10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 000-55780

Terra Secured Income Fund 5, LLC

(Exact name of registrant as specified in its charter)

Delaware	90-0967526
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

550 Fifth Avenue, 6th Floor

New York, New York 10036

(Address of principal executive offices) (Zip Code)

(212) 753-5100

(Registrant’s telephone number, including area code)

Securities registered pursuant to section 12(b) of the Securities Exchange Act of 1934:

None

Securities registered pursuant to section 12(g) of the Securities Exchange Act of 1934:

Units of Limited Liability Company Interests

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☑	Smaller reporting company	☑
		Emerging growth company	☑

    If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☑

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

As of May 12, 2022, the registrant had 6,624.3 units of limited liability company interests outstanding. No market value has been computed based upon the fact that no active trading market had been established as of the date of this document.

TABLE OF CONTENTS

		Page
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Statements of Financial Condition as of March 31, 2022 (unaudited) and December 31, 2021	2
	Statements of Operations for the Three Months Ended March 31, 2022 and 2021 (unaudited)	3
	Statements of Changes in Members’ Capital for the Three Months Ended March 31, 2022 and 2021 (unaudited)	4
	Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021 (unaudited)	5
	Schedules of Investment as of March 31, 2022 (unaudited) and December 31, 2021	6
	Notes to Financial Statements as of March 31, 2022 (unaudited)	13
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	36
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3.	Defaults upon Senior Securities	37
Item 4.	Mine Safety Disclosures	37
Item 5.	Other Information	37
Item 6.	Exhibits	37
Signatures		39

1

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

Terra Secured Income Fund 5, LLC

Statements of Financial Condition

	March 31, 2022		December 31, 2021
	(unaudited)
Assets
Equity investment in Terra JV, LLC at fair value (cost of $217,482,964 and    $219,704,515, respectively)	$	216,121,691	$	217,324,720
Cash and cash equivalents	777,694		836,052
Other assets	31,586		33,830
Total assets	$	216,930,971	$	218,194,602
Liabilities and Members’ Capital
Liabilities
Accounts payable and accrued expenses	$	185,249	$	118,025
Total liabilities	185,249		118,025
Commitments and contingencies (Note 5)
Members’ capital:
Managing member	—		—
Non-managing members	216,745,722		218,076,577
Total members’ capital	216,745,722		218,076,577
Total liabilities and members’ capital	$	216,930,971	$	218,194,602
Net asset value per unit	$	32,659	$	32,860

See notes to unaudited financial statements.

2

Terra Secured Income Fund 5, LLC

Statements of Operations

(Unaudited)

	Three Months Ended March 31,
	2022		2021
Investment income
Dividend income	$	758,110	$	1,126,895
Other operating income	11		20
Total investment income	758,121		1,126,915
Operating expenses
Professional fees	127,060		120,135
Other	1,392		385
Total operating expenses	128,452		120,520
Net investment income	629,669		1,006,395
Net change in unrealized appreciation on investment	1,018,522		492,466
Net increase in members’ capital resulting from operations	$	1,648,191	$	1,498,861
Per unit data:
Net investment income per unit	$	95	$	152
Net increase in members’ capital resulting from operations per unit	$	248	$	226
Weighted average units outstanding	6,636.6		6,637.8

See notes to unaudited financial statements.

3

Terra Secured Income Fund 5, LLC

Statements of Changes in Members’ Capital

(Unaudited)

	Managing Member		Non-Managing Members		Total
Balance, January 1, 2022	$	—	$	218,076,577	$	218,076,577
Capital distributions	—		(2,979,046)		(2,979,046)
Increase in members’ capital resulting from operations:
Net investment income	—		629,669		629,669
Net change in unrealized appreciation on investment	—		1,018,522		1,018,522
Net increase in members’ capital resulting from operations	—		1,648,191		1,648,191
Balance, March 31, 2022	$	—	$	216,745,722	$	216,745,722

	Managing Member		Non-Managing Members		Total
Balance, January 1, 2021	$	—	$	235,417,419	$	235,417,419
Capital distributions	—		(2,979,582)		(2,979,582)
Increase in members’ capital resulting from operations:
Net investment income	—		1,006,395		1,006,395
Net change in unrealized appreciation on investment	—		492,466		492,466
Net increase in members’ capital resulting from operations	—		1,498,861		1,498,861
Balance, March 31, 2021	$	—	$	233,936,698	$	233,936,698

See notes to unaudited financial statements.

4

Terra Secured Income Fund 5, LLC

Statements of Cash Flows

(Unaudited)

	Three Months Ended March 31,
	2022		2021
Cash flows from operating activities:
Net increase in members’ capital resulting from operations	$	1,648,191	$	1,498,861
Adjustments to reconcile net increase in members’ capital resulting    from operations to net cash provided by operating activities:
Return of capital on investment	2,221,551		1,852,767
Net change in unrealized appreciation on investment	(1,018,522)		(492,466)
\
Changes in operating assets and liabilities:
Decrease in other assets	2,244		7,500
Increase in accounts payable and accrued expenses	67,224		23,360
Net cash provided by operating activities	2,920,688		2,890,022
Cash flows from financing activities:
Distributions paid	(2,979,046)		(2,979,582)
Net cash used in financing activities	(2,979,046)		(2,979,582)
Net decrease in cash and cash equivalents	(58,358)		(89,560)
Cash and cash equivalents at beginning of period	836,052		225,214
Cash and cash equivalents at end of period	$	777,694	$	135,654

See notes to unaudited financial statements.

5

Terra Secured Income Fund 5, LLC

Schedule of Investment

March 31, 2022 (Unaudited) and December 31, 2021

On January 1, 2016, the Company, the then parent of Terra Property Trust, Inc. (“Terra Property Trust”), contributed its consolidated portfolio of net assets to Terra Property Trust pursuant to a contribution agreement in exchange for shares of Terra Property Trust’s common stock, par value $0.01 per share. Upon receipt of the contribution of the consolidated portfolio of net assets from the Company, Terra Property Trust commenced its operations on January 1, 2016. As discussed in Note 4, on March 2, 2020, Terra Property Trust engaged in a series of transactions pursuant to which Terra Property Trust issued an aggregate of 4,574,470.35 shares of its common stock in exchange for the settlement of an aggregate of $49.8 million of participation interests in loans that Terra Property Trust owned, cash of $25.5 million and other working capital. As of both March 31, 2022 and December 31, 2021, Terra JV, LLC (“Terra JV”) held 87.4% of the issued and outstanding shares of Terra Property Trust’s common stock with the remainder held by Terra Offshore Funds REIT, LLC (“Terra Offshore REIT”), and the Company and Terra Secured Income Fund 7, LLC (“Terra Fund 7”) owned an 87.6% and 12.4% percentage interest, respectively, in Terra JV. Accordingly, as of both March 31, 2022 and December 31, 2021, the Company indirectly beneficially owned 76.5% of the outstanding shares of common stock of Terra Property Trust through Terra JV.

    The following table presents a summary of the Company’s investment as of March 31, 2022 and December 31, 2021:

		Percentage Interest		March 31, 2022						December 31, 2021
Investment	Date Acquired			Cost		Fair Value		% of Members’ Capital		Cost		Fair Value		% of Members’ Capital
Terra JV, LLC	3/2/2020	87.6	%	$	217,482,964	$	216,121,691	99.7	%	$	219,704,515	$	217,324,720	99.7	%

As of both March 31, 2022 and December 31, 2021, the Company indirectly beneficially owned 76.5% of the outstanding shares of common stock of Terra Property Trust. Additionally, as of both March 31, 2022 and December 31, 2021, Terra JV was jointly-controlled by the Company and Terra Fund 7.

    The following table presents a schedule of loans held for investment by Terra Property Trust at 100% and the Company’s pro-rata share of the fair value at March 31, 2022:

Portfolio Company	Collateral Location	Property Type	Coupon Rate		Current Interest Rate		Exit Fee		Acquisition Date	Maturity Date	Principal Amount		Amortized Cost		Fair Value (1)		Pro Rata Fair Value (2)		% (3)
Loans held for investment:
Mezzanine loans:
150 Blackstone River Road, LLC	US - MA	Industrial	8.5	%	8.5	%	—	%	9/21/2017	9/6/2027	$	7,000,000	$	7,000,000	$	6,862,858	$	5,250,086	2.4	%
High Pointe Mezzanine Investments, LLC	US - SC	Student housing	13.0	%	13.0	%	1.0	%	12/27/2013	1/6/2024	3,000,000		3,137,435		3,030,000		2,317,950		1.1	%
UNJ Sole Member, LLC (4)	US - CA	Mixed-use	15.0	%	15.0	%	1.0	%	11/24/2021	6/1/2017	7,444,357		7,478,454		7,478,454		5,721,017		2.6	%
											17,444,357		17,615,889		17,371,312		13,289,053		6.1	%
Preferred equity investments:
370 Lex Part Deux, LLC (5)(6)	US - NY	Office	LIBOR + 8.25% (2.44% Floor)		10.7	%	—	%	12/17/2018	1/9/2023	60,583,057		60,583,057		58,835,209		45,008,935		20.8	%
REEC Harlem Holdings Company, LLC (7)	US - NY	Mixed-use	LIBOR + 12.5% (no Floor)		13.0	%	—	%	3/9/2018	3/9/2023	15,925,032		15,925,032		2,998,624		2,293,947		1.1	%
RS JZ Driggs, LLC (5)(6)(8)	US - NY	Multifamily	12.3	%	12.3	%	1.0	%	5/1/2018	1/1/2021	16,933,491		17,099,374		17,098,238		13,080,152		6.0	%
											93,441,580		93,607,463		78,932,071		60,383,034		27.9	%

See notes to unaudited financial statements.

6

Terra Secured Income Fund 5, LLC

Schedule of Investment (Continued)

March 31, 2022 (Unaudited) and December 31, 2021

Terra Property Trust’s Schedule of Loans Held for Investment as of March 31, 2022 (Continued):

