Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

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

In this Quarterly Report on Form 10-Q (this "Form 10-Q"), unless context otherwise requires, references to "we," "us," "our" or the "Company" refer to Belpointe PREP, LLC, its operating companies, Belpointe PREP OC, LLC, and Belpointe PREP TN OC, LLC (each an "Operating Company" and collectively, the "Operating Companies"), and each of the Operating Companies' direct and indirect subsidiaries, collectively.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and related notes appearing elsewhere in this Form 10-Q and our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2024 (our "Annual Report") filed with the U.S. Securities and Exchange Commission on March 31, 2025, a copy of which may be accessed here. As discussed in the section entitled "Forward-Looking Statements," the following discussion and analysis contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below, identified in the section entitled "Forward-Looking Statements," and those discussed in the section entitled "Risk Factors" included our Annual Report.

Overview

We are the only publicly traded qualified opportunity fund listed on a national securities exchange. We are a Delaware limited liability company formed on January 24, 2020, and a partnership for U.S. federal income tax purposes. We qualified as a qualified opportunity fund beginning with our taxable year ended December 31, 2020. Because we are a qualified opportunity fund certain of our investors are eligible for favorable capital gains tax treatment on their investments.

We are focused on identifying, acquiring, developing or redeveloping and managing properties in two operating segments: commercial and mixed-use real estate, in each case located within qualified opportunity zones. The commercial segment consists of properties such as office, retail centers, and warehouses (the "Commercial Segment"), and the mixed-use segment consists of properties that have both residential and retail spaces within a single real estate asset (the "Mixed-use Segment").

At least 90% of our assets consist of qualified opportunity zone property, and all of our assets are and will continue to be held by, and all of our operations are and will continue to be conducted through, one or more of our Operating Companies, either directly or indirectly through their subsidiaries. We are externally managed by Belpointe PREP Manager, LLC (our "Manager"), which is an affiliate of our sponsor, Belpointe, LLC (our "Sponsor"). Subject to the oversight of our board of directors (our "Board"), our Manager is responsible for managing our affairs on a day-to-day basis and for identifying and making acquisitions and investments on our behalf.

We are the successor in interest to Belpointe REIT, Inc., a Maryland corporation ("Belpointe REIT"), incorporated on June 19, 2018. During the year ended December 31, 2021, we acquired all of the outstanding shares of common stock of Belpointe REIT in an exchange offer and related conversion and merger transaction.

On May 9, 2023, the U.S. Securities and Exchange Commission (the "SEC") declared effective our registration statement on Form S-11, as amended (File No. 333-271262) (the "Follow-on Registration Statement"), registering the offer and sale of up to $750,000,000 of our Class A units on a continuous "best efforts" basis by any method deemed to be an "at the market" offering pursuant to Rule 415(a)(4) under the Securities Act of 1933, as amended (the "Securities Act"), including by offers and sales made directly to investors or through one or more agents (our "Follow-on Offering").

In connection with the Follow-on Registration Statement, we entered into a non-exclusive dealer manager agreement with Emerson Equity LLC (the "Dealer Manager"), a registered broker-dealer, for the sale of our Class A units through the Dealer Manager. The Dealer Manager enters into participating dealer agreements and wholesale agreements with other broker-dealers, referred to as "selling group members," to authorize those broker-dealers to solicit offers to purchase our Class A units. We pay our Dealer Manager commissions of up to 0.25%, and the selling group members commissions ranging from 0.25% to 4.50%, of the principal amount of Class A unit sold in the Follow-on Offering.

For the three and nine months ended September 30, 2025, we have sold aggregate gross proceeds of $4,380,590 and $8,403,711, respectively, of Class A units in connection with our Follow-on Offering. Together with the gross proceeds raised in our primary offering, which expired in 2024 (our "Primary Offering," and together with our Follow-on Offering, our "Public Offerings"), and the gross proceeds raised in Belpointe REIT's prior offerings, as of September 30, 2025, we have raised aggregate gross offering proceeds of $365.7 million.

The purchase price for Class A units in our Follow-on Offering is the lesser of (i) the net asset value ("NAV") of our Class A units, and (ii) the average of the high and low sale prices of our Class A units on the NYSE American (the "NYSE") during regular trading hours on the last trading day immediately preceding the investment date on which the NYSE was open for trading and trading in our Class A units occurred. Our Manager calculates our NAV within approximately 60 days of the last day of each quarter, and any adjustments take effect as of the first business day following its public announcement. On August 29, 2025, we announced that our NAV as of June 30, 2025 was equal to $116.74 per Class A unit.

Our Business Outlook

Market conditions for commercial and mixed-use properties in the geographic regions in which we operate have generally remained consistent over the past several quarters. However, future economic conditions and demand for commercial and mixed-use properties are, and the real estate industry in general is, subject to ongoing uncertainty as a result of a number of factors, including, among others, the rate of rent growth, rate of new construction, rate of absorption, the rate of unemployment, reductions in or cancellations of government programs and spending, fluctuating interest rates, higher rates of inflation, potentially higher costs associated with the development of our projects, the availability of credit, financial market volatility, uncertainty around the timing, magnitude and impact of tariffs and general political and economic uncertainty, increasing energy costs, supply chain disruptions and labor shortages. The potential effect of these and other factors and the projected impact of these and other events on our business, results of operations and financial performance, presents material uncertainty and risk with respect to our future performance and financial results, including the potential to negatively impact our costs of operations, our financing arrangements, the value of our investments, and the laws, regulations and governmental and regulatory policies applicable to us. As a result, our past performance may not be indicative of future results.

The One Big Beautiful Bill Act and Opportunity Zones 2.0

On July 4, 2025, the One Big Beautiful Bill Act (the "OBBBA") was enacted, making qualified opportunity zones a permanent feature of the U.S. federal income tax laws. Among other things, the OBBBA calls for the designation of new opportunity zones by state governors beginning on July 1, 2026 (and taking effect on January 1, 2027), and each 10-year period thereafter, and creates a new category of qualified opportunity funds, called the qualified rural opportunity fund, which will offer a 30% step-up in basis on deferred capital gains for qualifying investments.

The OBBBA also extends multiple other provisions of the 2017 Tax Cuts and Jobs Act and makes significant changes to various areas of the U.S. federal tax laws. We are currently in the early stages of evaluating the impact that the OBBBA may have on our future investment strategy, and you are urged to consult with your tax advisors with respect to the OBBBA and its potential effect on an investment in our Class A units.

