Transparency Report: Active Deal Workouts and Recovery Updates

As of March 31, 2025

Percent is committed to providing transparency regarding the performance of all deals on our platform. While the vast majority of deals performed as expected, some loans have faced challenges and entered workout status. This page provides detailed information on current workouts, including the underlying borrower, the events leading to the workout, the underwriter’s response, and the current status of recovery efforts.

We believe that transparency and open communication are essential to building trust with our investors. We are dedicated to providing regular updates on workout situations and working diligently to maximize recoveries on behalf of our investors.

Detailed Workout Summaries

Zinobe: Colombian SME Lender

Background: In early 2023, Zinobe faced cash flow issues due to a default by its parent company on other debt, and misused funds assigned to Percent for operating purposes, leading to a violation of the participation agreement central to this deal and a default on the Percent note program.

Underwriter Response: We engaged legal counsel in Colombia and agreed on a recovery path with Zinobe. We enacted legal safeguards to maximize recovery and are actively monitoring the situation and keeping investors updated.

Principal at Start of Default: $1.54M
Recovered So Far: $0.68M (44.1%)
Remaining Principal Outstanding: $0.86M

Current Status: The assets remaining in the underlying portfolio are nearly entirely all delinquent, in particular, a single loan to ASIC S.A.S. which is presently in insolvency proceedings and makes over 80% of the remaining outstanding portfolio. According to Zinobe, they believe that ASIC S.A.S. will seek to extend the principal repayment of the loan by 5-6 years. Because of the nonperforming status of this loan and continued doubts about Zinobe’s ability to continue as a going concern, Percent has directed Zinobe to market this loan for sale. Percent and Zinobe have investigated several options and the leading potential buyers at this point are two private debt funds that have expressed interest in acquiring the ASIC S.A.S. debt. However, both have expressed that they want to wait until a later stage of the insolvency proceedings before making an offer. The next milestone which may prompt an offer from these potential buyers is the delivery by ASIC S.A.S. of a restructuring plan. Given the considerable uncertainty, a sale of the loan while ASIC S.A.S. remains in insolvency proceedings may result in a recovery of less than 20% of the outstanding principal value of this loan. So far in 2025, a further $73,988.99 was distributed to investors. This amount was $23,378.63 in interest and $50,610.36 in principal. The distribution brought the note current on accrued interest through January 17, 2025, the date of that distribution. These amounts were paid from the cash reserve of the transaction and not from payments received from Zinobe. The amount remaining in the cash reserve is $45,000.00. Further, Percent has consented to the dissolution of the trust account that was used to receive collections on the portfolio. Because the portfolio currently consists only of severely delinquent loans, particularly the ASIC S.A.S. loan described in past updates, there are no cash flows being received into the trust. Still, it continues to accrue expenses which would need to be paid to the trustee. As a result, Percent consented to the dissolution of the trust on March 11, 2025. In the meantime, interest on ZIN2 2023-1 continues to accrue at 14.00% APY.

Taiger: Exposure to a senior corporate loan

Background: Taiger was unable to make payment on its principal maturities in January 2024, as various developments affected their strategy, operations, and access to financing, including delays in its Spanish debt restructuring, a shift to smaller contracts related to industry-specific solutions, leading to defaults on junior debt, and delays in convertible note financing and Series C round.

Underwriter Response: Underwriters retained legal counsel in Singapore. Percent, AP-SF, and Taiger agreed on a 6-month forbearance agreement (with two 3-month extensions subject to certain terms) to waive both the event of default and foreclosure on the collateral (shares of Taiger) as well as allowing for PIK interest at the current rate in exchange for consent rights on capital raised, tighter restricted payments covenants, 20% equity warrant coverage, and Board observer seat. Additionally, all parties hosted a webinar for Percent investors to learn more about the business, forbearance plan, and next steps.