Portfolio Company	Collateral Location	Property Type	Coupon Rate		Current Interest Rate		Exit Fee		Acquisition Date	Maturity Date	Principal Amount		Amortized Cost		Fair Value (1)		Pro Rata Fair Value (2)		% (3)
Loans held for investment:
First mortgages:
14th & Alice Street Owner, LLC (9)	US - CA	Multifamily	LIBOR + 4.0% (0.25% Floor)		4.5	%	2.0	%	10/15/2021	4/15/2023	$	39,468,000	$	40,197,784	$	40,222,586	$	30,770,278	14.2	%
1389 Peachtree St, LP; 1401 Peachtree St, LP;    1409 Peachtree St, LP (10)	US - GA	Office	LIBOR + 4.5% (no Floor)		5.0	%	0.5	%	2/22/2019	8/10/2023	53,970,491		54,221,854		53,083,178		40,608,631		18.7	%
330 Tryon DE LLC (10)	US - NC	Office	LIBOR + 4.25% (0.10% Floor)		4.7	%	0.5	%	2/7/2019	3/1/2024	22,800,000		22,903,651		22,638,331		17,318,323		8.0	%
606 Fayetteville LLC and 401 E. Lakewood LLC (11)	US - NC	Land	9.0	%	9.0	%	1.0	%	8/16/2021	8/1/2023	17,536,492		17,663,959		17,690,666		13,533,359		6.2	%
870 Santa Cruz, LLC (11)	US - CA	Office	LIBOR + 6.75% (0.5% Floor)		7.3	%	1.0	%	12/15/2020	12/15/2023	19,760,033		19,934,619		19,993,943		15,295,366		7.1	%
AARSHW Property LLC (11)	US - NJ	Industrial	SOFR +7.5% (0.15% Floor)		7.7	%	0.9	%	3/7/2022	3/7/2024	18,771,608		18,541,648		18,911,932		14,467,628		6.7	%
AAESUF Property LLC (11)	US - NJ	Industrial	SOFR +11.95% (0.05% Floor)		12.1	%	5%-10%		3/15/2022	3/1/2024	16,800,000		16,849,956		17,456,207		13,353,998		6.2	%
AGRE DCP Palm Springs, LLC (10)	US - CA	Hotel - full/    select service	LIBOR + 5.0% (1.80% Floor)		6.8	%	1.5	%	12/12/2019	1/1/2024	43,222,381		43,696,133		43,738,712		33,460,115		15.4	%
Austin H. I. Borrower LLC (11)	US- TX	Hotel - full/    select service	LIBOR + 7.5% (0.25% Floor)		8.0	%	1.0	%	9/21/2021	10/1/2024	13,695,947		13,824,587		13,832,906		10,582,173		4.9	%
D-G Acquisition #6, LLC and D-G    Quimisa, LLC (11)	US - CA	Land	LIBOR + 7.0% (0.25% Floor)		7.5	%	0.5	%	7/21/2021	7/21/2023	8,846,216		8,854,524		8,886,221		6,797,959		3.1	%
Grandview’s Madison Place, LLC (9)	US - WA	Multifamily	SOFR + 4.45% (0.05% Floor)		4.6	%	0.8	%	2/10/2022	2/10/2025	17,000,000		17,111,299		17,111,299		13,090,144		6.0	%
Hillsborough Owners LLC (12)	US - NC	Mixed-use	LIBOR + 8.0% (0.25% Floor)		8.5	%	1.0	%	10/27/2021	11/1/2023	5,444,696		5,458,850		5,468,477		4,183,385		1.9	%
NB Factory TIC 1, LLC (9)	US - UT	Student housing	LIBOR + 5.0% (0.25% Floor)		5.5	%	3.3	%	8/16/2021	3/5/2023	28,000,000		28,529,857		28,861,172		22,078,797		10.3	%
Patrick Henry Recovery Acquisition, LLC (10)	US - CA	Office	LIBOR + 2.95% (1.5% Floor)		4.5	%	0.3	%	11/25/2019	12/1/2023	18,000,000		18,041,590		18,049,540		13,807,898		6.4	%
The Lux Washington, LLC (11)	US - WA	Land	LIBOR + 7.0% (0.75% floor)		7.8	%	1.0	%	7/22/2021	1/22/2024	7,424,855		7,376,668		7,489,172		5,729,217		2.6	%
University Park Berkeley, LLC (10)	US - CA	Multifamily	LIBOR + 4.2% (1.50% Floor)		5.7	%	0.8	%	2/27/2020	3/1/2023	25,815,378		25,995,342		26,008,381		19,896,411		9.2	%
Windy Hill PV Five CM, LLC (13)	US - CA	Office	LIBOR + 6.0% (2.05% Floor)		8.1	%	0.5	%	9/20/2019	9/20/2022	54,078,939		54,416,729		54,375,474		41,597,238		19.2	%
											410,635,036		413,619,050		413,818,197		316,570,920		146.1	%
Credit facility:
Post Brothers Holdings LLC (5)(6)	US - PA	N/A	15.0	%	15.0	%	4.6%-8.9%		03/29/2022	3/29/2025	21,000,000		21,670,442		21,670,443		16,577,889		7.6	%
William A. Shopoff & Cindy L. Shopoff (5)(6)	US - CA	Industrial	15.0	%	15.0	%	1.0	%	10/4/2021	4/4/2023	25,000,000		25,214,933		25,214,934		19,289,425		8.9	%
											46,000,000		46,885,375		46,885,377		35,867,314		16.5	%
Total gross loans held for investment											567,520,973		571,727,777		557,006,957		426,110,321		196.6	%
Obligations under participation agreements and secured borrowing (5)(6)(13)											(95,283,106)		(96,090,690)		(95,483,175)		(73,044,629)		(33.7)	%
Allowance for loan losses											—		(13,708,777)		—		—		—	%
Net loans held for investment											$	472,237,867	$	461,928,310	$	461,523,782	$	353,065,692	162.9	%

See notes to unaudited financial statements.

7

Terra Secured Income Fund 5, LLC

Schedule of Investment (Continued)

March 31, 2022 (Unaudited) and December 31, 2021

Terra Property Trust’s Schedule of Loans Held for Investment as of March 31, 2022 (Continued):

Operating real estate:
Description	Acquisition Date		Fair Value of Real Estate (1)		Encumbrance		Net Investment		Pro Rata Net Investment (2)		% (3)(16)
Multi-tenant office building in Santa Monica, CA (14)	7/30/2018		$	65,043,111	$	31,757,725	$	33,285,386	$	25,463,320	11.7		%
Land in Conshohocken, PA (15)	1/9/2019		8,395,011		—		8,395,011		6,422,183		3.0		%
			$	73,438,122	$	31,757,725	$	41,680,397	$	31,885,503	14.7		%
Portfolio Company	Dividend Yield		Acquisition Date		Maturity Date		Shares		Cost		Fair Value			Pro Rata Fair Value (2)		% (3)
Marketable securities (17):
Common and preferred shares:
Nexpoint Real Estate Finance, Inc. - Cumulative    Series A Preferred Shares	8.5	%	7/30/2020		7/24/2025		20,204		$	475,201	$	510,151		$	390,266	0.2	%
Total marketable securities									$	475,201	$	510,151		$	390,266	0.2	%
Equity investments:
Portfolio Company							Ownership Interest		Cost		Fair Value			Pro Rata Fair Value (2)		% (3)
Mavik Real Estate Special Opportunities Fund, LP - limited partnership interest (18)							44%		$	40,245,914	$	44,531,683		$	34,066,737	15.7	%
LEL Arlington JV LLC - limited liability member units (19)							80%		23,962,388		23,962,388			18,331,227		8.5	%
LEL NW 49th LV LLC - limited liability member units (19)							80%		4,838,353		4,838,353			3,701,340		1.7	%
TCG Corinthian FL Portfolio JV LLC (19)							90%		22,615,435		22,615,435			17,300,808		8.0	%
									$	91,662,090	$	95,947,859		$	73,400,112	33.9	%

__________________________

(1)Because there is no readily available market for these investments, these loans were valued using significant unobservable inputs under Level 3 of the fair value hierarchy and were approved in good faith by Terra REIT Advisors, LLC (“Terra REIT Advisors”), Terra Property Trust’s manager, pursuant to Terra Property Trust’s valuation policy.

(2)Amount represents the Company’s portion, or 76.5%, of the fair value or net investment value.

(3)Percentage is based on the Company’s pro rata share of the fair value or net investment value over the Company’s total members’ capital of $216.7 million at March 31, 2022.

(4)Terra Property Trust purchased a portion of the interest in this loan from Mavik Real Estate Special Opportunities Fund REIT, LLC, a related-party real estate investment trust managed by Terra REIT Advisors, via a participation agreement.

8

(5)The loan participations from Terra Property Trust do not qualify for sale accounting and therefore, the gross amount of these loans remain in Terra Property Trust’s consolidated balance sheets.

(6)Terra Property Trust sold a portion of its interest in this loan through a participation agreement to Terra Income Fund 6, Inc. (“Terra Fund 6”), an affiliated fund advised by Terra Income Advisors, LLC, an affiliate of our sponsor and Terra REIT Advisors.

(7)For the three months ended March 31, 2022, Terra Property Trust suspended interest income accrual of $0.6 million on this loan, because recovery of such income was doubtful. Additionally, the fair value of the loan declined as a result of a decline in the fair value of the collateral.

(8)This loan is in maturity default. Terra Property Trust has exercised its rights and is facilitating the completion of construction of the asset in anticipation of lease up and disposition of the asset. For the three months ended March 31, 2022, Terra Property Trust suspended interest income accrual of $0.5 million on this loan because recovery of such income was doubtful.

(9)These loans were used as collateral for $58.2 million of borrowings under a repurchase agreement.

(10)These loans were used as collateral for $118.3 million of borrowings under a repurchase agreement.

(11)These loans were used as collateral for $65.0 million of borrowings under a revolving line of credit.

(12)Terra Property Trust purchased a portion of the interest in this loan from Terra Fund 6 via a participation agreement.

(13)In March 2020, Terra Property Trust entered into a financing transaction where a third-party purchased an A-note position. Because the transaction does not qualify for sale accounting, the gross amount of the loan remains in the consolidated balance sheets. The liability is reflected as secured borrowing in Terra Property Trust’s consolidated balance sheets.

(14)Terra Property Trust acquired this property through foreclosure of a $54.0 million first mortgage.

(15)Terra Property Trust acquired the collateral for this loan pursuant to a deed in lieu of foreclosure. The land is currently vacant and the fair value reflects its estimated selling price. In March 2022, Terra Property Trust entered into a sales agreement to sell the land. As of March 31, 2022, the land was classified as assets held-for-sale on Terra Property Trust’s consolidated balance sheets.

(16)Percentage is based on Terra Property Trust’s net exposure on the property (real estate owned less encumbrance).

(17)From time to time, Terra Property Trust may invest in short-term debt and equity securities. These securities are comprised of shares of common and preferred stock and bonds.

(18)On August 3, 2020, Terra Property Trust entered into a subscription agreement with Mavik Real Estate Special Opportunities Fund, LP (“RESOF”) whereby Terra Property Trust committed to fund up to $50.0 million to purchase a limited partnership interest in RESOF. RESOF’s primary investment objective is to generate attractive risk-adjusted returns by purchasing performing and non-performing mortgages, loans, mezzanines and other credit instruments supported by underlying commercial real estate assets. As of March 31, 2022, the unfunded commitment was $16.4 million.

(19)In the fourth quarter of 2021 and the first quarter of 2022, Terra Property Trust purchased equity interests in three joint ventures that invest in real estate properties.

See notes to unaudited financial statements.

9

Terra Secured Income Fund 5, LLC

Schedule of Investment (Continued)

March 31, 2022 (Unaudited) and December 31, 2021     

    The following table presents a schedule of loans held for investment held by Terra Property Trust as of December 31, 2021:

Portfolio Company	Collateral Location	Property Type	Coupon Rate		Current Interest Rate		Exit Fee		Acquisition Date	Maturity Date	Principal Amount		Amortized Cost		Fair Value (1)		Pro Rata Fair Value (2)		% (3)
Loans held for investment:
Mezzanine loans:
150 Blackstone River Road, LLC	US - MA	Industrial	8.5	%	8.5	%	—	%	9/21/2017	9/6/2027	$	7,000,000	$	7,000,000	$	6,982,101	$	5,341,307	2.4	%
High Pointe Mezzanine Investments, LLC	US - SC	Student housing	13.0	%	13.0	%	1.0	%	12/27/2013	1/6/2024	3,000,000		3,145,614		3,059,611		2,340,602		1.1	%
UNJ Sole Member, LLC (4)	US - CA	Mixed-use	15.0	%	15.0	%	1.0	%	11/24/2021	6/1/2017	7,444,357		7,477,190		7,477,190		5,720,050		2.6	%
											17,444,357		17,622,804		17,518,902		13,401,959		6.1	%
Preferred equity investments:
370 Lex Part Deux, LLC (5)(6)	US - NY	Office	LIBOR + 8.25% (2.44% Floor)		10.7	%	—	%	12/17/2018	1/9/2023	60,012,639		60,012,639		57,858,019		44,261,385		20.3	%
REEC Harlem Holdings Company, LLC (7)	US - NY	Mixed-use	LIBOR + 12.5% (no Floor)		12.6	%	—	%	3/9/2018	3/9/2023	16,633,292		16,633,292		3,708,310		2,836,857		1.3	%
RS JZ Driggs, LLC (5)(6)(8)	US - NY	Multifamily	12.3	%	12.3	%	1.0	%	5/1/2018	1/1/2021	15,606,409		15,754,641		15,748,942		12,047,941		5.5	%
											92,252,340		92,400,572		77,315,271		59,146,183		27.1	%
First mortgages:
14th & Alice Street Owner, LLC (9)	US - CA	Multifamily	LIBOR + 4.0% (0.25% Floor)		4.3	%	2.0	%	10/15/2021	4/15/2023	39,384,000		40,089,153		40,130,448		30,699,793		14.1	%
1389 Peachtree St, LP; 1401 Peachtree St, LP;    1409 Peachtree St, LP (10)	US - GA	Office	LIBOR + 4.5% (no Floor)		4.6	%	0.5	%	2/22/2019	8/10/2023	53,289,288		53,536,884		52,031,363		39,803,993		18.3	%
330 Tryon DE LLC (10)	US - NC	Office	LIBOR + 4.25% (0.10% Floor)		4.4	%	0.5	%	2/7/2019	3/1/2024	22,800,000		22,902,354		22,594,654		17,284,910		7.9	%
606 Fayetteville LLC and 401 E. Lakewood LLC (11)	US - NC	Land	9.0	%	9.0	%	1.0	%	8/16/2021	8/1/2023	16,829,962		16,935,803		16,974,601		12,985,570		6.0	%
870 Santa Cruz, LLC (11)	US - CA	Office	LIBOR + 6.75% (0.5% Floor)		7.3	%	1.0	%	12/15/2020	12/15/2023	17,540,875		17,669,303		17,781,285		13,602,683		6.2	%
AGRE DCP Palm Springs, LLC (10)(12)	US - CA	Hotel - full/    select service	LIBOR + 5.0% (1.80% Floor)		6.8	%	1.5	%	12/12/2019	1/1/2024	43,222,381		43,669,992		43,829,842		33,529,829		15.5	%
Austin H. I. Borrower LLC (11)(13)	US- TX	Hotel - full/    select service	LIBOR + 7.5% (0.25% Floor)		7.8	%	1.0	%	9/21/2021	10/1/2024	13,625,000		13,725,690		13,735,569		10,507,710		4.8	%
D-G Acquisition #6, LLC and D-G    Quimisa, LLC (11)	US - CA	Land	LIBOR + 7.0% (0.25% Floor)		7.3	%	0.5	%	7/21/2021	7/21/2023	8,607,092		8,605,341		8,645,413		6,613,741		3.0	%
Hillsborough Owners LLC (14)	US - NC	Mixed-use	LIBOR + 8.0% (0.25% Floor)		8.3	%	1.0	%	10/27/2021	11/1/2023	4,863,009		4,866,542		4,883,878		3,736,167		1.7	%
NB Factory TIC 1, LLC (9)	US - UT	Student housing	LIBOR + 5.0% (0.25% Floor)		5.3	%	3.3	%	8/16/2021	3/5/2023	28,000,000		28,420,056		28,851,547		22,071,433		10.1	%
Patrick Henry Recovery Acquisition, LLC (10)	US - CA	Office	LIBOR + 2.95% (1.5% Floor)		4.5	%	0.3	%	11/25/2019	12/1/2023	18,000,000		18,041,124		18,055,377		13,812,363		6.3	%
The Lux Washington, LLC (11)	US - WA	Land	LIBOR + 7.0% (0.75% floor)		7.8	%	1.0	%	7/22/2021	1/22/2024	3,523,401		3,382,683		3,553,330		2,718,297		1.2	%
University Park Berkeley, LLC (10)(15)	US - CA	Multifamily	LIBOR + 4.2% (1.50% Floor)		5.7	%	0.8	%	2/27/2020	3/1/2023	25,815,378		25,991,962		26,015,500		19,901,858		9.1	%
Windy Hill PV Five CM, LLC (16)	US - CA	Office	LIBOR + 6.0% (2.05% Floor)		8.1	%	0.5	%	9/20/2019	9/20/2022	49,954,068		50,264,568		50,077,674		38,309,421		17.6	%
											345,454,454		348,101,455		347,160,481		265,577,768		121.8	%

