregate cap of $33.0 million. At the sellers’ election, each such payment may be made in cash, in additional shares of Common Stock valued at $3.00 per share or in a combination of cash and shares. Stewards International Funds PCC, on behalf of the Stewards Private Credit Fund, guarantees these obligations. Stewards International Funds PCC is affiliated with Mr. Steward.
Registration Rights Agreement
At closing, the Company, the sellers and Stewards International Funds PCC, on behalf of the Stewards Private Credit Fund, entered into a Registration Rights Agreement. The Company is required to use commercially reasonable efforts to file a resale registration statement covering the 7,000,000 escrowed shares no later than 30 days after September 23, 2026 and to cause it to become effective no later than 60 days after that date, or 90 days after that date if the Securities and Exchange Commission reviews and comments on the registration statement. The agreement also provides customary demand and piggyback registration rights and requires the Company to bear specified registration expenses, other than underwriting discounts and selling commissions.
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Guaranty Fees and Reimbursement Agreement
In consideration of the guaranties supporting the LoanCore financing, the Purchaser agreed to pay each of Bernard Hsiao, Michael Hsiao, Mr. Steward, Mr. Quin and the Company an annual fee equal to 0.30% of the outstanding principal balance of the LoanCore financing, for an aggregate annual fee of 1.50%, prorated for 2026 and payable in monthly installments after closing. Mr. Steward and Mr. Quin are related parties of the Company.
At closing, Bernard Hsiao, Michael Hsiao, Mr. Steward, Mr. Quin, the Company and Stewards International Funds PCC, on behalf of the Stewards Private Credit Fund, also entered into a Reimbursement Agreement allocating liability under the recourse guaranty. Under that agreement, the Hsiao parties are responsible for obligations attributable to their intentional fraud or willful misconduct, and the Stewards parties are responsible for the other obligations arising under the recourse guaranty and must indemnify the Hsiao parties for those obligations, subject to the terms of the agreement.
The foregoing descriptions of the Purchase Agreement, the Registration Rights Agreement and the Escrow Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of those agreements, which are filed as Exhibits 2.1, 4.1 and 10.10, respectively, to this Current Report on Form 8-K and are incorporated herein by reference. The description of the Reimbursement Agreement is qualified in its entirety by reference to Exhibit 10.9.
Item 2.01 Completion of Acquisition or Disposition of Assets
On September 23, 2026, the Company completed the acquisition contemplated by the Purchase Agreement. Through the Purchaser, the Company acquired 100% of the membership interests in Envy Development DE, LLC and Envy Recreational, LLC and, indirectly, the real estate and related operating assets commonly known as Envy Pompano Beach, located at 425-475 East Atlantic Boulevard, Pompano Beach, Florida.
Envy Pompano Beach is a Class A mixed-use real estate project situated on approximately 1.61 acres and includes 214 residential apartments in two 11-story buildings completed in 2020, approximately 5,575 square feet of ground-floor commercial space, a marina with 26 boat slips, a three-story commercial community center and related leases, deposits, furniture, fixtures, equipment, permits and other operating assets. The Company intends to continue operating the property as a multifamily and mixed-use real estate asset.
The sellers of the acquired membership interests were Envy Development PB, LLC and The Myelin Group, LLC. Glen Steward, the Company’s Chairman of the Board and a director, holds an immaterial, indirect passive investment through an entity owned or controlled by another investor that has an interest in the Envy ownership structure. Mr. Steward does not control that entity, had no ability to influence decision-making on behalf of the sellers or the acquired entities, and did not participate in the sellers’ approval of the transaction. Based on the immaterial nature of Mr. Steward’s indirect interest and his lack of control or influence over the sellers or the acquired entities, the Company determined that the acquisition did not constitute a related-party transaction solely by reason of that interest. Except for this indirect interest and the transaction documents, financing guaranty arrangements and guaranty-fee arrangements described in this report, the Company is not aware of any material relationship between the sellers and the Company or any of its affiliates, directors or officers.
The contractual purchase price and the consideration delivered at closing are described under Item 1.01 above and are incorporated into this Item 2.01 by reference. The acquisition was financed in part through the property-level financing described under Item 2.03 below, which refinanced $44,557,435.93 of existing property-level indebtedness and funded reserves and closing costs. The acquisition is accounted for as an asset acquisition under ASC 805-50.
Historical revenues and certain operating expenses of the acquired real estate operation are presented under Rule 3-14 of Regulation S-X in Exhibits 99.1 and 99.2. Those statements exclude mortgage interest, depreciation, amortization, management fees and income taxes and are not indicative of future GAAP results. The six months ended June 30, 2026 include an approximately $202,000 real-estate tax refund that is non-recurring.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
LoanCore Financing
On September 23, 2026, Envy Development DE, LLC and Envy Recreational, LLC, each a wholly owned subsidiary of the Company following the acquisition, entered into a Loan Agreement with LoanCore Capital Credit REIT LLC, as lender, providing for a $47.7 million mortgage loan. The loan refinanced $44,557,435.93 of existing indebtedness secured by the property and funded reserves and transaction costs. The loan is evidenced by an amended and restated renewal promissory note issued by Envy Development DE, LLC. The note reflects a future advance of $3,142,564.07, bringing the outstanding principal to $47,700,000.
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The loan bears interest at one-month Term SOFR, subject to a 3.35% floor, plus 3.60% per annum. The loan is interest-only, with monthly interest payments beginning November 9, 2026, and matures on October 9, 2028. Subject to specified conditions, including no continuing event of default, maintenance of an interest-rate cap, a debt yield of at least 6.50% and payment of a 0.50% extension fee, the borrowers may extend the maturity date to October 9, 2029. The borrowers are required to maintain an interest-rate cap with a 4.50% strike rate. The loan also provides for a 1.0% origination fee, a 1.0% exit fee, a $1,000 monthly administrative fee and a spread-maintenance premium for specified repayments before the eighteenth payment date.
