Transparency Report: Active Deal Workouts and Recovery Updates

As of September 30, 2026

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

The table below lists every borrower program in active workout status, followed by an individual write-up of each.

_{As of September 30, 2026. All figures in USD. Totals: $76,363,025 defaulted, $1,346,017 recovered, $1,125,831 interest PIK, $3,000,000 charged off, $73,142,627 outstanding. PIK is paid-in-kind: interest accrued and added to the balance rather than paid in cash.}

Detailed Workout Summaries (Corporate Loans)

Detailed Workout Summaries per Corporate Loan Borrowers

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 an interest payment in April 2024, 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. 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: $0.42M (17.4%)
• Remaining Principal Outstanding: $2.00M

Current Status: The Underwriter and its special servicer continue to work on the Gas Pos loan towards a payoff. On March 31, 2025, the borrower executed a Letter of Intent (LOI) with a potential acquirer regarding the sale of certain assets and assumption of specific liabilities. The proposed consideration includes: (i) $5.0 million in cash at closing, (ii) $1.0 million held back by the purchaser to be paid one year post-closing, and (iii) a structured earnout over a four-year period following the transaction. Quiq Capital anticipates receiving all or most of the $5.0 million cash component at closing. The transaction was delayed in May 2025 as the letter-of-intent was modified to accommodate an equipment lender. In parallel, discussions with another prospective purchaser have expanded to potentially include not only the merchant portfolio and software but also the equipment lease portfolio, with a total estimated transaction value of approximately $20 million. Between December 2024 and July 2025 , the borrower continued to make weekly payments ranging from $10,000 to $20,000, which were applied toward reducing the outstanding principal balance. However, a planned asset sale stalled due to the bank lender's inflexibility. Gas Pos has not made any further partial principal payments since July. Quiq Capital has indicated that a change in the borrower’s payment processor for its merchant contracts has negatively impacted monthly revenue collections, contributing to the payment interruption. The borrower is reportedly working to resolve this operational issue; however it is difficult to project when payments could resume. According to Quiq Capital, litigation against the guarantors and the senior equipment lender remains ongoing and continues to progress through the court system. Quiq Capital will monitor these proceedings and provide updates as the courts issue decisions or as the matters materially advance. Gas Pos, Inc. filed a voluntary Chapter 11 bankruptcy petition in the U.S. Bankruptcy Court for the Northern District of Alabama on February 2, 2026 (Case No. 26-00362-DSC11). The company is currently operating as a debtor-in-possession under court supervision and is in the early stages of its reorganization process. Quiq Capital is working with legal counsel to evaluate the appropriate strategy in light of the bankruptcy filing and to protect creditor interests through the court-supervised process. Additionally, on the week of April 27, counsel filed a claim on behalf of creditors in the U.S. Bankruptcy Court for the Northern District of Alabama.

Separately, on April 15, 2026, default judgments were entered in favor of Quiq Income Fund against Gas Pos, Inc., Cameron Hogan, Joshua Smith, and RMFT Ventures, LLC. The judgments were entered jointly and severally and total approximately $8.6 million, plus post-judgment interest. According to Quiq Capital, it is currently working with legal counsel to pursue collection and enforcement efforts arising from these judgments. In July 2026, the bankruptcy administrator moved to dismiss, citing delinquent reporting, unpaid fees and withholding taxes, and unfiled returns. The debtor cured much of the reporting delinquency in June, and operating statements show profitable operations excluding debt service. Percent will continue to monitor both the bankruptcy proceedings and related recovery efforts and provide updates as material developments occur.

US ATM: 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 continued 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. 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 (0.0%)
• Remaining Principal Outstanding: $3.64M

Current Status: Quiq Capital has issued default notices to US ATM ASI and the guarantors in connection with the underlying loan. In March 2025, the borrower’s bank accounts were frozen following an ex parte motion for judgment granted to a vendor due to non-payment under a settlement agreement scheduled to commence in January 2025. The borrower contends that the freeze was unjust. The accounts were frozen for approximately two weeks, which prevented the borrower from making critical vendor payments and led to the loss of several major clients and essential vendors. Quiq Capital continues to conduct 1–2 calls per week with the management team of US ATM ASI to finalize an asset sale plan. Additionally, US ATM ASI is working with its restructuring advisors to reduce its Accounts Payables. While the company had previously expected to recover approximately $1–2 million through an Employee Retention Credit (ERC) tax refund, its Q3 2021 ERC claim was subsequently disallowed following the retroactive implementation of the eligibility cutoff under the One Big Beautiful Bill Act (OBBA). As a result, the company no longer expects any recoveries from this ERC claim. Proceeds are expected to be used to pay down principal. Quiq Capital has engaged an independent expert to assess the value of the owners’ collateral and guarantees, enabling prompt enforcement should the asset sale proceeds fall short of repaying the loan in full. Quiq Capital is taking a strategic approach by incentivizing the owners to maximize sale value while making clear that it is prepared to pursue personal collateral if necessary. The failed sale process had a credible resolution path, evidenced by Quiq Capital’s own $650K loan originated in December 2024 to help the Company meet critical vendor payables as it continued to run its sale process. This loan sits pari passu to the other US ATM ASI loans held by Quiq Capital and Percent. In July 2025, the management team of US ATM ASI informed Quiq Capital that the original sellers of US ATM ASI's business filed a motion to appoint a receiver to collect on a default judgment relating to the seller note used to finance the acquisition. Following the appointment, the US ATM ASI management team has ceased liquidating assets and is awaiting the receiver’s direction. This change shifts control of the asset sale process from the owners to the receiver, and may delay the sale timeline as the receiver evaluates how to maximize recoveries on behalf of creditors. Quiq Capital has informed us that legal complaints remain pending against both the guarantors and the original sellers of US ATM ASI’s business. According to Quiq Capital, the defendants’ motion to dismiss the New Jersey litigation for lack of personal jurisdiction was granted on September 18, 2026. In addition, there have been changes in legal representation for several defendants, with new counsel appearing for one defendant while counsel for certain other defendants has withdrawn. According to Quiq Capital, in December 2025, the court approved the receiver’s request to abandon certain assets that were determined to provide no material benefit to the receivership estate, including all ATM equipment, office property, and company leases. In addition, the court authorized the company to assign its litigation claims to the personal guarantors in exchange for a release of their claims against the company, a measure intended to reduce administrative expenses and potential liabilities of the estate. The personal guarantors continue to pursue the assigned litigation claims against the credit union related to the frozen bank accounts described above. More recently, the court approved the receiver's second report and related fees following the sale of a vehicle, which generated approximately $84,000 in gross proceeds. Quiq Capital has also filed its proof of claim in the receivership. No additional material activity has occurred since the court's approval. The litigation involving Wright-Patt Credit Union remains in the discovery and pretrial stages, with no material developments since our last update. Quiq Capital will continue to monitor the New Jersey litigation, the receivership proceedings, and the Wright-Patt litigation, and will provide further updates as the courts issue decisions or as these matters materially advance.

Littlemees Limited / Littlemees USA: Exposure to a senior corporate loan

Background: Littlemees Limited (“The Cloud” or “CLD”) communicated on March 15, 2024 that the CEO of The Cloud, Georges 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 George Karams’ 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 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 2024, Percent and Aluna:

1. Negotiated a restructuring proposal for CLD Notes directly with The Cloud and its 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. Percent 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.

2. Concurrently collaborated with Georges Karam to protect KBX Note holder interests to create a new UK Holding entity to own all international non-GCC operations including the assets acquired from the original proceeds of the KBX Note, the separate offering on the Percent platform which funded a specific subsidiary of The Cloud.

3. After Aluna and Percent communicated the acceptance of the final CLD Notes restructuring proposal in late July 2024, we learned in August 2024 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. 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.

4. 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. 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.