See notes to unaudited financial statements.

10

Terra Secured Income Fund 5, LLC

Schedule of Investment (Continued)

March 31, 2022 (Unaudited) and December 31, 2021

Terra Property Trust’s Schedule of Loans Held for Investment as of December 31, 2021 (Continued):

Portfolio Company	Collateral Location	Property Type	Coupon Rate		Current Interest Rate		Exit Fee		Acquisition Date	Maturity Date	Principal Amount		Amortized Cost		Fair Value (1)		Pro Rata Fair Value (2)		% (3)
Loans held for investment:
Credit facility:
William A. Shopoff & Cindy L. Shopoff (5)(6)	US - CA	Industrial	15.0	%	15.0	%	1.0	%	10/4/2021	4/4/2023	$	25,000,000	$	25,206,964	$	25,206,965	$	19,283,328	8.8	%
											25,000,000		25,206,964		25,206,965		19,283,328		8.8	%
Total gross loans held for investment											480,151,151		483,331,795		467,201,619		357,409,238		163.8	%
Obligations under participation agreements and secured borrowing (5)(6)(16)											(76,569,398)		(76,818,156)		(75,900,089)		(58,063,568)		(26.6)	%
Allowance for loan losses											—		(13,658,481)		—		—		—	%
Net loans held for investment											$	403,581,753	$	392,855,158	$	391,301,530	$	299,345,670	137.2	%

Operating real estate:
Description	Acquisition Date		Fair Value of Real Estate (1)		Encumbrance		Net Investment		Pro Rata Net Investment (2)		% (3)(19)
Multi-tenant office building in Santa Monica, CA (17)	7/30/2018		$	65,043,111	$	31,962,692	$	33,080,419	$	25,306,521	11.6		%
Land in Conshohocken, PA (18)	1/9/2019		10,000,000		—		10,000,000		7,650,000		3.5		%
			$	75,043,111	$	31,962,692	$	43,080,419	$	32,956,521	15.1		%
Portfolio Company	Dividend Yield		Acquisition Date		Maturity Date		Shares		Cost		Fair Value			Pro Rata Fair Value (2)		% (3)
Marketable securities (20):
Common and preferred shares:
Nexpoint Real Estate Finance, Inc. - Cumulative    Series A Preferred Shares	8.5	%	7/30/2020		7/24/2025		50,000		$	1,176,006	$	1,310,000		$	1,002,150	0.5	%
Total marketable securities									$	1,176,006	$	1,310,000		$	1,002,150	0.5	%
Equity investments:
Portfolio Company							Ownership Interest		Cost		Fair Value			Pro Rata Fair Value (2)		% (3)
Mavik Real Estate Special Opportunities Fund, LP - limited partnership interest (21)							50%		$	40,458,282	$	39,643,024		$	30,326,913	13.9	%
LEL Arlington JV LLC - limited liability member units (22)							80%		23,949,044		23,949,044			18,321,019		8.4	%
LEL NW 49th LV LLC - limited liability member units (22)							80%		5,306,467		5,306,467			4,059,447		1.9	%
									$	69,713,793	$	68,898,535		$	52,707,379	24.2	%

__________________________

11

(1)Because there is no readily available market for these investments, these loans were valued using significant unobservable inputs under Level 3 of the fair value hierarchy and were approved in good faith by Terra REIT Advisors, Terra Property Trust’s manager, pursuant to Terra Property Trust’s valuation policy.

(2)Amount represents the Company’s portion, or 76.5%, of the fair value or net investment value.

(3)Percentage is based on the Company’s pro rata share of the fair value or net investment value over the Company’s total members’ capital of $218.1 million at December 31, 2021.

(4)Terra Property Trust purchased a portion of the interest in this loan from Mavik Real Estate Special Opportunities Fund REIT, LLC, a related-party real estate investment trust managed by Terra REIT Advisors, via a participation agreement.

(5)The loan participations from Terra Property Trust do not qualify for sale accounting and therefore, the gross amount of these loans remain in Terra Property Trust’s consolidated balance sheets.

(6)Terra Property Trust sold a portion of its interest in this loan through a participation agreement to Terra Fund 6, an affiliated fund advised by Terra Income Advisors, LLC, an affiliate of our sponsor and Terra REIT Advisors.

(7)For the year ended December 31, 2021, Terra Property Trust suspended interest income accrual of $2.3 million on this loan, because recovery of such income was doubtful. Additionally, the fair value of the loan declined as a result of a decline in the fair value of the collateral.

(8)This loan is in maturity default. Terra Property Trust has exercised its rights and is facilitating the completion of construction of the asset in anticipation of lease up and disposition of the asset. For the year ended December 31, 2021, Terra Property Trust suspended interest income accrual of $0.9 million on this loan because recovery of such income was doubtful.

(9)These loans were used as collateral for $44.6 million of borrowings under a repurchase agreement.

(10)These loans were used as collateral for $93.8 million of borrowings under a term loan payable.

(11)These loans were used as collateral for $38.6 million of borrowings under a revolving line of credit.

(12)In March 2021, Terra Property Trust amended the loan agreement to change the spread on the interest rate to 5.0%, increased the exit fee to 1.5% and extended the maturity to January 1, 2024. Additionally, under the loan amendment, the borrower made a partial repayment of $2.6 million.

(13)In September 2021, Terra Property Trust refinanced a previously-defaulted mezzanine loan with a new first mortgage. This refinancing was accounted for as a troubled debt restructuring and Terra Property Trust recognized a loss of $0.3 million on the restructuring.

(14)Terra Property Trust purchased a portion of the interest in this loan from Terra Fund 6 via a participation agreement.

(15)In December 2020, Terra Property Trust entered into a forbearance agreement with the borrower pursuant to which interest accrues on the loan during the 90-day forbearance period from November 2020 to January 2021. In March 2021, the forbearance period was extended through August 2021.

(16)In March 2020, Terra Property Trust entered into a financing transaction where a third-party purchased an A-note position. Because the transaction does not qualify for sale accounting, the gross amount of the loan remains in the consolidated balance sheets. The liability is reflected as secured borrowing in Terra Property Trust’s consolidated balance sheets.

(17)Terra Property Trust acquired this property through foreclosure of a $54.0 million first mortgage.

(18)Terra Property Trust acquired the collateral for this loan pursuant to a deed in lieu of foreclosure. The land is currently vacant and the fair value reflects its estimated selling price.

(19)Percentage is based on Terra Property Trust’s net exposure on the property (real estate owned less encumbrance).

(20)From time to time, Terra Property Trust may invest in short-term debt and equity securities. These securities are comprised of shares of common and preferred stock and bonds.

(21)On August 3, 2020, Terra Property Trust entered into a subscription agreement with RESOF whereby Terra Property Trust committed to fund up to $50.0 million to purchase a limited partnership interest in RESOF. RESOF’s primary investment objective is to generate attractive risk-adjusted returns by purchasing performing and non-performing mortgages, loans, mezzanines and other credit instruments supported by underlying commercial real estate assets. As of December 31, 2021, the unfunded commitment was $15.1 million.

(22)In the fourth quarter of 2021, Terra Property Trust purchased equity interests in two joint ventures that invest in real estate properties.

See notes to unaudited financial statements.

12

Terra Secured Income Fund 5, LLC

Notes to Financial Statements (Unaudited)

March 31, 2022

Note 1. Business

    Terra Secured Income Fund 5, LLC (the “Company”), is a real estate credit focused company that originates, structures, funds and manages high yielding commercial real estate investments, including mezzanine loans, first mortgage loans, subordinated mortgage loans and preferred equity investments throughout the United States. The Company’s loans finance the acquisition, construction, development or redevelopment of quality commercial real estate in the United States. The Company focuses on the origination of middle market loans in the approximately $10 million to $50 million range, to finance properties in primary and secondary markets. The Company was formed as a Delaware limited liability company on April 24, 2013 and commenced operations on August 8, 2013. The Company makes substantially all of its investments and conducts substantially all of its real estate lending business through Terra Property Trust, which has elected to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes commencing with its taxable year ended December 31, 2016. The Company’s investment objectives are to (i) preserve its members’ capital contributions, (ii) realize income from its investments and (iii) make monthly distributions to its members from cash generated from investments. There can be no assurances that the Company will be successful in meeting its investment objectives.

    In December 2015, the members approved the merger of Terra Secured Income Fund, LLC (“Terra Fund 1”), Terra Secured Income Fund 2, LLC (“Terra Fund 2”), Terra Secured Income Fund 3, LLC (“Terra Fund 3”) and Terra Secured Income Fund 4, LLC (“Terra Fund 4”) with and into subsidiaries of the Company (individually, each a “Terra Fund” and collectively, the “Terra Funds”) through a series of separate mergers effective January 1, 2016 (collectively, the “Merger”). Following the Merger, the Company contributed the consolidated portfolio of net assets of the five Terra Funds to Terra Property Trust, a newly-formed and wholly-owned subsidiary of the Company that elected to be taxed as a REIT, in exchange for the shares of common stock of Terra Property Trust. Upon completion of the Merger, the Company became the parent company of Terra Funds 1 through 4 and the direct and indirect sole common stockholder of, and began conducting substantially all of its real estate lending business through, Terra Property Trust.

    On March 2, 2020, Terra Fund 1, Terra Fund 2 and Terra Fund 3 merged with and into Terra Fund 4, with Terra Fund 4 continuing as the surviving company (the “Terra Fund Merger”), and the Company consolidated its holdings of shares of common stock of Terra Property Trust in Terra Fund 4. Subsequent to the Terra Fund Merger, the legal name of Terra Fund 4 was changed to Terra JV. On March 2, 2020, Terra Property Trust engaged in a series of transactions pursuant to which Terra Property Trust issued an aggregate of 4,574,470.35 shares of its common stock in exchange for the settlement of an aggregate of $49.8 million of participation interests in loans that Terra Property Trust owned, cash of $25.5 million and other working capital. As of March 31, 2022, Terra JV held 87.4% of the issued and outstanding shares of Terra Property Trust’s common stock with the remainder held by Terra Offshore REIT, and the Company and Terra Fund 7 owned an 87.6% and 12.4% percentage interest, respectively, in Terra JV (Note 4). The Company does not consolidate Terra JV because the Company and Terra Fund 7 share joint approval rights with respect to certain major decisions that are taken by Terra JV and Terra Property Trust (Note 4).

