Lightstone REIT II Narrows Q3 Loss, But 9-Month Deficit Widens

TL;DR

**Lightstone REIT II's Q3 net income is a mirage; the nine-month loss and shrinking asset base point to continued struggles for this unlisted REIT.**

AI Summary

Lightstone Value Plus REIT II, Inc. reported a net income of $133 thousand for the three months ended September 30, 2025, a significant improvement from a net loss of $1.264 million in the same period of 2024. However, for the nine months ended September 30, 2025, the company posted a net loss of $4.158 million, an increase from the $3.406 million net loss in the prior year. Revenues slightly decreased to $12.103 million for the three-month period in 2025 from $12.136 million in 2024, and to $36.180 million for the nine-month period in 2025 from $36.719 million in 2024. Key business changes include a reduction in net investment property from $137.823 million at December 31, 2024, to $134.013 million at September 30, 2025, and a decrease in cash and cash equivalents from $27.139 million to $24.818 million over the same period. The company's total assets declined from $193.900 million to $181.505 million, while total liabilities decreased from $109.244 million to $106.109 million. Strategic outlook remains focused on owning and operating commercial hospitality properties, with potential diversification into other real estate types and real estate-related investments, while facing risks from economic conditions and financing availability.

Why It Matters

For investors, the mixed financial results—improved Q3 net income but a wider nine-month net loss—signal ongoing challenges in the REIT's core operations and asset management. The decline in net investment property and cash, alongside a reduction in total assets, suggests a contraction in the company's portfolio and liquidity, which could impact future dividend sustainability and growth prospects. Employees and customers of the 10 consolidated limited-service hotels may see continued operational adjustments as the company navigates a challenging economic environment. In a competitive real estate market, Lightstone REIT II's performance reflects broader pressures on hospitality and commercial property sectors, particularly given its dependence on an external advisor and unlisted shares.

Risk Assessment

Risk Level: high — The company reported a net loss of $4.158 million for the nine months ended September 30, 2025, an increase from the $3.406 million net loss in the prior year, indicating persistent unprofitability. Total assets decreased by $12.395 million from $193.900 million at December 31, 2024, to $181.505 million at September 30, 2025, while stockholders' equity declined by $9.260 million from $84.656 million to $75.396 million, signaling a deteriorating financial position.

Analyst Insight

Investors should exercise extreme caution and consider divesting, given the widening nine-month net loss and shrinking asset base. The lack of a public listing and dependence on an external advisor further complicate valuation and transparency, making it difficult to assess fair value or future prospects.

Financial Highlights

debt To Equity

1.41

revenue

$12.103 million

operating Margin

N/A

total Assets

$181.505 million

total Debt

$97.455 million

net Income

$133 thousand

eps

$0.00

gross Margin

N/A

cash Position

$24.818 million

revenue Growth

-0.27%

Revenue Breakdown

Key Numbers

• $133 thousand — Net income for Q3 2025 (Improved from a net loss of $1.264 million in Q3 2024)
• $4.158 million — Net loss for nine months ended September 30, 2025 (Worsened from a net loss of $3.406 million in the prior year period)
• $12.103 million — Revenues for Q3 2025 (Slightly decreased from $12.136 million in Q3 2024)
• $36.180 million — Revenues for nine months ended September 30, 2025 (Decreased from $36.719 million in the prior year period)
• $134.013 million — Net investment property as of September 30, 2025 (Decreased from $137.823 million at December 31, 2024)
• $24.818 million — Cash and cash equivalents as of September 30, 2025 (Decreased from $27.139 million at December 31, 2024)
• $181.505 million — Total Assets as of September 30, 2025 (Decreased from $193.900 million at December 31, 2024)
• $106.109 million — Total Liabilities as of September 30, 2025 (Decreased from $109.244 million at December 31, 2024)
• $75.396 million — Total Stockholders' Equity as of September 30, 2025 (Decreased from $84.656 million at December 31, 2024)
• 15.9 million — Outstanding shares of common stock as of November 7, 2025 (Reflects share redemptions and cancellations)