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%)
• PIK Interest: $1.12M
• Remaining Principal Outstanding: $3.70M

Current Status: 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 over one year 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 extended GFV terms and conditions to postpone the repayment of the KBX Note by one year. Counsel continued 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 GFV in consideration for the purchase price. GFV has made operational progress, growing revenue, expanding its footprint, and raising $300K in junior capital. Since December 2024, GFV has continued to grow and stabilize its business to generate more predictable top-line revenue. GFV was unable to resume interest payments under the KBX Note. As a result, the forbearance agreement was extended in order to extend PIK interest, with terms aligned to upcoming acquisitions, improved cash flow, and a revised financial model. The new forbearance agreement runs until June 2027. Following the forbearance extension, PIK interest continued to accrue. GFV launched Saudi Arabia operations in September and is growing UK revenue to support resuming cash interest on November 30, 2025. Following execution of an NDA, Percent and GFV received materials from the liquidator and submitted a formal offer to acquire the assets and transfer the outstanding CLD Notes to GFV. The liquidator subsequently indicated that Percent was the winning bidder and shared an asset purchase agreement. Following further diligence, certain issues were identified, and despite continued engagement, the liquidator later informed Percent it would proceed with another buyer. Percent, together with Counsel, has since escalated the matter to the ADGM court, which has halted the sale process pending a hearing. On the KBX Note, GFV has continued to accrue PIK interest under the forbearance agreement, bringing the outstanding balance to $3,373,327 as of May 31, 2026. Although revenue performance remains below forecast, GFV is actively pursuing additional equity capital. GFV also provided an operational update to shareholders on November 18, 2025, highlighting continued top-line growth, progress in the UAE and UK markets, and a major rollout with Herfy in 400 locations, expected to meaningfully increase Middle East/North Africa revenues. Percent and GFV executed an amendment to the existing forbearance agreement that establishes a defined schedule for the resumption of cash interest payments on the KBX note. Under the amended terms, PIK interest will cease once cash interest payments return to the full contractual amount; however, any shortfall between interest due and cash paid will continue to accrue as PIK. Specifically, the amendment provides for: (i) an additional $5,000 cash interest payment on December 31, 2025; (ii) $10,000 cash interest payments on each of January 31, 2026 and February 28, 2026; and (iii) monthly cash interest payments thereafter that increase by $5,000 per month until full cash interest payments are achieved. The amendment preserves the existing principal repayment mechanics, pursuant to which principal repayments remain linked to the borrower’s free cash flow. As of March 31, 2026, the payments for December, January, and February were met, as outlined above. Due to reduced cash flows in certain markets, GFV did not make the scheduled cash interest payment since March 2026. Percent has continued to press for the resumption of cash interest payments and has requested that GFV provide a cost reduction plan, updated financial information, and revised cash flow projections. According to GFV, the company is implementing a number of initiatives intended to improve liquidity, including reducing operating costs, expanding its network of kitchens, and raising a modest amount of junior debt financing. GFV also expects these initiatives to increase the platform to approximately 900 locations by year-end while supporting future revenue growth and operating margins. However, projections produced by GFV, together with discussions with its CEO, do not suggest payments can be resumed without external capital raising as the company still has negative cash flow from operations. All unpaid interest continues to accrue as PIK interest in accordance with the amended forbearance agreement.

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, 2025, 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: On May 21, 2025, Rocketfy advised that their expectation of growth had not materialized as of then and that they had a total of 13 clients, an increase of 3 clients from the previous two months. As a result of this and poor prospects for the legacy product going forward, Rocketfy shifted their business model to focus solely on their software product, moving away from their prior role, acting as an intermediary in shipping and payment processes for their client base, with the goal of increasing their operational profitability. On May 30th, with the objective to avoid operational disruption from unsecured creditors claiming close to $1 million through potential lawsuits, Rocketfy presented a request to enter a reorganization procedure under Colombian Law 1116, similar in some respects to filing Chapter 11 Reorganization Bankruptcy in the United States. With the exception of labor and tax liabilities and amounts due to employees, Percent sits senior to all other creditor claims and is Rocketfy’s sole Class 2 creditor that has majority of voting rights during claim verification and negotiation state, and legal priority at repayment stage ahead of other unsecured creditors, based on information provided by Rocketfy during the meeting and local legal counsel. There are no Class 3 or Class 4 creditors in the proceedings, while Class 5 creditors, consisting primarily of former Rocketfy customers for amounts previously held on their behalf, rank junior to Percent. During the summer of 2025, the company was experiencing a cash burn of USD $10,000 per month However, repayments on amounts due to satisfy tax liabilities and amounts due to employees would take priority and are unlikely to be satisfied any earlier than October 2027. Thereafter repayment on Percent notes may begin. As of July 2026, Rocketfy has provided a proposed reorganization agreement to Percent and Aluna Partners following substantial discussions among the parties and this was subsequently approved by Percent. Under the current proposal, payments on the Percent notes would not commence until overdue salaries and tax obligations have been satisfied in accordance with the creditor priority provisions under Colombian Law 1116. Based on the current proposal, repayments to the Percent notes are not expected to begin until approximately 35 months following confirmation of the reorganization agreement, or approximately mid-2029. Under the reorganization agreement, outstanding principal balances owed to creditors, including Percent, will accrue interest at 4.0% per annum. Under Colombian Law 1116, the proposed reorganization plan remains subject to approval by both the bankruptcy court and the requisite majority of creditors. The agreement also includes a mechanism intended to support Rocketfy’s customer acquisition and potentially accelerate repayment to Percent. Class 5 creditors that enter into new revenue-generating contracts with Rocketfy may have a portion of their existing claims paid pari passu with Percent, with the eligible amount limited to 50% of the value of new services purchased and paid for in cash. The mechanism is intended to generate incremental cash flow that supports both repayment of Percent and participating Class 5 creditors. Importantly, this preferential treatment would not apply in a liquidation, in which case participating Class 5 creditors would revert to their junior position. Approval by the bankruptcy court is also required, and counsel has advised that the anticipated appointment of a new judge following Colombia's presidential transition may delay confirmation of the reorganization plan. Percent and Aluna Partners continue to work with Rocketfy and its advisors toward securing full approval of the proposed agreement.

FIT SRL: Exposure to a senior corporate loan

Background: On February 28, 2025 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.

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

Current Status: FIT continues to pursue its legal claim against Lotus and is being represented by Gunnercooke LLP and an instructed barrister. Following FIT’s March 2026 letter before claim, Lotus submitted a detailed 28-page response, and the matter is now progressing through the mandatory English pre-action protocol process. FIT’s counsel is currently preparing its response, with the pre-action process expected to conclude within approximately one month and formal filing of the claim targeted for September 2026. A final hearing is currently expected approximately 9 to 12 months following filing. There are no active settlement discussions with Lotus at this time. Most recently, FIT has informed us that under the terms of its contract with Lotus, it retains the right to claim “shortfall payments” for minimum volumes not ordered by the buyer. FIT has now issued invoices for shortfall payments relating to 2023, 2024, and 2025, totaling approximately €9 million. FIT’s current claim against Lotus is valued at approximately €12.5 million, consisting of approximately €9 million of contractual shortfall payments for minimum bicycle volumes not ordered by Lotus during 2023–2025, together with amounts sought under the contract’s penalty clause. This represents a narrower claim than the broader damages claim of more than €20 million previously contemplated by FIT, as FIT’s advisors consider the shortfall-payment claim more straightforward to establish. FIT has represented that recoveries under the claim would be sufficient to repay amounts owed to Percent noteholders in full, although Percent has not independently verified this assessment. In addition, FIT delivered a contract termination notice to Lotus in early December 2025, triggering a 60-day remediation period. As the default was not cured, FIT formally terminated the contract after invoicing additional remaining shortfall amounts. FIT’s business remains substantially inactive and is reported to have no employees. FIT and its parent entity, Except, are currently in voluntary liquidation, with shareholder funding being used to cover litigation and liquidation costs. Management and the group’s accountant are also evaluating a Piano di Ristrutturazione Omologato (“PRO”) for FIT and Except and expect to provide a further update in September 2026. Any PRO would be subject to court approval, and Percent has neither agreed to nor been presented with the terms of any proposed PRO at this time. No third-party litigation funder is currently involved. Instead, FIT’s shareholders are funding the litigation directly, with Gunnercooke and the Barrister working under a fee arrangement pursuant to which 50% of fees are paid monthly based on work performed and the remaining 50% is contingent on a successful outcome. Total litigation costs through trial are currently estimated at approximately £300,000. Lotus has also raised a security-for-costs argument regarding FIT’s ability to satisfy a potential adverse costs award. FIT has indicated that insurance can be obtained to address this risk, although Percent has not confirmed that such coverage has been finalized. Based on information provided by BonelliErede, FIT has approximately €1.5 million of liabilities to Italian tax authorities and approximately €180,000 owed to Intesa Sanpaolo, in addition to approximately €230,000 of smaller unsecured creditors associated with the Lotus project, although the latter amount may overlap with the other reported liabilities. Except also appears unable to be wound up on a solvent basis. Outside of the Lotus claim, FIT’s remaining assets appear limited and include 26 completed Lotus-branded bicycles and approximately 110 unfinished frames manufactured to Lotus specifications, which management believes may be difficult to monetize given their customization. As a result, the Lotus litigation remains the primary potential source of recovery for creditors. On September 23, 2026, Percent was informed that the legal claim has been drafted and is in process of being finalized before litigation commencing.

