Thank you for watching. Thank you for watching. Thank you. Thank you for watching. Good morning and thank you for joining the Lumen Finance Trust second quarter 2026 earnings call. Today's call is being recorded and will be made available via webcast on the company's website. I would now like to turn a call over to Anderson with investor relations at Lumen Investment Management. Please go ahead.

Morning, everyone. Thank you for joining our call to discuss Lumen Finance Trust second quarter 2026 financial results. With me on the call today are Jim Flynn, our CEO, Jim Briggs, our CFO, Greg Calvert, our president, and Zach Halpern, our portfolio manager. Last evening, we filed their 10-Q with the SEC and issued a press release to provide details on our recent financial results. We also provided a supplemental earnings presentation, which can be found on our website. For handling the call over to Jim Flynn, I'd like to remind everyone that certain statements made during the course of this call are not based on historical information and may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements are subject to various risks and uncertainties that could cause actual results that differ materially from those contained in the forward-looking statements. These results and uncertainties are discussed in the company's reports filed with the SEC, in particular the risk factors section of our Form 10-K and Form 10-Qs. It is not possible to predict or identify all such risks, and listeners are cautioned not to place undue reliance on these forward-looking statements. The company undertakes no obligation to update any of these forward-looking statements. Further, certain non-GAAP financial measures will be discussed on this conference call. A presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Reconciliations of these non-GAAP financial measures to the most comparable measures prepared in accordance with GAAP can be accessed through our filings with the SEC. For the second quarter of 2026, we reported a GAAP net loss of 18 cents and distributable loss of 10 cents per share of common stock. In June, we had declared a quarterly dividend of 4 cents per share with respect to the second quarter in line with the prior quarterly dividend.

I will now turn the call over to Jim Flynn. Please go ahead. Thank you, Andrew. Good morning, everyone.

Welcome to the Lumen Finance Trust earnings call for the second quarter of 2026. We appreciate you joining us today. We also wanted to express our appreciation to our investors for their patience, support, and continued engagement as we work through issues in the legacy portfolio. We recognize the challenges that the company has faced and we remain focused every day on improving outcomes for our shareholders. Looking at the economic and market conditions in the country today, conditions remain generally stable. There is continued uncertainty around monetary policy, weighing on investment activity. Recent economic data has increased uncertainty regarding the path of the Fed. including whether short-term rates may remain elevated for longer than previously expected. Long-term rates also remain elevated, continuing to pressure transaction activity and real estate valuations. Within multifamily, fundamentals continue to improve as the sector moves beyond peak supply levels. While rent growth remains modest, long-term demand drivers, including housing affordability challenges, continue to support the multifamily rental sector. Capital markets remain active, with liquidity available across warehouse securitization and institutional lending channels strong through the first half of this year. The CRE CLL market continues to be an important source of financing for multifamily mortgage assets, and investor demand for floating rate credit remains relatively strong, particularly for repeat issuers with proven track records.

Active asset management remains our highest priority.