Key Players & Entities

• Lightstone Value Plus REIT II, Inc. (company) — Registrant and primary entity
• Lightstone Value Plus REIT II LP (company) — Operating Partnership, 99% owned by Lightstone REIT II
• David Lichtenstein (person) — Majority owner of the Advisor and Chairman/CEO of the Company
• Lightstone Value Plus REIT II LLC (company) — The Advisor, majority owned by David Lichtenstein
• Lightstone Holdings LLC (company) — Wholly-owned subsidiary of the Sponsor and related party
• Lightstone Group LLC (company) — The Sponsor of the Company
• Brownmill, LLC (company) — Unconsolidated affiliated entity, 48.6% owned by Lightstone REIT II
• LVP LIC Hotel JV LLC (company) — Unconsolidated affiliated entity, 50% owned by Lightstone REIT II
• Lightstone Value Plus REIT III, Inc. (company) — Related party REIT in Hilton Garden Inn Joint Venture
• Lightstone Value Plus REIT I, Inc. (company) — Related party REIT in Hotel Joint Venture

FAQ

Risk Factors

• Economic Downturn Impact [high — market]: The company's performance is sensitive to economic conditions, which can affect occupancy rates and rental income for its hospitality properties. A prolonged economic slowdown could lead to further revenue declines and impact profitability.
• Financing Availability [medium — financial]: Access to capital is crucial for real estate investments. Changes in market liquidity and interest rates could impact the company's ability to secure financing for acquisitions or refinancing existing debt, potentially limiting growth opportunities.
• Property Operating Expenses [medium — operational]: Property operating expenses increased to $8.861 million in Q3 2025 from $8.669 million in Q3 2024. This rise, if not offset by revenue growth, can pressure margins.
• Real Estate Market Fluctuations [medium — market]: The value of investment properties can fluctuate based on market conditions. A decline in property values could negatively impact the company's balance sheet and equity.
• Interest Expense [medium — financial]: Interest expense for the nine months ended September 30, 2025, was $6.152 million, a decrease from $7.084 million in the prior year. However, significant debt levels ($97.455 million mortgage payable) expose the company to interest rate risk.

Industry Context

The company operates within the commercial hospitality real estate sector, which is highly sensitive to economic cycles, travel trends, and consumer spending. Competition can be intense, with a focus on limited-service hotels. Diversification into other real estate types is a stated strategy, indicating a potential shift to mitigate risks associated with a single asset class.

Regulatory Implications

As a REIT, the company must adhere to specific IRS regulations to maintain its tax-advantaged status, including distributing a significant portion of its taxable income to shareholders. Compliance with real estate and financial regulations is ongoing.

What Investors Should Do

1. Monitor revenue trends and expense management.
2. Assess the impact of interest rate changes on debt servicing.
3. Evaluate the company's strategy for property portfolio management and potential diversification.
4. Review cash flow generation and liquidity position.

Key Dates

• 2025-09-30: Quarterly Financial Reporting — Reported net income of $133 thousand for Q3 2025, a significant improvement from a net loss in the prior year, though the year-to-date net loss widened.
• 2025-12-31: Previous Fiscal Year End — Provided a baseline for comparison of asset and liability changes, showing a decrease in net investment property and cash reserves.
• 2024-09-30: Prior Year Quarter Reporting — Reported a net loss of $1.264 million for Q3 2024, highlighting the Q3 2025 improvement. Year-to-date loss was $3.406 million.

Glossary

REIT

Real Estate Investment Trust. A company that owns, operates, or finances income-generating real estate. (Lightstone Value Plus REIT II, Inc. is structured as a REIT, which has specific tax and operational requirements.)

UPREIT

Umbrella Partnership Real Estate Investment Trust. A structure where the REIT owns a partnership interest in an operating partnership that holds the real estate assets. (This structure is used by Lightstone REIT II, allowing for tax-deferred contributions of property.)

Accumulated deficit

The cumulative net losses of a company that have not been offset by net income. (Indicates the company has historically incurred more losses than profits, with an accumulated deficit of $71.711 million as of September 30, 2025.)

Noncontrolling interests

The portion of equity in a subsidiary that is not attributable to the parent company. (Represents ownership stakes in consolidated entities that do not belong to the main company's shareholders.)