Principal at Start of Default: $5.00M
Recovered So Far: $0.19M (3.8%)
Remaining Principal Outstanding: $4.81M

Current Status: On January 7, 2025, Percent was informed by Taiger management that they held a meeting with representatives of its preferred shareholder classes, during which management disclosed that employees are owed six months of unpaid salaries, and key personnel, including the CTO, Chief Architect, and VP of Finance, have resigned. In response, management recommended liquidating the business and sought shareholder approval to approve an orderly liquidation by appointing a professional Singapore based liquidator. On January 9, 2025, Taiger management confirmed to Percent the support from shareholders to move forward with appointing a professional liquidator. Taiger management also confirmed that it has no remaining cash and is requesting ~SGD 52,000 from stakeholders (including Percent) to cover liquidation and advertising costs. Given the uncertainty of liquidation proceeds, Percent decided not to contribute to the liquidation expenses per advice of Withers, our local counsel because Percent is already in a senior position and should liquidation proceeds not be enough to cover these expenses, we would be unnecessarily draining a significant portion of the remaining cash reserve, which currently stands at $134,340.00 for the benefit of the TGR1 2023-1 note specifically (for the TGR1 2023-2 note the cash reserve was fully utilized to make interest payments on that note). On March 7, 2025, Percent was contacted by Charles Mah, a professional liquidator nominated by Taiger’s management and preferred shareholders, informing us of a formal creditors meeting to be held on March 21, 2025, as well as documents to be submitted evidencing our claims in advance. Percent and its counsel attended the formal creditors meeting, which was short and procedural in nature as the professional liquidator, hosted and managed the call according to the agenda previously distributed. During the meeting, two resolutions were declared to be passed unanimously – the appointment of Charles Mah as liquidator and the appointment of a Committee of Inspection of no more than 5 members. Percent voted in favor of both. Subsequently, Percent and its counsel nominated Prath Reddy from Percent to be a member of the Committee of Inspection. Four other members, including Sinuhe Arroyo, CEO/Founder of Taiger, were thereafter nominated and appointed as members as well. No other material topics, timeline or next steps were discussed other than that Percent and its counsel will hear back from Charles Mah on next steps with respect to both the liquidation process as well as instructions for the Committee of Inspection. At this time, there are no additional action items for investors to take. Percent and APSF will continue to supply updates on the situation as well as any new developments.

Sharestates (SHA2 and SHA4): Exposure to a senior mortgage

Background: In January 2024, Sharestates notified Percent that the borrower associated with this transaction, Skyward TX LLC, was seeking refinancing of its outstanding loan with the lender in order to repay the outstanding principal balance. While seeking a refinancing, the underlying borrower did not make its contractual payments and the deal entered a workout.

Underwriter Response: Due to the underlying borrower’s failure to provide supporting refinancing or buyer documentation, Sharestates opted to initiate foreclosure proceedings on the property. Sharestates’ legal representative will issue a notice of default to the underlying borrower. As Texas operates as a ‘Non-Judicial’ state, the foreclosure process typically concludes within 8-10 weeks. Sharestates believes it will take approximately 12-18 months for the underlying mortgage to be paid off, including the time it takes to gain ownership of the property and sell it.

Principal at Start of Default: $0.65M
Recovered So Far: $0.0M (0%)
Remaining Principal Outstanding: $0.65M

Current Status: According to Sharestates, the foreclosure sale of the underlying property was completed on August 6th, but Sharestates did not secure a bidder. The underlying property is now in REO status, and Sharestates’ attorney has completed updating the foreclosure deed, and waiting for the deed to be recorded. Sharestates has already obtained a property manager since the property already has tenants. Since there are no longer any potential buyers, the underlying property has been transferred to Sharestates’ agent, who is currently finalizing the marketing materials and preparing the Multiple Listing Service listing. Sharestates is currently in the process of preparing and renovating several units at the underlying property to enhance their marketability and overall value. This effort is aimed at maximizing the property’s appeal to potential buyers and optimizing the return for investors. Upon completion of the renovation work, Sharestates plans to list the property for sale. Interest continues to accrue at 11.50% APY on the outstanding principal.

Sharestates (SHA3): Exposure to a senior mortgage

Background: Sharestates notified Percent that the borrower linked to the transaction, Attack Life II, LLC, failed to complete the construction project by the maturity date of the underlying mortgage, on March 1^st, 2024. As the borrower was unable to fulfill the required principal payment by the maturity date of the SHA3 2023-1 note (March 28th), the offering defaulted.