Given the evolving nature of certain of these factors, the extent to which they may impact our future performance and financial results will depend on future developments which remain highly uncertain and, as a result, at this time we are unable to estimate the impact that these factors may have on our future financial results. Our Manager continuously reviews our investment and financing strategies for optimization and to reduce our risk in the face of the fluidity of these and other factors.

Our Investments

As of the date of this Form 10-Q, our investment portfolio consisted of the following commercial and mixed-use properties:

1991 Main Street - Sarasota, Florida ("Aster & Links") - 1991 Main Street ("1991 Main" or "Aster & Links") is a 5.13-acre mixed-use luxury development site in downtown Sarasota, Florida, which we acquired for an aggregate purchase price of $20.7 million, inclusive of transaction costs. In August 2023, we acquired an adjacent parcel that was previously subject to a ground lease for a purchase price of $4.9 million, inclusive of transaction costs. In July 2024, we also completed the redevelopment of 1900 Fruitville Road, a nearby 1.2-acre site which we acquired for an aggregate purchase price of $4.7 million, inclusive of transaction costs, to provide additional non-exclusive parking for Aster & Links' retail tenants, including Sprouts Farmers Market^® ("Sprouts").

During the year ended December 31, 2024, we substantially completed construction and began leasing at Aster & Links. The property comprises two distinct ten-story buildings with a total of 424 luxury residential units, including a mix of one-, two-, three-, and four-bedroom apartments, townhome-style penthouse residences, and six guest suites. The development also includes approximately 51,000 square feet of ground-floor retail space and more than 900 garage and surface-level parking spaces designed to accommodate both residents and retail customers.

In September 2025, we completed an approximately $204.1 million post-construction financing for Aster & Links, the proceeds of which were used to retire existing construction debt and will provide additional liquidity to support lease-up and stabilization. We expect the refinancing to generate annual interest savings of several million dollars over the term of the loans. See "-Our Investments-1991 Main Street - Sarasota Florida ("Aster & Links")-Aster & Links Mortgage and Mezzanine Loans" below for a more detailed discussion of the refinancing.

Aster & Links features an extensive suite of resident amenities, including a clubroom, fitness center, center courtyard with a heated saltwater pool and rooftop amenities such as a community room, a private dining area for events, and outdoor grills and seating. Each building contains its own leasing office to support new residents. As of October 31, 2025, Aster & Links was greater than 55% leased.

Sprouts occupies approximately 23,000 square feet of retail space at Aster & Links, and, together with other curated retail tenants, enhances the project's walkability and community activation. Situated in downtown Sarasota, at the intersection of Main Street and Links Avenue, Aster & Links is located in a high foot traffic area next to a number of popular retail establishments. Sarasota's metro area economy has historically been the largest of the southwest Florida markets and has experienced strong gains in jobs, population, and home values over the past few years. We believe that Aster & Links is well-positioned to be a premier residential and retail destination in the heart of what will continue to be a vibrant city.

Aster & Links Mortgage and Mezzanine Loans

On September 29, 2025, we, through our indirect majority-owned subsidiaries, BPOZ 1991 Main, LLC, a Delaware limited liability company ("BPOZ 1991 Main"), and BP Mezz 1991 Main, LLC, a Delaware limited liability company and holding company for BPOZ 1991 Main ("BP Mezz 1991 Main" and, together with BPOZ 1991 Main, the "Aster & Links Borrowers"), entered into a variable-rate mortgage loan agreement (the "Aster & Links Mortgage Loan Agreement") and variable-rate mezzanine loan agreement (the "Aster & Links Mezzanine Loan Agreement" and, together with the Aster & Links Mortgage Loan Agreement, and all other agreements and instruments executed by the Aster & Links Borrowers or the Company in connection therewith, the "Aster & Links Loan Agreements") with SM Finance III LLC, a Delaware limited liability company (the "SMF"), for up to approximately $204.1 million in aggregate principal amount (the "Aster & Links Loans" or "Aster & Links Refinance Transactions"), of which a total of approximately $172.8 million was advanced at the closing (the "Initial Advance"). The Aster & Links Loans bear interest at a fluctuating rate based on: (i) one-month term Secured Overnight Financing Rate ("SOFR"), subject to a 3.25% floor, plus (ii) a blended rate of 2.55%, require interest-only monthly payments during their term, and initially mature on October 11, 2027, with two one-year extensions exercisable at the Aster & Links Borrowers' election, but subject to SMF's approval based on certain terms and conditions set forth in the Aster & Links Loan Agreements.

We used approximately $165.8 million of the proceeds from the Initial Advance to extinguish our existing variable-rate construction loan with Bank OZK and mezzanine loan with Southern Realty Trust Holdings, LLC. The remaining proceeds from the Initial Advance and any proceeds from additional advances may be used to fund expenses that we incur or advance in connection with leasing the remaining non-residential space at Aster & Links, as well as for certain capital expenditures, and, subject to the terms and conditions set forth in the Aster & Links Loan Agreements, to fund up to an aggregate of $9.0 million in earnouts, and up to an aggregate of $9.0 million in approved debt service and carry expenses.

The Aster & Links Loans are secured by a first-priority mortgage on Aster & Links by BPOZ 1991 Main in favor of SMF, and a pledge by BP Mezz 1991 Main of all of its rights, title and interest in BPOZ 1991 Main to SMF. In addition, we have entered into a series of guaranty agreements in favor of SMF, whereby the Company, as guarantor, has guaranteed payment and performance of certain of the Aster & Links Borrowers' obligations under the Aster & Links Loan Agreements. The guaranty agreements also require, among other things, that we maintain certain net worth and liquid asset standards during the term of the Aster & Links Loans.

As of September 30, 2025, we have drawn down approximately $172.8 million under the Aster & Links Loans.

The foregoing description of the Aster & Links Mortgage Loan Agreement and Aster & Links Mezzanine Loan Agreement, are a summary, do not purport to be complete and are qualified in their entirety by reference to the Aster & Links Mortgage Loan Agreement and Aster & Links Mezzanine Loan Agreement, copies of which are filed as Exhibits 10.4 and 10.5, respectively, to this Quarterly Report on Form 10-Q.

Aster & Links Construction Management Agreement

During the year ended December 31, 2022, our indirect wholly-owned subsidiary entered into a construction management agreement for the development of Aster & Links (the "1991 Main CMA"). The 1991 Main CMA contains terms and conditions that are customary for a project of this type and is subject to a guaranteed maximum price (a "GMP"). We currently anticipate that the funding for construction and soft costs associated with the development will be a minimum of $180.2 million, inclusive of the GMP, and are building to an estimated unlevered yield of greater than 6%.