Net investment property

The value of real estate properties owned by the company, net of accumulated depreciation. (This is a core asset for the REIT, showing a decrease from $137.823 million to $134.013 million.)

Year-Over-Year Comparison

Compared to the prior year, Lightstone Value Plus REIT II, Inc. has seen a significant improvement in quarterly net income, turning a $1.264 million loss in Q3 2024 into a $133 thousand profit in Q3 2025. However, the year-to-date performance shows a widening net loss, increasing from $3.406 million to $4.158 million. Revenues have experienced a slight decline in both the quarterly and year-to-date periods. The company's asset base has contracted, with net investment property decreasing by $3.81 million and total assets falling by $12.395 million, while liabilities have also decreased. This indicates a deleveraging or asset disposition trend.

Key Financial Figures

• $0.075 — ,760 (a) Distributions per share were $0.075. Common Stock Additional Paid-In Ac
• $0.225 — ,760 (a) Distributions per share were $0.225. Common Stock Additional Paid-In Ac

Filing Documents

• lvpr210q093025.htm (10-Q) — 755KB
• lvpr2ex31-1.htm (EX-31.1) — 12KB
• lvpr2ex31-2.htm (EX-31.2) — 12KB
• lvpr2ex32-1.htm (EX-32.1) — 5KB
• lvpr2ex32-2.htm (EX-32.2) — 5KB
• 0001185185-25-001735.txt ( ) — 4213KB
• lvpr-20250930.xsd (EX-101.SCH) — 45KB
• lvpr-20250930_cal.xml (EX-101.CAL) — 28KB
• lvpr-20250930_def.xml (EX-101.DEF) — 171KB
• lvpr-20250930_lab.xml (EX-101.LAB) — 329KB
• lvpr-20250930_pre.xml (EX-101.PRE) — 185KB
• lvpr210q093025_htm.xml (XML) — 423KB

Financial Statements (unaudited)

Financial Statements (unaudited) 3 Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024 3 Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024 4 Consolidated Statements of Stockholders' Equity for the Three and Nine Months Ended September 30, 2025 and 2024 5 Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 6

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 7 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 2 1 Item 4.

Controls and Procedures

Controls and Procedures 37 PART II OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 38 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 38 Item 3. Defaults Upon Senior Securities 38 Item 4. Mine Safety Disclosures 38 Item 5. Other Information 38 Item 6. Exhibits 39 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION:

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS: LIGHTSTONE VALUE PLUS REIT II, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except per share data and where indicated in millions) September 30, 2025 December 31, 2024 (unaudited) Assets Investment property: Land and improvements $ 26,184 $ 26,176 Building and improvements 145,647 146,459 Furniture and fixtures 29,236 29,278 Construction in progress 126 228 Gross investment property 201,193 202,141 Less accumulated depreciation ( 67,180 ) ( 64,318 ) Net investment property 134,013 137,823 Investments in unconsolidated affiliated entities 7,744 11,146 Cash and cash equivalents 24,818 27,139 Marketable securities, available for sale 10,074 10,209 Restricted cash 1,116 4,938 Accounts receivable and other assets 3,740 2,645 Total Assets $ 181,505 $ 193,900 Liabilities and Stockholders' Equity Accounts payable, other accrued expenses and other liabilities $ 7,098 $ 6,490 Mortgage payable, net 97,455 101,183 Distributions payable 1,198 1,209 Due to related party 358 362 Total liabilities 106,109 109,244 Commitments and contingencies Stockholders' Equity: Company's stockholders' equity: Preferred shares, $ 0.01 par value, 10.0 million shares authorized, none issued and outstanding - - Common stock, $ 0.01 par value, 100.0 million shares authorized, 16.0 million and 16.1 million shares issued and outstanding, respectively 159 160 Additional paid-in-capital 135,943 137,405 Accumulated deficit ( 71,711 ) ( 63,955 ) Total Company stockholders' equity 64,391 73,610 Noncontrolling interests 11,005 11,046 Total Stockholders' Equity 75,396 84,656 Total Liabilities and Stockholders' Equity $ 181,505 $ 193,900 The accompanying notes are an integral part of these consolidated financial statements. 3 Table of Contents