Underwriter Response: Sharestates has identified a replacement individual to oversee the project’s completion. Sharestates is taking the necessary steps in ensuring that this individual has the requisite creditworthiness and expertise to effectively oversee the project. Additionally, the individual will be expected to bring the loan current, establish a three-month interest reserve, and collaborate with Sharestates on a comprehensive loan repayment plan.

Principal at Start of Default: $0.25M
Recovered So Far: $0.0M (0%)
Remaining Principal Outstanding: $0.25M

Current Status: In July 2024, the transfer of property ownership had been finalized and the new borrower assumed the principal balance outstanding, resulting in the loan becoming current. A three-month interest reserve was established by the new borrower. Additionally, the new borrower would need to adhere to the monthly payment schedule stipulated by the loan. The maturity date of the new loan was November 1st 2024, providing the new borrower with five months to finish the construction and either refinance or sell the property. In November 2024, Sharestates advised that the new borrower associated with the property located at 2604 North College Avenue had not made interest payments in October 2024 and had been unresponsive to Sharestates’ outreach efforts. Sharestates was actively working to establish communication with the borrower. If the associated loan remained delinquent, the account could reach 90 days of delinquency on December 1st. At that point, Sharestates would be able to initiate legal action by issuing a notice of default in an attempt to encourage borrower responsiveness and facilitate repayment of the missed interest payments. Following these efforts, Sharestates and the borrower signed an extension agreement, establishing a new maturity date of April 8, 2025, while maintaining all other terms from the original agreement. The borrower for the property at 2604 North College Avenue successfully remitted all outstanding past-due interest payments on February 15, 2025 and is currently working on completing the property’s construction. In March 2025, we were informed by Sharestates, that the borrower for the property requires approximately seven additional months to complete construction and pursue either a refinance or sale of the property. As such, Sharestates and the borrower intend to execute an extension agreement, setting a new maturity date approximately seven months beyond the current April 30, 2025 maturity, while preserving all other terms of the original agreement. As a result, the expected payoff is no longer anticipated in April. Interest continues to accrue at 12.50% APY on the outstanding principal balance.

Gas Pos: Exposure to a senior corporate loan

Background: Quiq Capital syndicated approximately $2.4 million of this $6.0 million secured corporate term loan on the Percent platform on a pro-rata basis. In January 2024, Gas Pos did not make an interest payment and partial principal payment when due and the deal went into workout. This was amended shortly after but as Gas Pos has still not been able to secure alternative funding, they have consequently missed a new interest payment in April, and as such the transaction is back in workout status.

Underwriter Response: According to Quiq Capital, Gas Pos aimed to settle the entire outstanding balance of Quiq Capital’s loan that underlies the Percent note program by March 2024 by obtaining financing from USDA. As part of the arrangement, Quiq Capital’s outstanding loan would become subordinated to this new debt as it must be funded in a set of incremental tranches before the Gas Pos loan is repaid. Quiq Capital believed that allowing Gas Pos to secure this financing would preserve collateral value and facilitate a timely payoff of Quiq Capital’s loan maturing in December 2024. As of the end of January 2024, and following the execution of the subordination agreement, Gas Pos has made the accrued interest payments due in January, February, as well as advance payment for March 2024 accrued interest, along with a $450,000 principal paydown on the underlying loan. On January 30, 2024, Percent received note interest payments for January and February, as well as the prorated principal paydown amount from Quiq.

Principal at Start of Default: $2.42M
Recovered So Far: $0.31M (12.8%)
Remaining Principal Outstanding: $2.11M

Current Status: The Underwriter and its special servicer continue to work on the Gas Pos loan towards a payoff. Quiq Capital continues to work closely with Gas Pos toward achieving a payoff of the Gas Pos note program. Gas Pos continues to work with the prospective purchaser toward finalizing an Indication of Interest (IOI). Discussions have expanded to include the potential acquisition of not only the merchant portfolio and software but also the equipment lease portfolio. The anticipated transaction value is approximately $20 million. Negotiations are ongoing, and further updates will be provided as developments unfold. In the interim, the borrower continues to make good-faith payments of $10,000 to $20,000 per week. These payments are being applied toward principal.