Aster & Links Interest Rate Caps

In connection with the Aster & Links Loans, the Borrowers have entered into interest rate cap agreements (the "Aster & Links Interest Rate Cap") with an aggregate notional amount of approximately $204.1 million and one-month term SOFR strike rate equal to 6.0% per annum, which Aster & Links Interest Rate Cap has been assigned to SMF pursuant to the terms of the Aster & Links Loans Agreements. The Aster & Links Interest Rate Cap will continue through October 15, 2027, and, pursuant to the terms of the Aster & Links Loan Agreement, must either be extended or the Borrowers must enter into a new interest rate cap agreement that extends through the date of any extensions granted by SMF.

1000 First Avenue North and 900 First Avenue North - St. Petersburg, Florida ("VIV") - 1000 First Avenue North, St. Petersburg, Florida ("1000 First" or "VIV") consists of several parcels, totaling approximately 1.6-acres, which we acquired for an aggregate purchase price of $12.1 million, inclusive of transaction costs. As of September 30, 2025, construction was approximately 97.7% complete. Leasing commenced in October 2025, and the first residential move-ins are scheduled to occur in November 2025. As of October 31, 2025, VIV was approximately 10% leased.

VIV consists of two 11-story residential towers above a four-story parking structure, containing 269 apartment homes with a mix of studio, one-, two-, and three-bedroom units, and approximately 15,500 square feet of ground-floor retail space. Amenities include a clubroom, fitness center, courtyard with a swimming pool, shared working space, and leasing office.

VIV is located in downtown St. Petersburg, one mile west of Tampa Bay and the downtown waterfront district, and one block from Tropicana Field, home of the Tampa Bay Rays. The property offers direct access to downtown amenities, including public parking, restaurants, museums, and cultural attractions.

St. Petersburg placed 46th on Niche's 2025 Best Cities to Live in America list, earning an Overall Niche Grade of "A." St. Petersburg is the 5th largest city in Florida and the 86th largest city in the United States and an annual population growth rate of approximately 0.6% in 2024. Downtown St. Petersburg is one of the fastest growing neighborhoods in the Tampa-St. Petersburg-Clearwater metropolitan statistical area ("MSA") and has experienced increased demand in recent years because of proximity to the water, sporting events, shopping, bars and restaurants in the neighborhood. The Tampa-St. Petersburg-Clearwater MSA is home to more than 19 corporate headquarters, 13 of which are on the 2024 edition of the Inc. 5000 (listing the fastest-growing private companies in America). The St. Petersburg area also includes a branch of St. Petersburg College and the University of South Florida St. Petersburg and is home to two professional sports teams, the Tampa Bay Rays (Major League Baseball) and the Tampa Bay Rowdies (United Soccer League Championship).

900 First Avenue North ("900 First") is a parcel of land containing a two-tenant retail building which we acquired for an aggregate purchase price of $2.5 million, inclusive of transaction costs. 900 First will remain a two-tenant retail building, and we have transferred the additional development rights to VIV.

VIV Construction Management Agreement

In April 2023, our indirect majority-owned subsidiary entered into a construction management agreement in connection with the development of VIV (the "1000 First CMA"). The 1000 First CMA contains terms and conditions that are customary for a project of this type and will be subject to a GMP of $141.1 million.

VIV Construction Loan

On June 28, 2024, our indirect majority-owned subsidiary entered into a variable-rate construction loan agreement (the "1000 First Construction Loan Agreement") for up to $104.0 million in principal amount (the "1000 First Construction Loan") with various lenders, which is secured by VIV. Advances under the 1000 First Construction Loan bear interest at a per annum rate equal to the one-month term SOFR plus 3.80%, subject to a minimum all-in per annum rate of 7.55% and may be used to fund the development of VIV. The 1000 First Construction Loan has an initial maturity date of June 28, 2027 and contains two one-year extension options, subject to certain restrictions. As of September 30, 2025, we have drawn down $73.9 million on the 1000 First Construction Loan. In addition, we have entered into a series of guaranty agreements which require, among other things, that we maintain certain net worth and liquid asset standards during the term of the 1000 First Construction Loan. The 1000 First Construction Loan is prepayable in whole or in part at any time with not less than 45 days' notice. Full prepayment is subject to an interest rate make-whole amount, if any, calculated as of the prepayment date.

VIV Interest Rate Cap

As required under the terms of the 1000 First Construction Loan Agreement, on June 26, 2025, our indirect majority-owned subsidiary entered into an interest rate cap agreement, effective July 1, 2025, with a notional amount of $104.0 million, a strike price of 6.25% and which is scheduled to mature on July 1, 2026.

1701, 1702 and 1710 Ringling Boulevard - Sarasota, Florida - 1701 Ringling Boulevard ("1701 Ringling") and 1710 Ringling Boulevard ("1710 Ringling") make up a 1.6-acre site, consisting of a six-story office building and a parking lot which we acquired for an aggregate purchase price of $7.0 million, inclusive of transaction costs. We currently anticipate that 1701 Ringling will be renovated into a modern office building, consisting of approximately 80,000 square feet of rentable space, with 1710 Ringling consisting of an approximately 128-space parking lot. Upon acquiring 1701 Ringling, we entered into a new lease agreement with the existing tenant covering approximately 42,000 square feet for an initial term of 20 years, and several lease extension options.

1702 Ringling Boulevard ("1702 Ringling" and, together with 1701 Ringling and 1710 Ringling, "1701-1710 Ringling") is a 0.327-acre site consisting of a fully-leased, single-story 1,546 gross square foot single-tenant office building and associated parking lot, which we acquired for an aggregate purchase price of $1.5 million, inclusive of transaction costs. We currently anticipate holding 1702 Ringling for future multifamily development.

1701-1710 Ringling is located within the historic downtown Sarasota area along Ringling Boulevard, a major two-way arterial road, with good access to the surrounding Sarasota market, as well as easy access to Interstate 75 and the greater Tampa-St Petersburg area. 1701-1710 Ringling is located in a high foot traffic area close to a number of popular restaurants and retail establishments.