FINANCIAL INFORMATION, CONTINUED

PART I. FINANCIAL INFORMATION, CONTINUED:

FINANCIAL STATEMENTS, CONTINUED

ITEM 1. FINANCIAL STATEMENTS, CONTINUED: LIGHTSTONE VALUE PLUS REIT II, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except per share data) (unaudited) For the Three Months Ended September 30, For the Nine Months Ended September 30, 2025 2024 2025 2024 Revenues $ 12,103 $ 12,136 $ 36,180 $ 36,719 Expenses: Property operating expenses 8,861 8,669 26,159 25,507 Real estate taxes 629 581 1,806 1,798 General and administrative costs 1,013 937 3,112 3,021 Depreciation and amortization 1,321 1,477 3,938 4,446 Casualty (gain)/loss, net ( 786 ) - 203 - Total expenses 11,038 11,664 35,218 34,772 Interest expense ( 2,038 ) ( 2,371 ) ( 6,152 ) ( 7,084 ) Earnings from investments in unconsolidated affiliated entities 428 182 217 ( 52 ) Other income, net 678 453 815 1,783 Net income/(loss) 133 ( 1,264 ) ( 4,158 ) ( 3,406 ) Less: net (income)/loss attributable to noncontrolling interests ( 148 ) ( 21 ) 4 ( 15 ) Net loss applicable to Company's common shares $ ( 15 ) $ ( 1,285 ) $ ( 4,154 ) $ ( 3,421 ) Net loss per Company's common share, basic and diluted $ - $ ( 0.08 ) $ ( 0.26 ) $ ( 0.21 ) Weighted average number of common shares outstanding, basic and diluted 15,978 16,163 16,020 16,444 The accompanying notes are an integral part of these consolidated financial statements. 4 Table of Contents

FINANCIAL INFORMATION: CONTINUED

PART I. FINANCIAL INFORMATION: CONTINUED:

FINANCIAL

ITEM 1. FINANCIAL LIGHTSTONE VALUE PLUS REIT II, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Amounts in thousands) (unaudited) Common Stock Additional Paid-In Accumulated Noncontrolling Total Stockholders' Shares Amount Capital Deficit Interests Equity BALANCE, June 30, 2024 16,164 $ 161 $ 137,940 $ ( 58,868 ) $ 11,004 $ 90,237 Net loss - - - ( 1,285 ) 21 ( 1,264 ) Distributions declared (a) - - - ( 1,212 ) - ( 1,212 ) Distributions from noncontrolling interests - - - - ( 1 ) ( 1 ) BALANCE, September 30, 2024 16,164 $ 161 $ 137,940 $ ( 61,365 ) $ 11,024 $ 87,760 (a) Distributions per share were $0.075. Common Stock Additional Paid-In Accumulated Noncontrolling Total Stockholders' Shares Amount Capital Deficit Interests Equity BALANCE, December 31, 2023 17,002 $ 169 $ 143,219 $ ( 54,284 ) $ 11,009 $ 100,113 Net loss - - - ( 3,421 ) 15 ( 3,406 ) Distributions declared (a) - - - ( 3,660 ) - ( 3,660 ) Contributions of noncontrolling interests - - - - 9 9 Distributions from noncontrolling interests - - - - ( 9 ) ( 9 ) Tender, redemption and cancellation of shares ( 838 ) ( 8 ) ( 5,279 ) - - ( 5,287 ) BALANCE, September 30, 2024 16,164 $ 161 $ 137,940 $ ( 61,365 ) $ 11,024 $ 87,760 (a) Distributions per share were $0.225. Common Stock Additional Paid-In Accumulated Noncontrolling Total Stockholders' Shares Amount Capital Deficit Interests Equity BALANCE, June 30, 2025 16,007 $ 159 $ 136,363 $ ( 70,498 ) $ 10,857 $ 76,881 Net loss - - - ( 15 ) 148 133 Distributions declared (a) - - - ( 1,198 ) - ( 1,198 ) Redemption and cancellation of shares ( 38 ) - ( 420 ) - - ( 420 ) BALANCE, September 30, 2025 15,969 $ 159 $ 135,943 $ ( 71,711 ) $ 11,005 $ 75,396 (a) Distributions per share were $0.075. Common Stock Additional Paid-In Accumulate