We continue to work closely with borrowers and operating partners to maximize outcomes across both performing and non-performing investments. We continue to proactively evaluate resolution strategies for legacy assets while maintaining a disciplined approach to credit. While the market for certain legacy assets remains soft, we are beginning to see an acceleration in resolution activity, including both negotiated sales and other paths, monetized or stabilized challenge positions. continue to work tirelessly to resolve these assets in a manner that protects value, improves liquidity, and positions the company to reinvest capital efficiently. On the portfolio side, during the quarter, we were intentional about managing liquidity on our balance sheet to support ongoing portfolio management efforts while selectively redeploying CLO capital when available. We generally held on to cash from non-securitized assets when payoffs. Our financing profile remains well positioned following the refinancing initiatives completed earlier this year. We believe our current liquidity position remains appropriate to support asset resolution activities, portfolio management, and selective capital deployment opportunities. As capital becomes available through resolutions and repayments, our objective is to redeploy it efficiently into investments that meet our credit standards and are expected to be accreted to earnings. We are being disciplined on timing and asset selection, but we are also focused on ensuring that the company's capital is put back to work as efficiently and quickly as possible. Our Board of Directors recently approved a 10-for-1 reverse stock split of our common stock after having determined that such actions were in the best interest of the company and its stockholders, providing flexibility to maintain compliance with the applicable New York Stock Exchange listing requirements and support an efficient public market for the company's common stock. The reverse stock split is expected to become effective at the close of business on Wednesday, September 9th and the company's common stock is expected to begin trading on a split-adjusted basis on the New York Stock Exchange at the opening of trading on Thursday, September 10th under the existing ticker symbol LFT. The reverse stock split will affect all stockholders uniformly and will not alter any stockholders percentage ownership interest in the company except with respect to treatment of fractional shares which will be paid out in cash. We have also posted for our investors a reverse stock split FAQ document on our website. We believe the reverse stock split is an important step toward reducing technical pressure on the public stock price and supporting a more orderly market for our shares. While this action does not change the underlying economics of the company, we believe it helps address one of the external pressures on the stock and allows investors to focus more clearly on the value of the portfolio, our asset resolution progress, and our earnings trajectory. Our priorities remain unchanged. We are committed to resolving legacy assets, protecting book value, and thoughtfully redeploying capital into high-quality multifamily investments. We appreciate the continued patience and support of our investors and capital partners as we execute on this plan. While we recognize the resolution of our non-performing and REO assets remains challenging, we are seeing improving momentum in deal resolutions and sales activity. As those resolutions occur, we intend to reinvest capital efficiently and on a disciplined basis. We remain committed to fully deploying our capital in 2027, which we believe will be an important driver of improved earnings and, over time, enhance shareholder value. We recognize there is still work to do, and the timing of certain MPL and REO resolutions remains subject to submarket conditions. That said, we believe the company has the support of its capital partners, a clear path to redeployment, and the platform capabilities necessary to move forward constructively.

With that, I'd like to turn the call over to Jim Briggs who will provide details regarding our financial results. Jim?

Thanks, Jim. Good morning. Last night, we filed our quarterly report on Form 10-Q and provided a supplemental investor presentation on our website, which we'll be referring to during our remarks. Supplemental investor presentation has been uploaded to the webcast as well for your reference. On pages four through seven of the presentation, you'll find key updates and an earnings summary for the quarter. For the second quarter of 2026, we reported net loss to common stockholders of $9.2 million, or $0.18 per share. We reported a distributable loss of $5.3 million, or $0.10 per share. There are a few Q2 P&L items I'd like to highlight. For Q2, net interest income was $4.5 million. Sequential decline from $5.7 million recorded in Q1. This was primarily driven by a lower average performing loan portfolio balance quarter over quarter as we chose to build liquidity during the quarter rather than reinvest principal repayments from loans held outside of CLO. The ending outstanding UPD of the total portfolio was approximately $1 billion compared to $1.13 billion as of March 31st. The weighted average coupon of our loan portfolio declined to 704 basis points compared to 709 basis points in the prior quarter due to payoffs of higher spread loans relative to newly acquired assets, as well as a slight decline in the average SOFR rate during the period. Although we had greater payoffs compared to Q1, our exit fee income was relatively flat to prior quarter and recognition of extension fee income was down by about $300,000 quarter over quarter. Our total operating expenses, including fees to our manager, were higher quarter on quarter at 3.9 million versus 3.7 million. Primary driver was higher reimbursable expenses compared to Q1, driven primarily by resource allocation. Difference between reported gap net loss and distributable loss during the quarter was primarily attributable to an 8.6 million net provision for credit losses recorded in the period. 5.1 million of realized losses on mortgage loans and REO included in distributable, and 390,000 of depreciation on REO. The 8.6 million in net provision for credit losses recorded during the quarter, which is excluded from distributable earnings, was driven primarily by specific reserves and risk-rated five loans. As of June 30th, we had six loans rated risk-rated five, all collateralized by multifamily assets. Greg will provide a bit more detail in his remarks. We evaluated our risk-rated five loans individually to determine whether asset-specific reserves were necessary. During the quarter, we recorded specific provisions related to two loans downgraded to a five risk-rated in the quarter and three loans that were already risk-rated five at March 31st, including one property that was foreclosed upon and transferred to REO during the period. Specific reserves totaled $7.4 million at quarter end, representing approximately 18% of the associated UPV of specifically evaluated assets. The $5.1 million in realized losses included in distributable earnings related to three assets that were fully resolved in the quarter. These included discounted payoffs on two previous five risk-rated loans, one in Philadelphia and one in Des Moines. with proceeds generally consistent with their March 31st net carrying values. In addition, we sold one REO property in San Antonio for $12.1 million and recognized small gap gain on that sale. The realized losses reflected in distributable earnings this period were primarily attributable to prior period reserves and impairments recorded on those assets. At quarter end, our CLO's capital was substantially fully deployed at an 88% advance rate and a cost of funds of SOFR plus 191. As of June 30, a portion of our loan and REO portfolio were pledged to warehouse facilities that provided financing and an effective advance rate of 68% and a weighted average cost of funds of SOFR plus 209. We ended Q2 with an unrestricted cash balance of $29 million. and FL3 was substantially fully deployed. The company's total book equity at the end of the quarter was approximately 205 million. The total book value of common stock was approximately 145 million or $2.76 per share, decreasing sequentially from $2.97 a share on March 31st. I will now turn the call over to Greg Calvert to provide details on the company's investment activity and portfolio performance during the quarter. Greg.