Noypitz Holdings: Exposure to a senior corporate loan

Background: Percent has not received the required surveillance reporting from Noypitz. The only information towards satisfaction of these requirements that Percent received were financial statements for two Noypitz locations, Long Beach and Las Vegas, for Q1 2025. The financial statements showed a small net profit ($14,539.86 for the first three months of 2025) for a Long Beach restaurant location and a larger net loss ($ -154,045.25) for a Las Vegas restaurant location. These were received in late May 2025 and did not include any of the other Noypitz locations. Given the persistent delinquency in delivering the required reporting, Percent declined to offer Noypitz an opportunity to refinance the Percent notes with new ones.

Underwriter Response: On Thursday, June 26, 2025, the third-party Underwriter for this transaction, Millenia Ventures, notified Percent that the borrower was requesting a one month extension. The Underwriter is also leading efforts to secure new capital intended to replace the Percent notes.

• Principal at Start of Default: $0.50M
• Recovered So Far: $0.00M (0.7%)
• Remaining Principal Outstanding: $0.50M

Current Status: A call between Percent, Millenia, and Noypitz took place on July 2, 2025, one day after Percent received the interest due but not the principal. On the call, Noypitz requested a six month extension. The CEO of Noypitz said that during this period, it will be able to pay interest and a small amount beyond that but no more than $12,000 per month total. For comparison, the current interest payments amount to a little less than $7,000 per month. The company described performance of its restaurants as mixed with Long Beach continuing to do well but a location in Las Vegas struggling. The Underwriter said they are looking for alternative financing to repay Percent investors. After initially receiving no offers which exceeded $250,000, they are now pursuing an SBA loan option which may be more likely to satisfy amounts due to Percent in full. Percent has continued to instruct Noypitz to pay at least $12,000 per month, an amount that covers interest (including penalty interest) and a little over $4,000 towards principal. One such payment was received in pieces and distributed to investors on September 4, 2025. Since the September 4 payment, Noypitz has not made further remittances, and Millenia reports that continued losses at the Las Vegas location, estimated at $30–50K per month, are constraining liquidity. On November 7, Percent spoke with Silveridge Group, the advisor assisting with the SBA 7(a) loan process. On November 13, Noypitz’s CEO reported improved visibility on November–December revenues driven by holiday bookings, projecting a 30–40% seasonal increase. However, in subsequent updates, Noypitz noted that holiday sales were mixed between Thanksgiving and Christmas among the locations, which was a worse outcome than originally expected. Percent continues to receive updates on refinancing efforts which have been delayed, partly due to government shutdowns in October and February which affected SBA loans. As of April 2026, Noypitz continues to pursue an SBA 7(a) loan to repay the Percent loan, with applications submitted to two banks, one unlikely to proceed and the other still pending. The process has been delayed by prior government shutdowns in October–November 2025 and February 2026. Noypitz continues to report difficulty making payments on the loan. Its Town Square location in Las Vegas, which had been underperforming and contributing to the borrower’s liquidity constraints, has closed. Noypitz has indicated that it expects to be in a better position to make payments following the long-delayed opening of its new Hayward, California location, which is expected to occur in August 2026. Given the continued lack of payments and insufficient financial reporting, Percent has communicated to Noypitz that the current situation is unacceptable and that further forbearance should not be expected absent meaningful improvement in payment performance and financial transparency. During a July 16, 2026 call with Percent, Noypitz committed to providing biweekly revenue reports covering its operating locations on Decatur Boulevard in Las Vegas and Rancho Cucamonga, as well as the new Hayward location once opened. Percent requested the first such report on July 30 but only received delivery of very limited information from Noypitz.

LVL Technology Holdings: Exposure to a senior corporate loan

Background: As noted in prior Critical Updates and investor communications, LVL Technology Holding (“LVL”) has continued to experience severe liquidity challenges and has been unable to fund product development or materially grow revenue during 2025. Recent interest payments on the LVL note program have been made from the cash reserve established at the inception of the transaction, as LVL has not remitted funds. The LVL1 2024-3 tranche, which matured on September 4, 2025, remains unpaid. On September 9, 2025, LVL’s CEO confirmed that the company was not in a position to make the required repayment, and no payment was received within five business days. As a result, this transaction has been placed in “Work-out” status. LVL has pursued several strategic options, including potential M&A transactions. Two prior offers (each below $500,000) have fallen through, and while LVL is pursuing a third potential acquisition, progress has been slow. Recovery prospects remain highly dependent on a successful sale of the business or its assets. In the meantime, client attrition has continued as LVL has been unable to invest in product development for most of 2025.

Underwriter Response: With the underwriter’s close support, Percent has sent a notice of default to LVL and has received a business update from it on Monday September 29. A status update was received on the potential acquisition of LVL but progress is slow. Aluna Partners is exploring alternative avenues for recovery in the event no offer to purchase LVL or its assets is received.

• Principal at Start of Default: $4.0M
• Recovered So Far: $0.00M (0.0%)
• Remaining Principal Outstanding: $1.00M
• Charged off: $3.00M

Current Status: LVL is continuing to pursue a potential sale of the company. Aluna Partners is exploring alternative avenues for recovery in the event no offer to purchase LVL or its assets is received. LVL has been reduced to a single notable contract and a single full time employee.

Against this backdrop, two potential avenues for a partial recovery remain (i) making partial payments from the limited revenues available and (ii) a sale of the company. Regarding option (i), LVL is exploring a joint venture which may increase revenues but this is still in an early exploration stage. Further, Percent, Aluna, and LVL have identified potential cost savings that may allow LVL to restore some payments. However, these payments, if they can be realized at all, are unlikely to exceed $15,000.00 for all of Q1 2026. This compares to monthly ordinary interest payments on the note of $66,233.87 per month (excl. default / penalty interest). Further, the nature of the company's revenues mean any payments will likely be irregular in terms of their timing rather than on a consistent monthly schedule. Lastly, should customers decline to renew contracts as they come due, revenue is likely to decline further. One large contract is due for renewal in the first half of 2026 and the company’s ability to continue operating is heavily dependent on this client choosing to renew. As for option (ii), the company continues to engage with potential acquirers. There are two newer prospects that LVL is in communication with and there are three other parties that expressed interest in the past that may be willing to re-engage with LVL. However, M&A opportunities are slow to convert into an actual transaction, are very uncertain in timing and likelihood of closing, and are unlikely to result in a repayment in full of the Percent notes. As a result of the above, Percent is looking into a restructuring of the loan to LVL, which may include a material write-down and/or a material reduction in interest payments. Such a restructuring may allow LVL to raise new capital, garner more interest from potential acquirers, pursue new ventures, and thus preserve some partial recovery to investors. Given the very low likelihood of any meaningful recovery, Percent charged off 75% of remaining principal balance on December 29, 2025. Further conversations with the borrower have not indicated any tangible improvement.

Carryt: Exposure to a senior corporate loan

Background: Percent did not receive the scheduled September 10 interest payment on all outstanding notes from the CAR1 program within five business days and the transaction has been moved to “Work-out” status.

Underwriter Response: Percent and Aluna Partners have been in ongoing communication with Carryt to emphasize the importance of timely servicing of platform notes. On September 30, Percent held discussions with Carryt and Aluna Partners, regarding Carryt’s plans to meet the missed payment.

• Principal at Start of Default: $6.1M
• Recovered So Far: $0.00M (0.0%)
• Remaining Principal Outstanding: $6.1M

Current Status: Carryt confirmed that its cash reserve was fully depleted after covering the August 10 interest payment. Carryt advised it expected to receive $65,000 during the week of September 22 from an advance payment on an existing customer invoice. However, by the end of September, Percent had only received $25,000. Carryt also anticipates approximately BRL 500,000 from a SAFE note issued to Evoy Consórcios within the next two weeks, which would supplement funds to cover the September 10 interest obligation. Over the long term, Carryt is pursuing multiple financing avenues to stabilize operations and address payment obligations, including:

• Discussions with several finance companies to raise approximately $100,000;

• A debt capital raise with lenders in Colombia and Europe; and

• A credit facility currently under investment committee review could provide about $1,000,000, of which $250,000–$500,000 would be used to partially repay principal on Percent platform notes and the remainder to fund operations.

Additionally, Carryt remains in the due diligence phase of a Series A equity raise, targeting USD $8,000,000 in proceeds, with funds expected by the end of Q4 2025.