The loan is secured by first-priority mortgages on the apartment, marina and community-center properties, assignments of leases and rents, security interests in related personal property and accounts, and a pledge by the Purchaser of its equity interests in the borrowers. The loan documents establish springing cash-management arrangements at PNC Bank, National Association. Those arrangements are unsprung at closing and may be activated upon a trigger event under the Loan Agreement. The loan documents also require specified tax, insurance, repair, leasing, capital-expenditure, security-upgrade and interest reserves. The borrowers also agreed to use best efforts to clear specified outstanding fire-code violations within 30 days after closing. Subject to written notice and an additional 30-day cure period, failure to do so may constitute an event of default.
The Purchaser and Envy Recreational, LLC delivered payment guaranties. In addition, Bernard Hsiao, Michael Hsiao, Mr. Quin, Mr. Steward and the Company delivered a guaranty of recourse and other obligations. That guaranty covers specified recourse liabilities, scheduled monthly debt-service payments and specified property operating expenses, and it provides for full recourse upon specified springing-recourse events. The allocation of responsibility among the guarantors is governed by the Reimbursement Agreement described under Item 1.01.
Seller Promissory Note
On September 23, 2026, in connection with the closing of the Envy acquisition, Envy Development PB, LLC advanced $2.0 million to the Company, and the Company issued and delivered to Envy Development PB, LLC an unsecured promissory note in the original principal amount of $2.0 million. Although the note bears an “Effective Date” of September 17, 2026, the note was not released or delivered, the loan was not funded, and the Company did not become obligated to repay the loan until the closing occurred and the funds were advanced on September 23, 2026. Accordingly, the Company’s direct financial obligation under the note arose on September 23, 2026.
The note accrues interest at a fixed rate of $1,333.33 per day on the outstanding principal balance. The entire principal balance, together with all accrued and unpaid interest, is due on October 5, 2026. The Company may prepay the note without premium or penalty. The note contains customary events of default and permits the lender, following an event of default, to accelerate the outstanding principal, accrued interest and other amounts due. The note is unsecured and does not require a personal guaranty.
Item 3.02 Unregistered Sales of Equity Securities
On September 23, 2026, as partial consideration for the acquisition, the Company issued an aggregate of 14,263,025 shares of Common Stock at the contractual value of $3.00 per share, consisting of 13,788,066 shares issued to Envy Development PB, LLC and 474,959 shares issued to The Myelin Group, LLC. Of those shares, 6,766,900 shares allocated to Envy Development PB, LLC and 233,100 shares allocated to The Myelin Group, LLC, for an aggregate of 7,000,000 shares, were deposited in escrow as described in Item 1.01. After the issuance, 225,625,627 shares of Common Stock were outstanding.
The shares were issued in a transaction not involving a public offering in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, and, to the extent applicable, Regulation D promulgated thereunder. The recipients made customary investment-intent and accredited-investor representations. The shares are restricted securities and may be resold only pursuant to an effective registration statement or an available exemption from registration. No underwriter or placement agent participated in the issuance, and the Company received no cash proceeds from the issuance.
Item 9.01 Financial Statements and Exhibits
(a) Financial Statements of Real Estate Operation Acquired
The audited statement of revenues and certain operating expenses of Envy Development PB, LLC for the year ended December 31, 2025, together with the related notes and the report of Turner, Stone & Company, L.L.P., is filed as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.
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The unaudited statement of revenues and certain operating expenses of the Envy real estate operation for the six months ended June 30, 2026 and 2025, together with the related notes, is filed as Exhibit 99.2 to this Current Report on Form 8-K and incorporated herein by reference.
(b) Pro Forma Financial Information
The unaudited pro forma condensed combined financial information giving effect to the acquisition is filed as Exhibit 99.3 to this Current Report on Form 8-K and incorporated herein by reference.
(d) Exhibits
| Exhibit No. | Description |
| 2.1 | Membership Interests Purchase and Sale Agreement, dated as of September 21, 2026, by and among Envy Development PB, LLC, HSU Gamma Investments LP, Michael Hsiao, the Estate of Christopher Longsworth, The Myelin Group, LLC, Envy Development DE, LLC, Envy Recreational, LLC, SRC Envy Holdco LLC and Stewards, Inc. |
| 4.1 | Registration Rights Agreement, dated as of September 23, 2026, by and among Stewards, Inc., Envy Development PB, LLC, The Myelin Group, LLC and Stewards International Funds PCC, on behalf of the Stewards Private Credit Fund. |
| 4.2 | Amended and Restated Renewal Promissory Note, dated September 23, 2026, in the original principal amount of $47,700,000, issued by Envy Development DE, LLC to LoanCore Capital Credit REIT LLC. |
| 4.3 | Promissory Note in the principal amount of $2,000,000, effective as of September 17, 2026, issued by Stewards, Inc. to Envy Development PB, LLC. |
| 10.1 | Loan Agreement, dated as of September 23, 2026, by and among Envy Development DE, LLC and Envy Recreational, LLC, as borrowers, and LoanCore Capital Credit REIT LLC, as lender. |
| 10.2 | Amended and Restated Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated as of September 23, 2026, by Envy Development DE, LLC in favor of LoanCore Capital Credit REIT LLC. |
| 10.3 | Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated as of September 23, 2026, by Envy Recreational, LLC in favor of LoanCore Capital Credit REIT LLC. |
| 10.4 | Guaranty of Recourse and Other Obligations, dated as of September 23, 2026, by Bernard Hsiao, Michael Hsiao, Shaun Quin, Glen Steward and Stewards, Inc. in favor of LoanCore Capital Credit REIT LLC. |
| 10.5 | Guaranty of Payment, dated as of September 23, 2026, by SRC Envy Holdco LLC in favor of LoanCore Capital Credit REIT LLC. |
| 10.6 | Payment Guaranty, dated as of September 23, 2026, by Envy Recreational, LLC in favor of LoanCore Capital Credit REIT LLC. |
| 10.7 | Pledge and Security Agreement, dated as of September 23, 2026, by SRC Envy Holdco LLC in favor of LoanCore Capital Credit REIT LLC. |
| 10.8 | Springing Cash Management Agreement, dated as of September 23, 2026, among Envy Development DE, LLC, Envy Recreational, LLC, LoanCore Capital Credit REIT LLC and PNC Bank, National Association. |
| 10.9 | Reimbursement Agreement, entered into at the September 23, 2026 closing, by and among Bernard Hsiao, Michael Hsiao, Glen Steward, Shaun Quin, Stewards, Inc. and Stewards International Funds PCC, on behalf of the Stewards Private Credit Fund. |
| 10.10 | Escrow Agreement, effective as of September 23, 2026, by and among Stewards, Inc., Envy Development PB, LLC, The Myelin Group, LLC and ClearTrust, LLC, relating to 7,000,000 shares of Stewards, Inc. common stock. |
| 99.1 | Audited statement of revenues and certain operating expenses of Envy Development PB, LLC for the year ended December 31, 2025, and related notes. |
| 99.2 | Unaudited statement of revenues and certain operating expenses of the Envy real estate operation for the six months ended June 30, 2026, and related notes. |
| 99.3 | Unaudited pro forma condensed combined financial information of Stewards, Inc. giving effect to the Envy acquisition. |
The Company has omitted certain schedules and exhibits from Exhibit 2.1 pursuant to Item 601(a)(5) of Regulation S-K. The Company will furnish copies of any omitted schedule or exhibit to the Securities and Exchange Commission upon request.
