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cmct-20220809

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): August 9, 2022

Commission File Number 1-13610

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION

(Exact name of registrant as specified in its charter)

Maryland

75-6446078

(State or Other Jurisdiction of
Incorporation or Organization)

(I.R.S. Employer
Identification No.)

17950 Preston Road, Suite 600, Dallas, TX 75252

(972) 349-3200

(Address of Principal Executive Offices)

(Registrant's telephone number)

None

(Former name or former address, if changed since last report)

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

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

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

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

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

Securities Registered Pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.001 Par Value

CMCT

Nasdaq Global Market

Common Stock, $0.001 Par Value

CMCT-L

Tel Aviv Stock Exchange

Series L Preferred Stock, $0.001 Par Value

CMCTP

Nasdaq Global Market

Series L Preferred Stock, $0.001 Par Value

CMCTP

Tel Aviv Stock Exchange

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

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Item 2.02 Results of Operations and Financial Condition

On August 9, 2022, Creative Media & Community Trust Corporation (the “Company”) issued a press release announcing its financial results for the period ended June 30, 2022. A copy of the press release is attached to this Form 8-K as Exhibit 99.1 and is incorporated by reference herein.

The information in this Item 2.02 and Exhibit 99.1 are being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Effective August 10, 2022, Barry Berlin, 62, an Executive Vice President of the Company and the Chief Executive Officer and Chairman of the Board of the Company’s lending division, will assume the additional roles of Chief Financial Officer and Secretary of the Company. Nathan DeBacker, the prior Chief Financial Officer and Secretary of the Company, will focus on other responsibilities within CIM Group, the manager of the Company (including continuing as the Chief Financial officer of CIM Real Estate Finance Trust, Inc., a public non-listed REIT operated by an affiliate of CIM Group).

Mr. Berlin has been the Executive Vice President of the Company since October 2008 and was Chief Financial Officer of the Company’s predecessor from June 1993 to March 2014. He has been Chief Financial Officer of the Company’s wholly-owned subsidiary lending business since 1992 and has been the Chief Executive Officer and Chairman of the Board of Directors of that business since 2020. In addition, Mr. Berlin has served in various finance and accounting roles within CIM Group and its affiliates since 2017 and is currently a Managing Director of CIM Group, Chief Financial Officer of CIM Real Assets & Credit Fund, a closed-ended interval fund advised by an affiliate of CIM Group that is registered as an investment company under the Investment Company Act of 1940, as amended, and Chief Financial Officer of CIM Capital, LLC, the Company’s operator and an investment adviser registered with the Securities & Exchange Commission. Mr. Berlin earned a Bachelor of Science degree in Accounting from the University of Florida and is a certified public accountant. Mr. Berlin began his career in public accounting.

Mr. Berlin has no family relationship with any of the Company’s directors or executive officers. There is no arrangement or understanding between Mr. Berlin and any other person pursuant to which Mr. Berlin was appointed as Chief Financial Officer. Mr. Berlin has no direct or indirect material interest in any related party transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K under the Securities Act of 1933, as amended. Mr. Berlin’s current employment agreement with the Company will remain unchanged.

Item 7.01. Regulation FD Disclosure

A copy of the Company’s Q2 2022 Investor Presentation is attached to this Form 8-K as Exhibit 99.2 and is incorporated by reference herein. Additionally, the Company has posted a copy of the presentation on its Shareholder Relations page at www.creativemediacommunity.com.

The information in this Item 7.01 and Exhibit 99.2 are being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference into any filing of the Company under the Securities Act or the Exchange Act, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Item 9.01 Financial Statements and Exhibits.


Exhibit Number						Exhibit Description

99.1						Press Release dated August 9, 2022, regarding the Company's financial results for the quarter ended June 30, 2022.
99.2						Investor Presentation Q 2 2022.
104						Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURE

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 thereunto duly authorized.

CREATIVE MEDIA & COMMUNITY TRUST CORPORATION

Dated: August 9, 2022

By:

/s/ David Thompson

David Thompson

Chief Executive Officer

Document

Exhibit 99.1

Creative Media & Community Trust Corporation Reports 2022 Second Quarter Results

Dallas—(August 9, 2022) Creative Media & Community Trust Corporation (NASDAQ: CMCT and TASE: CMCT-L) (“we”, “our”, “CMCT”, or the “Company”), today reported operating results for the three and six months ended June 30, 2022.

Second Quarter 2022 Highlights

Real Estate Portfolio

•Stabilized office portfolio(1) was 87.2% leased.

•Executed 39,392 square feet of leases with terms longer than 12 months.

•Purchased a Jefferson Park, Los Angeles property for $5.7 million. The Company intends to develop approximately 114 residential units.

Financial Results

•Net loss attributable to common stockholders of $2.3 million, or $0.10 per diluted share.

•Funds from operations (“FFO”) attributable to common stockholders(3) was $2.6 million, or $0.11 per diluted share.

•Core FFO attributable to common stockholders(4) was $2.7 million, or $0.11 per diluted share.

Management Commentary

“Our second quarter was highlighted by increased leasing activity and a significant year over year increase in our FFO that was driven by improving results at our one hotel and a large reduction in our cost structure,” said David Thompson, Chief Executive Officer of Creative Media & Community Trust Corporation. “In August 2022, we signed a 20-year lease for approximately 18,000 square feet of retail space at our Beverly Hills office building, increasing the leased percentage at the property to over 90%.”

“CMCT is focused on investing in premier multifamily and creative office assets, and we have assembled an attractive development pipeline. We intend to leverage our distribution and development capabilities to execute on this pipeline using an asset-light approach, where we raise third party capital on an asset level basis, maintain a minority interest and earn a percentage of the profits.

We believe this is a compelling model for the Company that will contribute to strong returns on invested capital. We anticipate launching our first co-investment opportunity under this structure over the next few months.”