Minor amounts were received over the course of September and October but these were insufficient to fully cover interest due. As of December 2025, prospective take out transactions for the Percent notes have been delayed to 1H 2026. As of April 30, 2026, Percent and Aluna Partners have progressed negotiations with Carryt and have agreed in principle via email to a 6-month forbearance agreement related to the CAR1 note program. The proposed structure includes a defined payment schedule based on EBITDA, subject to a minimum monthly payment of $50,000, as well as enhanced security provisions, including new share pledge agreements to strengthen Percent’s collateral position and improve enforceability. Final documentation is currently under review by Carryt and its counsel and is expected to be finalized within the next few weeks. Carryt previously expected to receive a bridge loan and tax rebate by March 31, 2026; however, there has been no recent update confirming the status or timing of these proceeds. Carryt also advised that the equity raise for approximately $7,700,000, previously expected to be finalized by December 31, 2025, and subsequently delayed to June 30, 2026 has been slower than expected, particularly with respect to the government-backed development bank, and overall timing remains uncertain. Carryt is also continuing to explore additional capital-raising avenues, including engagement with potential investors in Europe, while Percent awaits Q1 2026 financial reporting to further assess the company’s cash flow generation and liquidity position. Further potential refinancing avenues were added to the company’s plans in Q1 2026, including through new hired advisors to explore potential investor interest from investors in regions outside Latin America. After considerable back-and-forth, Carryt and Percent agreed on key terms for a forbearance agreement that include partial interest payments and an approximately 6 month extension in the term, among other terms. On September 7, 2026, Percent and Carryt agreed to and signed the forbearance agreement. Over a forbearance period running through year-end 2026, Carryt agrees to make monthly $50,000 payments. The first payment was not received when due though the borrower insists the payment is forthcoming.

SmartBeemo: Exposure to a senior corporate loan

Background: Smartbeemo has experienced ongoing liquidity constraints driven by its inability to reach sustained profitability and reliance on external capital to fund operations and service debt obligations. Beginning in late 2025, Smartbeemo utilized cash reserves to meet interest payments under the BMO1 2025-4 and BMO1 2025-5 platform notes (collectively, the “BMO1 Notes”), and has not since replenished reserves to required levels. Despite founder capital injections exceeding $120,000 in early 2026 and efforts to reduce customer acquisition costs through a revised operating model, Smartbeemo remains EBITDA and net income negative. In March 2026, Smartbeemo failed to make scheduled interest payments due on March 23, 2026, and the applicable grace period has elapsed, resulting in the BMO1 Notes being placed into workout status.

Underwriter Response: Percent and Aluna Partners are in active dialogue with the Borrower to assess its financial position and determine an appropriate path forward. Smartbeemo has been responsive and has provided updates on its business performance, strategic initiatives, and ongoing capital raise efforts. As of March 2026, the Borrower is currently pursuing an equity raise expected to range between $500,000 and $1,000,000, though timing remains uncertain. Percent is advocating for an immediate partial payment while working toward full remediation of the missed interest obligations. Discussions are ongoing to evaluate potential restructuring options and near-term liquidity solutions.

• Principal at Start of Default: $4.00M
• Recovered So Far: $0.00M (0.0%)
• Remaining Principal Outstanding: $4.00M

Current Status: Smartbeemo remains actively engaged with Percent and Aluna Partners regarding its financial condition and repayment obligations. On August 28, 2026, Percent and Smartbeemo entered into a forbearance agreement pursuant to which Percent agreed to forbear from exercising remedies with respect to certain specified defaults through March 31, 2027, subject to Smartbeemo satisfying its payment and other obligations under the agreement. Under the agreement, Smartbeemo was required to make an initial $10,000 payment upon signing, which was received and distributed to investors on August 31, 2026. Smartbeemo is also required to make minimum monthly payments of $12,500 in September 2026 and $15,000 per month from October 2026 through the end of the forbearance period, with each monthly amount payable in two equal semimonthly installments due on the 15th and 30th of each month. The agreement also provides for higher monthly payments if Smartbeemo's net revenues meaningfully exceed current expectations. Specifically, Smartbeemo is required to make a monthly revenue-based payment equal to 10% of the amount by which net revenue exceeds $400,000, if such payment would exceed the applicable minimum fixed monthly payment. Based on the company's current projections, Percent does not expect these revenue-based payments to exceed the required minimum payments during the forbearance period. Interest and default interest continue to accrue at approximately $85,561 per month. Any accrued interest in excess of the cash payments made during the forbearance period will remain outstanding and payable by Smartbeemo. Smartbeemo cannot extinguish its obligations under the loan without repayment of such overdue accrued interest. Percent's forbearance may terminate early, restoring its ability to exercise remedies, if Smartbeemo fails to make a required forbearance payment or if another Event of Default occurs other than the specified defaults covered by the agreement. The forbearance agreement also provides Percent's consent to the renewal of a merchant cash advance obtained by Smartbeemo earlier this year and requires Smartbeemo to obtain Percent's consent prior to any subsequent renewals of that debt. Except as modified by the forbearance agreement, the terms of the original promissory note continue to govern. Smartbeemo is also required to provide updated financial projections quarterly. Smartbeemo continues to transition toward a content creator-led customer acquisition strategy and upgrade its checkout and payments infrastructure. The company is not currently expected to generate sufficient cash flow or raise sufficient near-term capital to repay the Percent notes in full by March 31, 2027. Smartbeemo's current projections indicate modest positive EBITDA of approximately $38,000 by Q4 2026 on net revenues of approximately $1.27 million. Percent will continue to monitor Smartbeemo's financial performance and compliance with the forbearance agreement and expects to reassess the company's performance ahead of the end of the forbearance period to determine the next phase of the workout process. In the interim, Percent will continue to receive and distribute partial interest payments made by Smartbeemo to investors. As of the end of September 2026, the first 3 payments due have been received. Percent will continue to provide updates as the situation evolves.

Detailed Workout Summaries (Asset-Based Notes)

Detailed Workout Summaries per Asset-Based Notes Borrowers

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 comprises more than 80% of the remaining outstanding portfolio. 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 had expressed that they preferred to wait until a later stage of the insolvency proceedings before making an offer. On Tuesday May 27, 2025, Zinobe notified Percent that ASIC S.A.S., the obligor of the large delinquent loan, comprising the vast majority of the remaining portfolio, has proposed a payment schedule for creditors. This was the expected next step in the ASIC S.A.S. insolvency proceedings. The proposed repayment schedule would feature annual payments beginning in 2028 and continuing until 2034 with the largest payments scheduled for the last two years, 2033 and 2034. The initial payment schedule remains subject to approval; however, more recent revised proposals have been put forward with less favorable terms. Following the receipt of the proposed payment schedule, Percent requested Zinobe to inform two potential loan buyers of the updated status of the ASIC S.A.S. workout. Previously, potential buyers of this loan were not interested in proceeding until the insolvency proceedings progressed further. Unfortunately, one of these potential buyers has declined to make an offer for the loan given the long repayment horizon. Separately, Percent understands that Tangerine Pomelo Group, S.A.P.I. de C.V., the Mexico-based parent company of Zinobe, has since exited restructuring proceedings and is now focused on securing new financing to support operations. As of July 2026, Percent continues to receive periodic updates on the status of Zinobe, its parent company Tangerine Pomelo Group, S.A.P.I. de C.V. (“Tangelo”), and ASIC S.A.S. Tangelo has exited restructuring proceedings and Zinobe expects to do the same in Colombia by mid-June 2026. Tangelo is also in discussions with creditors to secure a new credit line to support renewed business growth. Nonetheless, recovery prospects for the Percent notes remain primarily dependent on ASIC, which continues to be in restructuring proceedings. While ASIC previously proposed a repayment schedule with payments from 2028 through 2034, more recent proposals are materially less favorable. A revised plan received sufficient creditor support; however, a judicial confirmation hearing has not yet been held. Under the current proposal, interest payments for Class Five creditors would begin in 2031, with principal repaid in eight quarterly installments between 2037 and 2038, and interest accruing at approximately 2% annually. The principal balance owed by ASIC to Zinobe, in which Percent holds a participation interest, is approximately COP 2.9 billion (approximately $900,000), compared to the outstanding principal balance of approximately $862,000 on the Percent notes. In addition, in December 2025, Zinobe received an offer from a private buyer at approximately ten cents on the dollar for the ASIC debt. Percent declined the offer and countered at a higher level; however, no further engagement has been received from that party or other potential buyers. Zinobe continues to seek a buyer, although interest remains limited given the current restructuring terms.