US ATM ASI: Exposure to a senior corporate loan

Background: Quiq Capital syndicated approximately $3.64 million of this $5.5 million secured corporate term loan on the Percent platform on a pro-rata basis. The underwriter’s Quiq Income Fund, LP continues to retain the balance of the exposure, equivalent to approximately $1.86 million. In July 2024 US ATM did not make an interest payment when due on July 1, 2024 and the deal went into workout.

Underwriter Response: According to Quiq, After communications with Quiq Capital, US ATM ASI said that they plan to make additional payments once some of their larger clients make payment on monthly payables due to US ATM ASI. In June, the Underwriter executed an extension agreement for the existing US ATM ASI loan through August 1, 2024, as US ATM worked through refinancing and/or loan payoff strategies. More recently they began exploring an outright sale of the company to repay the loan as well. Still, US ATM ASI is continuing to work with its investment bank to evaluate takeout lenders. Quiq Capital and Percent have received some updates and confidential materials prepared by the investment bank to track progress.

Principal at Start of Default: $3.64M
Recovered So Far: $0.00M (0.00%)
Remaining Principal Outstanding: $3.64M

Current Status: According to Quiq Capital, US ATM ASI is actively engaged with a large private company with respect to an outright sale of the borrower. A large public company that was previously evaluating the transaction temporarily paused its due diligence over the holiday. The borrower is following up to confirm the public company’s continued interest and whether an Indication of Interest (IOI) can be expected. Quiq Capital continues to believe that the overall collateral value exceeds the outstanding balance of the loans. Additionally, Quiq Capital granted a forbearance on interest payments due in November and December allowing the borrower to prioritize payroll and settle aging accounts payable with critical vendors. Furthermore, Quiq Capital worked with a strategic investor and the borrower’s direct owners to provide $825,000 in new financing to address overdue payments to a key vendor. This new financing is structured on a pari-passu basis with the existing underlying loan, with interest payments deferred until the loan’s maturity in June 2025 (this increases Quiq Capital’s exposure to US ATM ASI and its affiliates, net of Percent’s participations, to approximately $6.1 million). Weekly meetings between Quiq Capital and the borrower are ongoing to review business operations and monitor progress on the sale.

Fiberight: Exposure to a senior corporate loan

Background: The borrower did not make a payment when due on July 31, 2024 so the transaction was categorized as in workout in August 2024 (after the grace period ended). Fiberight had been working on refinancing the loan without outside capital. In communications with the third-party underwriter for this transaction, New Technology Ventures, and Percent, Fiberight has said that they have agreed to a hard deadline with an investor providing Fiberight with equity capital. This date was set to August 19. By then, Fiberight expected to raise enough capital to repay the entire note’s principal and accrued interest balance but this did not materialize.

Underwriter Response: New Technology Ventures and Percent did receive some updates and confidential materials related to the contemplated refinancing, which included a signed term sheet. When the transaction fell through, Percent was notified of the company’s intent to go through a voluntary liquidation. Fiberight filed for a creditors voluntary liquidation on October 1, 2024. Charles Hamilton Turner and Jack Callow from Opus Restructuring LLP were formally appointed as Joint Liquidators of the company.

Principal at Start of Default: $0.54M
Recovered So Far: $0.04M (7.5%)
Remaining Principal Outstanding: $0.49M