Second Quarter 2022 Results

Real Estate Portfolio

As of June 30, 2022, our real estate portfolio consisted of 17 assets, all of which were fee-simple properties, including one office property which the Company has an approximate 44% ownership interest through its investment in an unconsolidated joint venture. The portfolio included twelve office properties and three development sites (one being used as a parking lot), totaling approximately 1.4 million rentable square feet, and one 503-room hotel with an ancillary parking garage.

Financial Results

Net loss attributable to common stockholders was $2.3 million, or $0.10 per diluted share of common stock, for the three months ended June 30, 2022, compared to a net loss attributable to common stockholders of $4.2 million, or $0.28 per diluted share of common stock, for the same period in 2021.

FFO attributable to common stockholders(3) was $2.6 million, or $0.11 per diluted share of common stock, for the three months ended June 30, 2022, compared to $859,000, or $0.06 per diluted share of common stock, for the same period in 2021.

Core FFO attributable to common stockholders(4) was $2.7 million, or $0.11 per diluted share of common stock, for the three months ended June 30, 2022, compared to $1.0 million, or $0.06 per diluted share of common stock, for the same period in 2021. The increase in FFO and Core FFO is primarily attributable to an increase in office segment net operating income of $314,000, an increase in hotel segment net operating income of $3.2 million, a decrease in asset management fees of $1.3 million and a decrease in provision for

income taxes of $675,000, partially offset by a decrease in lending segment net operating income of $3.4 million and an increase in redeemable preferred stock dividends declared or accumulated of $540,000.

Segment Information

Our reportable segments during the three months ended June 30, 2022 and 2021 consisted of two types of commercial real estate properties, namely, office and hotel, as well as a segment for our lending business. Total Segment net operating income (“NOI”)(5) was $12.8 million for the three months ended June 30, 2022, compared to $12.6 million for the same period in 2021.

Office

Same-Store

Same-store(2) office Segment NOI(5) was $7.4 million for both the three months ended June 30, 2022 and 2021, while same-store(1) office Cash NOI(6) increased to $7.0 million for the three months ended June 30, 2022 compared to $6.9 million in the same period in 2021.

At June 30, 2022, the Company’s same-store(2) office portfolio was 78.3% occupied, an increase of 30 basis points year-over-year on a same-store(2) basis, and 79.1% leased, an increase of 40 basis points year-over-year on a same-store(2) basis. The annualized rent per occupied square foot(7) on a same-store(2) basis was $54.83 at June 30, 2022 compared to $52.32 at June 30, 2021. During the three months ended June 30, 2022, the Company executed 39,392 square feet of leases with terms longer than 12 months at our same-store(2) office portfolio.

Total

Office Segment NOI(5) increased to $7.9 million for the three months ended June 30, 2022, from $7.6 million for the same period in 2021. The increase is primarily due to income from the Company’s unconsolidated joint venture entity which is included in non-same-store office net operating income. The Company made its investment in the unconsolidated joint venture, which owns an office property and multifamily development site in Los Angeles, California, during the first quarter of 2022.

Hotel

Hotel Segment NOI(5) increased to income of $3.2 million for the three months ended June 30, 2022, from a loss of $2,000 for the same period in 2021, due to an increase in occupancy and average daily rate as a result of the hospitality industry recovering from the impact of COVID-19.


	Three Months Ended June 30,
	2022			2021
Occupancy	77.5		%	47.7		%
Average daily rate(a)	$	175.67		$	122.33
Revenue per available room(b)	$	136.09		$	58.31

______________________

(a)Calculated as trailing 3-month room revenue divided by the number of rooms occupied.

(b)Calculated as trailing 3-month room revenue divided by the number of available rooms.

Lending

Our lending segment primarily consists of our SBA 7(a) lending platform, which is a national lender that primarily originates loans to small businesses in the hospitality industry. Lending Segment NOI(5) was $1.7 million for the three months ended June 30, 2022, compared to $5.0 million for the same period in 2021. The decrease was primarily due to lower premium income as a result of lower loan sale volume and a reduction in the market premium achieved during the three months ended June 30, 2022, compared to the three months ended June 30, 2021. We expect lending revenue to be lower materially for the second half of 2022, when compared to the second half of 2021 because of lower loan origination volume compared to 2021, a year when the SBA temporarily increased guaranteed percentages for SBA 7(a) loan originations, decreased demand for variable rate loans in the current inflationary economic environment, which we believe tends to lead borrowers to seek fixed rate loan products, and lower revenue from servicing assets retained for servicing the government guaranteed portion of our loans due to expected increases in prepayment. These factors were partially offset by acceleration of income-recognition from any principal discounts recorded on our loans due to increased prepayment.

Debt and Equity

During the three months ended June 30, 2022, we issued 302,136 shares of Series A Preferred Stock for aggregate net proceeds of $6.9 million. In June 2022, we began conducting a continuous public offering with respect to our Series A1 Preferred stock. During the three months ended June 30, 2022, we issued 192,440 shares of Series A1 Preferred Stock for aggregate net proceeds of $4.4 million. Net proceeds represent gross proceeds offset by costs specifically identifiable to the offering of Series A Preferred Stock and Series A1 Preferred Stock, such as commissions, dealer manager fees and other offering fees and expenses. Additionally, during the three months ended June 30, 2022, we had net incremental borrowings of $15.0 million on our revolving credit facility.

In July 2022, we issued 1,305,492 shares of our Series A1 Preferred Stock for aggregate net proceeds of $29.9 million.

In May 2022, CMCT’s Board of Directors authorized a repurchase program of up to $10 million of the Company’s common stock. During the three months ended June 30, 2022, CMCT repurchased 41,374 shares at an average price of $7.32 per share.