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 (0.0%)
• 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. Sharestates has already obtained a property manager since the property already has tenants. Sharestates began renovating several units to improve marketability and enhance overall value, with the goal of maximizing returns for investors. Since then, Sharestates has received two offers for the full 131-unit Beaumont portfolio. Unfortunately, the prospective buyers did not want to move forward. Sharestates has initiated the process of pursuing a judgment against the borrower. Additionally, Sharestates has completed its review and determined that it has sufficient information to commence legal proceedings against the guarantors. Sharestates is currently finalizing additional legal analysis regarding the interaction between Texas foreclosure and sales law and the New York–governed guarantee, primarily to ensure the complaint is appropriately structured and that the amounts sought are properly supported. As of April 2026, Sharestates has confirmed that demand letters related to the guarantee were approved on April 1 and are currently being served on the guarantor. Sharestates is awaiting confirmation of service, after which counsel is expected to provide a more detailed timeline and outline of next steps with respect to enforcement actions. Based on initial guidance from counsel, voluntary repayment by the guarantor is not expected. If the April 30, 2026 cure date passes without payment, Sharestates intends to proceed with filing a legal action to enforce the guarantee. At this stage, Sharestates’ counsel is evaluating the optimal enforcement strategy, including the form of action, whether to pursue a consolidated or separate filing approach, and the appropriate jurisdiction. While the guarantee limits many potential defenses, the guarantor may seek to challenge standing or the amount of damages claimed. Additionally, given potential delays in New York courts, a precise timeline for resolution remains uncertain. Sharestates’ counsel is currently finalizing its recommended approach, including estimated timing and costs. At the same time, there is also ongoing broker search for a potential sale of the underlying property. Updates will be shared as negotiations progress. Interest continues to accrue at a rate of 11.50% per annum on the outstanding principal. Percent will continue to monitor the situation closely and provide further updates as developments progress.

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 1st, 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 is 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 (0.0%)
• 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 was required 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. 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. To memorialize subsequent extensions, Sharestates has since finalized a forbearance agreement with the borrower for the property located at 2604 North College Avenue. Under the terms of the agreement, the borrower has paid interest for April and May 2025. Interest payments for June, July, and August have been deferred and will be due at payoff. The maturity date has been extended to November 1, 2025. In September 2025, the forbearance period for the property located at 2604 North College Avenue, Indianapolis, IN ended. Despite the temporary relief granted, including deferred interest payments for June through August, the borrower continues to experience cash flow challenges and has not resumed regular payments. Sharestates remains in active communication with the borrower and is pursuing a repayment and exit strategy, which may include refinancing or a sale of the property, while reserving the right to enforce the loan terms ahead of maturity if necessary. Further updates will be provided as additional developments occur. As of December 2, 2025, Sharestates had informed us that a buyer had been identified for the property located at 2604 North College Avenue, Indianapolis, IN. The prospective buyer had submitted an offer of $280,000, and the parties are currently targeting a tentative closing date of December 31, 2025. Due to the continued non-responsiveness of the new buyer for the property located at 2604 North College Avenue, Sharestates has decided to proceed with initiating foreclosure proceedings. Sharestates is taking the necessary steps to enforce its rights under the loan documents and will provide further updates as the foreclosure process progresses and additional milestones are reached. Sharestates remains in active communication with the relevant parties and will provide further updates as additional developments occur.

Juancho Te Presta: Exposure to a senior asset-based consumer loans

Background: Juancho Te Presta (JTP) informed Aluna Partners on September 27, 2024 that it initiated a formal reorganization process to address recent financial challenges, and Aluna Partners promptly notified Percent. These challenges primarily stem from the company's inability to achieve operational breakeven due to its limited current portfolio size, obligations to replace delinquent assets under its financing facilities, and interest expense, particularly on a high interest corporate debt the company has outstanding with Alma (https://almavest.com/). This reorganization pertains to JTP’s principal corporate entity and it does not extend to Digital Lending S.A.S., the special purpose vehicle (SPV) set up for the Percent note program. However, there are material indirect consequences of the restructuring. Despite the restructuring process, JTP will continue servicing its existing loan portfolio held within the SPV.

Underwriter Response: Juancho Te Presta and Aluna Partners explored the appointment of a backup servicer. Percent and Aluna Partners were evaluating sharing in the cost of servicing the portfolio by allowing Juancho Te Presta to collect a servicing fee from the collections it obtained on the collateral portfolio for this offering. For the time being, Percent and Aluna Partners decided not to accept this proposal.

• Principal at Start of Default: $0.70M
• Recovered So Far: $0.24M (34.5%)
• Remaining Principal Outstanding: $0.46M

Current Status: Despite Juancho Te Presta’s efforts, including their success in collecting on some delinquent loans, the servicing of the portfolio has been hampered by the following impediments: First, Juancho Te Presta has reduced the size of its external servicing team from 20 to 12 people; that said, the internal servicing team remains at a size of 4 people. Second, Juancho Te Presta has observed that consumer insolvency filings in Colombia have grown more common. Third, laws protecting consumers from potentially harassing collections actions and data protection laws impact on the ability to report missed payments to credit bureaus have affected Juancho Te Presta’s ability to collect amounts due from underlying borrowers through its usual collections methods. Fourth, Juancho Te Presta has observed a negative trend in its ability to successfully contact delinquent borrowers. Lastly, while Juancho Te Presta has the ability to deduct payments from the wages of delinquent borrowers, successfully doing this takes time. While the company typically initiates the process once loans are 10 days past due, it typically takes 2-3 months from there to receive the first payment by wage garnishment in the case of a cooperative employer. Unfortunately, Juancho Te Presta estimates that approximately 60% of employers are initially uncooperative to requests by Juancho Te Presta to exercise this remedy, despite the company’s right to do this. Though performing loans have been collected on and many have repaid in full, the remaining portfolio comprises loans that are largely delinquent. On January 30, 2026, the Superintendency of Corporations in Colombia formally commenced liquidation proceedings for Juancho Te Presta and appointed a liquidator, transferring control of the company away from prior management. Juancho Te Presta is no longer funding certain administrative costs of Digital Lending S.A.S. If the SPV must assume additional servicing responsibilities, operating expenses could rise. As a result, recoveries may be delayed and net proceeds reduced due to increased legal and operating costs. Digital Lending S.A.S. submitted a petition to the Superintendency of Corporations in Colombia seeking to exclude the receivables collateral and related proceeds securing the Percent facility from the liquidation estate of Juancho Te Presta. The petition was submitted at the urging of Percent, Aluna Partners, and Colombian counsel, as Digital Lending owns the receivables while Percent holds a security interest in the assets. As of June 29, 2026, the Superintendency of Corporations in Colombia granted Digital Lending S.A.S.'s petition to exclude the receivables collateral securing the Percent facility, and the related proceeds, from the liquidation estate of Juancho Te Presta. This ruling protects investors' interests in approximately 1,000 underlying loans with an outstanding balance of approximately $290,000 at current exchange rates. In the same order, the court authorized Juancho Te Presta to continue servicing the portfolio for an additional two months. However, based on information provided by Juancho Te Presta's former management team and the representatives currently managing the SPV, the liquidator has ceased funding certain critical technology systems necessary for portfolio servicing and reporting. As a result, servicing operations have been disrupted and the delivery of information required for ongoing surveillance reporting has been interrupted, with the timing for resolution remaining uncertain. The remaining portfolio continues to consist primarily of substantially delinquent loans, with approximately 95% of the underlying loans more than nine months past due. Estimated collections, net of collections expenses, are expected to be low considering the servicing disruptions discussed above. Percent and Aluna Partners are also evaluating alternative recovery strategies, including a potential sale of the remaining portfolio and discussions regarding a negotiated settlement with Digital Lending and its principals. While initial indications of interest were received from prospective buyers, neither converted into a worthwhile offer. Percent will continue to provide updates as material developments occur.

FAT Brands: Exposure to a junior asset-based financing to restaurant franchising

Background: Percent syndicated exposure to FAT Brands through both the FAT2 and FAT3 note programs. The FAT2 program is secured by subordinated Class M-2 bonds issued by FAT Brands GFG Royalty I, LLC, and the FAT3 program is secured by subordinated Class M-2 bonds issued by FAT Brands Royalty I, LLC. In each case, the underlying securitizations are backed primarily by franchise royalty revenues and related cash flow streams. Beginning in Q3 2025, FAT Brands failed to transfer required securitization collections into the designated collection accounts, resulting in the declaration of a Potential Rapid Amortization Event and subsequent Event of Default by the trustee. The trustee later accelerated the outstanding principal of all series of notes under the securitizations, including the Class M-2 bonds collateralizing both the FAT2 and FAT3 programs. On January 26, 2026, FAT Brands filed for Chapter 11 bankruptcy protection. As a result of the automatic stay under the Bankruptcy Code, enforcement actions with respect to the underlying securitization collateral are currently stayed. The scheduled January 30, 2026 payments were not received, and after the applicable grace period elapsed, both the FAT2 and FAT3 programs were designated as being in “Workout” status on the Percent platform.