FINANCIAL INFORMATION, CONTINUED

PART I. FINANCIAL INFORMATION, CONTINUED:

FINANCIAL STATEMENTS, CONTINUED

ITEM 1. FINANCIAL STATEMENTS, CONTINUED: LIGHTSTONE VALUE PLUS REIT II, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) (unaudited) For the Nine Months Ended September 30, 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ ( 4,158 ) $ ( 3,406 ) Adjustments to reconcile net loss to net cash (used in)/provided by operating activities: Depreciation and amortization 3,938 4,446 Amortization of deferred financing costs 272 272 Earnings from investments in unconsolidated affiliated entities ( 217 ) 52 Casualty gain, net ( 128 ) - Other non-cash adjustments 13 ( 138 ) Changes in assets and liabilities: Increase in accounts receivable and other assets ( 437 ) ( 679 ) Decrease in accounts payable, other accrued expenses and other liabilities ( 494 ) ( 171 ) (Decrease)/increase in due to related party ( 4 ) 2 Net cash (used in)/provided by operating activities ( 1,215 ) 378 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of investment property ( 599 ) ( 671 ) Proceeds from the sale of marketable securities 4,500 4,000 Purchases of marketable securities ( 4,297 ) ( 4,261 ) Proceeds from property insurance claim 300 - Contributions to unconsolidated affiliated entities ( 309 ) ( 74 ) Distributions from unconsolidated affiliated entities 4,589 1,488 Net cash provided by investing activities 4,184 482 CASH FLOWS FROM FINANCING ACTIVITIES: Payment on mortgage payable ( 4,000 ) - Contributions from noncontrolling interests 7 9 Distributions to noncontrolling interests ( 44 ) ( 9 ) Tender, redemption and cancellation of common shares ( 1,463 ) ( 5,287 ) Distributions to common stockholders ( 3,612 ) ( 3,723 ) Net cash used in financing activities ( 9,112 ) ( 9,010 ) Change in cash, cash equivalents and restricted cash ( 6,143 ) ( 8,150 ) Cash, cash equivalents and restricted cash, beginning of year 32,077 40,741 Cash,

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Dollar amounts in thousands, except per share/unit data and where indicated in millions) (Unaudited) 1. Business and Structure Lightstone Value Plus REIT II, Inc. ("Lightstone REIT II"), is a Maryland corporation formed on April 28, 2008, which elected to qualify as a real estate investment trust ("REIT") for United States (the "U.S.") federal income tax purposes beginning with the taxable year ended December 31, 2009. Lightstone REIT II is structured as an umbrella partnership REIT, or UPREIT, and substantially all of its current and future business will be conducted through Lightstone Value Plus REIT II LP, a Delaware limited partnership (the "Operating Partnership"). As of September 30, 2025, Lightstone REIT II held an approximately 99 % general partnership interest in the Operating Partnership's common units. Lightstone REIT II and the Operating Partnership and its subsidiaries are collectively referred to as the "Company" and the use of "we," "our," "us" or similar pronouns in these consolidated financial statements refers to Lightstone REIT II, its Operating Partnership or the Company as required by the context in which such pronoun is used. Through the Operating Partnership, the Company owns and operates commercial properties and makes real estate-related investments. Since its inception, the Company has primarily acquired and operated commercial hospitality properties, principally consisting of limited-service-hotels all located in the U.S. Although the Company has historically acquired hotels, it has and may continue to purchase other types of real estate. Assets other than hotels may include, without limitation, office buildings, shopping centers, business and industrial parks, manufacturing facilities, single-tenant properties, multifamily residential properties, student housing properties, warehouses and distribution facilities and medical/life sciences office buildings. The Company's real estate inv