Dividends

On June 10, 2022, we declared a quarterly cash dividend of $0.0850 per share of our common stock, which was paid on July 5, 2022 to stockholders of record at the close of business on June 20, 2022.

On June 10, 2022, we declared a quarterly cash dividend of $0.34375 per share of our Series A Preferred Stock for the third quarter of 2022, payable as follows: $0.114583 per share to be paid on August 15, 2022 to Series A Preferred Stockholders of record on August 5, 2022; $0.114583 per share to be paid on September 15, 2022 to Series A Preferred Stockholders of record on September 5, 2022; and $0.114583 per share to be paid on October 17, 2022 to Series A Preferred Stockholders of record on October 5, 2022.

On June 10, 2022, we declared a quarterly cash dividend of $0.375 per share of our Series A1 Preferred Stock for the second and third quarter of 2022, payable as follows: (1) with respect to the second quarter, $0.125 per share was paid on July 15, 2022 to Series A1 Preferred Stockholders of record on July 5, 2022 and (ii) with respect to the third quarter, $0.125 per share to be paid on August 15 , 2022 to Series A1 Preferred Stockholders of record on August 5, 2022; $0.125 per share to be paid on September 15, 2022 to Series A1 Preferred Stockholders of record on September 5, 2022; and $0.125 per share to be paid on October 17, 2022 to Series A1 Preferred Stockholders of record on October 5, 2022.

On June 10, 2022, we declared a quarterly cash dividend of $0.353125 per share of our Series D Preferred Stock for the third quarter of 2022, payable as follows: $0.117708 per share to be paid on August 15, 2022 to Series D Preferred Stockholders of record on August 5, 2022; $0.117708 per share to be paid on September 15, 2022 to Series D Preferred Stockholders of record on September 5, 2022; and $0.117708 per share to be paid on October 17, 2022 to Series D Preferred Stockholders of record on July 5, 2022.

Acquisitions

In February 2022, CMCT acquired 3101 S. Western in Jefferson Park, Los Angeles for $2.3 million. CMCT intends to entitle the property and develop approximately 45 residential units starting in 2023. In May 2022, CMCT acquired 3022 S Western, an adjacent site, for $5.7 million. CMCT intends to entitle the property and develop 114 residential units starting in 2024.

About the Data

Descriptions of certain performance measures, including Segment NOI, Cash NOI, FFO attributable to common stockholders, and Core FFO are provided below. Refer to the subsequent tables for reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure.

(1)Stabilized office portfolio: represents office properties where occupancy was not impacted by a redevelopment or repositioning during the period.

(2)Same-store properties: are properties that we have owned and operated in a consistent manner and reported in our consolidated results during the entire span of the periods being reported. We excluded from our same-store property set this quarter any properties (i) acquired on or after April 1, 2021; (ii) sold or otherwise removed from our consolidated financial statements on or before June 30, 2022; or (iii) that underwent a major repositioning project we believed significantly affected its results at any point during the period commencing on April 1, 2021 and ending on June 30, 2022. When determining our same-store properties as of June 30, 2022, one property was excluded pursuant to (i) and (iii) above and no properties were excluded pursuant to (ii) above.

(3)FFO attributable to common stockholders: represents net income (loss) attributable to common stockholders, computed in accordance with GAAP, which reflects the deduction of redeemable preferred stock dividends accumulated, excluding gain (or loss) from sales of real estate, impairment of real estate, and real estate depreciation and amortization. We calculate FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts (the “NAREIT”).

See ‘Core FFO’ definition below for discussion of the benefits and limitations of FFO as a supplemental measure of operating performance.

(4)Core FFO attributable to common stockholders (“Core FFO”): represents FFO attributable to common stockholders (computed as described above), excluding gain (loss) on early extinguishment of debt, redeemable preferred stock deemed dividends, redeemable preferred stock redemptions, gain (loss) on termination of interest rate swaps, and transaction costs.

We believe that FFO is a widely recognized and appropriate measure of the performance of a REIT and that it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. In addition, we believe that Core FFO is a useful metric for securities analysts, investors and other interested parties in the evaluation of our Company as it excludes from FFO the effect of certain amounts that we believe are non-recurring, are non-operating in nature as they relate to the manner in which we finance our operations, or transactions outside of the ordinary course of business.

Like any metric, FFO and Core FFO should not be used as the only measure of our performance because it excludes depreciation and amortization and captures neither the changes in the value of our real estate properties that result from use or market conditions nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of our properties, and Core FFO excludes amounts incurred in connection with non-recurring special projects, prepaying or defeasing our debt, repurchasing our preferred stock, and adjusting the carrying value of our preferred stock classified in temporary equity to its redemption value, all of which have real economic effect and could materially impact our operating results. Other REITs may not calculate FFO and Core FFO in the same manner as we do, or at all; accordingly, our FFO and Core FFO may not be comparable to the FFOs and Core FFOs of other REITs. Therefore, FFO and Core FFO should be considered only as a supplement to net income (loss) as a measure of our performance and should not be used as a supplement to or substitute measure for cash flows from operating activities computed in accordance with GAAP. FFO and Core FFO should not be used as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends. FFO and Core FFO per share for the year-to-date period may differ from the sum of quarterly FFO and Core FFO per share amounts due to the required method for computing per share amounts for the respective periods. In addition, FFO and Core FFO per share is calculated independently for each component and may not be additive due to rounding.

(5)Segment NOI: for our real estate segments represents rental and other property income and expense reimbursements less property related expenses and excludes non-property income and expenses, interest expense, depreciation and amortization, corporate related general and administrative expenses, gain (loss) on sale of real estate, gain (loss) on early extinguishment of debt, impairment of real estate, transaction costs, and benefit (provision) for income taxes. For our lending segment, Segment NOI represents interest income net of interest expense and general overhead expenses. See ‘Cash NOI’ definition below for discussion of the benefits and limitations of Segment NOI as a supplemental measure of operating performance.