497-501 Middle Turnpike and Cedar Swamp Road - Storrs, Connecticut - 497-501 Middle Turnpike ("497-501 Middle") is an approximately 60.0-acre site, consisting of approximately 30 acres of former golf course and approximately 30 acres of wetlands some of which includes walking trails. On June 28, 2022, through an indirect majority-owned subsidiary, we acquired a 70.2% controlling interest (the "CMC Interest") in CMC Storrs SPV, LLC ("CMC"), the holding company for 497-501 Middle, for an initial capital contribution of $3.8 million. As part of the transaction two unaffiliated joint venture partners (the "CMC JV Partners") were deemed to have made initial capital contributions to CMC. Following our acquisition of the CMC Interest, we discovered that one of the CMC JV Partners had misappropriated cash from the other's cash account. Accordingly, the CMC JV Partner forfeited $1.0 million, or 29.8%, of their noncontrolling interest in CMC on March 24, 2023. As a result of the forfeiture, we indirectly own a 100% controlling interest in CMC.

We currently anticipate 497-501 Middle will be developed into an approximately 261-apartment home community and an adjacent single-family home, with amenities that will include a leasing office, clubroom with a chef's kitchen, fitness center, game room, study/lounge area, meeting rooms, and an outside AstroTurf meadow.

Cedar Swamp Road ("Cedar Swamp Road") is a 1.1-acre site immediately adjacent to 497-501 Middle, which we acquired for a purchase price of $0.3 million, inclusive of transaction costs. We currently anticipate adding Cedar Swamp Road to the 497-501 Middle development.

497-501 Middle and Cedar Swamp Road are located less than a mile from the main college campus at the University of Connecticut ("UConn") in Storrs, Connecticut ("Storrs"), approximately 30 minutes from Hartford, Connecticut, and 90 minutes from Boston, Massachusetts. UConn ranked 32nd among "Top Public Schools" nationally in the 2025 U.S. New & World Report ("U.S. News") collegiate rankings, and, based on a fact sheet published by UConn, over 20,056 undergraduate students attended college at the Storrs campus in Fall 2024, with more than a third of a students living off campus.

900 8th Avenue South - Nashville, Tennessee - 900 8th Avenue South ("900 8th Avenue South") is a 3.2-acre land assemblage, which we acquired for an aggregate purchase price of $19.7 million, inclusive of transaction costs.

On June 26, 2024, we, through our indirect majority-owned subsidiary, 900 Eighth, LP, a Tennessee limited liability company ("900 Eighth"), entered into a fixed-rate loan for $10.0 million in principal amount with KHRE SMA Funding, LLC, which is secured by 900 8th Avenue South (the "900 8th Land Loan"). The 900 8th Land Loan bears interest at a rate of 9.50% per annum. In June 2025, we exercised the first six-month extension option on the 900 8th Land Loan, extending the maturity to January 2, 2026. One additional six-month extension option remains available, subject to certain conditions.

900 8th Avenue South is located in central Nashville at the north end of the 8th Avenue South District, within walking distance of a number of popular retail, dining and nightlife establishments in downtown Nashville. The parcels have received approval for a mixed-use development including residential, retail and office with a maximum of 300 residential multi-family units and a maximum of seven stories.

900 8th Purchase and Sale Agreement

On September 15, 2025, 900 Eighth entered into an Agreement for Purchase and Sale of Property (the "900 8th Purchase and Sale Agreement") with WP South Acquisitions, L.L.C., a Georgia limited liability company ("WP South"), for the sale of 900 8th Avenue South, together with all improvements thereon and rights to intangible personal property related thereto, for an aggregate purchase price of $19.3 million, subject to adjustment for any additional number of units that WP South is permitted and intends to construct in excess of the minimum number of units set forth in the 900 8th Purchase and Sale Agreement.

Under the terms and conditions of the 900 8th Purchase and Sale Agreement, the entitlement date will fall on January 13, 2026, subject to one 30-day discretionary extension by WP South (the "Entitlement Date"), the inspection date will fall 30 days after the Entitlement Date (the "Inspection Date") and, subject to the remaining customary terms and conditions set forth in the 900 8th Purchase and Sale Agreement, the anticipated closing of the sale will take place on the earlier of 180 days following the Inspection Date or any other closing date (the "Closing Date") chosen by WP South upon seven days prior written notice to 900 Eighth, with such Closing Date subject to three discretionary 30-day extensions by WP South. The 900 8th Purchase and Sale Agreement is also subject to certain customary representations, warranties and closing conditions.

WP South has posted a $150,000 earnest money deposit with an escrow agent (the "Earnest Money"), which Earnest Money is, and any deposits for extension by WP South are, non-refundable after the Inspection Date, except as otherwise provided in the 900 8th Purchase and Sale Agreement.

The foregoing description of the 900 8th Purchase and Sale Agreement, is a summary, does not purport to be complete and is qualified in its entirety by reference to the 900 8th Purchase and Sale Agreement, a copy of which is filed as Exhibit 10.3 to this Quarterly Report on Form 10-Q.

1700 Main Street - Sarasota, Florida - 1700 Main Street ("1700 Main") is a 1.3-acre site, consisting of a former gas station, a three-story office building with parking lot and a two-story retail building, which we acquired for an aggregate purchase price of $6.9 million, inclusive of transaction costs. We currently anticipate that 1700 Main will be redeveloped into an approximate 187-apartment home community consisting of one-bedroom, two-bedroom and three-bedroom units, with approximately 6,000 square feet of retail space located on the first two levels. We anticipate that 1700 Main will consist of a 10-story podium style building with a 3-story, 330-space garage and 7 stories of apartments above, including a clubroom, fitness center and courtyard with a swimming pool, as well as a leasing office.

U.S. News & World Report ranked Sarasota as the 59th best place to live in Florida for 2025-2026, and the 4th best place to retire in the United States. Sarasota is headquarters to a diverse group of large companies, such as Boar's Head Provisions, CAE Healthcare, Sun Hydraulics and Voalte. The Sarasota area also has a large number of universities including the University of Southern Florida, Florida State University's College of Medicine campus, Ringling College, State College of Florida, Keiser College and New College of Florida.

1700 Main is located in historic downtown Sarasota along Main Street and is located in a high foot traffic area next to a number of popular restaurants and retail establishments.