Underwriter Response: Percent has been actively monitoring developments related to FAT Brands and the underlying securitizations. Following the declaration of the Potential Rapid Amortization Event and subsequent Event of Default, Percent engaged with the securitization trustee, company management, and external advisors to assess the impact on the subordinated Class M-2 bonds collateralizing the Percent notes. Upon FAT Brands’ Chapter 11 filing on January 26, 2026, Percent evaluated the implications of the automatic stay, including the temporary suspension of enforcement rights and the inability to compel transfers of securitization cash flows outside of the bankruptcy process. Percent is currently reviewing the proposed debtor-in-possession (DIP) financing and participating in discussions with company advisors and bondholder representatives to assess how the DIP structure and broader restructuring may affect recovery prospects for the M-2 bondholders. In parallel, Percent is working with legal counsel and relevant stakeholders to protect the interests of noteholders, evaluate potential restructuring outcomes, and maximize principal recovery.

• Principal at Start of Default: $15.30M
• Recovered So Far: $0.00M (0.0%)
• Remaining Principal Outstanding: $15.30M

Current Status: Although reported securitized revenues in recent quarters have exceeded debt service requirements on the underlying M-2 bonds, cash flows have not been remitted as required and remain subject to the bankruptcy process. Certain creditors participating in the mediation have expressed support for a sale process, though discussions regarding bidding procedures remain ongoing. FAT Brands filed a motion seeking approval of a process to market and sell all or a portion of its assets or brands, with proposed initial bid and objection deadlines in late April 2026. Effective March 19, 2026, CEO Andrew Wiederhorn took a leave of absence pursuant to a court-approved stipulation, and the company has terminated the employment of three family members previously in senior roles. These changes were implemented in connection with broader governance and restructuring efforts. In connection with the restructuring, the bankruptcy court has approved new DIP financing consisting of senior secured superpriority multiple-draw term loan facilities totaling up to approximately $307.6 million, including a “new money” component of approximately $76.9 million, with the remainder representing a roll-up of certain prepetition debt. The financing is being provided by investment funds affiliated with senior securitization noteholders and is intended to support operations, administrative costs, and the sale process. The DIP financing structure allows participating lenders to roll up portions of their existing Class A-2 holdings into the new superpriority facility, which may impact recoveries to junior tranches, including the M-2 notes. FAT Brands has since announced the results of the bidding process for its assets. Of the brands included in the sale process, only Hot Dog on a Stick and Elevation Burger received successful cash bids. The remaining assets were bid primarily through credit bids consisting of DIP financing obligations, Class A notes of the related securitizations, and a portion of the Class B notes. Following the May 2026 auction, the sales of the successful bids closed, with most transactions completing on June 15, 2026. A joint plan of liquidation was subsequently filed, received the requisite creditor support, and was confirmed by the bankruptcy court on July 27, 2026. Under the confirmed plan, a liquidation trust will administer the remaining estate assets, pursue legal claims, and make distributions in accordance with the court-approved payment waterfall. Percent filed an objection to the proposed sale, arguing that the liens securing the Class M notes should attach to the cash proceeds generated by the sale and therefore maintain priority over general unsecured claims. Percent was successful in being recognized as a distinct class from general unsecured creditors with respect to recoveries from the Class M-2 bond collateral. However, given the sale price achieved for the underlying assets, the structure of the credit bids, and the amount of more senior securitized debt, Percent does not expect recoveries through the Class M-2 collateral to exceed those available to general unsecured creditors. Under the confirmed liquidation plan, any shortfall in recoveries from the Class M-2 collateral will participate alongside general unsecured claims in distributions from the liquidation trust. The confirmed liquidation plan provides funding for the liquidation trust to pursue remaining legal claims and recover estate assets, with the trust authorized to operate for up to five years, subject to extension with court approval if necessary. Percent continues to monitor proceedings in the liquidation process and will provide further updates as material developments occur.

Iron Horse Credit: Exposure to a junior asset-based financing to Iron Horse

Background: On February 25, 2026, one of the two Iron Horse Credit (“IHC”) notes outstanding on the Percent platform was scheduled to mature. While Percent has secured enough interest from investors to proceed with the refinancing, IHC was unable to provide a customary representation or provide a required report to close the refinancing on February 25, 2026. Specifically, IHC was not able to confirm the level of the ‘Note Borrowing Base’ calculated as the amount which IHC may borrow against the adjusted value of its assets. When this delay arose, Percent demanded and received from IHC an interest payment covering interest accrued up to February 25. This was distributed to investors on February 26 while further information from IHC remained due. IHC informed Percent on February 24 that one of their largest clients, Infinity, is in the midst of financial trouble. Despite the facility being marked as in good standing in the most recent borrowing base report submitted up to that point in time, IHC stopped receiving collections on the accounts receivable for several weeks, an underperformance which, according to IHC, is highly unusual and was first noticed earlier in February. IHC disclosed that there was disagreement between IHC and its senior lender, Forbright Bank, as to how to treat this obligor for purposes of calculating the borrowing base.

Underwriter Response: Percent would not close the refinancing while the senior lender judges there to be a borrowing base deficiency on their loan, regardless of the specifics of the particular situation with Infinity, its level of delinquency, and prospects for recovery. As a result, Percent cancelled its refinancing offering with the ticker IHC1 2026-1. Percent spoke with the CEO of IHC on March 3rd and received an updated borrowing base report on March 4th. Further updates have been provided by IHC since then and Percent has also spoken with IHC’s senior lender, Forbright Bank, to ensure parties remain aligned as to the status of IHC and its orderly wind-down.

• Principal at Start of Default: $1.56M
• Recovered So Far: $0.00M (0.0%)
• Remaining Principal Outstanding: $1.56M

Current Status: Percent spoke with the CEO of IHC on March 3rd and received an updated borrowing base report on March 4th. As of the report date, the portfolio value stood at $33.85 million as compared to a $24.97 million outstanding principal balance on the Forbright Bank senior facility and $1.56 million outstanding on the Percent junior facility. However, $3.12 million of these assets constituted excesses over an obligor concentration limit and $7.06 million of these assets were deemed ineligible. This latter amount is primarily comprised of the Infinity position, which was deemed ineligible in its entirety by Forbright Bank, leading to a breached borrowing base on the senior facility. Based on IHC’s books and records, the Infinity exposure of approximately $5.6 million is supported by approximately $9.2 million of outstanding accounts receivable collateral. Confirmations from debtors with past-due balances were received, indicating payments were forthcoming. However, as of the end of March 2026, no payments were made. IHC informed Percent that they did not have sufficient liquidity to cure the borrowing base deficiency under the Forbright facility. Iron Horse signed a non-binding letter of intent (March 25, 2026) to sell the vast majority of its performing portfolio at par, with the potential for an additional premium of up to $1.5 million contingent on post-close performance milestones. On or about April 30, 2026, Iron Horse closed on the sale of facilities associated with three underlying portfolio obligors. The sale proceeds, received at par, allowed Iron Horse to reduce the outstanding principal balance of the senior Forbright Bank facility from $26.40 million as of March 31, 2026, to $15.58 million as of April 30, 2026, with ten positions remaining in the portfolio. Of the five performing positions, three are senior loans with no known breaches and aggregate outstanding balances of approximately $7.85 million. A fourth performing position, with an outstanding balance of approximately $2.9 million, has a borrowing base deficiency of approximately $1.2 million following the recent discovery of an overstatement of the underlying borrower’s inventory. Near-term deliveries of additional inventory are expected to address approximately half of this collateral shortfall. The remaining performing position is a second-lien loan with an outstanding balance of approximately $170,000 that is expected to be repaid by year-end. The two remaining positions continue to consist of the previously disclosed non-performing loans, including the Infinity exposure and an inventory line of credit, with aggregate outstanding balances of approximately $6.9 million. Recovery efforts for both positions have progressed to litigation and may be prolonged. Recoveries to Percent note investors will be distributed after the senior Forbright facility has been repaid in full. The refinancing of the largest performing loan, with an outstanding balance of approximately $3.8 million, is expected during September 2026, while another performing loan of approximately $1.75 million is expected to be repaid in October following the obligor’s sale of its remaining assets. Together with remaining expected premium payments and repayment of the approximately $170,000 second-lien loan, these proceeds are expected to reduce the senior Forbright facility to approximately $2.1 million. Repayment of the remaining performing loans, totaling approximately $5.2 million and including the presently undercollateralized loan, and/or recoveries from the two nonperforming positions would then be required to repay the remaining senior facility balance and approximately $1.6 million of Percent notes outstanding.

Full repayment of the Percent notes is not expected before October 31, 2026, and the ultimate timing will depend on the refinancing or repayment of the remaining performing positions or, failing that, recoveries from the nonperforming positions.