Current Status: They confirmed that at least as of the date of commencement of liquidation proceedings, of the dozens of creditors (most very small) Percent is the only known creditor with a ‘fixed and floating charge’ (a first lien security interest) on substantially all of the company’s assets. However, the company also had individual equipment finance agreements with 3 lenders with outstanding balances of approximately £0.85 million ($1.09 million). There are also some amounts due to employees and tax authorities in the UK. The liquidators liquidate the assets of the company to meet creditors’ claims in accordance with UK insolvency law. We have checked with the liquidators periodically and there are no material progress updates to be provided yet. On Monday December 9, 2024, the liquidators disclosed to Percent that despite their attempts, the landlord of the premises Fiberight leased refuses to grant the Joint Liquidators access to the site which has made it difficult to proceed with realising the value of the equipment. Percent communicated with the landlord to clarify our charge on a substantial portion of the assets of Fiberight and demand that they give access to the liquidators promptly and is exploring other legal options. Further, in seeking to enter into an agreement to sell whatever right and title Fiberight Ltd has in various intellectual property assets, following discussions with a connected third-party company which has claimed the IP assets belong to them, the liquidators have agreed a basis to settle the dispute that has arisen which will ensure proceeds from this settlement will be available to the liquidation estate. The liquidators are currently considering how those proceeds should be dealt with and distributed and will be liaising further with Percent about this. Percent has stepped in further with respect to this workout in lieu of the third-party underwriter for this deal, New Technology Ventures.

Littlemees Limited and Littlemees USA (The Cloud): Exposure to a senior corporate loan

Background: Littlemees Limited (“The Cloud” or “CLD”) communicated on March 15, 2024 that the CEO of The Cloud, George Karam, had resigned from his position. According to the Board of Directors of CLD, this outcome was the result of fundamental strategic disagreements between Georges Karam and the Board of Directors. In summary, Georges Karam wanted to develop CLD’s business in non-Gulf Cooperation Council (“GCC”) countries while the Board of Directors wanted to focus on GCC markets, particularly Saudi Arabia and the United Arab Emirates. In May 2024, Percent and Aluna received information from The Cloud’s management and Board of Directors about the The Cloud’s deteriorating financial condition following Georges’ departure and need to raise sufficient equity capital as well as the need to restructure CLD Notes in order for The Cloud to execute on its business plan to become cash flow positive and eventually repay CLD Notes. On September 10th 2024, following missed principal and interest payments, the transaction moved into “workout” status. Littlemees USA LLC is a subsidiary of Littlemees Limited (“The Cloud”) and had raised capital on Percent through its KBX1 note program to fund international expansion in December 2023 with a 15 month final term. The security for this KBX1 note program consists of newly acquired assets of Littlemees USA LLC. Affected by the same aforementioned issues of The Cloud and disruption in the international expansion plans, they missed the principal payment due in March 2025, and the status of that program was as well moved to workout.

Underwriter Response: Over the course of May, June and July, Percent and Aluna specifically:

Negotiated a restructuring proposal for CLD Notes directly with The Cloud and it’s Board of Directors that contemplated a variety of terms and conditions intended to support The Cloud’s business plan and financial needs as well as facilitate the successful separation of business entities, including but not limited to: i) An extension of the maturity by 24 months and deferral of interest until profitability is sustained in order to extend The Cloud’s cash runway in exchange for equity warrants and additional common shares to provide some potential upside compensation for CLD Note holders, ii) Requirement that The Cloud and its shareholders raise at least $2 million in new equity for working capital needs, iii) Provide right of first refusal on transferring certain international assets to Georges Karam to assist the separation process (namely the divestiture of certain loss-running non-GCC subsidiaries), iv) Providing Percent a variety of covenants, consent rights and representations in order to protect CLD Notes, v) engaged Eptalex as local counsel to advise us on a variety of matters including a proactive analysis on liquidation scenarios for The Cloud to ensure our security would be recognized in local courts and formulating a plan of action in the event the CLD Notes restructuring was unsuccessful.
Concurrently collaborated with Georges Karam to protect KBX Note holder interests to create a new UK Holding entity that currently and will own all international non-GCC operations including the assets acquired from the original proceeds of the KBX Note (a separate offering on the Percent platform which funded a specific subsidiary of The Cloud).
After Aluna and Percent communicated the acceptance of the final CLD Notes restructuring proposal in late July, we learned in August that the Board and a faction of existing venture equity shareholders that are aligned with the Board have decided to vote in favor of liquidating the company instead. While Aluna and Percent attempted several times to bring the Board back to the negotiating table, it has become apparent that the Board: i) No longer has any interest in growing The Cloud according to their own proposed business plan and ii) Was unable to raise enough of the equity capital required for the restructuring proposal.
With guidance from Percent’s local counsel, Eptalex, a liquidation petition was filed. However, on November 13, 2024, we discovered that a separate petition was filed by the borrower. We requested the court appoint our proposed liquidator, either as replacement for the borrower’s proposed liquidator or to work collaboratively with their liquidator but this was rejected by the judge. Shahab Haider of Compliance Forte LLP was appointed liquidator of the borrower. While Percent, Aluna and Eptalex proactively prepared for the liquidation, the timeline for a liquidation sale and resolution is subject to ADGM court procedures and we continue to expect this to take several months based on Eptalex’s guidance. The CLD Note is the only known secured debt obligation of The Cloud according to our counsel’s searches, so irrespective of who initiates the process, the liquidator will work in CLD Notes holders’ best interest.