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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.
Stewards, Inc.
/s/ Katuischia Murless
Katuischia
Murless
Chief Financial Officer
Date September 28, 2026
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ENVY DEVELOPMENT PB, LLC
CONSOLIDATED STATEMENT OF REVENUES AND CERTAIN EXPENSES
For the Year Ended December 31, 2025
Table of Contents
| Page | ||
| Independent Auditor’s Report | 3 | |
| Consilidated Statement of Revenue and Certain Operating Expenses | 5 | |
| Notes to the Consolidated Statement of Revenue and Operating Expenses | 6 |
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Your Vision Our Focus
INDEPENDENT AUDITOR’S REPORT
To the Sole Member
Envy Development PB, LLC:
Opinion
We have audited the accompanying consolidated statement of revenues and certain operating expenses of Envy Development PB, LLC (the “Company”) for the year ended December 31, 2025, and the related notes to the consolidated statement of revenues and certain operating expenses (collectively, the “financial statement”).
In our opinion, the accompanying financial statement presents fairly, in all material respects, the revenues and certain operating expenses of the Company described in Note 2 of the financial statement for the year ended December 31, 2025, in accordance with U.S. generally accepted accounting principles.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (“GAAS”). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statement 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 audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Emphasis of Matter
We draw attention to Note 2 to the financial statement, which describes that the accompanying financial statement was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission and is not intended to be a complete presentation of the Company’s revenues and expenses. As a result, the financial statement may not be suitable for another purpose. Our opinion is not modified with respect to this matter.
Responsibilities of Management for the Financial Statement
Management is responsible for the preparation and fair presentation of the financial statement in accordance with U.S. generally accepted accounting principles, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statement that is free from material misstatement, whether due to fraud or error.
In preparing the financial statement, 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 statement is available to be issued.
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Auditors’ Responsibilities for the Audit of the Financial Statement
Our objectives are to obtain reasonable assurance about whether the financial statement as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditors’ 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 statement.
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 statement, 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 statement.
· 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.
· 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 statement.
· 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.
Turner, Stone & Company, L.L.P. Dallas, Texas
September 23, 2026
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ENVY DEVELOPMENT PB, LLC
CONSOLIDATED STATEMENT OF REVENUES AND CERTAIN OPERATING EXPENSES
For the Year Ended December 31, 2025
| December 31, 2025 | ||||
| Revenue | ||||
| Rental and other property revenues | $ | 4,904,596 | ||
| Total revenue | 4,904,596 | |||
| Certain operating expenses | ||||
| Property operating expenses | 2,685,209 | |||
| Taxes and insurance | 1,817,940 | |||
| Total certain operating expenses | 4,503,149 | |||
| Revenues in Excess of Certain Operating Expenses | $ | 401,447 | ||
See accompanying notes to the consolidated statement of revenues and certain operating expenses.
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ENVY DEVELOPMENT PB, LLC
NOTES TO THE CONSOLIDATED STATEMENT OF REVENUES AND CERTAIN OPERATING EXPENSES
For the Year Ended December 31, 2025
1. Organization
Envy Development PB, LLC (the “Company”), a Florida limited liability company, was formed on July 10, 2017. The Company is a single-member limited liability company. The Company owns and operates an apartment complex (the “Property”), a 214-unit residential community located in Pompano Beach, Florida. The Company is to continue until terminated in accordance with the Limited Liability Company Agreement.
2. Basis of Presentation
The accompanying consolidated statement of revenues and certain operating expenses (the “financial statement”) has been prepared for the purpose of complying with Rule 3-14 of Regulation S-X of the United States Securities and Exchange Commission (the “SEC”) promulgated under the Securities Act of 1933, as amended. Accordingly, the financial statement is not representative of the actual operations for the period presented as revenues, and certain operating expenses, which may not be directly attributable to the revenues and expenses expected to be incurred in the future operations of the Property, have been excluded. Such items include management fees, depreciation, amortization, and interest.
3. Summary of Significant Accounting Policies
Principles of Consolidation
The accompanying financial statement includes the accounts of Envy Development PB, LLC and its wholly-owned subsidiary, Envy Development DE, LLC, a Delaware limited liability company. All material intercompany accounts and transactions have been eliminated.
Revenue Recognition
The Property’s residential units are rented to tenants under various lease agreements that are generally one year in length. All leases are accounted for as operating leases. The Property recognizes rental revenue on a straight-line basis over the terms of the rental agreements and in accordance with the Financial Accounting Standards Board Accounting Standards Codification Topic 842, Leases. Rental revenue is recognized on an accrual basis and when the collectability of the amounts due from tenants is deemed probable. Rental revenue is included within rental and other property revenues on the Property’s statement of revenues and certain operating expenses.