Thank you, Jim.

During the second quarter, LFT acquired or funded four loans with an aggregate UPB of $91 million and experienced $184 million of loan payoffs. As of June 30th, our total loan portfolio consisted of 51 floating rate loans with an aggregate unpaid principal balance of approximately $1 billion, a weighted average floating rate of 330 basis points over SOFR, and an unamortized aggregate purchase discount of approximately $800,000. The weighted average remaining term of our book as a quarter end was approximately 18 months, assuming all available extensions are exercised by our borrowers. 100% of the portfolio was indexed a one-month SOFR, and 91.7% of the portfolio was collateralized by multifamily properties. As of June 30th, approximately 81% of the loans in our portfolio were risk-rated at three or better, compared to 77% at March 31st. Average risk rating quarter over quarter remains stable at 3.1. During the quarter, we had several positive asset resolutions, including the resolutions of the two loan assets Jim mentioned in his remarks, which had been risk graded five as of March 31st, and for which we received payoff proceeds consistent with March 31st net carrying values. As of June 30th, we had six risk graded five loans with an average principal amount of $98 million, for approximately 10% of the unpaid principal balance of our quarter-end investment portfolio. Four of these loans, with an aggregate UPB of $62 million, were also risk-graded 5 as of the prior quarter due to either maturity or monetary default. Two of these loans, with an aggregate UPB of $36 million, were downgraded to a 5 risk rating for the first time due to monetary default. As of quarter end, the REO portfolio in total consisted of four multifamily properties with an aggregate carrying value of approximately $61.6 million and a weighted average occupancy rate of approximately 67%. During the period, we completed a sale of one San Antonio REO asset with a carrying value of $12.2 million. We also foreclosed on a multifamily property in Arlington, Texas. The $15.7 million loan associated with that property had been risk-rated and all five as of March 31st. Subsequent to quarter end, we foreclosed on a multifamily property in Dallas, Texas. This property had a $21.9 million mortgage loan associated with it and was risk graded five as of 6-30. We have been very active in seeking positive asset resolutions and maximizing recovery values and are pleased with the significant progress we have made so far, yet we understand that there's still more work to be done on behalf of our shareholders. I'll pass it back to Jim Flynn for his closing remarks and questions.

Thanks, Greg.

I'd like to thank everyone for joining us today and for your continued partnership and support. We recognize and appreciate the patience of our investors as we work through our legacy assets and reposition the company for improved earnings. We remain focused on resolving those challenged assets, redeploying capital efficiently, and moving the company toward a fully invested higher earning portfolio in 2027. Importantly, we continue to have the support of our capital partners as we move forward, and we believe the actions we are taking today position LFT to create value for our shareholders over time.

With that, I'll ask the operator to open the call for questions.

Thank you, ladies and gentlemen. We will now begin the question and answer session. Should you have a question, please press the star followed by the one on your touch-down phone. If you wish to cancel your request, please press the star followed by the two. If you are using a speakerphone, please flip the handset before pressing any keys. Once again, that is star one should you wish to ask a question. Your first question is from Steven Sepps. Your line is now open.

Yes, hello. Morning.