(6)Cash NOI: for our real estate segments, represents Segment NOI adjusted to exclude the effect of the straight lining of rents, acquired above/below market lease amortization and other adjustments required by generally accepted accounting principles (“GAAP”). For our lending segment, there is no distinction between Cash NOI and Segment NOI. We also evaluate the operating performance and financial results of our operating segments using cash basis NOI excluding lease termination income, or “Cash NOI excluding lease termination income”.

Segment NOI and Cash NOI are not measures of operating results or cash flows from operating activities as measured by GAAP and should not be considered alternatives to income from continuing operations, or to cash flows as a measure of liquidity, or as an indication of our performance or of our ability to pay dividends. Companies may not calculate Segment NOI or Cash NOI in the same manner. We consider Segment NOI and Cash NOI to be useful performance measures to investors and management because, when compared across periods, they reflect the revenues and expenses directly associated with owning and operating our properties and the impact to operations from trends in occupancy rates, rental rates and operating costs, providing a perspective not immediately apparent from income from continuing operations. Additionally, we believe that Cash NOI is helpful to investors because it eliminates straight line rent and other non-cash adjustments to revenue and expenses.

(7)Annualized rent per occupied square foot: represents gross monthly base rent under leases commenced as of the specified periods, multiplied by twelve. This amount reflects total cash rent before abatements. Where applicable, annualized rent has been grossed up by adding annualized expense reimbursements to base rent. Annualized rent for certain office properties includes rent attributable to retail.

FORWARD-LOOKING STATEMENTS

This press release contains certain “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 (the “Exchange Act”), which are intended to be covered by the safe harbors created thereby. Such forward-looking statements can be identified by the use of forward-looking terminology such as “may,” “will,” “project,” “target,” “expect,” “intend,” “might,” “believe,” “anticipate,” “estimate,” “could,” “would,” “continue,” “pursue,” “potential,” “forecast,” “seek,” “plan,” or “should,” or “goal” or the negative thereof or other variations or similar words or phrases. Such forward-looking statements include, among others, statements about CMCT’s plans and objectives relating to future growth and outlook. Such forward-looking statements are based on particular assumptions that management of CMCT has made in light of its experience, as well as its perception of expected future developments and other factors that it believes are appropriate under the circumstances. Forward-looking statements are necessarily estimates reflecting the judgment of CMCT’s management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. These risks and uncertainties include those associated with (i) the scope, severity and duration of the current pandemic of COVID-19, and actions taken to contain the pandemic or mitigate its impact,(ii) the adverse effect of COVID-19 on the financial condition, results of operations, cash flows and performance of CMCT and its tenants and business partners, the real estate market and the global economy and financial markets, among others, (iii) the timing, form, and operational effects of CMCT’s development activities, (iv) the ability of CMCT to raise in place rents to existing market rents and to maintain or increase occupancy levels, (v) fluctuations in market rents, including as a result of COVID-19, (vi) the effects of inflation and higher interest rates on the operations and profitability of CMCT and (vii) general economic, market and other conditions. Additional important factors that could cause CMCT’s actual results to differ materially from CMCT’s expectations are discussed under the section “Risk Factors” in CMCT’s Annual Report on Form 10-K for the year ended December 31, 2021. The forward-looking statements included herein are based on current expectations and there can be no assurance that these expectations will be attained. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond CMCT’s control. Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could be inaccurate and, therefore, there can be no assurance that the forward-looking statements included herein will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by CMCT or any other person that CMCT’s objectives and plans will be achieved. Readers are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date they are made. CMCT does not undertake to update them to reflect changes that occur after the date they are made.

For Creative Media & Community Trust Corporation

Media Relations:

Bill Mendel, 212-397-1030

bill@mendelcommunications.com

Shareholder Relations:

Steve Altebrando, 646-652-8473
shareholders@cimcommercial.com

CREATIVE MEDIA & TRUST CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

(Unaudited and in thousands, except share and per share amounts)


	June 30, 2022		December 31, 2021
ASSETS
Investments in real estate, net	$	502,607	$	497,984
Investment in unconsolidated entity - at fair value	22,788		—
Cash and cash equivalents	16,480		22,311
Restricted cash	11,208		11,340
Loans receivable, net	68,540		73,543
Accounts receivable, net	3,353		3,396
Deferred rent receivable and charges, net	36,474		36,095
Other intangible assets, net	4,812		5,251
Loan servicing asset, net and other assets	11,483		10,946

TOTAL ASSETS	$	677,745	$	660,866
LIABILITIES, REDEEMABLE PREFERRED STOCK, AND EQUITY
LIABILITIES:
Debt, net	$	207,816	$	201,145
Accounts payable and accrued expenses	19,195		26,751
Intangible liabilities, net	108		237
Due to related parties	7,013		4,541
Other liabilities	20,471		16,861