Tenant reimbursements for common area maintenance and other recoverable expenses, such as pet, administrative, application and other fees, are recognized when the services are provided and the obligations are satisfied. Tenant reimbursements are included within rental and other property revenues on the Property’s statements of revenues and certain operating expenses.
Certain Operating Expenses
Certain operating expenses include only those costs expected to be comparable to the proposed future operations of the Property. Property operating expenses include administrative, repairs and maintenance, marketing, payroll, utilities, taxes, and insurance.
Use of Estimates
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reporting and disclosure of revenues and certain expenses during the reporting period to present the statement of revenues and certain operating expenses. The estimates, judgments and assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results could differ from those estimates.
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ENVY DEVELOPMENT PB, LLC
NOTES TO THE CONSOLIDATED STATEMENT OF REVENUES AND CERTAIN OPERATING EXPENSES
For the Year Ended December 31, 2025
4. Minimum Future Lease Rentals
There are various lease agreements in place with tenants to lease space in the Property. As of December 31, 2025, the minimum future cash rents receivable under non-cancelable operating leases in each of the next five years and thereafter are as follows:
| 2026 | $ | 4,227,152 | |||
| 2027 | 252,845 | ||||
| Thereafter | — | ||||
| $ | 4,479,997 |
Leases generally require reimbursement of the tenant’s proportional share of common area, real estate taxes and other operating expenses, which are excluded from the amounts above.
5. Tenant Concentrations
No single tenant comprised over 10% of the Property’s total revenue for the year ended December 31, 2025.
6. Commitments and Contingencies
The Property is subject to various legal actions and claims arising in the ordinary course of business. Although the outcome of any legal matter cannot be predicted with certainty, management does not believe that any of these legal proceedings or matters will have a material adverse effect on the financial position or results of operations or liquidity of the Property.
7. Related Party Transactions
There were no significant related party transactions during the year ended December 31, 2025.
8. Subsequent Events
The Property evaluated subsequent events through September 16, 2026, the date the financial statements were available to be issued.
Income Tax Refund
Subsequent to December 31, 2025, the Company received a federal income tax refund of $202,030 related to its 2025 tax year. The refund resulted from a successful property tax challenge. No income tax receivable was recorded as of December 31, 2025, as property tax challenges are recorded in the accounting period when the final determination or settlement was reached.
| 7 |
ENVY AT POMPANO BEACH
Historical Statement of Revenues and Certain Operating Expenses
For the Six Months Ended June 30, 2026 and 2025 (Unaudited) (in thousands)
The following unaudited historical statement of revenues and certain operating expenses of Envy at Pompano Beach (the “Property”), a 214-unit apartment community held through Envy Development PB, LLC and its wholly-owned subsidiary, is presented under Rule 3-14 of Regulation S-X. It should be read together with the audited statement of revenues and certain operating expenses of the Property for the year ended December 31, 2025, which is filed separately.
| Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | |||||||
| Revenue | ||||||||
| Rental and other property revenues | $ | 2,861 | $ | 2,459 | ||||
| Total revenue | 2,861 | 2,459 | ||||||
| Certain operating expenses | ||||||||
| Property operating expenses | 903 | 929 | ||||||
| Taxes and insurance | 641 | 1,019 | ||||||
| Total certain operating expenses | 1,544 | 1,948 | ||||||
| Revenues in Excess of Certain Operating Expenses | $ | 1,317 | $ | 511 | ||||
Notes to the Historical Statement of Revenues and Certain Operating Expenses
1. Basis of presentation. The Property is a 214-unit residential apartment community located in Pompano Beach, Florida, held through Envy Development PB, LLC and its wholly-owned subsidiary, Envy Development DE, LLC. This statement has been prepared for the purpose of complying with Rule 3-14 of Regulation S-X and is not intended to be a complete presentation of the Property’s revenues and expenses. It is not representative of the actual operations of the Property for the periods presented. The interim statements are unaudited and, in the opinion of management, include all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation. They have been prepared on a basis consistent with the audited statement of revenues and certain operating expenses of the Property for the year ended December 31, 2025.
2. Excluded expenses. In accordance with Rule 3-14, the statement excludes expenses not comparable to the proposed future operations of the Property, including mortgage interest, depreciation and amortization, management fees, and income taxes. As a result of these exclusions, the statement is not indicative of the results of operations of the Property going forward.
3. Revenue recognition. The Property’s residential units are leased to tenants under agreements that are generally one year in length and are accounted for as operating leases under ASC 842, with rental revenue recognized on a straight-line basis when collectibility is probable. Tenant reimbursements and other property fees are recognized when the related services are provided.
4. Cash flow information. Separate historical statements of cash flows for the Property are not presented. Because the statement excludes mortgage interest, depreciation, amortization, management fees and income taxes, historical cash flow information on a basis comparable to the Property’s future operations is not available.
5. Material factors. Rental and other property revenues increased from $2.46 million for the six months ended June 30, 2025 to $2.86 million for the six months ended June 30, 2026, and vacancy losses were lower in the 2026 period. Taxes and insurance for the six months ended June 30, 2026 include a real estate tax refund of approximately $202,000, which is non-recurring. The historical amounts exclude, or do not reflect, items that will affect the Property’s future operations, including mortgage interest on the acquisition financing and the Company’s go-forward insurance program. Management is not aware of any other material factors relating to the Property that would cause the reported financial information not to be indicative of future operating results.
6. Subsequent event. On September 23, 2026, the Property was acquired by Stewards, Inc. in a transaction accounted for as an asset acquisition under ASC 805-50.
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Stewards, Inc. (the "Company") is providing this unaudited pro forma condensed combined financial information to illustrate the effects of the acquisition by SRC Envy Holdco LLC, a wholly owned subsidiary of the Company, of all membership interests in Envy Development DE, LLC and Envy Recreational, LLC (the "Envy Acquisition"). The acquired real estate consists of a 214-unit apartment community, a 26-slip marina and a three-story commercial community center in Pompano Beach, Florida. Envy Recreational, LLC was formed in connection with the acquisition, and the marina and commercial community center did not generate revenue before closing. The Envy Acquisition closed on September 23, 2026 and is accounted for as an asset acquisition under ASC 805-50.
The unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of SEC Regulation S-X. The pro forma adjustments are Transaction Accounting Adjustments reflecting the application of required accounting to the Envy Acquisition. No Management’s Adjustments are presented. The acquired real estate operations are presented under Rule 3-14, which reflects revenues and certain operating expenses and excludes mortgage interest, depreciation and amortization, management fees and income taxes that are not comparable to the future operations of the property.
A pro forma condensed combined balance sheet as of June 30, 2026 is presented as if the Envy Acquisition had occurred on that date. The pro forma condensed combined statements of operations for the year ended December 31, 2025 and the six months ended June 30, 2026 give effect to the Envy Acquisition as if it had occurred on January 1, 2025, in accordance with 17 CFR 210.11-02(a)(6)(i).
This information was derived from and should be read in conjunction with the Company’s historical financial statements and the historical statement of revenues and certain operating expenses of the acquired property. The pro forma information is for illustrative purposes only and does not purport to represent what the results of operations or financial position would actually have been.
Preliminary acquisition accounting. The final valuation of the make-whole obligation associated with the 7,000,000 escrowed shares remains subject to completion of the valuation specialist’s analysis. Changes in the final measurement could materially affect the recorded liability, acquired-asset basis and related depreciation and amortization.
Unaudited Pro Forma Condensed Combined Statement of Operations
For the Year Ended December 31, 2025 (in thousands, except per share data)
| Stewards, Inc. | Envy (Rule 3-14) | Envy Transaction Adjustments | Notes | Pro Forma Combined | ||||||||||||||||
| Revenues | ||||||||||||||||||||
| Income, financing and brokerage | $ | 11,660 | — | — | $ | 11,660 | ||||||||||||||
| Income from rental property | 4,617 | 4,905 | — | 9,522 | ||||||||||||||||
| Total revenues | 16,277 | 4,905 | — | 21,182 | ||||||||||||||||
| Cost of revenue | ||||||||||||||||||||
| Financing and brokerage | 2,518 | — | — | 2,518 | ||||||||||||||||
| Rental property | 2,100 | 4,007 | — | F | 6,107 | |||||||||||||||
| Total cost of revenue | 4,618 | 4,007 | — | 8,625 | ||||||||||||||||
| Gross profit | 11,659 | 898 | — | 12,557 | ||||||||||||||||
| Operating expenses | ||||||||||||||||||||
| General and administrative expenses | 12,142 | 497 | — | F | 12,639 | |||||||||||||||
| Provision for credit losses | 1,774 | — | — | 1,774 | ||||||||||||||||
| Depreciation and amortization | 6,090 | — | 3,504 | A | 9,594 | |||||||||||||||
| Professional fees | 3,061 | — | — | 3,061 | ||||||||||||||||
| Total operating expenses | 23,067 | 497 | 3,504 | 27,068 | ||||||||||||||||
| Loss from operations | (11,408 | ) | 401 | (3,504 | ) | (14,511 | ) | |||||||||||||
| Other income (expense) | ||||||||||||||||||||
| Interest expense | (8,452 | ) | — | (4,019 | ) | E | (12,471 | ) | ||||||||||||
| Financing charges | (648 | ) | — | (572 | ) | C | (1,220 | ) | ||||||||||||
| Other losses | (208 | ) | — | — | (208 | ) | ||||||||||||||
| Total other income (expense) | (9,308 | ) | — | (4,591 | ) | (13,899 | ) | |||||||||||||
| Net loss before income taxes | (20,716 | ) | 401 | (8,095 | ) | (28,410 | ) | |||||||||||||
| Income tax provision | (41 | ) | — | — | D | (41 | ) | |||||||||||||
| Net loss | (20,757 | ) | 401 | (8,095 | ) | (28,451 | ) | |||||||||||||
| Deemed dividend from conversion of preferred stock | (700 | ) | — | — | (700 | ) | ||||||||||||||
| Dividend on preferred stock | (1,651 | ) | — | — | (1,651 | ) | ||||||||||||||
| Net loss applicable to common stockholders | $ | (23,108 | ) | $ | 401 | $ | (8,095 | ) | $ | (30,802 | ) | |||||||||
| Net Loss Per Common Share - basic and diluted | $ | (0.16 | ) | $ | (0.19 | ) | ||||||||||||||
| Weighted-Average Common Shares Outstanding - basic and diluted | 145,573 | 14,263 | B | 159,836 | ||||||||||||||||
| Comprehensive Loss | ||||||||||||||||||||
| Net loss | (20,757 | ) | 401 | (8,095 | ) | (28,451 | ) | |||||||||||||
| Unrealized gain (loss) on foreign currency translation | ||||||||||||||||||||
| Total comprehensive loss | $ | (20,757 | ) | $ | 401 | $ | (8,095 | ) | $ | (28,451 | ) | |||||||||
For the Six Months Ended June 30, 2026 (in thousands, except per share data)
| Stewards, Inc. | Envy (Rule 3-14) | Envy Transaction Adjustments | Notes | Pro Forma Combined | ||||||||||||||||
| Revenues | ||||||||||||||||||||
| Income, financing and brokerage | $ | 2,539 | — | — | $ | 2,539 | ||||||||||||||