I've been a shareholder for many, many years.

and I see the book value declining considerably along with the stock price which is what I'm concerned about and your dividend which I bought many years ago has declined also significantly. I see what you're paying now and my question is I don't know how you're going to continue to pay that and a very simple question I have. It's just a size of scale. I don't think there's any company that's smaller than your company as far as assets and market cap in this particular space. There's another company I own, Cherry Hill, which recently made a merger with MITT and my question is, I see your expenses going up. I don't blame you. You know, inflation is there. People got to earn money. Everything costs money these days. But you see an opportunity to merge with another company because of the scale just doesn't make sense or just sell the assets since you said the book value is $2.70.

Thank you. Thank you. Thank you for the question. Thank you for...

for your time as a shareholder. We appreciate that support. I think that you've certainly identified a challenge, which we've discussed in the past, which is our size, and compared to many of the larger competitors in the space, that is accurate. It's also one of the reasons our portfolio, probably on average, is has distressed assets in the same relative percentages as the peer set. Our challenge is our size, and so we've held liquidity on our books and not redeployed that capital. So that's further suppressed earnings in addition to losses that have been taken on underperforming loans. So that's one of the drivers, as you point out. as we move through these assets and redeploy capital, we should be able to improve earnings as we move forward. In terms of evaluating potential M&A opportunities or other strategic alternatives, that is something that we continue to do with our bankers, with anyone that has discussions with us, with our board. All of those options are evaluated as they come up. unfortunately over the past couple of years we've been unable to execute on any of those that were discussed and to the extent something came forward we certainly would discuss that with the board and take any alternatives that could create shareholder value seriously and we'll continue to do so as we move forward.

The other question is how about just Thank you for joining us.

Vintage Multifamily Assets, if we were to attempt to sell that into the market, it might be difficult to sell the entire portfolio at those recoverable values. But as you point out, I think to the extent there is a strategic investor or someone that we were able to find, it would be something we would have to consider as a management team and a board.

Sir, what I have is the book value. Not just of you, but of many of these companies in the space, that they are overinflated. The book value should be what you should be able to receive, in my opinion.

Well, we believe that our book value does represent what we will receive on these assets.

Okay.

I've taken enough of your time. I appreciate it. answering my questions. As I said, I've been a shareholder prior to when you raised money into a REITs offering. You can see how long I go back. This has been the most disappointing REIT that I have. I have a significant portfolio of REITs and this is the most significant. Hopefully, you can turn this around. I remember when I bought this Everybody said you were conservative and that this would be a very, very good management company. And that's why I bought the stock. So hopefully you guys can turn it around or make a decision to look out for the shareholders instead of having the increase in expenses. That's sort of like an insult to Thank you very much.

Thank you. We appreciate both your questions and your time as an investor.

Thank you. Your next question is from Lee Zulch from Ubercap. Your line is now open.

Good morning. Is the 12-15-25 stock repurchase program still in effect? Is the $10 million there to buy common shares?

I'll defer to Jim Briggs on the timing of that agreement, but in general, the question around repurchasing shares and other strategic alternatives are all on the table in discussions with our board. The underlying question is the technical question on whether that agreement is... That is still open.

Yes.

Thanks, Jim. Thank you.

Thank you. Your next question is from John Power from Redwood Fund. Your line is now open.

Good morning. Thank you for your time. So if the stock buyback plan is still open and your stock is trading for 25% of NAV, why hasn't the board and management actually made any stock repurchases in the open market?

So any discussion around

Stock repurchases or other alternatives also have to reflect a full view of liquidity and maintain liquidity to make sure that we can resolve underperforming assets. But certainly our current stock price does not reflect what we believe is the fair value of our assets, and it is something that we will continue to discuss with the board around whether we take any action in that regard.

So any thoughts on how to close that gap?

I mean, there are several, right?

So certainly, you mentioned stock repurchase would certainly help. The primary way for us to improve book value is to work through assets and get them resolved off our books and redeployed efficiently. Today, we have and a number of others. So, you know, roughly a billion of assets outstanding, including non-performing loans. We should be closer to 1.4. That's a significant drag on earnings, not to mention that, you know, a portion of those assets are, you know, some 300 million and, you know, including REO are inefficiently financed or not financed at all. That is the biggest drag on our earnings. And so working through these assets, you know, it should point out, you know, having three resolutions last quarter, we expect to have several more here over the next quarter or two and really move through that legacy portfolio, which will allow us to move forward with redeploying that capital efficiently. That's the biggest drag, but along the way, we're going to continue to see if there are certain other potential opportunities to enhance the book value or the trading price of our shares relative to book value.