690/1106 Davidson Street - Nashville, Tennessee - 690/1106 Davidson Street ("690/1106 Davidson Street") is an approximately 8.0-acre site, consisting of two industrial buildings and associated parking, which we acquired for an aggregate purchase price of $21.0 million, inclusive of transaction costs. We currently anticipate that 690/1106 Davidson Street will be redeveloped into mixed-use residential community consisting of studio, one-bedroom, two-bedroom and three-bedroom apartments. The buildings will have a fitness center, game room, co-working spaces, outdoor heated saltwater swimming pool, riverfront courtyards and rooftop terraces as well as a leasing office. In September 2023, the parcels were successfully rezoned to accommodate medium to high density multi-family residential and a mix of other commercial uses including hotel, office, retail and restaurant.

1130 Davidson Street - Nashville, Tennessee - 1130 Davidson Street ("1130 Davidson Street") is an approximately 1.7-acre site consisting of a single-story, 10,000 square foot retail building and associated parking lot, which we acquired for an aggregate purchase price of $2.1 million, inclusive of transaction costs. In September 2023, the parcel was successfully rezoned to accommodate medium to high density multi-family residential and a mix of other commercial uses including hotel, office, retail and restaurant.

1400 Davidson Street - Nashville, Tennessee - 1400 Davidson Street ("1400 Davidson Street") is an approximately 5.9-acre site consisting of an industrial building, which we acquired for an aggregate purchase price of $16.4 million, inclusive of transaction costs. We currently anticipate that 1400 Davidson Street will be redeveloped into a mixed-use residential community consisting of studio, one-bedroom, two-bedroom and three-bedroom apartments. In September 2023, the parcel was successfully rezoned to accommodate medium to high density multi-family residential and a mix of other commercial uses including hotel, office, retail and restaurant.

Storrs Road - Storrs, Connecticut - Storrs Road ("Storrs Road") is a 9.0-acre parcel of land near UConn, which we acquired for an aggregate purchase price of $0.1 million, inclusive of transaction costs. We currently intend on holding Storrs Road for future multifamily development.

1750 Storrs Road - Storrs, Connecticut - 1750 Storrs Road ("1750 Storrs") is an approximately 19.0-acre development site near UConn, which we acquired for an aggregate purchase price of $5.5 million, inclusive of transaction costs.

We currently anticipate that 1750 Storrs will be developed into a multifamily mixed-use development, featuring one-bedroom, two-bedroom and three-bedroom apartments. Amenities are anticipated to include a clubhouse, with state-of-the-art fitness center, chef's kitchen and more.

901-909 Central Avenue North - St. Petersburg, Florida - 901-909 Central Avenue North ("901-909 Central Avenue") is a 0.13-acre site consisting of a single-story 5,328 gross square foot retail/office building comprised of 4 units located in St. Petersburg, Florida, which we acquired for an aggregate purchase price of $2.6 million, inclusive of transaction costs.

Segment Reporting

As a result of having placed Aster & Links into service and commencing operations in 2024, we revised our reportable segments into two distinct operating segments based on the way that we organize and evaluate our business internally: Commercial Segment and Mixed-use Segment. Our Commercial Segment includes properties such as office, retail centers, and warehouses, and our Mixed-use Segment includes properties that blend both residential and retail components within a single real estate asset.

Our Chief Executive Officer is our chief operating decision maker ("CODM"), and our CODM reviews our financial information on a segment basis for purposes of allocating resources, making decisions and assessing financial performance.

Segment Net Operating Income

We believe that analyzing net operating income (loss) ("NOI") at the segment level ("Segment NOI") provides a useful financial performance measure, because it reflects the core rental operations of our real estate assets. We calculate Segment NOI as rental revenue, less property expenses, excluding non-segment NOI ("Non-Segment NOI"). Non-Segment NOI includes corporate level items, such as management fees incurred to our Manager, general and administrative expenses, interest expense, depreciation and amortization, interest income and other non-operating items.

NOI is not a financial measure included in accounting principles generally accepted in the United States of America ("U.S. GAAP"), however it is widely used in the real estate industry as a measure of the operating performance of real estate assets. Notwithstanding its common usage, NOI should not be considered as an alternative to net income (loss), operating income (loss), or cash flow from operating activities as determined in accordance with U.S. GAAP. Our computation of NOI may differ from methods used by other companies, and therefore may not be comparable. A reconciliation of Segment NOI to the most directly comparable U.S. GAAP measure has been included below.

Results of Operations

Comparison of the Three Months Ended September 30, 2025 to the Three Months Ended September 30, 2024

The following table sets forth information regarding our results of Segment NOI, reconciled to our consolidated statement of operations, for the three months ended September 30, 2025 and 2024 (amounts in thousands):

		Three Months Ended September 30,
		2025												2024
		Commercial Segment				Mixed-use Segment				Total				Commercial Segment				Mixed-use Segment				Total
Segment NOI:
Rental revenue		$	204			$	2,178			$	2,382			$	275			$	585			$	860
Property expenses			(516	)			(2,450	)			(2,966	)			(362	)			(1,049	)			(1,411	)
Total Segment NOI		$	(312	)		$	(272	)		$	(584	)		$	(87	)		$	(464	)		$	(551	)
Non-segment items:
Management fees, included in Property expenses											(830	)											(672	)
General and administrative											(1,305	)											(921	)
Interest expense											(4,846	)											(3,331	)
Depreciation and amortization											(1,881	)											(1,464	)
Interest income											283												148
Other expense											(13	)											(133	)
Loss on extinguishment of debt											(2,960	)											-
Net loss											(12,136	)											(6,924	)
Net loss (income) attributable to noncontrolling interests											5												(4	)
Net loss attributable to Belpointe PREP, LLC										$	(12,131	)										$	(6,928	)

Segment NOI

Commercial Segment

During the three months ended September 30, 2025 as compared to the same period in 2024, Commercial Segment NOI decreased by $0.2 million, primarily due to higher real estate taxes and lower base rents resulting from tenant vacancies.

Mixed-use Segment

During the three months ended September 30, 2025 as compared to the same period in 2024, Mixed-use Segment NOI increased by $0.2 million. The increase in both rental revenues and property expenses relates to the continued stabilization of Aster & Links, which was in its initial lease-up phase during the prior year period. As a result, Mixed-use Segment NOI is not directly comparable from year to year.

Non-Segment NOI

Management Fees

Pursuant to the terms of a management agreement between us, our Operating Companies and our Manager (the "Management Agreement"), we pay our Manager a quarterly management fee in arrears of one-fourth of 0.75%. The management fee is based on our NAV at the end of each quarter. During the three months ended September 30, 2025 as compared to the same period in 2024, management fees increased by $0.2 million due to an increase in our NAV.