| Income from rental property | 4,783 | 2,861 | — | 7,644 | ||||||||||||||||
| Total revenues | 7,322 | 2,861 | — | 10,183 | ||||||||||||||||
| Cost of revenue | ||||||||||||||||||||
| Financing and brokerage | 471 | — | — | 471 | ||||||||||||||||
| Rental property | 2,782 | 1,357 | — | F | 4,139 | |||||||||||||||
| Total cost of revenue | 3,253 | 1,357 | — | 4,610 | ||||||||||||||||
| Gross profit | 4,069 | 1,504 | — | 5,573 | ||||||||||||||||
| Operating expenses | ||||||||||||||||||||
| General and administrative expenses | 5,742 | 187 | — | F | 5,929 | |||||||||||||||
| Provision for credit losses | 251 | — | — | 251 | ||||||||||||||||
| Depreciation and amortization | 4,320 | — | 1,737 | A | 6,057 | |||||||||||||||
| Professional fees | 1,924 | — | — | 1,924 | ||||||||||||||||
| Total operating expenses | 12,237 | 187 | 1,737 | 14,161 | ||||||||||||||||
| Loss from operations | (8,168 | ) | 1,317 | (1,737 | ) | (8,588 | ) | |||||||||||||
| Other income (expense) | ||||||||||||||||||||
| Interest expense | (6,078 | ) | — | (1,993 | ) | E | (8,071 | ) | ||||||||||||
| Financing charges | (34 | ) | — | (284 | ) | C | (318 | ) | ||||||||||||
| Change in fair value of the warrant instrument | 1,364 | — | — | 1,364 | ||||||||||||||||
| Other loss | (27 | ) | — | — | (27 | ) | ||||||||||||||
| Total other income (expense) | (4,775 | ) | — | (2,277 | ) | (7,052 | ) | |||||||||||||
| Net loss before income taxes | (12,943 | ) | 1,317 | (4,014 | ) | (15,640 | ) | |||||||||||||
| Income tax provision | — | — | — | D | — | |||||||||||||||
| Net loss | (12,943 | ) | 1,317 | (4,014 | ) | (15,640 | ) | |||||||||||||
| Dividend on preferred stock | (1,342 | ) | — | — | (1,342 | ) | ||||||||||||||
| Net loss applicable to common stockholders | $ | (14,285 | ) | $ | 1,317 | $ | (4,014 | ) | $ | (16,982 | ) | |||||||||
| Net Loss Per Common Share - basic and diluted | $ | (0.07 | ) | $ | (0.08 | ) | ||||||||||||||
| Weighted-Average Common Shares Outstanding - basic and diluted | 208,881 | 14,263 | B | 223,144 | ||||||||||||||||
| Comprehensive Loss | ||||||||||||||||||||
| Net loss | (12,943 | ) | 1,317 | (4,014 | ) | (15,640 | ) | |||||||||||||
| Unrealized gain (loss) on foreign currency translation | ||||||||||||||||||||
| Total comprehensive loss | $ | (12,943 | ) | $ | 1,317 | $ | (4,014 | ) | $ | (15,640 | ) | |||||||||
| 2 |
Notes to the Unaudited Pro Forma Condensed Combined Statements of Operations
A - Reflects depreciation and amortization of the acquired asset basis allocated to depreciable real estate, furniture, fixtures and equipment, and the in-place lease intangible. Land is not depreciated. The adjustment uses a 44-year life for building and improvements, a 17-year life for site improvements, a 4-year life for furniture, fixtures and equipment, and a 12-month life for the in-place lease intangible. The resulting adjustment is approximately $3.504 million for the year ended December 31, 2025 and $1.737 million for the six months ended June 30, 2026.
B - Reflects all 14,263,025 rollover shares issued at closing, including the 7,000,000 escrowed shares, as outstanding from the beginning of each period presented. The escrowed shares are treated as equity because they were issued at closing, although they remain subject to the contractual escrow, release and redemption mechanics. Because the Company reports a net loss, diluted earnings per share equals basic earnings per share.
C - Reflects the recurring guaranty fee on the new $47.70m loan at 1.20% per year, or $0.57m, being the 1.50% contractual fee net of the 0.30% payable to Stewards that eliminates on consolidation, presented in financing charges.
D - Reflects the income tax effect of the pro forma adjustments. No pro forma income tax benefit has been recognized on the pro forma adjustments because the Company is in a net operating loss position with an accumulated deficit and does not recognize a tax benefit on additional losses.
E - Reflects interest expense on the new $47.70m LoanCore Capital Credit REIT LLC loan based on one-month Term SOFR of 3.9375% plus 3.60%, or 7.5375% in total (actual/360), together with amortization of the $0.75m of debt issuance costs over the 24-month loan term (ASC 835-30). The resulting adjustment is approximately $4.019 million for the year ended December 31, 2025 and $1.993 million for the six months ended June 30, 2026.
F - Certain operating-expense captions in the Envy Rule 3-14 historical statements have been reclassified within the Envy column to conform to the Company’s presentation. These reclassifications do not change total revenues, total certain operating expenses or revenues in excess of certain operating expenses.