Okay, thank you, and we appreciate you holding these calls and talking to shareholders and investors. Thank you.

Thank you for your support.

Thank you. Your next question is from Greg Bennett. Your line is now open.

Hey, good morning. On your supplemental data, when you have a closing date for a loan and then you have maturity date, you look at some of these loans that were done in 21, let's say, I take it this is the problem for folks. Am I correct that most of these problem loans are the ones that were done in 21 and 22? Would that be correct?

That would generally be correct, maybe into early 23, but that is generally the kind of the, across the industry and our portfolio, the time of the most challenged assets, typically valuation issues, meaning they were overvalued to begin with.

When we're looking at these and the maturity date, there's some that I'll see that the closing date was 21, but they will have an... How many of these have an extension? I guess what I'm trying to get at. You take a loan that was done in 21 and you see that the maturity date is 27 now.

That would have been a six-year loan.

Does that maturity date Shouldn't there be an asterisk next to that that tells us that you actually did a loan extension that we could identify maybe these were the weaker loans? Does the maturity date include a loan extension, or is that what the original term was?

So it would be what the current maturity date is in the supplemental, and if I I'll ask the team to step in if I say anything wrong. But most of our bridge loans have a total maturity of five years, usually three years initial term with two one-year extensions. Occasionally it's two with three one-year extensions. And the outside maturity date is listed as that five-year period. But for any loan that has gone through and a modification with an extended maturity date. The maturity date in the supplemental would be listed as the current maturity date. We can provide that data in future supplementals to be clear, but for loans that were I suspect that someone doesn't have the data right at their fingertips. Anyone else on the team has that, meaning the number of extensions? Some loans have extended before, too, right at the end of the three years, and then they get an initial period because of some agreement that they've reached with us on an extension, typically a pay down.

Yeah, so the problem loans have to do with just the management of a property that has finished its remodeling. or it's construction or that they're just not managed well or is it because they're still using a loan to put capital renovation in the property?

So any troubled loan we're generally no longer advancing on in terms of the last question. In terms of management, it's a bit of a mixed bag. Certainly in some cases it's due to management. It's because sponsors have themselves run out of capital. These are not their only properties or only loans, and they just no longer have the capital to commit to the assets that they have, whether in our portfolio or others. And what happens when sponsors no longer invest capital, even minor things, is properties deteriorate, which make it harder to rent new units. I think the answer to your question is in many cases it is bad management. It's not necessarily that sponsors don't know how to do it or what to do. It's that they no longer have the resources as they've held on to these assets for an extended period waiting for the market to turn better, the sub-market that they're in, thinking places like Houston or San Antonio and those types of cities. and many more. That sponsor doesn't have capital to put into the asset. We are trying to work with them to exit the asset, hopefully add our loan proceeds. But at this point, in many cases, as we've seen below loan proceeds, and that process is frankly a challenging one with some sponsors who are unwilling to cut their losses, so to speak, and move on. That's something that is accelerated a bit here in 2026, moving toward a resolution, but that is the biggest problem, that sponsors acquired assets at valuation levels that have since declined meaningfully, their expenses have gone up, and their resources have been drained.

Going forward, when you do commit to loans, I mean, obviously there's a lack of confidence based on the stock price. So I'm wondering from a management point of view or from, you know, from Oreck, your sponsor, if there's some way of, well, first of all, you know, the commitment going forward that maybe you only invest in two-rated loans, you know, to try to improve, I guess, what the quality of the portfolio is. I don't know if that would matter or not. And another thing is, go ahead.

Well, I was going to say, we've certainly evaluated investment criteria and have considered sponsor strength as one of the key components here in terms of common themes among struggling assets. Again, I think the portfolio for multifamily assets across the entire industry, not just LFT's portfolio, has seen significant struggles in assets that were acquired during that period as identified in the 21 to 23 period. They were acquired at a time of lower interest rates, lower expenses, and lower cap rates. All three of those things have moved meaningfully against and those owners. And so we've taken a particularly closer look and identified stronger sponsors on newer assets. Those with deeper pockets, more capital, more experience and those that have not necessarily grown as significantly as many sponsors did during that period. So that is certainly and a number of other people. So that's something that we have done.

