Compound Asset Management

The Company, its Parent, and lending subsidiary have minimal or no prior experience in mortgage loan acquisition, underwriting, or managing real estate investments. Officers Inderjit Tuli and Michael Burmi are acknowledged to have very little direct experience making real estate investments.

“Inderjit Tuli & Michael Burmi have very little direct with making real estate investments, and thus will be relying on the advice and guidance of others as they acquire and manage the Company's portfolio.”

The same officers and directors manage an affiliated entity (Compound Real Estate Bonds, Inc.) with substantially similar investment objectives. Assets may be allocated between the two funds at management's discretion without arm's-length standards, and cross-fund transactions are possible.

“Specifically, our officers and directors also manage an affiliated entity, Compound Real Estate Bonds, Inc., that manages a real estate fund with investment objectives like our own that makes loans secured by real estate and real estate investments. Our officers and directors will allocate assets between these two funds in a manner that believe to be fair and equitable, taking into consideration such factors as capital available from each fund, asset mix, risk exposure, targeted return, diversification, and such other factors as they deem appropriate. It is also possible that the two affiliated funds could buy and sell assets from each other, the terms of which transactions will not be the result of arms' length transactions and could favor one fund over the other.”

CH (the Parent) is entitled to all Company profits after bond payments, which may incentivize officers (who have ownership interests in CH) to make riskier business decisions, particularly when outstanding debts exceed available assets.

“Profit Interest of Compound Real Estate Holdings, Inc., Our parent company's right to our any profits we make over and above the amount we must make to repay our bondholders and pay our other expenses may cause our Officers (who have ownership interests and/or compensation agreements with our parent company, CH) to make more risky business decisions than they would in the management of their own assets, particularly when the Company's outstanding debts are larger than the assets available to pay them.”

The Company's agreement with its Parent to pay a 2% annual license fee for use of the Compound Fintech Platform is verbal (not written), exposing the Company to risks including misunderstanding of terms, inability to prove the contract exists, and potential loss of platform access.

“On June 30, 2025, we entered into a verbal agreement with CH to pay a license fee to CH in the amount of 2% of the value of the total Compound Bonds sold on the Compound Fintech Platform per year. In exchange, CH allows us along with current and potential bondholders to use the Compound Fintech Platform. There are no other terms to such verbal agreement.”