General and Administrative Expense

During the three months ended September 30, 2025 and 2024, general and administrative expenses primarily consisted of employee cost sharing expenses (pursuant to our Management Agreement and the employee and cost sharing agreement between us, our Operating Companies, our Manager and our Sponsor (the "Employee and Cost Sharing Agreement")), marketing expenses, legal, audit, tax and accounting fees. During the three months ended September 30, 2025, as compared to the same period in 2024, general and administrative expenses increased by $0.4 million primarily due to higher legal expenses.

Interest Expense

During the three months ended September 30, 2025 and 2024, interest expense totaled $4.8 million and $3.3 million, respectively, consisting of gross interest expense of $5.0 million and $4.5 million, respectively, and the impact of non-cash amortization of debt discount and debt issuance costs of $0.5 million and $0.7 million, respectively, partially offset by capitalized interest and fees of $0.7 million and $1.9 million, respectively. The increase in interest expense during the three months ended September 30, 2025 as compared to the same period in 2024, is primarily due to lower capitalized interest and fees.

Please see "Note 7- Debt, Net" in our consolidated financial statements in this Form 10-Q for additional information regarding our debt obligations.

Depreciation and Amortization

During the three months ended September 30, 2025 as compared to the same periods in 2024, depreciation and amortization increased by $0.4 million. This increase is primarily attributable to the impact of placing additional fixed assets in service at Aster & Links subsequent to September 30, 2024.

Interest Income

During the three months ended September 30, 2025 and 2024, interest income totaled $0.3 million and $0.1 million, respectively, and was comprised of interest earned from cash balances held in interest bearing bank accounts. The increase in interest income during the three months ended September 30, 2025 as compared to the same period in 2024, is primarily attributable to higher cash balances in interest bearing accounts.

Other expense

Other expense for the three months ended September 30, 2025 and 2024 was primarily comprised of losses in connection with our interest rate caps. Please see "Note 7- Debt, Net" and "Note 9 - Derivative Instruments" in our consolidated financial statements in this Form 10-Q for additional information regarding our interest rate caps.

Loss on extinguishment of debt

During the three months ended September 30, 2025, in connection with the Aster & Links Refinance Transaction, we recorded a loss on extinguishment of debt of $3.0 million, which includes a non-cash write off of unamortized deferred financing costs of $2.6 million. See "-Our Investments-1991 Main Street - Sarasota Florida ("Aster & Links")-Aster & Links Mortgage and Mezzanine Loans" above and "Note 7- Debt, Net" for a more detailed discussion of the Aster & Links Refinance Transactions.

Comparison of the Nine Months Ended September 30, 2025 to the Nine Months Ended September 30, 2024

The following table sets forth information regarding our results of Segment NOI, reconciled to our consolidated statement of operations, for the nine months ended September 30, 2025 and 2024 (amounts in thousands):

		Nine Months Ended September 30,
		2025												2024
		Commercial Segment				Mixed-use Segment				Total				Commercial Segment				Mixed-use Segment				Total
Segment NOI:
Rental revenue		$	718			$	5,405			$	6,123			$	844			$	737			$	1,581
Property expenses			(1,549	)			(6,440	)			(7,989	)			(849	)			(1,889	)			(2,738	)
Total Segment NOI		$	(831	)		$	(1,035	)		$	(1,866	)		$	(5	)		$	(1,152	)		$	(1,157	)
Non-segment items:
Management fees, included in Property expenses											(2,482	)											(2,037	)
General and administrative											(4,100	)											(3,667	)
Interest expense											(12,072	)											(5,757	)
Depreciation and amortization											(5,660	)											(2,389	)
Impairment of real estate											-												(777	)
Interest income											782												386
Other expense											(34	)											(224	)
Loss on extinguishment of debt											(2,960	)											-
Net loss											(28,392	)											(15,622	)
Net loss (income) attributable to noncontrolling interests											15												(8	)
Net loss attributable to Belpointe PREP, LLC										$	(28,377	)										$	(15,630	)

Segment NOI

Commercial Segment

During the nine months ended September 30, 2025 as compared to the same period in 2024, Commercial Segment NOI decreased by $0.8 million, primarily due to higher real estate taxes and lower base rents resulting from tenant vacancies.

Mixed-use Segment

During the nine months ended September 30, 2025 as compared to the same period in 2024, Mixed-use Segment NOI increased by $0.1 million. The increase in both rental revenues and property expenses relates to the continued stabilization of Aster & Links, which was in its initial lease-up phase during the prior year period. As a result, Mixed-use Segment NOI is not directly comparable from year to year.

Non-Segment NOI

Management Fees

Pursuant to our Management Agreement, we pay our Manager a quarterly management fee in arrears of one-fourth of 0.75%. The management fee is based on our NAV at the end of each quarter. During the nine months ended September 30, 2025 as compared to the same period in 2024, management fees increased by $0.4 million due to an increase in our NAV.

General and Administrative Expense

During the nine months ended September 30, 2025 and 2024, general and administrative expenses primarily consisted of employee cost sharing expenses (pursuant to our Management Agreement and Employee and Cost Sharing Agreement), marketing expenses, legal, audit, tax and accounting fees. During the nine months ended September 30, 2025, as compared to the same period in 2024, general and administrative expenses increased by $0.4 million primarily due to higher legal expenses as well as higher allocation of costs incurred by our Manager and its affiliates.

Interest Expense

During the nine months ended September 30, 2025 and 2024, interest expense totaled $12.1 million and $5.8 million, respectively, consisting of gross interest expense of $15.1 million and $8.8 million, respectively, and the impact of non-cash amortization of debt discount and debt issuance costs of $2.0 million and $1.5 million, respectively, partially offset by capitalized interest and fees of $5.0 million and $4.5 million, respectively. The increase in interest expense during the nine months ended September 30, 2025 as compared to the same period in 2024, is primarily due to a higher weighted average outstanding debt balance in the current year period as compared to the prior year period, as well as no longer capitalizing interest on properties that were under development during the prior year period.

Please see "Note 7- Debt, Net" in our consolidated financial statements in this Form 10-Q for additional information regarding our debt obligations.

Depreciation and Amortization

During the nine months ended September 30, 2025 as compared to the same periods in 2024, depreciation and amortization increased by $3.3 million. This increase is primarily attributable to the impact of placing fixed assets in service at Aster & Links, which the current period reflects the full period of depreciation and amortization as compared to only a partial period in the prior year.