And if you look at our portfolio that's been invested since that period, it's performed quite well.

One thought I have, and I don't know if this is available or not, but part of the reason for investing in your company had to have been, you know, the relationship with Lumen and then the parent company, you know, Horrocks. I mean, this would be self-serving, but since the insiders own roughly, if you think about it, the insiders own roughly 45% of this company, the publicly traded company with Ork, I guess the largest shareholder. If there's some way of, if there's some way to build investor confidence back in the price of Ork or the sponsor, basically, I don't know how you would do it, but taking back these assets for a preferred stock in the company and allow the parent company to work this out. They're the ones who put these loans on. You didn't buy these from a broker. Part of the appeal... of investing in this says that you weren't relying on third parties to bring you these deals. These were all underwritten and done in-house by the parent company, which we pay our management fee. That might be a crazy idea, but the idea of closing the discount is not going to happen until we see the tide turning. And the way to turn the tide faster would be to, I think, to eliminate The lack of confidence that investors... We're a small group now, and with the reverse split, we're going to be even smaller. So is that possible to do that?

Well, is it possible? I'm sure it's possible, but...

In terms of looking at the portfolio and finding ways for, whether through our parent or other investors, to find ways to basically what I would say is to kind of box that risk or move that risk of what is now a shrinking part of the portfolio but still having a meaningful impact on earnings, both, again, as I said, in losses and from effectively and efficiently deploying capital. you know what you describe you know minus the you know I won't say oh the parent is committing to doing anything like that but the idea of trying to box that risk into a portfolio of loans that could be you know set aside and work through is something that we certainly have been and are evaluating and to the extent we could can figure something out that's accretive to the shareholders we certainly would like to do so, and we'll explore that opportunity as we move forward here. So I think your question and your thought is a good one, and there are opportunities we're looking at with investors about ways that we could possibly do that or something like that.

Yeah. You know, you're right.

In your comments, you frame that Outlook is starting to look more positive for some of these problem loans. But, I mean, I see the San Antonio property paid off $11 million, whatever, but I... So you have that, so now you're down to, what, $50 million of real estate or... I mean, I don't know if I don't have a sense necessarily that real estate owned or problem assets is necessarily getting better.

Is that you indicate?

What's happening, what's starting to turn again, we're looking at markets that have not seen good news for several years that we're seeing occupancy increasing Thank you for joining us today. in rental growth, occupancy, vacancy, and deal momentum. We're starting to see a few deals get done. What we've seen for a couple of years now is assets go under contract or at least initial LOIs for sale, either performing and non-performing, and those sales fall through. for whatever reason, usually something in diligence comes up or the market just moves against and the buyer walks away. What we've seen in a couple of instances, including this quarter, is that we got to a resolution. It's not positive relative to the original loan amount, but it's positive to move the asset off our books to recapture that liquidity and to be able to redeploy it into performing assets. So to be clear, it's more about and many more. So, you know, optimistic is the wrong word, but there are signs in these markets that we could see, you know, some deal momentum. Now, I would also offer that we're not the only lender that are trying to sell or dispose of assets in these markets. And so that has put some pressure on are all going back quarters now. But even as we go forward, we'll continue to see other lenders having the same experience, which means we might see some struggling or distressed assets coming to market from several lenders in the same places. That would be the only caveat. But to be clear, I'm not suggesting that these are complete turnaround stories. It's just relative to where we are, we're starting to see some aspects change.

Okay. Hey, one other comment for trying to build the investor confidence. Is there any way of these loans that are underwritten by the parent, is there any provision in there going forward? These aren't bought from brokers. You guys are underwriting it. Where the trust has a put provision that if we don't like the way this is turning out, We do have the ability to put some of these loans back to the parent. I mean, that would be something that would...

I mean, the loans are underwritten by Lumen.

It was owned by Oryx, and we underwrite the loans, obviously.

I don't think that that is a market provision.