Littlemees Limited:

Principal at Start of Default: $2.00M
Recovered So Far: $0.00M (0.0%)
Remaining Principal Outstanding: $2.00M

Littlemees USA:

Principal at Start of Default: $2.58M
Recovered So Far: $0.00M (0.0%)
Remaining Principal Outstanding: $2.58M

Current Status: We continue to collaborate closely with Georges Karam and his UK HoldCo team to protect KBX Note holder interests and ultimately CLD Note holder interests upon the conclusion of the liquidation. The UK HoldCo, which is the secured guarantor of the KBX Note (and future secured guarantor of the CLD Note post The Cloud’s liquidation) has been fully operational now for several months in the UK under a new name and brand, “Global Food Ventures”, or “GFV”. To ensure GFV continues to achieve scale, attract equity investment and ultimately service and repay both KBX and CLD Notes, Percent and Aluna have extended GFV terms and conditions to postpone the repayment of the KBX Note by one year and GFV has subsequently accepted these terms. Counsel continues to advocate to the liquidator and ADGM courts Percent’s senior secured position and desire to facilitate the sale of assets to Georges Karam to be purchased by transferring the totality of the outstanding CLD Notes to GSFV in consideration for the purchase price. A formal creditors meeting occurred on February 27, 2025, that was largely procedural in nature and did not receive any clarity on current offers on the assets, however, we did learn it is the liquidator’s view that the process will take several months. The liquidator followed up on March 12, 2025, with a statement of affairs outlining the assets and liabilities of the company, as well as minutes and an attendees list from the meeting. Georges Karam, Percent and Aluna hosted a webinar on March 12, 2025, and discussed the original rationale for CLD and KBX Notes, events and progress to date, the vision for GFV and paths to debt repayment for both CLD Notes and the KBX Note.

Rocketfy: Exposure to a senior corporate loan

Background: On January 9th, as the maturity of February 28, 2025 for the ROC Corporate Loan Sr. 2024-2 Unsecured Note (“ROC1 2024-2”) was approaching Percent reached out to the third-party arranger, Aluna Partners (“Aluna”), for confirmation that Rocketfy S.A.S. (“Rocketfy”) was expecting to rollover the outstanding principal amount on ROC1 2024-2. On February 7th, Aluna advised that Rocketfy would be unable to make the interest payments for ROC1 2024-2, ROC Corporate Loan Sr. 2024-3 (“ROC1 2024-3”) and ROC Corporate Loan Sr. 2024-4 (“ROC1 2024-4”), (collectively, the “ROC1 Notes”). The cash reserve was used to make the interest payments due on January 31, 2025, totalling $29,075.49, and as of March 3, 2025 the cash reserve for the ROC1 Notes stood at $156,490.41. On February 10, 2025, Percent met with Aluna and Rocketfy to discuss their business and financial position. Rocketfy expressed that, based on the competitive position of their product offering compared to that of competitors, their revenues have meaningfully fallen and that they were unable to service the principal of the ROC1 Notes, resulting in a missed payment. As a result, on March 7, the notes were moved to workout status.