    The Company’s investment activities are externally managed by Terra Fund Advisors, LLC (“Terra Fund Advisors” or the “Manager”). The Company does not currently have any employees and does not expect to have any employees. Services necessary for the Company’s business are provided by individuals who are employees of the Manager or its affiliates or by individuals who were contracted by the Company or by the Manager or its affiliates to work on behalf of the Company pursuant to the terms of the operating agreement, as amended.

    The Company’s amended and restated operating agreement provides that the Company’s existence will continue until December 31, 2023, unless sooner terminated. However, the Company expects that prior to such date it will consummate a liquidity transaction, which could occur as early as this year and may include an orderly liquidation of its assets or an alternative liquidity event such as a strategic business combination, a sale of the Company or an initial public offering and listing of Terra Property Trust’s shares of common stock on a national securities exchange. The Manager would pursue an alternative liquidity event only if it believes such a transaction would be in the best interests of the Company’s members.

On April 1, 2021, Mavik Capital Management, LP (“Mavik”), an entity controlled by Vikram S. Uppal, the Chief Executive Officer of the Company, completed a series of related transactions that resulted in all of the outstanding interests in Terra Capital Partners, LLC, being acquired by Mavik for a combination of cash and interests in Mavik.

13

Notes to Unaudited Financial Statements

As described in greater detail in Note 8, on May 2, 2022, Terra Property Trust, Terra Fund 6, Terra Merger Sub, LLC, a wholly owned subsidiary of Terra Property Trust (“Merger Sub”), Terra Income Advisors, LLC and Terra REIT Advisors, LLC, entered into an Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which, subject to the terms and conditions therein, Terra Income Fund 6 will be merged with and into Merger Sub, with Merger Sub surviving as a wholly owned subsidiary of Terra Property Trust (such surviving company, the “Surviving Company” and such transaction, the “Merger”). The Merger is expected to close during the third quarter of 2022, subject to the required approvals by Terra Income Fund 6’s stockholders and other customary closing conditions. There can be no assurances that the Merger will close.

Note 2. Summary of Significant Accounting Policies

Basis of Presentation

    The interim financial statements have been prepared in accordance with United States generally accepted accounting principles (U.S. GAAP”) and include all of the Company’s accounts. The accompanying interim financial statements of the Company and related financial information have been prepared pursuant to the requirements for reporting on Form 10-Q and Articles 6 or 10 of Regulation S-X. The Company is an investment company, as defined under U.S. GAAP, and applies accounting and reporting guidance in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, Financial Services — Investment Companies.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may ultimately differ from those estimates.

The coronavirus (“COVID-19”) pandemic has had a significant impact on local, national and global economies and has resulted in a world-wide economic slowdown. However, after two years into the COVID-19 pandemic, the real estate market has started to recover from the dislocation it experienced. A strong pace of vaccination along with aggressive fiscal stimulus, has improved the outlook for the real estate market. The Company continues to closely monitor the impact of the COVID-19 pandemic on all aspects of its investments and operations. The Company believes the estimates and assumptions underlying its financial statements are reasonable and supportable based on the information available as of March 31, 2022; however, the extent to which the COVID-19 pandemic may impact the Company’s investments and operations going forward will depend on future developments, which are highly uncertain and cannot be predicted with confidence. These developments include the duration of the outbreak, the impact of the global vaccination effort, any new strains of the virus that are resistant to available vaccines, the impact of government stimulus, new information that may emerge concerning the severity of the COVID-19 pandemic, and actions taken by federal, state and local agencies as well as the general public to contain the COVID-19 pandemic or treat its impact, among others. Accordingly, any estimates and assumptions as of March 31, 2022 are inherently less certain than they would be absent the current and potential impacts of the COVID-19 pandemic.

Equity Investment in Terra JV

    Equity investment in Terra JV represents the Company’s equity interest in Terra JV, which was initially recorded at cost. Subsequent to the asset contribution, the equity investment is reported, at each reporting date, at fair value on the statements of financial condition. Change in fair value is reported in net change in unrealized appreciation or depreciation on investment on the statements of operations.

Revenue Recognition

    Dividend Income: Dividend income associated with the Company’s ownership of Terra JV or Terra Property Trust is recognized on the record date as declared by Terra JV or Terra Property Trust. Any excess of distributions over Terra JV or Terra Property Trust’s cumulative taxable net income are recorded as return of capital.

    Other Operating Income: All other income is recognized when earned.

14

Notes to Unaudited Financial Statements

Cash and Cash Equivalents

The Company considers all highly liquid investments, with original maturities of ninety days or less when purchased, as cash equivalents. Cash and cash equivalents are exposed to concentrations of credit risk. The Company maintains all of its cash at financial institutions which, at times, may exceed the amount insured by the Federal Deposit Insurance Corporation.

Income Taxes

    No provision for U.S. federal and state income taxes has been made in the accompanying financial statements, as individual members are responsible for their proportionate share of the Company’s taxable income. The Company, however, may be liable for New York City Unincorporated Business Tax (the “NYC UBT”) and similar taxes of various other municipalities. New York City imposes the NYC UBT at a statutory rate of 4% on net income generated from ordinary business activities carried on in New York City. For the three months ended March 31, 2022 and 2021, none of the Company’s income was subject to the NYC UBT.

    Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statements and tax basis assets and liabilities using enacted tax rates in effect for the year in which differences are expected to reverse. Such deferred tax assets and liabilities were not material.

    The Company did not have any uncertain tax positions that met the recognition or measurement criteria of ASC 740-10-25, Income Taxes, nor did the Company have any unrecognized tax benefits as of the periods presented herein. The Company recognizes interest and penalties, if any, related to unrecognized tax liabilities as income tax expense in its statements of operations. For the three months ended March 31, 2022 and 2021, the Company did not incur any interest or penalties. Although the Company files federal and state tax returns, its primary tax jurisdiction is federal. The Company’s 2018-2020 federal tax years remain subject to examination by the Internal Revenue Service.

Recent Accounting Pronouncement

London Interbank Offered Rate (“LIBOR”) is a benchmark interest rate referenced in a variety of agreements that are used by all types of entities. In July 2017, the U.K. Financial Conduct Authority, which regulates the LIBOR administrator, ICE Benchmark Administration Limited (“IBA”), announced that it would cease to compel banks to participate in setting LIBOR as a benchmark by the end of 2021, which has subsequently been delay to June 30, 2023. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) — Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). The amendments in ASU 2020-04 provide optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848), which expanded the scope of Topic 848 to include derivative instruments impacted by discounting transition (“ASU 2021-01”). ASU 2020-04 and ASU 2021-01 are effective for all entities through December 31, 2022. The expedients and exceptions provided by the amendments do not apply to contract modifications and hedging relationships entered into or evaluated after December 31, 2022, except for hedging transactions as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. In the event LIBOR is unavailable, Terra Property Trust’s investment documents provide for a substitute index, on a basis generally consistent with market practice, intended to put the Terra Property Trust in substantially the same economic position as LIBOR. As a result, the Company does not expect the reference rate reform and the adoption of ASU 2020-04 and ASU 2021-01 to have a material impact on its financial statements and disclosures

Note 3. Investment and Fair Value

Equity Investment in Terra JV

The Company invested substantially all of its equity capital in the purchase of shares of common stock of Terra Property Trust. As of both March 31, 2022 and December 31, 2021, Terra JV held 87.4% of the issued and outstanding shares of Terra Property Trust’s common stock with the remainder held by Terra Offshore REIT, and the Company and Terra Fund 7 owned an 87.6% and 12.4% percentage interest, respectively, in Terra JV, and Terra JV became the Company’s only investment (Note 4).

15

Notes to Unaudited Financial Statements

The following tables present a summary of the Company’s investment at March 31, 2022 and December 31, 2021:

	March 31, 2022						December 31, 2021
Investment	Cost		Fair Value		% of Members’ Capital		Cost		Fair Value		% of Members’ Capital
87.6% interest in Terra JV, LLC	$	217,482,964	$	216,121,691	99.7	%	$	219,704,515	$	217,324,720	99.7	%

For the three months ended March 31, 2022 and 2021, the Company received approximately $3.0 million and $3.0 million of distributions from Terra JV, of which $2.2 million and $1.9 million were returns of capital, respectively.

        As of both March 31, 2022 and December 31, 2021, the Company indirectly beneficially owned 76.5% (Note 4) of the outstanding shares of common stock of Terra Property Trust. The following tables present the summarized financial information of Terra Property Trust:

	March 31, 2022		December 31, 2021
Carrying value of loans held for investment	$	558,019,000	$	469,673,314
Equity investment in unconsolidated investments	91,662,090		69,713,793
Real estate owned, net	62,448,945		65,776,839
Cash, cash equivalent and restricted cash	25,568,820		51,098,647
Other assets	34,897,190		37,279,565
Total assets	772,596,045		693,542,158
Term loan payable, unsecured notes payable, obligations under participation    agreements, repurchase agreement payable, mortgage loan payable, revolving    line of credit and secured borrowing	(448,176,646)		(364,910,392)
Accounts payable, accrued expenses and other liabilities	(45,804,851)		(45,078,478)
Lease intangible liabilities	(9,426,358)		(9,709,710)
Total liabilities	(503,407,855)		(419,698,580)
Stockholder’s equity	$	269,188,190	$	273,843,578

	Three Months Ended March 31,
	2022		2021
Revenues	$	12,112,270	$	10,289,252
Expenses	(14,241,581)		(10,136,375)
Realized gains on marketable securities	51,133		—
Unrealized losses on marketable securities	(99,044)		(14,608)
Equity income from unconsolidated investments	1,419,335		1,337,827
Net (loss) income	$	(757,887)	$	1,476,096

Fair Value Measurements

    The Company adopted the provisions of ASC 820, Fair Value Measurement (“ASC 820”), which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 established a fair value hierarchy that prioritizes and ranks the level of market price observability used in measuring investments at fair value. Market price observability is impacted by a number of factors, including the type of investment, the characteristics specific to the investment, and the state of the marketplace (including the existence and transparency of transactions between market participants). Investments with readily available, actively quoted prices or for which fair value can be measured from actively quoted prices in an orderly market will generally have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Investments measured and reported at fair value are classified and disclosed into one of the following categories based on the inputs as follows:

16

Notes to Unaudited Financial Statements

        Level 1 — Quoted prices (unadjusted) in active markets for identical assets and liabilities that the Company has the ability to access.

      Level 2 — Pricing inputs are other than quoted prices in active markets, including, but not limited to, quoted prices for similar assets and liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market corroborated inputs.

       Level 3 — Significant unobservable inputs are based on the best information available in the circumstances, to the extent observable inputs are not available, including the Company’s own assumptions used in determining the fair value of investments. Fair value for these investments are determined using valuation methodologies that consider a range of factors, including but not limited to the price at which the investment was acquired, the nature of the investment, local market conditions, trading values on public exchanges for comparable securities, current and projected operating performance, and financing transactions subsequent to the acquisition of the investment. The inputs into the determination of fair value require significant management judgment.

     In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment.

Assets and Liabilities Reported at Fair Value

    The following table summarizes the Company’s equity investment at fair value on a recurring basis as of March 31, 2022 and December 31, 2021:

	March 31, 2022
	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
Investment:
Equity investment in Terra JV	$	—	$	—	$	216,121,691	$	216,121,691

	December 31, 2021
	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
Investment:
Equity investment in Terra JV	$	—	$	—	$	217,324,720	$	217,324,720

    Changes in Level 3 investment for the three months ended March 31, 2022 and 2021 were as follows:

	Equity Investment in Terra JV
	Three Months Ended March 31,
	2022		2021
Beginning balance	$	217,324,720	$	235,357,977
Return of capital	(2,221,551)		(1,852,767)
Net change in unrealized appreciation on investment	1,018,522		492,466
Ending balance	$	216,121,691	$	233,997,676
Net change in unrealized appreciation on investment for the period relating to those    Level 3 assets that were still held by the Company	$	1,018,522	$	492,466

    Transfers between levels, if any, are recognized at the beginning of the period in which transfers occur. For the three months ended March 31, 2022 and 2021, there were no transfers.

The Company estimated that its other financial assets and liabilities had fair values that approximated their carrying values at March 31, 2022 and December 31, 2021 due to their short-term nature.