Quartix: Exposure to a junior asset-based financing to Quartix

Background: Beginning in early 2026, performance across Quartix's underlying receivables portfolio deteriorated significantly. As receivables aged and became ineligible under the borrowing base requirements of Quartix's senior credit facility, Quartix breached the borrowing base under both its Senior Loan and the QTX1 notes. The proportion of receivables eligible for maximum advance rates declined substantially, while the portion of the portfolio deemed ineligible for credit increased materially. In response to these developments, Quartix notified Percent of its intention to wind down its business and subsequently entered into a forbearance agreement with its Senior Lender. Under the terms of the forbearance agreement, collections generated by the underlying portfolio are currently being applied toward repayment of the Senior Loan and may not be distributed to junior stakeholders, including holders of the QTX1 notes. On May 8, 2026, Quartix informed Percent that it would not be able to make the interest payment due on May 4, 2026. Following the expiration of the applicable grace period, the QTX1 notes were designated as being in "Workout" status on the Percent platform.

Underwriter Response: Percent has been actively monitoring developments related to Quartix and its underlying receivables portfolio. Following Quartix's notification that it intended to wind down its business and its subsequent disclosure that it would be unable to make the May 2026 interest payment, Percent has remained in communication with Quartix regarding the status of the transaction. Percent also held a recent call with the Senior Lender, during which the Senior Lender confirmed that Quartix is currently receiving a servicing fee of approximately $20,000 every four weeks to cover operating expenses while collections generated by the portfolio are being directed toward repayment of the Senior Loan.

• Principal at Start of Default: $2.60M
• Recovered So Far: $0.00M (0.0%)
• Remaining Principal Outstanding: $2.60M

Current Status: Quartix has continued collecting from obligors but between the April 8, 2026 borrowing base report and May 27, 2026, collections have only been obtained from 10 of the 17 borrowers in the portfolio. These borrowers comprise approximately $4.05 million of the portfolio principal as of May 27, 2026. The other 7 borrowers comprise approximately $3.48 million of the portfolio principal (approximately $7.53 million together with performing assets). Payment plans are still being arranged with underlying portfolio borrowers. However, certain of the obligors have either been difficult to contact, have not made payments in over 60 days, or face business challenges that complicate efforts to secure a recovery. Efforts to secure cooperation are expected to step up as Quartix is drafting letters with counsel to obtain borrowers’ cooperation. As of June 17, 2026, 9 of the 16 obligors in the portfolio (comprising $4.8 million of $6.9 million remaining balance) have either not made a payment since our first update or are known to be under financial stress. In some cases, obligors expressed needing more time to refinance the Quartix-provided financings. However, one of these obligors has proposed a payment plan, another is expected to make a payment within the next two weeks, and a third has offered to settle the outstanding balance at a discount. With respect to other obligors, efforts to secure recoveries via a personal guarantee or assets of the borrowers may present a viable path to recoveries. Nonetheless, given the outstanding balance of the portfolio assets, the amount due to the senior lender, and the proportion of the portfolio that is challenged, it is likely that recoveries on the Percent note will depend on collections received on assets that are presently underperforming or whose obligors are facing financial stress. Amounts collected under this junior financing structure are first being applied to repay the senior lender. The balance on the senior loan is $3.90 million as of June 24, 2026. The majority of this reduction was facilitated by the repayment in full of an approximately $323,000 position in the portfolio.

Fenchurch: Exposure to a senior asset-based financing collateralized by UK litigation financing receivables

Background: Fenchurch Legal Limited (“Fenchurch Legal”), the originator and servicer under the FEN1 program, entered into administration following enforcement by Lowry Trading Limited, a legacy secured creditor holding a first-charge debenture over Fenchurch Legal. The appointment was made out of court by Lowry as a qualifying floating charge holder, following a dispute over the outstanding balance on a corporate loan that matured on March 31, 2026. Fenchurch Legal has attempted to contest the appointment of an administrator and has ongoing proceedings against Lowry Trading in court. Fenchurch SPV 5 Limited (“SPV5”), the borrowing entity under the Percent notes, is a separate legal entity and remains active, and is not in administration. As of April 23, 2026, Percent held a cash reserve of approximately $119,000 (net of potential legal costs set-aside of $50,000), representing approximately 2.5 months of aggregate interest coverage. SPV5 initiated a payment sufficient to cover interest due in April, but the payment is held by the provider of Fenchurch’s FX conversion and hedging counterparty as a consequence of the administration of Fenchurch Legal. Thus, the April 2026 interest payment on the Percent notes was made on April 24, 2026, using the cash reserve held by Percent, resulting in a cash reserve balance of $121,569.38 as of April 26, 2026.

Underwriter Response: Percent took immediate actions following notification of the administration. UK litigation counsel with a restructuring and insolvency practice (Trethowans LLP) was instructed on April 15, 2026. On April 22, Percent, its counsel, Fenchurch SPV5, and the appointed administrator participated in an introductory call. Percent explained the structure to the administrator, mainly that SPV5 was assigned the underlying loan receivables and that those loans and their cash flows belong to SPV5, not Fenchurch Legal. The administrator did not dispute any of this. We are now preparing written correspondence to the administrator to formalise this position and preempt any change in their view.

• Principal at Start of Default: $3.79M
• Recovered So Far: $0.00M (0.0%)
• Remaining Principal Outstanding: $3.79M

Current Status: On June 16, 2026, Fenchurch SPV 5 Limited failed to make the scheduled interest payment due under the FEN1 note program. Following the expiration of the applicable grace period after the missed interest payment, the FEN1 note program was designated as being in "Workout" status on the Percent platform. No further interest payments have been received since the missed June 16 payment. Unpaid interest continues to accrue at the applicable note rates, with an additional 2.0% per annum accruing from June 24, 2026, in accordance with the transaction documents. Since then, Fenchurch SPV 5 Limited has entered administration. As the holder of the first-ranking qualifying floating charge over SPV5, Percent exercised its right to select the administrators rather than accept a competing appointment and, on June 26, 2026, appointed Andrew Hosking and Andrew Andronikou of BTG Begbies Traynor as joint administrators of SPV5. Percent is also discussing with Trethowans whether pursuing a fraudulent misrepresentation claim against other relevant parties may provide an additional avenue to protect noteholder recoveries. The underlying loan book has been sold to Fenchurch Recovery SPV Limited, a newly formed entity wholly owned by Lowry Trading Limited (“Lowry”), subject to existing security interests in the portfolio. Lowry's counsel has since disputed the senior priority of Percent's security interest in the underlying loan receivables, primarily based on the timing of Lowry's floating charge over Fenchurch Legal's assets and a negative pledge contained in Lowry's security documents. The relevant debenture was originally created in favor of Huddle SPV 17 Limited and subsequently assigned to Lowry. Percent identified the Huddle charge during its initial due diligence and, based on the documents and information provided by Fenchurch Legal at the time, understood that the transfers to SPV5 were permitted under the debenture’s ordinary-course-of-business carve-out and that the loans transferred to SPV5 did not overlap with the loans identified as subject to Lowry’s fixed charge. Percent also relied on Fenchurch Legal’s representation that the Huddle/Lowry charge did not extend to all of Fenchurch Legal’s assets and repeated representations from Fenchurch CEO Louisa Klouda that the loan book transferred to SPV5 was free and clear of liens. Further legal review now suggests that the ordinary-course-of-business carve-out is narrow and likely inapplicable. A fixed charge extending to Fenchurch Legal’s book debts may create a defensible charge over the entire Fenchurch Legal portfolio, and even if characterized as a floating charge, it likely crystallized prior to the transfers to SPV5. Accordingly, contesting the extent of Lowry’s charge based on the provisions of the debenture is now considered unlikely to succeed. Percent continues to discuss potential paths forward with its UK counsel, Trethowans LLP, including whether pursuing a fraudulent misrepresentation claim against other relevant parties may better protect noteholder recoveries. On August 25, 2026, Trethowans formally notified Ms. Klouda’s D&O insurer, the Fenchurch Legal administrator, Ms. Klouda and Lowry’s solicitors of a potential claim against Ms. Klouda and Fenchurch Legal for fraud, deceit and/or deliberate concealment of material facts in connection with Percent’s original investment. Trethowans is instructing Counsel to provide an opinion on the merits of the potential fraud claim before further resources are committed, and that opinion remains pending.

Percent is also pursuing or evaluating additional recovery avenues, including (i) enforcement of Ms. Klouda’s limited “bad acts” personal guaranty dated December 16, 2024, which is governed by New York law and represents a potential claim independent of the UK secured-creditor dispute; (ii) SPV5’s position as an unsecured creditor of Fenchurch Legal, including its potential entitlement to a distribution from the “Additional Consideration” payable by Lowry as recoveries on the loan book are received, after payment of secured and preferential creditors; (iii) potential recovery through Ms. Klouda’s D&O insurance, subject to applicable policy terms and exclusions; and (iv) fraudulent misrepresentation claims against Fenchurch Legal.

