On a pro forma basis as of June 30, 2026, the combined company would have approximately $289 million of book value, approximately $534 million of total assets, and approximately $604 million of total loan commitments across 14 portfolio loans collateralized by assets located predominately in core Southern U.S. markets.

The transaction is expected to create a larger, more efficient CRE lending platform with increased margin, broader index inclusion, improved trading liquidity, and access to more efficient leverage. Upon closing, SUNS will remain listed on Nasdaq and continue to be externally managed by Sunrise Manager LLC ("SUNS Manager").

Management Commentary

Leonard M. Tannenbaum, Executive Chairman of SUNS and SRT, said:

"This merger represents a transformative milestone in Sunrise’s evolution as a public company and will enable SRT stockholders to benefit from an expanded capital base, float, and liquidity. By combining two complementary portfolios built on the same disciplined investment philosophy, we intend to create a larger, more efficient commercial real estate lending platform with lower operating costs on a combined basis, broader index inclusion, and enhanced earnings potential. We believe these improvements will strengthen our competitive position, increase our relevance in the public markets, and position the combined company to deliver more attractive risk-adjusted returns for stockholders."

Brian Sedrish, Chief Executive Officer of SUNS and SRT, added:

"The commercial real estate lending market continues to present compelling opportunities for experienced lenders with disciplined underwriting, flexible capital, and strong sponsor relationships. We see strong demand and a robust set of opportunities for providing debt capital to owners of residential and commercial properties primarily located in established and rapidly expanding Southern markets. We're confident in our ability to construct a portfolio of attractive, risk-adjusted loans to high-quality sponsors with assets located in our target markets."

Transaction Terms

Under the terms of the Merger Agreement, each share of SRT common stock will be converted into the right to receive (i) 1.45 shares of newly issued SUNS common stock (based on an exchange ratio that applies a 6.0% premium to SRT’s book value per share relative to SUNS’ book value per share as of June 30, 2026), and (ii) from SUNS Manager, as additional consideration, $0.05 per share in cash. SUNS expects to issue approximately 8.4 million shares of common stock in the aggregate as stock consideration in the merger. Upon completion of the merger, existing SUNS stockholders are expected to own approximately 62% of the combined company and former SRT stockholders are expected to own approximately 38%.

In connection with entry into the Merger Agreement, (i) certain SUNS stockholders who in the aggregate own or control approximately 28% of the outstanding shares of SUNS common stock have entered into a voting agreement pursuant to which they have agreed, among other things, to vote their shares of SUNS common stock in favor of the transaction, (ii) certain SRT stockholders who in the aggregate own or control approximately 32% of the outstanding shares of SRT common stock have entered into a voting agreement pursuant to which they have agreed, among other things, to vote their shares of SRT common stock in favor of the transaction, and (iii) certain SRT stockholders who in the aggregate own or control approximately 32% of the outstanding shares of SRT common stock have agreed to customary lock-up restrictions with respect to the shares of SUNS common stock to be received in the merger for a period of 120 days following the closing of the merger.

In addition, prior to the closing, SRT’s external manager will fund a special distribution to SRT stockholders in accordance with the terms of the SRT management agreement and has agreed to waive any termination fee or similar payment otherwise payable to it in connection with the termination of SRT’s management agreement at the closing. In connection with the closing, SUNS’ management agreement with SUNS Manager will be amended and restated to, among other things, (i) reduce the incentive fee rate from 20% to 17.5%, (ii) reduce the hurdle rate from 8% to 7% per annum, and (iii) provide for a management fee waiver by SUNS Manager of $1.0 million, payable over four quarters, for the benefit of all SUNS stockholders following closing.

Following the closing, the combined company will continue to operate as Sunrise Realty Trust, Inc., trade on Nasdaq under the ticker symbol "SUNS" and be externally managed by SUNS Manager, with Brian Sedrish continuing to serve as Chief Executive Officer. At closing, the SUNS board of directors will be expanded to include one independent director designated by SRT, subject to approval by the SUNS board of directors.

Strategic Rationale

The combination is expected to deliver significant benefits to the stockholders of both companies, including:

Consolidation of Co-Investments: SUNS and SRT are co-lenders across the same portfolio of loans. The merger consolidates these existing co-investments into a single balance sheet, simplifying the platform without introducing a new investment strategy or unfamiliar assets.

Enhanced Public Market Profile: The increase in public float and market capitalization is expected to enhance the combined company’s visibility among institutional investors and eligibility for broader index participation and may improve average daily trading volume and secondary-market liquidity over time.

Reduced Cost Structure: The elimination of duplicative audit, legal, administrative, board and compliance costs inherent in maintaining two separate REIT platforms is expected to generate annualized G&A savings on a combined basis, increasing margin, before giving effect to the SUNS Manager’s management fee waiver of $1.0 million.

Better Access to Capital: A larger combined balance sheet is expected to support broader access to institutional capital and financing and provide a stronger platform for future capital formation.

Liquidity for SRT Stockholders: The combination will provide SRT stockholders with a path to hold shares in a publicly-traded company without realizing the typical IPO valuation discount, underwriting fees and expenses.

Governance and Process

The merger and the other transactions contemplated by the Merger Agreement, as well as the terms thereof, were evaluated and negotiated by special committees of the boards of directors of each of SUNS and SRT, with each special committee consisting solely of disinterested and independent directors. Each special committee unanimously recommended that its respective board approve the merger and the other transactions contemplated by the Merger Agreement. Thereafter, the boards of directors of SUNS and SRT unanimously approved and adopted the Merger Agreement and the transactions contemplated thereby.

The Merger Agreement provides for a 30-day "go-shop" period beginning on the signing date that will expire at 12:01 a.m. Eastern Time on September 5, 2026, during which SRT and its representatives may actively solicit, evaluate and negotiate alternative acquisition proposals. There can be no assurance that this process will result in a superior proposal, and SRT does not intend to disclose developments with respect to the go-shop process unless and until SRT determines such disclosure is appropriate or is otherwise required.

Timing and Approvals

The transaction is subject to approval by SUNS and SRT stockholders. SUNS expects to file a proxy statement with the SEC containing additional information. The transaction is expected to close in the fourth quarter of 2026, subject to SUNS and SRT stockholder approval and the satisfaction of certain other customary closing conditions. The closing of the transaction is not subject to any financing conditions.