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Notes to Unaudited Financial Statements

Valuation Process for Fair Value Measurement

    Market quotations are not readily available for the Company’s investment in Terra Property Trust or Terra JV, which is included in Level 3 of the fair value hierarchy. The fair value of the Company’s sole investment takes into consideration the fair value of Terra Property Trust’s assets and liabilities which are valued utilizing a yield approach, i.e. a discounted cash flow methodology. In following this methodology, loans are evaluated individually, and management takes into account, in determining the risk-adjusted discount rate for each of Terra Property Trust’s loans, relevant factors, which may include available current market data on applicable yields of comparable debt/preferred equity instruments; market credit spreads and yield curves; the investment’s yield; covenants of the investment, including prepayment provisions; the portfolio company’s ability to make payments, its net operating income, debt-service coverage ratio; construction progress reports and construction budget analysis; the nature, quality, and realizable value of any collateral (and loan-to-value ratio); and the forces that influence the local markets in which the asset (the collateral) is purchased and sold, such as capitalization rates, occupancy rates, rental rates, replacement costs and the anticipated duration of each real estate-related loan. Valuation of Terra Property Trust’s investment in a 4.9 acre development parcel is based on the estimated selling price. The fair value of Terra Property Trust’s investment in an office building is determined using the direct capitalization method.

The Manager designates a valuation committee to oversee the entire valuation process of Terra Property Trust’s Level 3 investments. The valuation committee is comprised of members of the Manager’s senior management, deal and portfolio management teams, who meet on a quarterly basis, or more frequently as needed, to review Terra Property Trust investments being valued as well as the inputs used in the proprietary valuation model. Valuations determined by the valuation committee are supported by pertinent data and, in addition to a proprietary valuation model, are based on market data, third-party valuation data and discount rates or other methods the valuation committee deems to be appropriate.

The following tables summarize the valuation techniques and significant unobservable inputs used by the Company to value the Level 3 investments as of March 31, 2022 and December 31, 2021. The tables are not intended to be all-inclusive, but instead identify the significant unobservable inputs relevant to the determination of fair values.

	Fair Value		Primary Valuation Technique	Unobservable Inputs	March 31, 2022
Asset Category					Minimum		Maximum		Weighted Average
Assets:
Equity investment in Terra JV	$	216,121,691	Discounted cash flow (1)(2)	Discount rate (1)(2)	1.90	%	15.00	%	14.74	%

	Fair Value		Primary Valuation Technique	Unobservable Inputs	December 31, 2021
Asset Category					Minimum		Maximum		Weighted Average
Assets:
Equity investment in Terra JV	$	217,324,720	Discounted cash flow (1)(2)	Discount rate (1)(2)	2.45	%	15.00	%	12.66	%

_______________

(1)Discounted cash flows and discount rates applied to Terra Property Trust’s assets and liabilities.

(2)The fair value of Terra Property Trust’s investment in an office building is determined using the direct capitalization method with cap rate ranges from 5.25% to 6.00% as of March 31, 2022 and December 31, 2021, respectively. Additionally, the fair value of Terra Property Trust’s investment in a 4.9 acre development parcel is based on the estimated selling price.

Risks and Uncertainties

    The Company’s investment in Terra Property Trust through Terra JV is highly illiquid and there is no assurance that the Company will achieve its investment objectives, including targeted returns. Terra Property Trust’s loans are highly illiquid. Due to the illiquidity of the loans, valuation of the loans may be difficult, as there generally will be no established markets for these loans.

The COVID-19 pandemic has resulted in extreme volatility in a variety of global markets, including the real estate-related debt markets. U.S. financial markets, in particular, are experiencing limited liquidity and forced selling by certain market

18

Notes to Unaudited Financial Statements

participants with insufficient liquidity available to meet current obligations, which puts further downward pressure on asset prices.

As the Company’s investment is carried at fair value with fair value changes recognized in the statements of operations, any changes in fair value would directly affect the Company’s members’ capital.

Note 4. Related Party Transactions

Operating Agreement

    The Company has an operating agreement, as amended, with Terra Fund Advisors. The operating agreement, as amended, is scheduled to terminate on December 31, 2023 unless the Company is dissolved earlier. Starting January 1, 2016, the Company conducts all of its real estate lending business through Terra Property Trust. As such, Terra Property Trust is responsible for management compensation paid and operating expenses reimbursed to its manager pursuant to a management agreement with the manager.

Dividend Income

    As discussed in Note 3, for the three months ended March 31, 2022 and 2021, the Company received approximately $3.0 million and $3.0 million of distributions from Terra JV, of which $2.2 million and $1.9 million were returns of capital, respectively.

Note 5. Commitments and Contingencies

The Company enters into contracts that contain a variety of indemnification provisions. The Company’s maximum exposure under these arrangements is unknown; however, the Company has not had prior claims or losses pursuant to these contracts. The Manager has reviewed the Company’s existing contracts and expects the risk of loss to the Company to be remote.

The Company is not currently subject to any material legal proceedings and, to the Company’s knowledge, no material legal proceedings are threatened against the Company. From time to time, the Company may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of the Company’s rights under contracts with its portfolio companies. While the outcome of any legal proceedings cannot be predicted with certainty, the Company does not expect that any such proceedings will have a material adverse effect upon its financial condition or results of operations.

Note 6. Members’ Capital

    As of both March 31, 2022 and December 31, 2021, the Company had 6,636.6 units outstanding. The net asset value per unit was $32,659 and $32,860 as of March 31, 2022 and December 31, 2021, respectively.

Capital Distributions

    At the discretion of the Manager, the Company may make distributions from net cash flow from operations, net disposition proceeds, or other cash available for distribution. Distributions are made to holders of Continuing Income Units (regular units of limited liability company interest in the Company) in proportion to their unit holdings until they receive a return of their initial Deemed Capital Contribution, as defined in the operating agreement, plus a preferred return ranging from 8.5% to 9.0% depending on the historical preferred return applicable to their Terra Fund units, after which time distributions are made 15% to the Manager which the Company refers to as the carried interest distribution, and 85% to the holders of Continuing Income Units. The preferred return applicable to the Continuing Income Units sold in the offering concurrent with the Merger is 8.5%.

For the three months ended March 31, 2022 and 2021, the Company made total distributions to non-managing members of $3.0 million and $3.0 million, respectively. For the three months ended March 31, 2022 and 2021, the Company did not make any carried interest distributions to the Manager.

Capital Redemptions

    At the discretion of the Manager, a reserve of 5% of cash from operations may be established in order to repurchase units from non-managing members. The Manager is under no obligation to redeem non-managing members’ units. As of March 31,

19

Notes to Unaudited Financial Statements

2022 and 2021, no such reserve was established. For the three months ended March 31, 2022 and 2021, the Company did not redeem any units.

Allocation of Income (Loss)

    Profits and losses are allocated to the members in proportion to the units held in a given calendar year.

Note 7. Financial Highlights

    The financial highlights represent the per unit operating performance, return and ratios for the non-managing members’ class, taken as a whole, for the three months ended March 31, 2022 and 2021. These financial highlights consist of the operating performance, the internal rate of return (“IRR”) since inception of the Company, and the expense and net investment income ratios which are annualized except for the non-recurring expenses.

    The IRR, net of all fees and carried interest (if any), is computed based on actual dates of the cash inflows (capital contributions), outflows (capital distributions), and the ending capital at the end of the respective period (residual value) of the non-managing members’ capital account.

    The following summarizes the Company’s financial highlights for the three months ended March 31, 2022 and 2021:

	Three Months Ended March 31,
	2022			2021
Per unit operating performance:
Net asset value per unit, beginning of period	$	32,860		$	35,467
Increase in members’ capital from operations (1):
Net investment income	95			152
Net change in unrealized appreciation on investment	153			74
Total increase in members’ capital from operations	248			226
Distributions to members (2):
Capital distributions	(449)			(449)
Net decrease in members’ capital resulting from distributions	(449)			(449)
Net asset value per unit, end of period	$	32,659		$	35,244
Ratios to average net assets:
Expenses	0.23		%	0.21		%
Net investment income	1.13		%	1.72		%
IRR, beginning of period	4.91		%	5.82		%
IRR, end of period	4.86		%	5.73		%

_______________

(1)The per unit data was derived by using the weighted average units outstanding during the applicable periods, which were 6,636.6 and 6,637.8 for the three months ended March 31, 2022 and 2021.

(2)The per unit data for distributions reflects the actual amount of distributions paid per unit during the periods.

Note 8. Subsequent Events

Management has evaluated subsequent events through the date the financial statements were available to be issued. Management has determined that there are no material events other than the one described below that would require adjustment to, or disclosure in, the Company’s financial statements.

On May 2, 2022, Terra Property Trust, Terra Fund 6, Merger Sub, Terra Income Advisors, LLC and Terra REIT Advisors, LLC, entered into the Merger Agreement pursuant to which, subject to the terms and conditions therein, Terra Fund 6 will be merged with and into Merger Sub, with Merger Sub surviving as a wholly owned subsidiary of Terra Property Trust.

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Notes to Unaudited Financial Statements

Pursuant to the terms of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), except for any shares of common stock, par value $0.001 per share, of Terra Fund 6 (“Terra BDC Common Stock”) held by Terra Property Trust or any of its wholly owned subsidiary or Terra Fund 6, which will be automatically retired and cease to exist with no consideration paid therefor, each issued and outstanding share of Terra BDC Common Stock will be automatically cancelled and retired and converted into the right to receive (i) 0.595 shares (as such number may be adjusted in accordance with the Merger Agreement, the “Exchange Ratio”) of the newly designated Class B Common Stock, par value $0.01 per share, of Terra Property Trust (“Class B Common Stock”), and (ii) cash, without interest, in lieu of any fractional shares of Class B Common Stock otherwise issuable in an amount, rounded to the nearest whole cent, determined by multiplying (x) the fraction of a share of Class B Common to which such holder would otherwise be entitled by (y) $14.38.

Prior to the Effective Time, Terra Property Trust will file with the State Department of Assessments and Taxation of Maryland Articles of Amendment to the Articles of Amendment and Restatement of Terra Property Trust (the “Charter Amendment”). Pursuant to the Charter Amendment, (i) the authorized shares of stock which Terra Property Trust has authority to issue will be increased from 500,000,000 to 950,000,000, consisting of 450,000,000 shares of Class A Common Stock, $0.01 par value per share (“Class A Common Stock”), 450,000,000 shares of Class B Common Stock, and 50,000,000 shares of Preferred Stock, $0.01 par value per share, and (ii) each share of Terra Property Trust’s common stock issued and outstanding immediately prior to the Effective Time will be automatically changed into one issued and outstanding share of Class B Common Stock.

Except with respect to conversion, each share of Class B Common Stock will have identical preferences, rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications, and terms and conditions of redemption as each other share of Terra Property Trust’s common stock. On the date that is 180 calendar days (or, if such date is not a business day, the next business day) after the date of initial listing of shares of Class A Common Stock for trading on a national securities exchange or such earlier date as approved by Terra Property Trust’s board of directors (the “First Conversion Date”), one-third of the issued and outstanding shares of Class B Common Stock will automatically and without any action on the part of the holder thereof convert into an equal number of shares of Class A Common Stock. On the date that is 365 calendar days (or, if such date is not a business day, the next business day) after the date of initial listing of shares of Class A Common Stock for trading on a national securities exchange or such earlier date following the First Conversion Date as approved by Terra Property Trust’s board of directors (the “Second Conversion Date”), one-half of the issued and outstanding shares of Class B Common Stock will automatically and without any action on the part of the holder thereof convert into an equal number of shares of Class A Common Stock. On the date that is 545 calendar days (or, if such date is not a business day, the next business day) after the date of initial listing of shares of Class A Common Stock for trading on a national securities exchange or such earlier date following the Second Conversion Date as approved by Terra Property Trust’s board of directors, all of the issued and outstanding shares of Class B Common Stock will automatically and without any action on the part of the holder thereof convert into an equal number of shares of Class A Common Stock.

Pursuant to the Merger Agreement, Terra Property Trust has agreed to take all necessary corporate action so that upon and after the Effective Time, the size of Terra Property Trust’s board of directors is increased from three to six, and three individuals designated by Terra Fund 6 (the “Terra BDC Designees”) are elected to the Board. If a Terra BDC Designee is not able or willing to serve on Terra Property Trust’s board of directors as of the Effective Time, Terra Fund 6 will select a replacement within a reasonable period of time prior to the Effective Time, and Terra Property Trust’s board of directors will elect such replacement as a member of Terra Property Trust’s board of directors as of the Effective Time.

The Merger is expected to close during the third quarter of 2022, subject to the required approvals by Terra Fund 6’s stockholders and other customary closing conditions. There can be no assurances that the Merger will close.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

    The information contained in this section should be read in conjunction with our unaudited financial statements and related notes thereto and other financial information included elsewhere in this quarterly report on Form 10-Q. In this report, the “Company,” “we,” “us” and “our” refer to Terra Secured Income Fund 5, LLC.