Total liabilities	254,603		249,535
COMMITMENTS AND CONTINGENCIES
REDEEMABLE PREFERRED STOCK: Series A cumulative redeemable preferred stock, $0.001 par value; 36,000,000 shares authorized; 1,565,703 and 1,565,703 shares issued and outstanding, respectively, as of June 30, 2022 and 1,633,965 and 1,631,965 shares issued and outstanding, respectively, as of December 31, 2021; liquidation preference of $25.00 per share, subject to adjustment	36,136		37,782
EQUITY:
Series A cumulative redeemable preferred stock, $0.001 par value; 36,000,000 shares authorized; 7,254,635 and 6,893,774 shares issued and outstanding, respectively, as of June 30, 2022 and 6,492,632 and 6,271,337 shares issued and outstanding, respectively, as of December 31, 2021; liquidation preference of $25.00 per share, subject to adjustment	172,176		156,431
Series A1 cumulative redeemable preferred stock, $0.001 par value; 28,000,000 shares authorized; 192,440 shares issued and outstanding as of June 30, 2022 and no shares issued or outstanding as of December 31, 2021; liquidation preference of $25.00 per share, subject to adjustment	4,770		—
Series D cumulative redeemable preferred stock, $0.001 par value; 27,000,000 shares authorized; 56,857 shares issued and outstanding as of June 30, 2022 and 56,857 shares issued and outstanding as of December 31, 2021; liquidation preference of $25.00 per share, subject to adjustment	1,396		1,396
Series L cumulative redeemable preferred stock, $0.001 par value; 9,000,000 shares authorized; 8,080,740 and 5,387,160 shares issued and outstanding, respectively, as of June 30, 2022 and December 31, 2021; liquidation preference of $28.37 per share, subject to adjustment	152,834		152,834
Common stock, $0.001 par value; 900,000,000 shares authorized; 23,358,941 shares issued and outstanding as of June 30, 2022 and 23,369,331 shares issued and outstanding as of December 31, 2021.	24		24
Additional paid-in capital	864,602		866,746

Distributions in excess of earnings	(809,157)		(804,227)
Total stockholders’ equity	386,645		373,204
Noncontrolling interests	361		345
Total equity	387,006		373,549
TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK, AND EQUITY	$	677,745	$	660,866

CREATIVE MEDIA & TRUST CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations

(Unaudited and in thousands, except per share amounts)


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
REVENUES:
Rental and other property income	$	14,194	$	13,309	$	28,290	$	26,658
Hotel income	9,107		3,130		16,511		4,862
Interest and other income	3,102		6,234		6,384		10,032
Total Revenues	26,403		22,673		51,185		41,552
EXPENSES:
Rental and other property operating	12,731		9,115		24,223		17,405
Asset management and other fees to related parties	920		2,260		1,841		4,519
Expense reimbursements to related parties—corporate	526		454		948		1,059
Expense reimbursements to related parties—lending segment	604		433		1,073		1,164
Interest	2,403		2,673		4,573		5,305
General and administrative	1,253		1,146		3,068		3,768

Depreciation and amortization	4,974		5,069		9,978		10,106


Total Expenses	23,411		21,150		45,704		43,326
Income from unconsolidated entity	260		—		380		—

INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES	3,252		1,523		5,861		(1,774)
Provision for income taxes	321		996		628		1,370
NET INCOME (LOSS)	2,931		527		5,233		(3,144)
Net (income) loss attributable to noncontrolling interests	(9)		3		(14)		4
NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY	2,922		530		5,219		(3,140)
Redeemable preferred stock dividends declared or accumulated	(5,161)		(4,621)		(10,179)		(9,087)
Redeemable preferred stock deemed dividends	(4)		(106)		(19)		(163)
Redeemable preferred stock redemptions	(106)		(13)		(181)		(26)
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(2,349)	$	(4,210)	$	(5,160)	$	(12,416)
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS PER SHARE:
Basic	$	(0.10)	$	(0.28)	$	(0.22)	$	(0.83)
Diluted	$	(0.10)	$	(0.28)	$	(0.22)	$	(0.83)
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING:
Basic	23,353		15,102		23,351		14,956
Diluted	23,353		15,102		23,351		14,956

CREATIVE MEDIA & TRUST CORPORATION AND SUBSIDIARIES

Funds from Operations

(Unaudited and in thousands, except per share amounts)


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Numerator:
Net loss attributable to common stockholders	$	(2,349)	$	(4,210)	$	(5,160)	$	(12,416)
Depreciation and amortization	4,974		5,069		9,978		10,106


FFO attributable to common stockholders	$	2,625	$	859	$	4,818	$	(2,310)
Redeemable preferred stock dividends declared on dilutive shares (a)	2,294		—		11		(1)
Diluted FFO attributable to common stockholders	$	4,919	$	859	$	4,829	$	(2,311)
Denominator:
Basic weighted average shares of common stock outstanding	23,353		15,102		23,351		14,956
Effect of dilutive securities—contingently issuable shares (a)	21,255		13		70		—
Diluted weighted average shares and common stock equivalents outstanding	44,608		15,115		23,421		14,956
FFO attributable to common stockholders per share:
Basic	$	0.11	$	0.06	$	0.21	$	(0.15)
Diluted	$	0.11	$	0.06	$	0.21	$	(0.15)

______________________

(a)For the three and six months ended June 30, 2022 and 2021, the effect of certain shares of redeemable preferred stock were excluded from the computation of diluted FFO attributable to common stockholders and the diluted weighted average shares and common stock equivalents outstanding as such inclusion would be anti-dilutive.

CREATIVE MEDIA & TRUST CORPORATION AND SUBSIDIARIES

Core Funds from Operations

(Unaudited and in thousands, except per share amounts)


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Numerator:
Net loss attributable to common stockholders	$	(2,349)	$	(4,210)	$	(5,160)	$	(12,416)
Depreciation and amortization	4,974		5,069		9,978		10,106


FFO attributable to common stockholders	$	2,625	$	859	$	4,818	$	(2,310)

Redeemable preferred stock redemptions	106		13		181		26
Redeemable preferred stock deemed dividends	4		106		19		163


Core FFO attributable to common stockholders	$	2,735	$	978	$	5,018	$	(2,121)
Redeemable preferred stock dividends declared on dilutive shares (a)	2,312		—		1,823		(1)
Diluted Core FFO attributable to common stockholders	$	5,047	$	978	$	6,841	$	(2,122)
Denominator:
Basic weighted average shares of common stock outstanding	23,353		15,102		23,351		14,956
Effect of dilutive securities-contingently issuable shares (a)	21,410		13		8,699		—
Diluted weighted average shares and common stock equivalents outstanding	44,763		15,115		32,050		14,956
Core FFO attributable to common stockholders per share:
Basic	$	0.12	$	0.06	$	0.21	$	(0.14)
Diluted	$	0.11	$	0.06	$	0.21	$	(0.14)

______________________

(a)For the three and six months ended June 30, 2022 and 2021, the effect of certain shares of redeemable preferred stock were excluded from the computation of diluted Core FFO attributable to common stockholders and the diluted weighted average shares and common stock equivalents outstanding as such inclusion would be anti-dilutive.