Impairment of Real Estate

During the nine months ended September 30, 2024, we recorded impairment charges of $0.8 million. The impairment charges recorded were in relation to one of our real estate assets located in Nashville, Tennessee, based on our conclusion that the estimated fair market value of the real estate asset was lower than the carrying value, and as a result, we reduced the carrying value to the estimated fair market value.

Interest Income

During the nine months ended September 30, 2025 and 2024, interest income totaled $0.8 million and $0.4 million, respectively, and was comprised of interest earned from cash balances held in interest bearing bank accounts. The increase in interest income during the nine months ended September 30, 2025 as compared to the same period in 2024, is primarily attributable to higher cash balances in interest bearing accounts.

Other expense

Other expense for the nine months ended September 30, 2025 and 2024 was primarily comprised of losses in connection with our interest rate caps. Please see "Note 7- Debt, Net" and "Note 9 - Derivative Instruments" in our consolidated financial statements in this Form 10-Q for additional information regarding our interest rate caps.

Loss on extinguishment of debt

During the nine months ended September 30, 2025, in connection with the Aster & Links Refinance Transactions, we recorded a loss on extinguishment of debt of $3.0 million, which includes a non-cash write off of unamortized deferred financing costs of $2.6 million. See "-Our Investments-1991 Main Street - Sarasota Florida ("Aster & Links")-Aster & Links Mortgage and Mezzanine Loans" above and "Note 7- Debt, Net" for a more detailed discussion of the Aster & Links Refinance Transactions.

Liquidity and Capital Resources

Overview

Our primary needs for liquidity and capital resources are to fund our investments, including construction and development costs, pay our Follow-on Offering and operating fees and expenses, pay any distributions that we may make to the holders of our units and pay interest on our outstanding indebtedness.

Our Follow-on Offering and operating fees and expenses include, among other things, legal, audit and valuation fees and expenses, federal and state filing fees, SEC, FINRA and NYSE filing fees, printing expenses, administrative fees, transfer agent fees, marketing and distribution fees, the management fee that we pay to our Manager, and fees and expenses related to acquiring, financing, appraising, and managing our commercial and mixed-use properties. We are externally managed and do not have office or personnel expenses as we do not have any employees.

Liquidity

Our future needs for liquidity will depend on a variety of factors, including, without limitation, our ability to generate cash flows from operations, the timing and availability of net proceeds from our Follow-on Offering and any future offerings that we may conduct, the timing and extent of our real estate acquisition and disposition activities, and the timing and extent of our construction and development costs.

Economic uncertainty, fluctuating interest rates, volatility in the real estate markets, slowdowns in transaction volume, delays in financings from banks and other lenders and other negative trends may, in the future, adversely impact our ability to timely access potential sources of liquidity. If we are unable to raise additional capital when desired, or on terms that are acceptable to us, our business, financial condition and results of operations could be adversely affected.

We believe that our cash on-hand, the anticipated net proceeds from our Follow-on Offering and any future offerings that we may conduct, the proceeds from our current debt obligations, the projected cash flows from our real estate assets and our current and anticipated financing activities will be sufficient to meet our liquidity and capital resource requirements for the next 12 months from the date of issuance of this Form 10-Q.

Capital Resources

Where our Manager and its affiliates, including our Sponsor, have funded, and in the future if they continue to fund, our capital requirements by advancing us offering and operating fees and expenses, we reimburse our Manager and its affiliates, including our Sponsor, pursuant to the terms of our Management Agreement and Employee and Cost Sharing Agreement. Fees payable and expenses reimbursable to our Manager and its affiliates, including our Sponsor, may be paid, at the election of the recipient, in cash, by issuance of our Class A Units at the then-current NAV, or through some combination of the foregoing. There were no Public Offering costs incurred by our Manager and its affiliates during the nine months ended September 30, 2025 and 2024. During the three months ended September 30, 2025 and 2024, our Manager and its affiliates, including our Sponsor, incurred operating expenses of $0.5 million and $0.5 million, respectively, on our behalf. During the nine months ended September 30, 2025 and 2024, our Manager and its affiliates, including our Sponsor, incurred operating expenses of $1.3 million and $1.7 million, respectively, on our behalf. Our Manager and its affiliates, including our Sponsor, have deferred the collection of management fees and the reimbursement of operating fees and expenses, without interest, and may continue to do so in the future, to support our operations and ensure that we maintain sufficient liquidity under the terms of our guaranty agreements. All or any part of deferred fees and expenses may be taken in any period as determined by the Manager.

Aster & Links

In September 2025, we completed approximately $204.1 million in post-construction Aster & Links Refinance Transactions, the proceeds of which were used to retire existing construction debt and will provide additional liquidity to support lease-up and stabilization. In connection with the Aster & Links Refinance Transactions we also entered into a series of guaranty agreements whereby we have guaranteed payment and performance of certain of the Aster & Links Borrowers' obligations under the Aster & Links Loan Agreements. The guaranty agreements require, among other things, that we maintain certain net worth and liquid asset standards during the term of the Aster & Links Loans. As of September 30, 2025, we were in compliance with all of the net worth and liquid asset standards. See "-Our Investments-1991 Main Street - Sarasota Florida ("Aster & Links")-Aster & Links Mortgage and Mezzanine Loans" above and "Note 7- Debt, Net" for a more detailed discussion of the Aster & Links Refinance Transactions.

As of September 30, 2025, we had an unfunded capital commitment totaling $3.7 million under the 1991 Main CMA as well as other construction related commitments for the development of Aster & Links. See "-Our Investments-1991 Main Street - Sarasota Florida ("Aster & Links")-Aster & Links Construction Management Agreement" above for additional details regarding the 1991 Main CMA.

As of the date of this Form 10-Q, we currently anticipate that the remaining funding for construction and soft costs associated with the development of Aster & Links will be a minimum of $13.0 million (inclusive of the aforementioned unfunded capital commitment). For additional details regarding Aster & Links, see "-Our Investments-1991 Main Street - Sarasota Florida ("Aster & Links")."

VIV

As of September 30, 2025, we have drawn down $73.9 million on the 1000 First Construction Loan and had an unfunded capital commitment of $14.0 million under the 1000 First CMA. See "-Our Investments-1000 First Avenue North and 900 First Avenue North - St. Petersburg, Florida ("VIV")" above for a more detailed discussion of the 1000 First Construction Loan and 1000 First CMA.