FORWARD-LOOKING STATEMENTS

    We make forward-looking statements in this quarterly report on Form 10-Q within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). For these statements, we claim the protections of the safe harbor for forward-looking statements contained in such Sections. The forward-looking statements contained in this quarterly report on Form 10-Q may include, but are not limited to, statements as to:

•our expected financial performance, operating results and our ability to make distributions to our members in the future;

•the potential negative impacts the of the coronavirus (“COVID-19”) pandemic on the global economy and the impacts of COVID-19 on our financial condition, results of operations, liquidity and capital resources and business operations;

•actions that may be taken by governmental authorities to contain the COVID-19 outbreak or to treat its impact;

•the efficacy of the vaccines or other remedies and the speed of their distribution and administration;

•the availability of attractive risk-adjusted investment opportunities in our target asset class and other real estate-related investments that satisfy our objectives and strategies;

•the origination or acquisition of our targeted assets, including the timing of originations or acquisitions;

•volatility in our industry, interest rates and spreads, the debt or equity markets, the general economy or the real estate market specifically, whether the results of market events or otherwise;

•changes in our investment objectives and business strategy;

•the availability of financing on acceptable terms or at all;

•the performance and financial condition of our borrowers;

•changes in interest rates and the market value of our assets;

•borrower defaults or decreased recovery rates from our borrowers;

•changes in prepayment rates on our loans;

•our use of financial leverage;

•actual and potential conflicts of interest with any of the following affiliated entities: Terra Fund Advisors, LLC (“Terra Fund Advisors” or the “Manager”), Terra REIT Advisors, LLC (“Terra REIT Advisors”), Terra Income Advisors, LLC; Terra Capital Partners, LLC (“Terra Capital Partners”), our sponsor; Terra JV, LLC (“Terra JV”); Terra Income Fund 6, Inc. (“Terra Fund 6”);Terra Secured Income Fund 5 International; Terra Income Fund International; Terra Secured Income Fund 7, LLC (“Terra Fund 7”); Terra Property Trust, Inc. (“Terra Property Trust”); Terra Offshore Funds REIT, LLC (“Terra Offshore REIT”); Mavik Real Estate Special Opportunities Fund, LP (“ RESOF”); or any of their affiliates;

•our dependence on our Manager or its affiliates and the availability of its senior management team and other personnel;

•liquidity transactions that may be available to us or our subsidiaries or affiliates in the future, including a liquidation of assets, a sale of our company or its subsidiaries or affiliates, or a strategic business combination, a listing of the shares

22

of common stock of Terra Property Trust on a national securities exchange, or an adoption of a share repurchase plan, in each case, which may include the distribution of our common stock of Terra Property Trust indirectly owned by our company and certain other fund vehicles managed by Terra Capital Partners or its affiliates to the ultimate investors in these vehicles, and the timing of any such transactions;

•Terra Property Trust’s ability to complete the contemplated acquisition of Terra Fund 6 (as defined herein) and achieve the expected synergies, cost savings and other benefits from the acquisition of Terra Fund 6;

•risks associated with achieving expected synergies, cost savings and other benefits from acquisitions, including the contemplated acquisition of Terra Fund 6, and Terra Property Trust’s increased scale;

•actions and initiatives of the U.S. federal, state and local government and changes to the U.S. federal, state and local government policies and the execution and impact of these actions, initiatives and policies;

•limitations imposed on our business and our ability to satisfy complex rules in order for us to maintain our exemption from registration as an “investment company” under the Investment Company Act of 1940, as amended (the “1940 Act”), and Terra Property Trust to maintain its qualification as a real estate investment trust (“REIT”) for U.S. federal income tax purposes; and

•the degree and nature of our competition.

In addition, words such as “anticipate,” “believe,” “expect” and “intend” indicate a forward-looking statement, although not all forward-looking statements include these words. The forward-looking statements contained in this quarterly report on Form 10-Q involve risks and uncertainties. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in “Part I — Item 1A. Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2021 and in “Part II - Item 1A. Risk Factors” in this quarterly report on Form 10-Q. Other factors that could cause actual results to differ materially include:

•changes in the economy;

•risks associated with possible disruption in our operations or the economy generally due to terrorism or natural disasters; and

•future changes in laws or regulations and conditions in our operating areas.

We have based the forward-looking statements included in this quarterly report on Form 10-Q on information available to us on the date of this quarterly report on Form 10-Q. Except as required by the federal securities laws, we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise. Members are advised to consult any additional disclosures that we may make directly to members or through reports that we may file in the future with the Securities and Exchange Commission (the “SEC”), including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

Overview

    We are a real estate credit focused company that originates, structures, funds and manages commercial real estate investments, including mezzanine loans, first mortgage loans, subordinated mortgage loans and preferred equity investments throughout the United States. Our loans finance the acquisition, construction, development or redevelopment of quality commercial real estate in the United States. We focus on the origination of middle market loans in the approximately $10 million to $50 million range, to finance properties primarily in primary and secondary markets. We believe loans in this size range are subject to less competition, offer higher risk adjusted returns than larger loans with similar risk metrics and facilitate portfolio diversification. We were formed as a Delaware limited liability company on April 24, 2013 and commenced operations on August 8, 2013. We make substantially all of our investments, and conduct substantially all of our real estate lending business, through Terra Property Trust, which has elected to be taxed as a REIT for U.S. federal income tax purposes commencing with its taxable year ended December 31, 2016. Our investment objectives are to (i) preserve our members’ capital contributions, (ii) realize income from our investments and (iii) make monthly distributions to our members from cash generated from investments. There can be no assurances that we will be successful in meeting our investment objectives.

23

    On January 1, 2016, Terra Secured Income Fund, LLC (“Terra Fund 1”), Terra Fund Secured Income Fund 2, LLC (“Terra Fund 2”), Terra Secured Income Fund 3, LLC (“Terra Fund 3”) and Terra Secured Income Fund 4, LLC (“Terra Fund 4”) merged with and into our subsidiaries (collectively, the “Terra Funds”) through a series of separate mergers (collectively, the “Merger”). Following the Merger, we contributed the consolidated portfolio of our net assets and the net assets of the Terra Funds to Terra Property Trust in exchange for all of the shares of common stock of Terra Property Trust. We elected to engage in these transactions, which we refer to as the “REIT formation transactions,” to make our investments through Terra Property Trust and to provide our members with a more broadly diversified portfolio of assets, while providing us with enhanced access to capital and borrowings, lower operating costs and enhanced opportunities for growth.

    On March 2, 2020, Terra Fund 1, Terra Fund 2 and Terra Fund 3 merged with and into Terra Fund 4, with Terra Fund 4 continuing as the surviving company (the “Terra Fund Merger”), and we consolidated our holdings of shares of common stock of Terra Property Trust in Terra Fund 4. Subsequent to the Terra Fund Merger, the legal name of Terra Fund 4 was changed to Terra JV, LLC. On March 2, 2020, Terra Property Trust engaged in a series of transactions pursuant to which Terra Property Trust issued an aggregate of 4,574,470.35 shares of its common stock in exchange for the settlement of an aggregate of $49.8 million of participation interests in loans that Terra Property Trust owned, cash of $25.5 million and other working capital. As of March 31, 2022, Terra JV held 87.4% of the issued and outstanding shares of Terra Property Trust’s common stock with the remainder held by Terra Offshore REIT; and we and Terra Fund 7 owned an 87.6% and 12.4% percentage interest, respectively, in Terra JV. Accordingly, as of March 31, 2022, we indirectly beneficially owned 76.5% of the outstanding shares of common stock of Terra Property Trust through Terra JV.

As previously disclosed, we continue to explore alternative liquidity transactions on an opportunistic basis to maximize value for our investors. Examples of the alternative liquidity transactions that, depending on market conditions, may be available to us, or our subsidiaries or affiliates, include a listing of our shares of common stock of Terra Property Trust on a national securities exchange, adoption of a share repurchase plan, a liquidation of assets, a sale of our company or its subsidiaries or affiliates or a strategic business combination, in each case, which may include the in-kind distribution of shares of common stock of Terra Property Trust indirectly owned by our company and certain other fund vehicles managed by Terra Capital Partners or its affiliates to the ultimate investors in these vehicles. We cannot provide any assurance that any alternative liquidity transaction will be available to us or, if available, that we will pursue or be successful in completing any such alternative liquidity transaction.

Recent Developments

Terra BDC Merger

On May 2, 2022, Terra Property Trust, Terra Fund 6, Terra Merger Sub, LLC, a wholly owned subsidiary of Terra Property Trust (“Merger Sub”), Terra Income Advisors, LLC and Terra REIT Advisors, entered into an Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which, subject to the terms and conditions therein, Terra Fund 6 will be merged with and into Merger Sub, with Merger Sub surviving as a wholly owned subsidiary of Terra Property Trust (such surviving company, the “Surviving Company” and such transaction, the “Merger”).

Pursuant to the terms of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each issued and outstanding share of common stock, par value $0.001 per share, of Terra Fund 6 (“Terra BDC Common Stock”) will be automatically cancelled and retired and converted into the right to receive (i) 0.595 shares (as such number may be adjusted in accordance with the Merger Agreement, the “Exchange Ratio”) of the newly designated Class B Common Stock, par value $0.01 per share, of Terra Property Trust (“Class B Common Stock”), and (ii) cash, without interest, in lieu of any fractional shares of Class B Common Stock otherwise issuable in an amount, rounded to the nearest whole cent, determined by multiplying (x) the fraction of a share of Class B Common to which such holder would otherwise be entitled by (y) $14.38.

Prior to the Effective Time, Terra Property Trust will file with Maryland Articles of Amendment to the Articles of Amendment and Restatement of Terra Property Trust (the “Charter Amendment”). Pursuant to the Charter Amendment, (i) the authorized shares of stock which Terra Property Trust has authority to issue will be increased from 500,000,000 to 950,000,000, consisting of 450,000,000 shares of Class A Common Stock, $0.01 par value per share (“Class A Common Stock”), 450,000,000 shares of Class B Common Stock, and 50,000,000 shares of Preferred Stock, $0.01 par value per share, and (ii) each share of Terra Property Trust’s common stock issued and outstanding immediately prior to the Effective Time will be automatically converted into one issued and outstanding share of Class B Common Stock.

Each share of Class B Common Stock will have identical preferences, rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications, and terms and conditions of redemption as each other share of Terra Property

24

Trust’s common stock. On the date that is 180 calendar days (or, if such date is not a business day, the next business day) after the date of initial listing of shares of Class A Common Stock for trading on a national securities exchange or such earlier date as is approved by Terra Property Trust’s board of directors (the “First Conversion Date”), one-third of the issued and outstanding shares of Class B Common Stock will automatically and without any action on the part of the holder thereof convert into an equal number of shares of Class A Common Stock. On the date that is 365 calendar days (or, if such date is not a business day, the next business day) after the date of initial listing of shares of Class A Common Stock for trading on a national securities exchange or such earlier date following the First Conversion Date as shall be approved by Terra Property Trust’s board of directors (the “Second Conversion Date”), one-half of the issued and outstanding shares of Class B Common Stock will automatically and without any action on the part of the holder thereof convert into an equal number of shares of Class A Common Stock. On the date that is 545 calendar days (or, if such date is not a business day, the next business day) after the date of initial listing of shares of Class A Common Stock for trading on a national securities exchange or such earlier date following the Second Conversion Date as shall be approved by Terra Property Trust’s board of directors, all of the issued and outstanding shares of Class B Common Stock will automatically and without any action on the part of the holder thereof convert into an equal number of shares of Class A Common Stock.

Pursuant to the Merger Agreement, Terra Property Trust has agreed to take all necessary corporate action so that upon and after the Effective Time, the size of Terra Property Trust’s board of directors is increased from three to six, and three individuals designated by Terra Fund 6 (the “Terra BDC Designees”) are elected to the Board. If a Terra BDC Designee is not able or willing to serve on Terra Property Trust’s board of directors as of the Effective Time, Terra Fund 6 will select a replacement within a reasonable period of time prior to the Effective Time, and Terra Property Trust’s board of directors will elect such replacement as a member of Terra Property Trust’s board of directors as of the Effective Time.

The Merger is expected to close during the third quarter of 2022, subject to the required approvals by Terra Fund 6’s stockholders and other customary closing conditions. There can be no assurances that the Merger will close.

COVID-19 Pandemic

The COVID-19 pandemic has evolved from its emergence in early 2020, so has its global impact. Governments and businesses have also instituted vaccine mandates and testing requirements for employees. While vaccine availability and uptake has increased, the longer-term macro-economic effects on global supply chains, inflation, labor shortages and wage increases continue to impact many industries, including the collateral underlying certain of our loans. Moreover, with the potential for new strains of COVID-19 to emerge, governments and businesses may re-impose aggressive measures, such as quarantines and restrictions on travel, to help slow its spread in the future. For this reason, among others, as the COVID-19 pandemic continues, the potential global impacts are uncertain and difficult to assess.    