CREATIVE MEDIA & TRUST CORPORATION AND SUBSIDIARIES

Reconciliation of Net Operating Income

(Unaudited and in thousands)


	Three Months Ended June 30, 2022
	Same-Store Office		Non-Same-Store Office		Total Office		Hotel		Lending		Total



Cash net operating income (loss)	$	6,996	$	388	$	7,384	$	3,249	$	1,689	$	12,322
Deferred rent and amortization of intangible assets, liabilities, and lease inducements	446		70		516		(2)		—		514

Straight line lease termination income	—		—		—		—		—		—
Segment net operating income (loss)	7,442		458		7,900		3,247		1,689		12,836

Asset management and other fees to related parties											(920)
Expense reimbursements to related parties—corporate											(526)
Interest expense											(2,284)
General and administrative											(880)

Depreciation and amortization											(4,974)



Income before benefit for income taxes											3,252
Provision for income taxes											(321)
Net income											2,931
Net loss attributable to noncontrolling interests											(9)
Net income attributable to the Company											$	2,922


	Three Months Ended June 30, 2021
	Same-Store Office		Non-Same-Store Office		Total Office		Hotel		Lending		Total



Cash net operating income	$	6,895	$	141	$	7,036	$	—	$	5,047	$	12,083
Deferred rent and amortization of intangible assets, liabilities, and lease inducements	391		3		394		(2)		—		392

Straight line lease termination income	156		—		156		—		—		156
Segment net operating income (loss)	7,442		144		7,586		(2)		5,047		12,631
Interest and other income											1
Asset management and other fees to related parties											(2,260)
Expense reimbursements to related parties—corporate											(454)
Interest expense											(2,491)
General and administrative											(835)

Depreciation and amortization											(5,069)



Income before benefit for income taxes											1,523
Benefit for income taxes											(996)
Net income											527
Net income attributable to noncontrolling interests											3
Net income attributable to the Company											$	530

cmct-q22022quarterlypres

Creative Media & Community Trust August 2022Investor Presentation

www.cimgroup.com | ©2018 CIM Group | TRADE SECRET / CONFIDENTIAL INFORMATIONwww.creativemediacommunity.com | ©2022 CMCT | CMCT Creative Media & Community Trust Corporation 3 Note: All pages of the presentation must be viewed in conjunction with the Important Disclosures starting on page 31. See “Property Pictures” on page 31 under Important Disclosures. Important Disclosures Forward-looking Statements The information set forth herein contains certain "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 (the "Exchange Act"), which are intended to be covered by the safe harbors created thereby. Such forward-looking statements include the timing and terms of the rights offering and the future activities and performance of CMCT, and may be identified by the use of forward-looking terminology such as "may," "will," "project," "target," "expect," "intend," "might," "believe," "anticipate," "estimate," "could," "would," "continue," "pursue," "potential," "forecast," "seek," "plan," “opportunity,” "should", or "goal" or the negative thereof or other variations or similar words or phrases. Such forward-looking statements also include, among others, statements about CMCT's plans and objectives relating to future growth and outlook. Such forward-looking statements are based on particular assumptions that management of CMCT has made in light of its experience, as well as its perception of expected future developments and other factors that it believes are appropriate under the circumstances. Forward-looking statements are necessarily estimates reflecting the judgment of CMCT's management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. These risks and uncertainties include those associated with (i) the scope, severity and duration of the current pandemic of COVID-19, and actions taken to contain the pandemic or mitigate its impact, and the winding down or termination of government assistance programs implemented to address the pandemic, (ii) the adverse effect of COVID-19 on the financial condition, results of operations, cash flows and performance of CMCT and its tenants and business partners, the real estate market and the global economy and financial markets, among others, (iii) the timing, form, and operational effects of CMCT's development activities, (iv) the ability of CMCT to raise in place rents to existing market rents and to maintain or increase occupancy levels, (v) fluctuations in market rents, including as a result of COVID-19, (vi) the effect of inflation and higher interest rates on the operations and profitability of CMCT and (vii) general economic, market and other conditions. Additional important factors that could cause CMCT's actual results to differ materially from CMCT's expectations are discussed under the section "Risk Factors" in CMCT's Annual Report on Form 10-K for the year ended December 31, 2021. The forward-looking statements included herein are based on current expectations and there can be no assurance that these expectations will be attained. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond CMCT's control. Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could be inaccurate and, therefore, there can be no assurance that the forward-looking statements included herein will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by CMCT or any other person that CMCT's objectives and plans will be achieved. Readers are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date they are made. CMCT does not undertake to update them to reflect changes that occur after the date they are made, except as may be required by applicable law.

