COMMERCIAL LOANS

6 Months Ended

Jun. 30, 2023

Receivables [Abstract]

COMMERCIAL LOANS

3. COMMERCIAL LOANS

Loans Receivable

The Company offers short-term secured non–banking loans to real estate investors (also known as hard money) to fund their acquisition and construction of properties located in the New York metropolitan area, including New Jersey and Connecticut, and in Florida. The loans are principally secured by collateral consisting of real estate and accompanied by personal guarantees from the principals of the borrowers. The loans are generally for a term of one year. The short term loans are initially recorded, and carried thereafter, in the financial statements at cost. Most of the loans provide for receipt of interest only during the term of the loan and a balloon payment at the end of the term.

At June 30, 2023, the Company was committed to $8,388,975 in construction loans that can be drawn by the borrowers when certain conditions are met.

At June 30, 2023, no entity had loans outstanding representing more than 10% of the total balance of the loans outstanding.

The Company generally grants loans for a term of one year. When a performing loan reaches its maturity and the borrower requests an extension, the Company may extend the term of the loan beyond one year. Prior to granting an extension of any loan, the Company reevaluates the underlying collateral.

Credit Risk

Credit risk profile based on loan activity as of June 30, 2023 and December 31, 2022:

Performing loans	Developers-Residential		Developers-Commercial		Developers-Mixed Use		Total outstanding loans
June 30, 2023	$	58,112,335	$	10,230,000	$	1,469,000	$	69,811,335
December 31, 2022	$	62,264,463	$	9,300,000	$	2,919,000	$	74,483,463

At June 30, 2023, the Company’s loans receivable consisted of loans in the amount of $40,160, $755,636, $2,635,250, $2,356,000 and $12,435,000, originally due in 2016, 2019, 2020, 2021 and 2022, respectively. The loans receivable also includes loans in the amount of $15,429,000 originally due in the first six months of 2023.

Generally, borrowers are paying their interest, and the Company receives a fee in connection with the extension of the loans. In all instances, except as described below, the borrower has either signed an extension agreement or are in the process of signing the extension. Accordingly, at June 30, 2023, no loan impairments exist and there are no provisions for impairments of loans or recoveries thereof.

During February 2023, the Company determined to, and sold, one of its loans receivable to a third-party investor at its face value of $485,000. Assaf Ran, the Company’s President and Chief Executive Officer, participated in such acquisition in the amount of $152,000. In addition, in June 2023, the Company filed a foreclosure lawsuit relating to one property, as a result of a deed transfer from the borrower to a buyer without the Company’s consent. In that instance, the buyer of a property on which the Company had a valid mortgage suffered a data breach which resulted in the failure of the buyer to remit the funds needed for the loan payoff. As a result, the Company filed the foreclosure lawsuit to assist the buyer in making a claim with its title insurer. The loan is currently performing and the mortgage is valid. The Company expects to retrieve the payoff funds either from the buyer’s title insurance or through foreclosing on the property.

Subsequent to the balance sheet date, $2,187,000 of the loans receivable at June 30, 2023 were paid off, including $152,000 originally due in or before 2022.