Portfolio Summary

The following tables provide a summary of Terra Property Trust’s net loan portfolio as of March 31, 2022 and December 31, 2021:

	March 31, 2022
	Fixed Rate			Floating Rate (1)(2)(3)			Total Gross Loans			Obligations under Participation Agreements and Secured Borrowing			Total Net Loans
Number of loans	7			18			25			5			25
Principal balance	$	97,914,340		$	469,606,633		$	567,520,973		$	95,283,106		$	472,237,867
Amortized cost	99,264,597			458,754,403			558,019,000			96,090,690			461,928,310
Fair value	99,045,593			457,961,364			557,006,957			95,483,175			461,523,782
Weighted average coupon rate	12.92		%	7.16		%	8.15		%	11.07		%	7.56		%
Weighted-average remaining    term (years)	1.98			1.32			1.44			0.97			1.53

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	December 31, 2021
	Fixed Rate			Floating Rate (1)(2)(3)			Total Gross Loans			Obligations under Participation Agreements and Secured Borrowing			Total Net Loans
Number of loans	6			15			21			4			21
Principal balance	$	74,880,728		$	405,270,423		$	480,151,151		$	76,569,398		$	403,581,753
Amortized cost	75,520,212			394,153,102			469,673,314			76,818,156			392,855,158
Fair value	75,449,410			391,752,209			467,201,619			75,900,089			391,301,530
Weighted average coupon rate	12.39		%	7.01		%	7.85		%	10.40		%	7.37		%
Weighted-average remaining    term (years)	1.93			1.45			1.53			0.82			1.66

_______________

(1)These loans pay a coupon rate of London Interbank Offered Rate (“LIBOR”) or Secured Overnight Financing Rate (“SOFR”) plus a fixed spread. Coupon rate shown was determined using LIBOR of 0.45% and SOFR of 0.16% as of March 31, 2022 and LIBOR of 0.10% as of December 31, 2021.

(2)As of March 31, 2022 and December 31, 2021, amount included $351.1 million and $290.6 million of senior mortgages used as collateral for $241.5 million and $176.9 million of borrowings under credit facilities, respectively.

(3)As of March 31, 2022 and December 31, 2021, sixteen and thirteen of these loans, respectively, are subject to a LIBOR or SOFR floor, as applicable.

    In addition to its net loan portfolio, as of March 31, 2022 and December 31, 2021, Terra Property Trust owned 4.9 acres of adjacent land acquired pursuant to a deed in lieu of foreclosure and a multi-tenant office building acquired pursuant to a foreclosure. The land and building and related lease intangible assets and liabilities had a net carrying value of $53.0 million and $56.1 million as of March 31, 2022 and December 31, 2021, respectively. The mortgage loan payable encumbering the office building had an outstanding principal amount of $31.8 million and $32.0 million as of March 31, 2022 and December 31, 2021, respectively.

Additionally, as of March 31, 2022 and December 31, 2021, Terra Property Trust owned 44.2% and 50.0%, respectively, of equity interest in a limited partnership that invests primarily in performing and non-performing mortgages, loans, mezzanines and other credit instruments supported by underlying commercial real estate assets. During 2022 and 2021, we purchased equity interests in three joint ventures. As of March 31, 2022 and December 31, 2021, these equity interests had total carrying value of $91.7 million and $69.7 million, respectively.

Portfolio Investment Activity    

    For the three months ended March 31, 2022 and 2020, Terra Property Trust invested $26.0 million and $15.5 million in new and add-on investments and had $1.4 million and $25.0 million of repayments, resulting in net investments of $24.6 million and net repayments of $9.5 million, respectively. Amounts are net of obligations under participation agreements, secured borrowing, borrowings under the master repurchase agreement, the term loan, the repurchase agreements and the revolving line of credit.

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Portfolio Information

    The tables below set forth the types of assets in Terra Property Trust’s portfolio, as well as the property type and geographic location of the properties securing the loans in the portfolio, on a net loan basis, which represents Terra Property Trust’s proportionate share of the loans, based on its economic ownership of these loans.

	March 31, 2022								December 31, 2021
Investment Structure	Principal Balance		Amortized Cost		Fair Value		% of Total		Principal Balance		Amortized Cost		Fair Value		% of Total
First mortgages	$	373,263,411	$	376,115,508	$	376,309,856	59.6	%	$	310,933,350	$	313,515,326	$	312,735,452	58.3	%
Preferred equity    investments	63,767,599		63,850,511		49,787,433		7.9	%	63,441,546		63,515,633		49,187,299		9.2	%
Mezzanine loans	17,444,357		17,615,889		17,371,312		2.8	%	17,444,357		17,622,804		17,518,902		3.3	%
Credit facility	17,762,500		18,055,179		18,055,181		2.9	%	11,762,500		11,859,876		11,859,877		2.2	%
Allowance for loan    losses	—		(13,708,777)		—		—	%	—		(13,658,481)		—		—	%
Total loan    investments	$	472,237,867	461,928,310		461,523,782		73.2	%	$	403,581,753	392,855,158		391,301,530		73.0	%
Marketable    securities			475,201		510,151		0.1	%			1,176,006		1,310,000		0.2	%
Real estate owned			53,022,587		73,438,122		11.6	%			56,067,129		75,043,111		14.0	%
Equity investment    in unconsolidated    Investments			91,662,090		95,947,859		15.2	%			69,713,793		68,898,535		12.8	%
Total			$	607,088,188	$	631,419,914	100.1	%			$	519,812,086	$	536,553,176	100.0	%

	March 31, 2022								December 31, 2021
Property Type	Principal Balance		Amortized Cost		Fair Value		% of Total		Principal Balance		Amortized Cost		Fair Value		% of Total
Office	$	170,616,825	$	171,393,890	$	168,875,011	26.8	%	$	166,071,342	$	166,836,320	$	163,723,036	30.6	%
Multifamily	96,746,958		98,042,469		98,079,744		15.5	%	72,999,417		73,955,240		74,017,225		13.9	%
Hotel - full/select    service	56,918,328		57,520,720		57,571,618		9.1	%	56,847,381		57,395,682		57,565,411		10.7	%
Industrial	54,334,108		54,255,229		55,094,623		8.7	%	18,762,500		18,859,876		18,841,978		3.5	%
Infill land	33,807,563		33,895,151		34,066,059		5.4	%	28,960,455		28,923,827		29,173,344		5.4	%
Student housing	31,000,000		31,667,292		31,891,172		5.1	%	31,000,000		31,565,670		31,911,158		5.9	%
Mixed use	28,814,085		28,862,336		15,945,555		2.5	%	28,940,658		28,977,024		16,069,378		3.0	%
Allowance for loan    losses	—		(13,708,777)		—		—	%	—		(13,658,481)		—		—	%
Total loan    investments	$	472,237,867	461,928,310		461,523,782		73.1	%	$	403,581,753	392,855,158		391,301,530		73.0	%
Marketable    securities			475,201		510,151		0.1	%			1,176,006		1,310,000		0.2	%
Real estate owned			53,022,587		73,438,122		11.6	%			56,067,129		75,043,111		14.0	%
Equity investment    in unconsolidated    Investments			91,662,090		95,947,859		15.2	%			69,713,793		68,898,535		12.8	%
Total			$	607,088,188	$	631,419,914	100.0	%			$	519,812,086	$	536,553,176	100.0	%

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	March 31, 2022								December 31, 2021
Geographic Location	Principal Balance		Amortized Cost		Fair Value		% of Total		Principal Balance		Amortized Cost		Fair Value		% of Total
United States
California	$	191,026,179	$	192,975,258	$	193,108,596	30.6	%	$	187,209,547	$	189,082,380	$	189,447,577	35.3	%
New York	63,767,599		63,850,511		49,787,433		7.8	%	63,441,546		63,515,633		49,187,299		9.1	%
Georgia	53,970,491		54,221,854		53,083,178		8.4	%	53,289,288		53,536,884		52,031,363		9.7	%
North Carolina	45,781,188		46,026,460		45,797,474		7.3	%	44,492,971		44,704,699		44,453,133		8.3	%
New Jersey	35,571,608		35,391,604		36,368,139		5.8	%	—		—		—		—	%
Utah	28,000,000		28,529,857		28,861,172		4.6	%	28,000,000		28,420,056		28,851,547		5.4	%
Washington	24,424,855		24,487,967		24,600,471		3.9	%	3,523,401		3,382,683		3,553,330		0.7	%
Texas	13,695,947		13,824,587		13,832,906		2.2	%	13,625,000		13,725,690		13,735,569		2.6	%
Massachusetts	7,000,000		7,000,000		6,862,858		1.1	%	7,000,000		7,000,000		6,982,101		1.3	%
Pennsylvania	6,000,000		6,191,554		6,191,555		1.0	%	—		—		—		—	%
South Carolina	3,000,000		3,137,435		3,030,000		0.5	%	3,000,000		3,145,614		3,059,611		0.6	%
Allowance for loan    losses	—		(13,708,777)		—		—	%	—		(13,658,481)		—		—	%
Total loan    investments	$	472,237,867	461,928,310		461,523,782		73.2	%	$	403,581,753	392,855,158		391,301,530		73.0	%
Marketable    securities			475,201		510,151		0.1	%			1,176,006		1,310,000		0.2	%
Real estate owned			53,022,587		73,438,122		11.6	%			56,067,129		75,043,111		14.0	%
Equity investment    in unconsolidated    Investments			91,662,090		95,947,859		15.2	%			69,713,793		68,898,535		12.8	%
Total			$	607,088,188	$	631,419,914	100.1	%			$	519,812,086	$	536,553,176	100.0	%

Factors Impacting Operating Results

    Our results of operations are affected by a number of factors and primarily depend on, among other things, the level of the interest income generated by Terra Property Trust from targeted assets, the market value of our assets and the supply of, and demand for, real estate-related loans, including mezzanine loans, first mortgage loans, subordinated mortgage loans, preferred equity investments and other loans related to high quality commercial real estate in the United States, and the financing and other costs associated with our business. Interest income and borrowing costs of Terra Property Trust may vary as a result of changes in interest rates, which could impact the net interest we receive on our assets. Our operating results may also be impacted by conditions in the financial markets and unanticipated credit events experienced by borrowers under our loan assets.

Market Risk

    Terra Property Trust’s loans are highly illiquid, and there is no assurance that it will achieve its investment objectives, including targeted returns. Due to the illiquidity of the loans, valuation of Terra Property Trust’s loans may be difficult, as there generally will be no established markets for these loans.

Credit Risk

    Credit risk represents the potential loss that Terra Property Trust would incur if the borrowers failed to perform pursuant to the terms of their obligations to Terra Property Trust. Terra Property Trust manages exposure to credit risk by limiting exposure to any one individual borrower and any one asset class. Additionally, Terra Property Trust employs an asset management approach and monitors the portfolio of loans through, at a minimum, quarterly financial review of property performance including net operating income, loan-to-value ratio, debt service coverage ratio, and the debt yield. Terra Property Trust also requires certain borrowers to establish a cash reserve, as a form of additional collateral, for the purpose of providing for future interest or property-related operating payments.

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    The performance and value of Terra Property Trust’s loans depend upon the sponsors’ ability to operate or manage the development of the respective properties that serve as collateral so that each property’s value ultimately supports the repayment of the loan balance. Mezzanine loans and preferred equity investments are subordinate to senior mortgage loans and, therefore, involve a higher degree of risk. In the event of a default, mezzanine loans and preferred equity investments will be satisfied only after the senior lender’s investment is fully recovered. As a result, in the event of a default, Terra Property Trust may not recover all of its investments.

    In addition, Terra Property Trust is exposed to the risks generally associated with the commercial real estate market, including variances in occupancy rates, capitalization rates, absorption rates, and other macroeconomic factors beyond its control. Terra Property Trust seeks to manage these risks through its underwriting and asset management processes.

    The COVID-19 pandemic has significantly impacted the commercial real estate markets, causing reduced occupancy, requests from tenants for rent deferral or abatement, and delays in construction and development projects currently planned or underway. These negative conditions may persist into the future and impair Terra Property Trust’s borrowers’ ability to pay principal and interest due to Terra Property Trust under its loan agreements.

    We and Terra Property Trust maintain all of our cash at financial institutions which, at times, may exceed the amount insured by the Federal Deposit Insurance Corporation.

Concentration Risk

    Terra Property Trust holds real estate-related loans. Thus, its loan portfolio may be subject to a more rapid change in value than would be the case if it were required to maintain a wide diversification among industries, companies and types of loans. The result of such concentration in real estate assets is that a loss in such loans could materially reduce Terra Property Trust’s capital.