www.cimgroup.com | ©2018 CIM Group | TRADE SECRET / CONFIDENTIAL INFORMATIONwww.creativemediacommunity.com | ©2022 CMCT | CMCT Creative Media & Community Trust Corporation 30 Note: All pages of the presentation must be viewed in conjunction with the Important Disclosures starting on page 31. See “Property Pictures” on page 31 under Important Disclosures. Important Information - Debt and Preferred Summary 1. Excludes: (a) $6.2 million of secured borrowings – government guaranteed loans, which represent sold loans that are treated as secured borrowing because the loan sales did not meet the derecognition criteria provided for in ASC 860-30, Secured Borrowing and Collateral, and (b) premiums, discounts and debt issuance costs. 2. In May 2018, we completed a securitization of the unguaranteed portion of certain of our SBA 7(a) loans receivable with the issuance of $38.2 million of unguaranteed SBA 7(a) loan-backed notes. The SBA 7(a) loan-backed notes are collateralized by the right to receive payments and other recoveries attributable to the unguaranteed portions of certain of our SBA 7(a) loans receivable. The notes mature on March 20, 2043, with monthly payments due as payments on the collateralized loans are received. Based on the anticipated repayments of our collateralized SBA 7(a) loans, at issuance, we estimated the weighted average life of the notes to be approximately two years. 3. In June 2020, CMCT borrowed funds from the Federal Reserve through the Paycheck Protection Program Liquidity Facility (the “PPPLF”). Advances under the PPPLF carry an interest rate of 0.35%, are made on a dollar-for-dollar basis based on the amount of loans originated under the Paycheck Protection Program and are secured by loans made by CMCT under the Paycheck Protection Program. The maturity date of PPPLF borrowings is the same as the maturity date of the loans pledged to secure the extension of credit, generally two or five years. At maturity, both principal and accrued interest are due. 4. In October 2018, the Company entered into a secured revolving credit facility with a bank syndicate that, as amended, allows the Company to borrow up to $209.5 million, subject to a borrowing base calculation (the “2018 revolving credit facility”). The 2018 revolving credit facility bears interest at (A) the base rate plus 0.55% or (B) LIBOR plus 1.55%. As of June 30, 2022 and December 31, 2021, the variable interest rate was 3.72% and 2.15%, respectively. The 2018 revolving credit facility is also subject to an unused commitment fee of 0.15% or 0.25% depending on the amount of aggregate unused commitments. The 2018 revolving credit facility is secured by deeds of trust on certain of the Company’s properties. The 2018 revolving credit facility contains customary covenants and is not subject to any financial covenants (though the amount the Company may borrow under the 2018 revolving credit facility is determined by a borrowing base calculation). The 2018 revolving credit facility matures in October 2022 and provides for one one-year extension option under certain conditions, including providing notice of the election and paying an extension fee of 0.15% of each lender’s commitment being extended on the effective date of such extension. The Company is working with a bank to refinance the 2018 revolving credit facility prior to its maturity date. There can, however, be no assurance that such refinancing will occur. In the interim, in order to preserve flexibility with respect to the Company’s liquidity, the Company submitted an extension notice in July 2022 to extend the maturity of the 2018 Revolving Credit Facility to October 2023. The extension is subject to the satisfaction of certain conditions that the Company expects to be able to satisfy (if the refinancing does not occur). As of June 30, 2022, $75.0 million was outstanding under the 2018 revolving credit facility, and approximately $125.9 million was available for future borrowings. 5. Outstanding Series A1 Preferred Stock represents total shares issued as of June 30, 2022 of 192,440 multiplied by the stated value of $25.00 per share. Gross proceeds are not net of commissions, fees, allocated costs or discount. Dividends on Series A1 Preferred Stock are paid at a rate of the greater of (i) an annual rate of 6.0% (i.e., the equivalent of $0.3750 per share per quarter) and (ii) the Federal Funds (Effective) Rate for such quarter and plus 2.5% up to a maximum of 2.5% of the Series A1 Preferred Stock Stated Value per quarter. 6. Outstanding Series A Preferred Stock represents total shares issued as of June 30, 2022 of 8,820,338, less redemptions of 360,861 shares, multiplied by the stated value of $25.00 per share. Includes shares issued to CIM Group in lieu of cash payment of the asset management fee. Gross proceeds are not net of commissions, fees, allocated costs or discount. 7. Outstanding Series D Preferred Stock represents total shares issued as of June 30, 2022 of 56,857 multiplied by the stated value of $25.00 per share. Gross proceeds are not net of commissions, fees, allocated costs or discount. 8. Outstanding Series L Preferred Stock represents total shares outstanding as of June 30,, 2022 of 5,387,160, multiplied by the stated value of $28.37 per share. Gross proceeds are not net of commissions, fees, allocated costs or discount.

www.cimgroup.com | ©2018 CIM Group | TRADE SECRET / CONFIDENTIAL INFORMATIONwww.creativemediacommunity.com | ©2022 CMCT | CMCT Creative Media & Community Trust Corporation 31 Note: All pages of the presentation must be viewed in conjunction with the Important Disclosures starting on page 31. See “Property Pictures” on page 31 under Important Disclosures. Important Disclosures Annualized rent represents gross monthly base rent, or gross monthly contractual rent under parking and retail leases, multiplied by 12. This amount reflects total cash rent before abatements. Where applicable, annualized rent has been grossed up by adding annualized expense reimbursements to base rent. Annualized rent for certain office properties includes rent attributable to retail. Assets Owned and Operated (AOO) represents the aggregate assets owned and operated by CIM on behalf of partners (including where CIM contributes alongside for its own account) and co-investors, whether or not CIM has discretion, in each case without duplication. Investment-Level Returns represent the performance of an investment based on the equity contributed to the investment and distributed from the investment, provided that generally, (a) distributions resulting from debt proceeds or third party capital used to replace equity contributions are applied as a reduction in contributions and, accordingly, are not treated as distributions; (b) any entity-level debt is allocated to the investments and assumed to be investment-level debt, the significant effects of which are as follows: (i) equity contributed is reduced by the amount of assumed debt and (ii) equity distributed is reduced by the amount of repayments on such debt; (c) temporary (working capital) contributions may be treated as a reduction of total contributions in the period the capital is returned to the fund and (d) certain amounts re-contributed to an investment are deemed to be reductions in prior distributions rather than additional contributions; the effects of (a) - (d) are to reduce the amount of distributions and contributions. Deposits and other pre-closing cash outflows are generally assumed to be contributed to the investment at closing. Returns are calculated after taking into account investment-level costs, but before taking into account entity-level costs and expenses, organizational expenses, management fees and taxes, the effect of which is expected to be material. DISCLAIMERS. The results that an investor will realize will depend, to a significant degree, on the assets actually purchased by CMCT from time to time and the actual performance of such assets, which may be impacted by economic and market factors, including COVID-19. The actual performance of CMCT will be subject to a variety of risks and uncertainties, including those on slide 2. In no circumstance should the hypothetical returns be regarded as a representation, warranty or prediction that a specific investment or group of investments will reflect any particular performance or that it will achieve or is likely to achieve any particular result or that investors will be able to avoid losses, including total loss of their investments. Inherent in any investment is the potential for loss. There can be no assurance that CMCT will achieve comparable results, that the returns sought will be achieved or that CMCT will be able to execute its proposed strategy. Actual realized returns on investments may differ materially from any return indicated herein. Property Pictures. The property/properties shown may not be representative of all transactions of a given type or of investments generally, may represent an investment/investments that performed better than other investments made by CIM-funds, is not necessarily indicative of the performance of all such investments by CIM-funds and is intended solely to be illustrative of the types of investments that may be made by CMCT. There can be no assurance similar investment opportunities will be available to CMCT or that CMCT will generate similar returns. Logos. CIM Group is not affiliated with, associated with, or a sponsor of any of the tenants pictured or mentioned. The names, logos, and all related product and service names, design marks and slogans are the trademarks or service marks of their respective companies. The trade names shown are reflective of the tenants in properties owned by CMCT. Corporate tenants may also occupy numerous properties that are not owned by CMCT. CMCT is not affiliated or associated with, is not endorsed by, does not endorse, and is not sponsored by or a sponsor of the tenants or of their products or services pictured or mentioned. The names, logos and all related product and service names, design marks and slogans are the trademarks or service marks of their respective companies.