| 3 |
Unaudited Pro Forma Condensed Combined Balance Sheet
As of June 30, 2026 (in thousands)
| Stewards, Inc. | Transaction Adjustments | Notes | Pro Forma Combined | |||||||||||||
| ASSETS | ||||||||||||||||
| Cash, cash equivalents | $ | 1,096 | $ | (577 | ) | b | $ | 519 | ||||||||
| Advance receivables, net | 4,948 | 4,948 | ||||||||||||||
| Prepaid expense | 728 | 287 | g | 1,015 | ||||||||||||
| Loan commitment asset | 3,719 | 3,719 | ||||||||||||||
| Due from related parties | 64 | 64 | ||||||||||||||
| Restricted cash | 3,715 | 2,906 | c | 6,621 | ||||||||||||
| Note receivable | 1,706 | (1,500 | ) | e | 206 | |||||||||||
| Other current assets | 549 | 34 | d | 583 | ||||||||||||
| Total current assets | 16,525 | 1,150 | 17,675 | |||||||||||||
| Fixed assets, net | 154,067 | 84,723 | a | 238,790 | ||||||||||||
| Operating lease right-of-use asset | 18 | 18 | ||||||||||||||
| Intangible assets, net | 985 | 1,439 | a | 2,424 | ||||||||||||
| Goodwill | 1,219 | 1,219 | ||||||||||||||
| Other assets | 1,162 | 520 | f | 1,682 | ||||||||||||
| TOTAL ASSETS | $ | 173,976 | $ | 87,832 | $ | 261,808 | ||||||||||
| LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY | ||||||||||||||||
| Accounts payable and accrued liabilities | $ | 7,302 | $ | 135 | d | $ | 7,437 | |||||||||
| Syndicate payable | 3,231 | 3,231 | ||||||||||||||
| Due to related parties - current | 1,883 | 1,883 | ||||||||||||||
| Deferred consideration - current | 270 | 4,060 | b | 4,330 | ||||||||||||
| Operating lease liabilities - current | 15 | 15 | ||||||||||||||
| Notes payable, net - current | 2,622 | 2,000 | h | 4,622 | ||||||||||||
| Warrant liability | 3,719 | 3,719 | ||||||||||||||
| Mortgage loan - current | — | — | ||||||||||||||
| Other current liabilities | 329 | 168 | d | 497 | ||||||||||||
| Total current liabilities | 19,371 | 6,363 | 25,734 | |||||||||||||
| Deferred consideration | 39 | 39 | ||||||||||||||
| Notes payable, net | 38,761 | 38,761 | ||||||||||||||
| Mortgage loan | 77,588 | 46,953 | b | 124,541 | ||||||||||||
| Other non-current liabilities | 291 | 291 | ||||||||||||||
| Total liabilities | 136,050 | 53,316 | 189,366 | |||||||||||||
| Redeemable nonparticipating noncontrolling interest | 8,462 | 8,462 | ||||||||||||||
| STOCKHOLDERS’ EQUITY | ||||||||||||||||
| Series A preferred stock | 7 | 7 | ||||||||||||||
| Series B preferred stock | 1 | 1 | ||||||||||||||
| Common stock | 21 | 1 | b | 22 | ||||||||||||
| Paid-in capital | 73,619 | 34,515 | b | 108,134 | ||||||||||||
| Accumulated deficit | (71,639 | ) | (71,639 | ) | ||||||||||||
| Accumulated other comprehensive income | 3 | 3 | ||||||||||||||
| Nonparticipating noncontrolling interest | 27,452 | 27,452 | ||||||||||||||
| Total stockholders’ equity | 29,464 | 34,516 | 63,980 | |||||||||||||
| TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY | $ | 173,976 | $ | 87,832 | $ | 261,808 | ||||||||||
| 4 |
Notes to the Unaudited Pro Forma Condensed Combined Balance Sheet
Preliminary Consideration Transferred (in thousands)
| Component | Measurement | Amount |
| Deposit applied | Three $500,000 promissory notes | $ 1,500 |
| Existing mortgage and net purchase-price adjustments | Property-level debt and closing adjustments | 45,711 |
| Total non-share consideration | Sum of preceding non-share components | 47,211 |
| Equity consideration | 14,263,025 shares at $2.42 | 34,517 |
| Preliminary make-whole obligation | Mechanical estimate, subject to final valuation | 4,060 |
| Total consideration transferred | 85,787 | |
| Direct acquisition costs | Capitalized under ASC 805-50 | 374 |
| Total asset acquisition cost | $ 86,161 |
The $90.0 million contractual price and $3.00 per-share reference were used to determine the share count. For preliminary GAAP accounting, the 14,263,025 shares were measured at the $2.42 closing market price.
a - Reflects the acquired Envy real estate under ASC 805-50 (asset acquisition, relative fair value). The acquisition is accounted for as an asset acquisition because substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset, the property. Preliminary fair-value consideration of $85.79m, together with $0.37m of capitalised direct acquisition costs, is allocated on a relative fair value basis to $84.72m of building, land, site improvements and equipment and $1.44m of in-place lease intangibles, using the BBG appraisal. The elevator is included within the appraised building and equipment. The acquisition accounting remains preliminary because the final valuation of the make-whole obligation is subject to completion of the valuation specialist’s analysis.
b - Reflects the financing and consideration. The Company placed a new $47.70m loan from LoanCore Capital Credit REIT LLC that refinanced and replaced the existing $44.56m mortgage, shown net of $0.75m of debt issuance costs at $46.95m. Under ASC 805-50, all 14,263,025 rollover shares are recorded in equity at the acquisition-date market price of $2.42, comprising $1,426 of common stock at $0.0001 par value and $34.52m of paid-in capital. This equity classification includes the 7,000,000 escrowed shares because they were issued at closing, although they remain subject to the MIPA redemption and sale mechanics, which contemplate seven monthly gross cash payments of $3.0 million, offset by proceeds from permitted share-sale or borrowing transactions. The associated make-whole obligation is presented as deferred consideration at a preliminary estimated acquisition-date fair value of $4.06 million. The $4.06 million amount is an accounting estimate and not a contractual cap. The final valuation remains subject to completion of the valuation specialist’s analysis and may differ materially. A $2.00m short-term promissory note issued to Envy Development PB, LLC funds a portion of the closing cash requirement (note h).
c - Reflects lender-required reserves of $2.75m (property tax and insurance escrows, interest, leasing, capital expenditure, security and repair reserves and the DACA minimum balance), recorded as restricted cash together with the transferred tenant security-deposit cash. Closing prorations are embedded in the rollover share consideration and settle in cash at closing, and are not presented as separate working capital adjustments. Items retained by the seller are excluded.
d - Reflects the Envy working-capital assets and liabilities that transfer with the entity, recorded at their June 30, 2026 carrying amounts: acquired assets of $34,070 of operating receivables and $160,491 of tenant security-deposit cash, and assumed liabilities of $117,501 of accrued operating expenses, $16,325 of accrued payroll, $7,155 of refunds payable and the $160,491 tenant security-deposit obligation.
e - Reflects the $1.50m acquisition deposit, consisting of three $500,000 promissory notes funded before June 30, 2026 and recorded in note receivable in the historical balance sheet. The deposit is applied against the purchase price at closing, reducing the note receivable and the cash required to fund the acquisition; it is not a June 30, 2026 cash movement.
f - Reflects the interest rate cap purchased at closing to hedge the floating-rate LoanCore loan, recorded as a derivative asset at its $0.52m premium under ASC 815; it is not expensed and not netted against the loan.
g - Reflects the property insurance premium of $0.29m paid at closing for the go-forward policy, recorded as prepaid insurance and amortised over the policy term.