There is currently no firm timeline for resolution. Litigation relating to the potential fraud claim could take approximately 12–24 months, while recoveries through Fenchurch Legal’s administration will depend on the timing of collections by Lowry/Fenchurch Recovery SPV and could extend beyond that period.

Community Finance: Exposure to a senior asset-based consumer installment leases

Background: Community Finance LLC ("Community Finance") originated consumer installment leases pledged to the Percent note program. In January 2024, Community Finance informed Percent that, due to the high interest rate environment and reduced investor demand for newly originated leases, it had ceased originating new leases and transitioned its business to servicing its existing lease portfolio. As a result, Community Finance was no longer able to replace prepaid, defaulted, or otherwise ineligible leases as contemplated under the transaction documents. Although the note program continued to make scheduled interest and principal payments over the following two years, overcollateralization steadily declined as the portfolio amortized and the remaining assets became increasingly delinquent. All outstanding Community Finance notes matured on July 14, 2026. Following the expiration of the applicable grace period without repayment of the remaining outstanding principal balance, the transaction was placed into workout status.

Underwriter Response: Pi Capital, the third-party underwriter that originated and managed the Community Finance note program, became less engaged in managing the relationship with Community Finance following the departure of the Managing Director responsible for the engagement. As a result, Percent began working directly with Community Finance. On April 11, 2024, Percent and Community Finance entered into a forbearance agreement that conditionally waived Community Finance's obligation to replace underperforming underlying leases, subject to a number of investor protections. These included restrictions on dividends and share repurchases, a requirement that new equity capital above specified thresholds be used to repay the Percent notes until overcollateralization was restored, and an increase in the frequency of collections sweeps from monthly to semi-monthly. The forbearance agreement also granted Percent the right to terminate the arrangement upon the occurrence of specified adverse events, including defaults on senior or pari passu debt or a further deterioration in overcollateralization. Percent has continued to receive regular reporting from Community Finance and remains engaged with the borrower to maximize recoveries, including evaluating a potential sale of the remaining portfolio and other recovery alternatives.

• Principal at Start of Default: $0.22M
• Recovered So Far: $0.00M (0.0%)
• Remaining Principal Outstanding: $0.22M

Current Status: As of July 2026, approximately 89% of the original principal balance of the Community Finance note program has been repaid, together with approximately $369,000 of interest (net of servicing fees). Since then, Percent received an additional $3,000 from Community Finance, of which $2,894.53 was applied to interest and $105.47 to principal. However, the remaining portfolio is largely comprised of substantially delinquent assets with limited recovery prospects. Community Finance continues to collect on the remaining portfolio and is exploring the sale of inactive assets, although Percent believes any such sale is unlikely to generate material proceeds. As of August 10, 2026, the active portfolio consisted of only 10 assets that were less than 30 days past due, with an aggregate remaining lease balance of approximately $8,740. Separately, as of June 2026, the defaulted portfolio consisted of 116 assets with approximately $515,000 of outstanding lease balances, less than 10% of which, by both account count and balance, had received a payment during 2026. While additional recoveries from the remaining portfolio and ongoing legal collection efforts are expected to support limited future payments, Percent does not expect future recoveries to be sufficient to repay the remaining outstanding principal balance in full. Percent will continue to monitor recovery efforts and provide updates as material developments occur.

Nera Capital: Exposure to a senior asset-based financing collateralized by UK litigation financing receivables

Background: Nera Capital Ltd. ("Nera"), as asset manager and claims administrator to Nera Capital Funding (UK) Ltd. (the "SPV"), the borrower under the NER1 note program, provides financing to UK law firms secured by portfolios of litigation finance receivables. Beginning in 2026, the two underlying law firms became subject to heightened supervisory review by the UK Solicitors Regulation Authority ("SRA"), primarily relating to their liquidity, solvency, and funding arrangements. According to Nera, while the underlying litigation assets continued to perform in line with expectations, the SRA review constrained the law firms' ability to make regular cash interest payments under their existing financing arrangements. As a result, the SPV relied on existing cash reserves to make the April and May 2026 interest payments. No settlement proceeds or interest payments were received from the underlying law firms in June 2026, and following the expiration of the applicable grace period after the scheduled June interest payment was not remitted to Percent, the NER1 note program was placed into workout status.

Underwriter Response: Percent has worked closely with Nera, and Nera's lead institutional funding partner, a global private investment firm with more than $35 billion of assets under management, to evaluate alternatives intended to preserve the value of the underlying litigation portfolio and maximize recoveries for investors. Percent has reviewed and negotiated a proposed consensual restructuring that would transfer the underlying litigation claims into lender-specific special purpose vehicles through a true sale, with each lender receiving senior secured notes backed by a first-priority security interest over its respective portfolio of litigation claims. Throughout these discussions, Percent has engaged external legal counsel and has proposed a number of enhancements to investor protections, including restrictions on operating expenditures, strengthened reporting obligations, dedicated lender collection accounts, enhanced security and enforcement rights, and contingency planning for the transfer of claims to alternative law firms if necessary. Percent has not agreed to the proposed restructuring and continues to evaluate whether the revised structure adequately protects the interests of NER1 investors. Separately, Percent has monitored Nera's discussions regarding a potential institutional portfolio sale that may provide an additional source of liquidity for the repayment of existing financing obligations.

• Principal at Start of Default: $20.34M
• Recovered So Far: $0.00M (0.0%)
• Remaining Principal Outstanding: $20.34M

Current Status: The proposed restructuring and potential institutional portfolio sale remain ongoing, with both intended to provide a path toward resuming payments and maximizing recoveries. The restructuring has progressed to the definitive documentation stage, and two other participating lenders executed the Consensual Restructuring Agreement (“CRA”) on August 29, 2026. The CRA establishes the overarching restructuring framework, while Percent has continued negotiating the Percent-specific transaction documents and terms required for its potential accession to the restructuring. Percent has not yet executed or acceded to the CRA. The remaining transaction documents continue to be negotiated and finalized, with October 2, 2026 currently targeted for execution.

Percent elected not to execute the CRA at this stage primarily due to outstanding matters regarding the law firms’ operating budgets and Percent’s approval rights over those expenses. Percent had not yet received or approved the initial budgets and was not comfortable with a framework under which either the initial budgets or subsequent increases in expenses allocated to the Percent silo could be approved without appropriate Percent consent or other agreed limitations. Since then, the parties have made substantial progress addressing Percent’s requested protections through the Percent-specific transaction documents, including limitations on the types of expenses that may constitute Operating Expenses and be allocated to the Percent silo, enhanced financial and claims reporting, restrictions relating to asset dispositions, and protections governing the administration and application of proceeds attributable to Percent-funded claims. Certain documentation and commercial matters remain under review before Percent determines whether to accede to the CRA. Importantly, until Percent accedes to the CRA, decisions made under the restructuring cannot bind the Percent silo, and Percent’s existing financing documents, contractual rights and security remain in place.

Under the contemplated restructuring, the economic rights to amounts owed to the law firms upon successful resolution of Percent-funded claims would be transferred to a Percent-specific SPV. Percent would receive senior PIK notes secured by the SPV’s rights to those proceeds and related economic rights, with amounts outstanding under the existing Percent notes, including principal, accrued and unpaid interest, default interest and other applicable amounts, expected to be incorporated into the new obligations. The contemplated structure would also provide for a security agent/trustee to hold the applicable security for the benefit of the Percent noteholder and for proceeds attributable to Percent-funded claims to be applied through an agreed payment waterfall. Percent has continued to negotiate the treatment and limitations of operating expenses and asset management fees within that waterfall, as these expenses affect the amount and timing of proceeds ultimately available to repay the Percent obligations. The CRA also provides that budgets approved before Percent’s accession cannot result in operating expenses being allocated to the Percent silo without Percent’s written approval and preserves protections relating to fraud, intentional misrepresentation, misappropriation and wilful misconduct occurring prior to the restructuring.

Separately, Nera continues to pursue a potential institutional portfolio sale as an additional source of liquidity. Nera has indicated that the prospective buyer would only acquire the portfolio following completion of the restructuring and currently expects the sale to close by the end of October 2026, subject to completion of the restructuring. The prospective buyer completed its final onsite due diligence in mid-August, although the extent to which the Percent-funded portfolio may be included remains subject to confirmation.

Percent continues to work with Nera, the other participating lenders and counsel toward finalizing the Percent-specific transaction documents and remaining implementation matters. Percent is also evaluating the funding and treatment of restructuring-related costs necessary to implement the contemplated structure. In parallel, Percent will continue to monitor the restructuring and potential portfolio sale as potential avenues for supporting investor recoveries.

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.