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Dollar amounts in thousands, except per share/unit data and where indicated in millions) (Unaudited) The Company's advisor is Lightstone Value Plus REIT II LLC (the "Advisor"), which is majority owned by David Lichtenstein. On May 20, 2008, the Advisor contributed $ 2 to the Operating Partnership in exchange for 200 limited partner common units ("Common Units") in the Operating Partnership. The Advisor also owns 20,000 shares of the Company's common stock ("Common Shares") which were issued on May 20, 2008 for $ 200 , or $ 10.00 per share. Mr. Lichtenstein also is a majority owner of the equity interests of the Sponsor, which served as the Company's sponsor during its initial public offering and follow-on offering (collectively, "the Offerings"), which terminated on August 15, 2012 and September 27, 2014, respectively. The Advisor, pursuant to the terms of an advisory agreement, together with the Company's board of directors (the "Board of Directors"), is primarily responsible for making investment decisions on behalf of the Company and managing its day-to-day operations. Through his ownership and control of the Sponsor, Mr. Lichtenstein is the indirect owner and manager of Lightstone SLP II LLC, a Delaware limited liability company (the "Associate General Partner"), which owns 177 subordinated profits interests ("Subordinated Profits Interests") in the Operating Partnership, which were acquired, at a cost of $ 100,000 per unit, or aggregate consideration of $ 17.7 million in connection with the Company's Offerings. Mr. Lichtenstein also acts as the Company's Chairman and Chief Executive Officer. As a result, he exerts influence over but does not control Lightstone REIT II or the Operating Partnership. The Company has no employees. The Company is dependent on the Advisor and certain affiliates of the Sponsor for performing a full range of services that are essential to it, including asset management, property manage

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Dollar amounts in thousands, except per share/unit data and where indicated in millions) (Unaudited) Other Noncontrolling Interests in Consolidated Subsidiaries Other noncontrolling interests consist of the (i) membership interest in the Hotel Joint Venture held by Lightstone REIT I and (ii) membership interests held by minority owners in one of the Company's limited-service hotels. Related Parties The Company's Sponsor, Advisor and their affiliates, including the Associate General Partner and LGH, are related parties of the Company as well as the other public REITs also sponsored and/or advised by these entities. Pursuant to the terms of various agreements, certain of these entities are entitled to compensation and reimbursement for services and costs incurred related to the investment, development, management and disposition of the Company's assets. The compensation is generally based on the cost of acquired properties/investments and the annual revenue earned from such properties/investments, and other such fees and expense reimbursements as outlined in each of the respective agreements. Current Environment The Company's operating results and financial condition are substantially impacted by the overall health of local, U.S. national and global economies and may be influenced by market and other challenges. Additionally, its business and financial performance may be adversely affected by current and future economic and other conditions; including, but not limited to, availability or terms of financings, financial markets volatility and banking failures, political upheaval or uncertainty, natural and man-made disasters, terrorism and acts of war, unfavorable changes in laws, ordinances and regulations, outbreaks of contagious diseases, cybercrime, technological advances and challenges, such as the use and impact of artificial intelligence and machine learning, loss of key relationships, inflation, tariffs

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Dollar amounts in thousands, except per share/unit data and where indicated in millions) (Unaudited) GAAP requires the Company's management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during a reporting period. The most significant assumptions and estimates relate to the valuation of investment properties and investments in other unconsolidated real estate entities and depreciable lives of long-lived assets. Application of these assumptions requires the exercise of judgment as to future uncertainties and, as a result, actual results could differ from these estimates. The consolidated balance sheet as of December 31, 2024 included herein has been derived from the consolidated balance sheet included in the Company's 2024 Form 10-K. The unaudited consolidated statements of operations for interim periods are not necessarily indicative of results for the full year or any other period. Tax Status and Income Taxes The Company elected to be taxed and qualify as a REIT commencing with the taxable year ended December 31, 2009. As a REIT, the Company generally will not be subject to U.S. federal income tax on its net taxable income that it distributes currently to its stockholders. To maintain its REIT qualification under the Internal Revenue Code of 1986, as amended, the Company must meet a number of organizational and operational requirements, including a requirement that it annually distribute to its stockholders at least 90% of its REIT taxable income (which does not equal net income, as calculated in accordance with GAAP), determined without regard to the deduction for dividends paid and excluding any net capital gain. If the Company fails to remain qualified for taxation as a REIT in any subsequent year and does not qualify for certain statut

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