h - Reflects a $2.00m short-term promissory note issued to Envy Development PB, LLC in connection with the closing and recorded in current notes payable. The note is effective September 17, 2026, bears interest at $1,333.33 per day and matures on October 5, 2026. Interest through maturity is not more than approximately $25,000 and is not separately reflected in the pro forma statements of operations because it is not material.
| 5 |
ENVY AT POMPANO BEACH
Historical Statement of Revenues and Certain Operating Expenses
For the Six Months Ended June 30, 2026 and 2025 (Unaudited) (in thousands)
The following unaudited historical statement of revenues and certain operating expenses of Envy at Pompano Beach (the “Property”), a 214-unit apartment community held through Envy Development PB, LLC and its wholly-owned subsidiary, is presented under Rule 3-14 of Regulation S-X. It should be read together with the audited statement of revenues and certain operating expenses of the Property for the year ended December 31, 2025, which is filed separately. Envy Recreational, LLC was formed in connection with the acquisition, and revenue generated by the marina and commercial community center before closing was immaterial. Accordingly, historical operating results for those assets have not been separately included.
| Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | |||||||
| Revenue | ||||||||
| Rental and other property revenues | $ | 2,861 | $ | 2,459 | ||||
| Total revenue | 2,861 | 2,459 | ||||||
| Certain operating expenses | ||||||||
| Property operating expenses | 903 | 929 | ||||||
| Taxes and insurance | 641 | 1,019 | ||||||
| Total certain operating expenses | 1,544 | 1,948 | ||||||
| Revenues in Excess of Certain Operating Expenses | $ | 1,317 | $ | 511 | ||||
Notes to the Historical Statement of Revenues and Certain Operating Expenses
1. Basis of presentation. The Property is a 214-unit residential apartment community located in Pompano Beach, Florida, held through Envy Development PB, LLC and its wholly-owned subsidiary, Envy Development DE, LLC. This statement has been prepared for the purpose of complying with Rule 3-14 of Regulation S-X and is not intended to be a complete presentation of the Property’s revenues and expenses. It is not representative of the actual operations of the Property for the periods presented. The interim statements are unaudited and, in the opinion of management, include all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation. They have been prepared on a basis consistent with the audited statement of revenues and certain operating expenses of the Property for the year ended December 31, 2025.
2. Excluded expenses. In accordance with Rule 3-14, the statement excludes expenses not comparable to the proposed future operations of the Property, including mortgage interest, depreciation and amortization, management fees, and income taxes. As a result of these exclusions, the statement is not indicative of the results of operations of the Property going forward.
3. Revenue recognition. The Property’s residential units are leased to tenants under agreements that are generally one year in length and are accounted for as operating leases under ASC 842, with rental revenue recognized on a straight-line basis when collectibility is probable. Tenant reimbursements and other property fees are recognized when the related services are provided.
4. Cash flow information. Separate historical statements of cash flows for the Property are not presented. Because the statement excludes mortgage interest, depreciation, amortization, management fees and income taxes, historical cash flow information on a basis comparable to the Property’s future operations is not available.
5. Material factors. Rental and other property revenues increased from $2,459 thousand for the six months ended June 30, 2025 to $2,861 thousand for the six months ended June 30, 2026, and vacancy losses were lower in the 2026 period. Taxes and insurance for the six months ended June 30, 2026 include a real estate tax refund of approximately $202,000 arising from a successful property tax challenge, which is non-recurring. The historical amounts exclude, or do not reflect, items that will affect the Property’s future operations, including mortgage interest on the acquisition financing and the Company’s go-forward insurance program. Management is not aware of any other material factors relating to the Property that would cause the reported financial information not to be indicative of future operating results.
6. Subsequent event. On September 23, 2026, the Property was acquired by Stewards, Inc. in a transaction accounted for as an asset acquisition under ASC 805-0.
| 6 |
Filing Exhibits & Attachments
20 documentsPress Releases
Other Documents
- EX-2 MEMBERSHIP INTERESTS PURCHASE AND SALE AGREEMENT, DATED AS OF SEPTEMBER 21, 2026 346.5 KB
- EX-4 REGISTRATION RIGHTS AGREEMENT, DATED AS OF SEPTEMBER 23, 2026 109.6 KB
- EX-4 AMENDED AND RESTATED RENEWAL PROMISSORY NOTE, DATED SEPTEMBER 23, 2026 32.2 KB
- EX-4 PROMISSORY NOTE IN THE PRINCIPAL AMOUNT OF $2,000,000, EFFECTIVE AS OF SEPTEMBER 29.3 KB
- EX-10 LOAN AGREEMENT, DATED AS OF SEPTEMBER 23, 2026 823.1 KB
- EX-10 AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMEN 126.3 KB
- EX-10 MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING, 114.6 KB
- EX-10 GUARANTY OF RECOURSE AND OTHER OBLIGATIONS, DATED AS OF SEPTEMBER 23, 2026 92.8 KB
- EX-10 GUARANTY OF PAYMENT, DATED AS OF SEPTEMBER 23, 2026, BY SRC ENVY HOLDCO LLC IN F 74.8 KB
- EX-10 PAYMENT GUARANTY, DATED AS OF SEPTEMBER 23, 2026, BY ENVY RECREATIONAL, LLC IN F 67.5 KB
- EX-10 PLEDGE AND SECURITY AGREEMENT, DATED AS OF SEPTEMBER 23, 2026, BY SRC ENVY HOLDC 125.1 KB
- EX-10 SPRINGING CASH MANAGEMENT AGREEMENT, DATED AS OF SEPTEMBER 23, 2026 83.7 KB
- EX-10 REIMBURSEMENT AGREEMENT, ENTERED INTO AT THE SEPTEMBER 23, 2026 67.0 KB
- EX-10 ESCROW AGREEMENT, EFFECTIVE AS OF SEPTEMBER 23, 2026 52.3 KB
- EX-101 XBRL SCHEMA FILE 2.9 KB
- EX-101 XBRL LABEL FILE 33.4 KB
- EX-101 XBRL PRESENTATION FILE 21.8 KB