As of the date of this Form 10-Q, we currently anticipate the remaining funding for construction and soft costs associated with the development of VIV will be a minimum of approximately $26.2 million (inclusive of the aforementioned unfunded capital commitment). For additional details regarding Viv, see "-Our Investments-1000 First Avenue North and 900 First Avenue North - St. Petersburg, Florida ("VIV")."

900 8th Avenue South

As of September 30, 2025, we have drawn down $10.0 million on the 900 8th Land Loan and exercised the first of two available six-month extension options on the 900 8th Land Loan, extending the maturity to January 2026. One additional six-month extension option remains available, subject to certain conditions. For additional details regarding 900 8th Avenue South and 900 8th Land Loan, see "-Our Investments-900 8th Avenue South - Nashville, Tennessee."

Short and Long-Term Capital Resources

We expect to continue to obtain the capital resources that we need over the short and long-term from cash on-hand, from the proceeds of our Follow-on Offering and any future offerings that we may conduct, from the advancement of reimbursable fees and expenses by our Manager and its affiliates, including our Sponsor, from the proceeds of our current debt obligations and future secured or unsecured financing from banks and other lenders, from projected operating funds from our real estate assets and from any other undistributed cash flow generated from operations. For additional details regarding our Public Offerings, see "-Overview" and "Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds-Use of Proceeds from Registered Sales of Securities."

Leverage

We employ leverage in order to provide more funds available for investment. We believe that careful use of conservatively structured leverage will help us to achieve our diversification goals and potentially enhance the returns on our investments.

Our targeted aggregate property-level leverage, excluding any debt at the Company level or on assets under development or redevelopment, after we have acquired a substantial portfolio of stabilized commercial and mixed-use real estate, is between 50-70% of the greater of the cost (before deducting depreciation or other non-cash reserves) or fair market value of our assets. During the period when we are acquiring, developing and redeveloping our investments, we may employ greater leverage on individual assets. An example of property-level leverage is a mortgage loan secured by an individual property or portfolio of properties incurred or assumed in connection with our acquisition of such property or portfolio of properties. An example of debt at the Company level is a line of credit obtained by us or our Operating Companies.

Our Manager may from time to time modify our leverage policy in its discretion in light of then-current economic conditions, relative costs of debt and equity capital, market values of our assets, general conditions in the market for debt and equity securities, growth and acquisition opportunities or other factors. There is no limit on the amount we may borrow with respect to any individual property or portfolio.

Cash Flows

The following table provides a breakdown of the net change in our cash and cash equivalents and restricted cash during the nine months ended September 30, 2025 and 2024 (amounts in thousands):

		Nine Months Ended September 30,
		2025				2024
Net cash used in operating activities		$	(14,996	)		$	(8,710	)
Net cash used in investing activities			(56,052	)			(110,785	)
Net cash provided by financing activities			78,004				123,425
Net increase in cash and cash equivalents and restricted cash		$	6,956			$	3,930

As of September 30, 2025 and 2024, cash and cash equivalents and restricted cash totaled approximately $35.8 million and $27.5 million, respectively.

Net cash flows used in operating activities during the nine months ended September 30, 2025 primarily relates to interest expense incurred on our indebtedness, the payment of employee cost sharing expenses as well as payments for property management, legal, and accounting fees. Net cash flows used in operating activities during the nine months ended September 30, 2024 primarily relates to interest expense incurred on our indebtedness, the payment of employee cost sharing expenses as well as payments for property management, legal, and accounting fees.

Net cash flows used in investing activities during the nine months ended September 30, 2025 and 2024 primarily relates to funding costs for our development properties. For additional details regarding our development properties, see "-Our Investments."

Net cash flows provided by financing activities for the nine months ended September 30, 2025 primarily relates to the net proceeds from debt financing activities, including additional draws on the 1000 First Construction Loan and net cash proceeds generated from the Aster & Links Refinancing Transactions further described in "-Our Investments -1000 First Avenue North and 900 First Avenue North - St. Petersburg, Florida ("VIV")" and "-Our Investments-1991 Main Street - Sarasota Florida ("Aster & Links")-Aster & Links Mortgage and Mezzanine Loans." Net cash flows provided by financing activities for the nine months ended September 30, 2024 primarily relates to proceeds from financings, including the variable-rate construction loan with Bank OZK and mezzanine loan with Southern Realty Trust Holdings, LLC that were subsequently retired by the Aster & Links Refinancing Transactions, the 1000 First Construction Loan, and the 900 8th Land Loan. For additional details regarding our outstanding indebtedness, see "-Liquidity and Capital Resources."

Critical Accounting Policies

The unaudited consolidated financial statements in this Form 10-Q have been prepared in accordance with U.S. GAAP and Article 8 of Regulation S-X of the rules and regulations of the SEC. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates.

Our significant accounting policies are described in "Note 2-Summary of Significant Accounting Policies," in our consolidated financial statements in this Form 10-Q. There have been no changes to our significant accounting policies and estimates during the nine months ended September 30, 2025 as compared to those disclosed in "Note 2-Summary of Significant Accounting Policies" included in our Annual Report for the year ended December 31, 2024, a copy of which may be accessed here.

Emerging Growth and Smaller Reporting Company Status

We are an "emerging growth company," as defined in the Jump Start Our Business Startups Act of 2012 ("JOBS Act"). Under Section 107 of the JOBS Act, emerging growth companies are permitted to use an extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards that have different effective dates for public and private companies.

We have elected to use the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of (i) the last day of the fiscal year (a) following the fifth anniversary of the effective date of our Primary Offering (which will fall on September 26, 2026), (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a "large accelerated filer" (as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), (ii) the date on which we have issued more than $1.0 billion in non-convertible debt during the preceding three-year period, or (iii) the date that we affirmatively and irrevocably opt out of the extended transition period provided in Section 7(a)(2)(B). By electing to extend the transition period for complying with new or revised accounting standards, our consolidated financial statements may not be comparable to the consolidated financial statements of companies that comply with public company effective dates.

We are also a "smaller reporting company" (as defined in Rule 12b-2 of the Exchange Act and Item 10(f)(1) of Regulation S-K). Even after we no longer qualify as an emerging growth company, we may remain a smaller reporting company and may continue to take advantage of the scaled disclosure obligations available to smaller reporting companies. We will be a smaller reporting company until the last day of the fiscal year in which (i) the market value of our Class A units held by non-affiliates exceeds $250 million, measured as of the last business day of the immediately preceding second fiscal quarter, and (ii) our annual revenue exceed $100 million as of the most recently completed fiscal year and the market value of our Class A units held by non-affiliates exceeds $700 million.