Underwriter Response: Percent and Aluna Partners began negotiations of a restructuring of the payment obligations of Rocketfy with respect to the ROC1 Notes moving forward. This was agreed on March 28, 2025. Under the new repayment plan, no payments will be due until the Borrower has realized earnings before interest, taxes, depreciation, and amortization (“EBITDA”) greater than $0.00 in a month OR the Borrower has earned gross revenue greater than $650,000,000.00 Colombian pesos in a month. After this is achieved, the amount of cash interest will be the greater of one hundred percent (100.0%) of EBITDA in excess of $0.00, if any, in the immediately prior calendar month or sixty percent (60.0%) of gross profit in excess of $650,000,000.00 Colombian pesos, if any, in the immediately prior calendar month. Any excess interest accruing above this amount will be paid-in-kind (“PIK’ed”). Percent and Aluna Partners have also taken certain actions to improve its security in the event of a liquidation or restructuring of Rocketfy.

Principal at Start of Default: $1.87M
Recovered So Far: $0.00M (0.0%)
Remaining Principal Outstanding: $1.87M

Current Status: There are no further updates beyond the ‘Underwriter Response’ above.

FIT SRL: Exposure to a senior corporate loan

Background: On February 28, Aluna advised that FIT SRL (“FIT”) was in breach of the minimum cash balance covenant due to some delays in collecting the invoiced amounts with its largest customer, Lotus Technology Innovative Limited (“Lotus”). Further, Aluna informed Percent that FIT was seeking to raise additional equity from its shareholders to restore the minimum cash balance and have a healthy buffer to run the company until the invoices are settled by the client. On March 4, Aluna informed Percent that based on updates received from FIT, Lotus stopped meeting its contractual obligations at the end of December 2024, including payments and issuing new orders. More extensive information was received by Percent on March 14, indicating that a commercial dispute has developed between FIT and Lotus. On March 21, 2025, Percent did not receive the scheduled interest and principal payment due at the maturity of FIT1 2024-1 or interest due on the other FIT notes outstanding, and as such the deals were marked as in workout status.

Underwriter Response: Given where FIT stood in relation to its goals, whether with respect to its contract with Lotus, traction with other customers and fundraising, and the amount of new capital needed, and especially given the timing and status of the dispute with Lotus, Percent did not believe a new offering to platform investors could be justified. Further, by the time sufficient information had been received to assess this possibility, there was little time with which to arrange a refinancing, even if Percent had been comfortable with the risk and had the most recent updates been positive. It is important to note that FIT has not yet provided the February-end surveillance reporting. That said, it has customarily taken FIT a few weeks to produce these in the past.

Principal at Start of Default: $2.30M
Recovered So Far: $0.00M (0.0%)
Remaining Principal Outstanding: $2.30M

Current Status: FIT is employing legal counsel to represent it in its dispute but is also open to attempting an amicable commercial solution. FIT has insisted that damages that it is prepared to seek in court, if needed, may exceed €20 million. If FIT is successful in securing a settlement or court judgement, raising new funds from other sources, finding new customers to replace Lotus, or other breakthroughs occur, repayments of the note could be realized subsequent to any default but it is too early at this stage to assess that likelihood. In the meantime, FIT is providing Lotus with a detailed breakdown of each component mentioned in the schedule of loss (including the investment agreement with Percent and the term sheet with Aluna which both clearly state how the financing was structured and executed for the sole purpose of supporting FIT’s fulfillment of the Lotus contract).

Understanding Workouts

A loan enters workout status when the borrower fails to meet their payment obligations or violates the terms of their loan agreement. Workouts can occur for various reasons, including financial difficulties faced by the borrower, changes in market conditions, or unforeseen events. When a loan enters workout, the underwriter responsible for the deal takes proactive measures to address the situation and protect investor interests. This may include negotiating with the borrower, restructuring the loan, or pursuing legal remedies.

We will continue to provide regular updates on these workout situations, including any significant developments or changes in status. Investors are encouraged to review these updates and the associated deal documentation for the most current information.

—

We invite you to reach out to us with any questions or concerns you may have regarding specific workouts or the workout process in general. Our team is dedicated to providing you with the information you need to make informed investment decisions.