www.cimgroup.com | ©2018 CIM Group | TRADE SECRET / CONFIDENTIAL INFORMATIONwww.creativemediacommunity.com | ©2022 CMCT | CMCT Creative Media & Community Trust Corporation 32 Note: All pages of the presentation must be viewed in conjunction with the Important Disclosures starting on page 31. See “Property Pictures” on page 31 under Important Disclosures. Important Disclosures Capital Returned to Shareholders The amounts of regular and special cash dividends per share are based on the number of shares outstanding as of the applicable record dates. All amounts have been adjusted to give retroactive effect to the reverse stock split that occurred in 2019. Past performance is not indicative of future results. CMCT is the product of a merger (the “Merger”) between a subsidiary of CIM Urban REIT, LLC (“CIM REIT”), a fund operated by CIM Group, and PMC Commercial Trust (“PMC”), a publicly traded mortgage real estate investment trust, consummated in Q1 2014. Represents dividends paid on our common stock from January 1, 2014 through September 30, 2020. Excludes a special dividend paid to PMC Commercial Trust’s stockholders in connection with the Merger, but includes 2014 dividends received by CIM REIT stockholders prior to the Merger and dividends on convertible preferred stock received by Urban Partners II, LLC, an affiliate of CIM REIT and CIM Group, on an as converted basis, in the Merger. The per share equivalent in proceeds from CMCT’s June 2016 tender offer is $6.45, calculated by dividing $210,000,000, the amount used by CMCT to purchase shares of common stock of CMCT in the tender offer, by 32,558,732, the number of shares of common stock outstanding immediately prior to such tender offer, as adjusted to give retroactive effect to the reverse stock split that occurred in 2019. Funds From Operations (FFO) The Company believes that funds from operations (“FFO”), a non-GAAP measure, is a widely recognized and appropriate measure of the performance of a REIT and that it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. FFO represents net income (loss) attributable to common stockholders, computed in accordance with GAAP, which reflects the deduction of redeemable preferred stock dividends accumulated, excluding gains (or losses) from sales of real estate, impairment of real estate, and real estate depreciation and amortization. The Company calculates FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts (the “NAREIT”). Like any metric, FFO should not be used as the only measure of our performance because it excludes depreciation and amortization and captures neither the changes in the value of our real estate properties that result from use or market conditions nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of our properties, all of which have real economic effect and could materially impact our operating results. Other REITs may not calculate FFO in accordance with the standards established by the NAREIT; accordingly, our FFO may not be comparable to the FFOs of other REITs. Therefore, FFO should be considered only as a supplement to net income (loss) as a measure of our performance and should not be used as a supplement to or substitute measure for cash flows from operating activities computed in accordance with GAAP. FFO should not be used as a measure of our liquidity, nor is it indicative of funds available to fund CMCT's cash needs, including CMCT's ability to pay dividends. Adjusted Funds From Operations (AFFO) AFFO is a non-GAAP, non- standardized measure which is widely reported by REITs. Other REITs may use different methodologies for calculating AFFO and, as a result, CMCT's AFFO may not be comparable to the AFFO of other REITs. CMCT calculates AFFO by (a) eliminating the impact on FFO of (i) straight-line rent revenue and expense; (ii) amortization of lease inducements; (iii) amortization of above and below market leases (including ground leases); (iv) amortization of above and below market debt, loan premiums and discounts, and deferred loan costs; (v) amortization of tax abatement; (vi) amortization of loan receivable discount and accretion of fees on loans receivable; (vii) unrealized premium adjustment; (viii) deferred income tax expense; (ix) non-cash compensation expense; (x) loss on early extinguishment of debt; (xi) redeemable preferred stock redemptions; and (xii) redeemable preferred stock deemed dividends and (b) subtracting (i) lease inducement payments and (ii) recurring capital expenditures and recurring tenant improvements and leasing commissions. AFFO is not intended to represent cash flow but may provide additional perspective on CMCT's operating results and our ability to fund cash needs and pay dividends. AFFO should only be considered as a supplement to net income.