You know, having a put rate back to the manager when the loan goes bad would be a challenge to get our parent or probably any parent to agree to, but certainly evaluating when assets have gone bad, how we can revise underwriting standards or look at assets differently will continue to do. And as I said earlier, we will continue to explore all opportunities and options to You know, speedily move these resolutions off the balance sheet with the help of existing and or new investors. But we have not found an opportunity to date that has been something that we feel would be accretive to shareholder value. Hopefully we can do so here in the coming quarters, but we haven't been able to as of yet.

Okay, thanks. One other question. Distributable loss, I don't think I'm, I'm not familiar with that term. What does that mean to a shareholder in the company, the terminology distributable loss? It sounds like free cash flow, but this is, that's something when you get your year-end taxes, 1099, that that's considered a loss?

Do you know for individual investors what that might mean?

So the distributable loss, and I'm not a tax expert, but distributable loss is a gap concept, and it's not a tax concept.

Okay, that's fine. All right, that's good.

Thank you for having me.

Yeah, thank you for having the call. Hopefully, I guess I'm getting off this call and I'm not sensing that necessarily the tide is necessarily turning, but I guess we'll see in the next couple quarters.

Yes, thank you, and I really appreciate your support.

Thank you. Your next question is from Martin Brody. Your line is now open.

Yeah. Hi. Good morning.

On the last call, I asked many questions that I was going to ask. I'm a long-suffering shareholder, too. I go back to several name changes. Poor Oaks, I think it was originally. In the middle of June, June the 25th, or June the 15th, the quarter was almost over, and you declared a second quarter dividend of four cents, which thrilled me at the time, but it sort of misled me a little bit, because I was assuming if you're paying four cents, then at least you had some positive income. are earnings available for distribution. Can you tell me why you did that?

When the court, as I said, the court was almost over, so you clearly knew the state of income expenses at that point.

Whenever we discuss the dividend, we share with our board and discuss with the board the current projections for Thank you. Thank you. and as we go through the dividend discussion in our next quarter with the board, we'll evaluate the current projections for this quarter and for the next several quarters and go through the same discussion we do each quarter. It's a quarterly discussion based on, you know, not just that quarter but the year anticipated and expected returns.

Okay.

Next question is, this is probably impossible, but you have an outside manager of which you pay a considerable fee to, and I understand that, but that is taking a larger and larger percentage of income.

Is it possible to internalize management?

I'm sorry, is it possible for, can you, I missed the last part.

Internalized management.

To lower the fee?

No, well.

Internalized. Internalized.

Both, actually. Thanks for bringing that up. Lower the fee and internalized management. Both ways would save money, of course.

Yeah, well, I don't think that that is likely, but what I would point out, I think internalizing management would would actually increase fees. There's a cap on reimbursable fees and expenses that a standalone public company of this size would likely go beyond, but there's currently no plans to internalize the manager.

Okay. I'm not quite sure. It seems like a fairly simple business.

But maybe I'm wrong.

One last question has to do with stock trade. So at the end of June, I think it was the day before they went ex-dividend, there was a 5 million share print at the end of the day, which is, as you know, massive. and in fact a year ago, approximately the same time, there was also 5 million share print and I was surprised that there was no reporting of this. Can you shed any light on that? I'm sure you're aware of it.

Yeah, I can answer that, Jim. Yeah, go ahead. We, LFT, a year ago, a little over a year ago at this point, as you point out, there was a big print at the end of June. LFT had been added to the FTSE Russell 3000. So what you saw a year ago in change and what you saw this past June was the effects of any actually from that rebalancing and index funds that were indexing to the Russell 3000 that we were in. Yeah, that explains that big print June of 25 when LFT was added. And when LFT was pulled out, that became effective at the close of business on that day that you saw the big print. So there was a lot of activity that day as well.

Okay, great. That answers that question. I had no idea they were removed. Okay. Thanks so much. Good luck with the future.

Thank you.

Thank you. There are no further questions at this time. Please proceed with the closing remarks.

I want to thank our investors for joining today.

Again, for your patience. Appreciate the questions and feedback and support. And we'll continue to work to improve the earnings profile and increase our – with intent to increase our trading price relative to book value.

Thank you all, and we'll speak next quarter.

Ladies and gentlemen, the conference has now ended. Thank you all for joining. You may now disconnect your lines.