Liquidity Risk

    Liquidity risk represents the possibility that we may not be able to sell, directly or indirectly, our equity interest in Terra Property Trust or Terra JV at a reasonable price in times of low trading volume, high volatility and financial stress.

Interest Rate Risk

    Interest rate risk represents the effect from a change in interest rates, which could result in an adverse change in the fair value of our interest-bearing financial instruments. With respect to Terra Property Trust’s business operations, increases in interest rates, in general, may over time cause: (i) the interest expense associated with variable rate borrowings to increase; (ii) the value of real estate-related loans to decline; (iii) coupons on variable rate loans to reset, although on a delayed basis, to higher interest rates; (iv) to the extent applicable under the terms of Terra Property Trust’s investments, prepayments on real estate-related loans to slow; and (v) to the extent we enter into interest rate swap agreements as part of Terra Property Trust’s hedging strategy, the value of these agreements to increase.

    Conversely, decreases in interest rates, in general, may over time cause: (i) the interest expense associated with variable rate borrowings to decrease; (ii) the value of real estate-related loans to increase; (iii) coupons on variable rate real estate-related loans to reset, although on a delayed basis, to lower interest rates (iv) to the extent applicable under the terms of Terra Property Trust’s investments, prepayments on real estate-related loans to increase; and (v) to the extent Terra Property Trust enters into interest rate swap agreements as part of its hedging strategy, the value of these agreements to decrease.

Prepayment Risk

    Prepayments can either positively or adversely affect the yields on Terra Property Trust’s loans. Prepayments on debt instruments, where permitted under the debt documents, are influenced by changes in current interest rates and a variety of economic, geographic and other factors beyond our control, and consequently, such prepayment rates cannot be predicted with certainty. If Terra Property Trust does not collect a prepayment fee in connection with a prepayment or are unable to invest the proceeds of such prepayments received, the yield on the portfolio will decline. In addition, Terra Property Trust may acquire assets at a discount or premium and if the asset does not repay when expected, the anticipated yield may be impacted. Under certain interest rate and prepayment scenarios Terra Property Trust may fail to recoup fully its cost of acquisition of certain loans.

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Extension Risk

    Extension risk is the risk that Terra Property Trust’s assets will be repaid at a slower rate than anticipated and generally increases when interest rates rise. In which case, to the extent Terra Property Trust has financed the acquisition of an asset, Terra Property Trust may have to finance its asset at potentially higher costs without the ability to reinvest principal into higher yielding securities because borrowers prepay their mortgages at a slower pace than originally expected, adversely impacting its net interest spread, and thus its net interest income.

Real Estate Risk

    The market values of commercial and residential mortgage assets are subject to volatility and may be affected adversely by a number of factors, including, but not limited to, national, regional and local economic conditions (which may be adversely affected by industry slowdowns and other factors); local real estate conditions; changes or continued weakness in specific industry segments; construction quality, age and design; demographic factors; retroactive changes to building or similar codes; pandemics; natural disasters; and other acts of god. In addition, decreases in property values reduce the value of the collateral and the potential proceeds available to a borrower to repay the underlying loans, which could also cause Terra Property Trust to suffer losses.

Use of Leverage

    Terra Property Trust deploys moderate amounts of leverage as part of its operating strategy, which may consist of borrowings under first mortgage financings, warehouse facilities, term loans, repurchase agreements and other credit facilities. While borrowing and leverage present opportunities for increasing total return, they may have the effect of potentially creating or increasing losses.

Results of Operations

    The following table presents the comparative results of our operations for the three months ended March 31, 2022 and 2021:

	Three Months Ended March 31,
	2022		2021		Change
Investment income
Dividend income	$	758,110	$	1,126,895	$	(368,785)
Other operating income	11		20		(9)
Total investment income	758,121		1,126,915		(368,794)
Operating expenses
Professional fees	127,060		120,135		6,925
Other	1,392		385		1,007
Total operating expenses	128,452		120,520		7,932
Net investment income	629,669		1,006,395		(376,726)
Net change in unrealized appreciation on investment	1,018,522		492,466		526,056
Net increase in members’ capital resulting from operations	$	1,648,191	$	1,498,861	$	149,330

Dividend Income

    Dividend income associated with our indirect ownership of Terra Property Trust primarily represents our proportionate share of Terra Property Trust’s net income or loss for the period. Any excess of distributions received from Terra Property Trust over its net income is recorded as return of capital. As of both March 31, 2022 and 2021, we indirectly beneficially owned 76.5% through Terra JV of the outstanding shares of common stock of Terra Property Trust.

    For the three months ended March 31, 2022 and 2021, we received distributions of $3.0 million and $3.0 million, or $0.20 and $0.20 per share, from Terra Property Trust, of which $0.8 million and $1.1 million was recorded as dividend income and $2.2 million and $1.9 million was recorded as return of capital, respectively.

For the three months ended March 31, 2022, Terra Property Trust recorded a net loss of $0.8 million, compared to a net income of $1.5 million recorded in the same period in 2021. The change in Terra Property Trust’s net (loss) income was due to

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an impairment charge of $1.6 million recorded on 4.9 acres of adjacent land for the three months ended March 31, 2022 to reduce the carrying value of the land to its estimated selling price (there was no impairment charge for the three months ended March 31, 2021) and an increase of $1.0 million in fees paid and operating expenses reimbursed to Terra Property Trust’s manager resulting from an increase in Terra Property Trust’s total assets under management, partially offset by a decrease in provision for loan losses of $0.2 million resulting from a decline in loans with higher risk and an increase in income from equity investment in unconsolidated investments of $0.1 million resulting from net equity income from the joint ventures that Terra Property Trust invested in in the fourth quarter of 2021 and first quarter of 2022.

Net Loan Portfolio

    In assessing the performance of Terra Property Trust’s loans, we believe it is appropriate to evaluate the loans on an economic basis, that is, gross loans net of obligations under participation agreements and secured borrowing, term loan payable, revolving line of credit and repurchase agreement payable.

     The following tables present a reconciliation of Terra Property Trust’s loan portfolio from a gross basis to a net basis for the three months ended March 31, 2022 and 2021:

	Three Months Ended March 31, 2022				Three Months Ended March 31, 2021
	Weighted Average Principal Amount (1)		Weighted Average Coupon Rate (2)		Weighted Average Principal Amount (1)		Weighted Average Coupon Rate (2)
Total portfolio
Gross loans	$	506,206,479	7.7	%	$	408,985,092	8.4	%
Obligations under participation agreements    and secured borrowing	(79,023,662)		10.4	%	(88,594,532)		10.1	%
Repurchase agreement payable	(102,225,409)		2.5	%	—		—	%
Term loan payable	(42,140,886)		5.3	%	(107,776,898)		5.3	%
Revolving line of credit	(44,891,269)		4.0	%	(1,745,785)		4.0	%
Net loans (3)	$	237,925,253	10.2	%	$	210,867,877	9.3	%
Senior loans
Gross loans	304,278,978		6.2	%	255,124,634		6.4	%
Obligations under participation agreements    and secured borrowing	(49,397,683)		9.9	%	(45,478,823)		8.6	%
Repurchase agreement payable	(102,225,409)		2.5	%	—		—	%
Term loan payable	(42,140,886)		5.3	%	(107,776,898)		5.3	%
Revolving line of credit	(44,891,269)		4.0	%	(1,745,785)		4.0	%
Net loans (3)	$	65,623,731	11.3	%	$	100,123,128	6.6	%
Subordinated loans (4)
Gross loans	201,927,501		9.6	%	153,860,458		11.7	%
Obligations under participation agreements	(29,625,979)		11.2	%	(43,115,709)		11.6	%
Net loans (3)	$	172,301,522	9.3	%	$	110,744,749	11.7	%

_______________

(1)Amount is calculated based on the number of days each loan is outstanding.

(2)Amount is calculated based on the underlying principal amount of each loan.

(3)The weighted average coupon rate represents net interest income over the period calculated using the weighted average coupon rate and weighted average principal amount shown on the table (interest income on the loans less interest expense) divided by the weighted average principal amount of the net loans during the period.

(4)Subordinated loans include mezzanine loans, preferred equity investments and credit facilities.

    For the three months ended March 31, 2022 as compared to the same period in 2021, the decrease in weighted average coupon rate was primarily due to a higher volume of loan originations with lower coupon rates.

Net Change in Unrealized Appreciation on Investment

    Net change in unrealized appreciation or depreciation on investment reflects the change in Terra Property Trust’s fair value during the reporting period. There may be fluctuations in unrealized gains and losses of the underlying portfolio as loans within

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the portfolio approach their respective maturity dates. In addition, the unrealized gains or losses in the portfolio may fluctuate over time due to changes in the market yields.

For the three months ended March 31, 2022, we recorded an increase in net change in unrealized appreciation on investment of $1.0 million, primarily due to an increase in the fair value of loans Terra Property Trust originated in the current period as well as a decrease in the trading price of its unsecured notes payable. For the three months ended March 31, 2021, we recorded an increase in net change in unrealized appreciation on investment of $0.5 million, primarily due to decreases in underlying index rates as a result of the macro-economic conditions.

Net Increase in Members’ Capital Resulting from Operations

    For the three months ended March 31, 2022 as compared to the same period in 2021, the resulting net increase in members’ capital resulting from operations increased by $0.1 million

Financial Condition, Liquidity and Capital Resources

    Liquidity is a measure of our ability to meet potential cash requirements, including funding and maintaining our assets and operations, making distributions to our members and other general business needs. Our primary cash requirements for the next twelve months are making the discretionary recurring distributions to our members. We expect to use cash distributions received from Terra Property Trust to meet such cash requirements. Distributions are made at the discretion of Terra Property Trust’s board of directors and will depend upon, among other things, its actual results of operations and liquidity.

A total of $44.7 million of Terra Property Trust’s obligations under participation agreements and $37.4 million of secured borrowing will mature in the next twelve months, and Terra Property Trust expects to use the proceeds from the repayment of the corresponding investments to repay the participation obligations. Additionally, Terra Property Trust expects to fund approximately $72.0 million of the unfunded commitments to borrowers during the next twelve months. Terra Property Trust expects to maintain sufficient cash on hand to fund such commitments through matching these commitments with principal repayments on outstanding loans or draw downs on its credit facilities. Additionally, Terra Property Trust had $31.8 million of borrowings outstanding under a mortgage loan payable that bears interest at an annual rate of LIBOR plus 3.85% with a LIBOR floor of 2.23%, that is collateralized by an office building. The mortgage loan payable matures on September 27, 2022. Terra Property Trust expects to refinance the mortgage loan payable by the time it matures. Terra Property Trust may also issue additional equity, equity-related and debt securities to fund its investment strategies. Terra Property Trust may issue these securities to unaffiliated third parties or to vehicles advised by affiliates of Terra Capital Partners or third parties. As part of its capital raising transactions, Terra Property Trust may grant to one or more of these vehicles certain control rights over its activities including rights to approve major decisions it takes as part of its business.

Summary of Financing

The table below summarizes Terra Property Trust’s debt financing as of March 31, 2022:

Type of Financing	Maximum Amount Available		Outstanding Balance		Amount Remaining Available		Interest Rate	Maturity Date
Fixed Rate:
Senior unsecured notes	N/A		$	85,125,000	N/A		6.00%	6/30/2026
			$	85,125,000
Variable Rate:
Mortgage loan payable	N/A		$	31,757,725	N/A		LIBOR plus 3.85% with a LIBOR floor of 2.23%	9/27/2022
Line of credit	$	125,000,000	64,953,549		$	60,046,451	LIBOR plus 3.25% with a combined floor of 4.0%	3/12/2024
UBS repurchase agreement	195,000,000		58,169,600		136,830,400		LIBOR or Term SOFR if LIBOR is not available plus a spread ranging from 1.60% to 2.25%	11/7/2024
GS repurchase agreement	200,000,000		118,349,549		81,650,451		Term SOFR (subject to underlying loan floors on a case-by-case basis) plus a spread ranging from 1.75% to 3.00%)	2/18/2024
	$	520,000,000	$	273,230,423	$	278,527,302

32

Cash Flows Provided by Operating Activities

2022 — For the three months ended March 31, 2022, cash flows provided by operating activities were $2.9 million, primarily due to $3.0 million of dividends received from Terra JV, of which $2.2 million was recorded as a return of capital.

2021 — For the three months ended March 31, 2021, cash flows provided by operating activities were $2.9 million, primarily due to $3.0 million of dividends received from Terra JV, of which $1.9 million was recorded as a return of capital.

Cash Flows used in Financing Activities

2022 — For the three months ended March 31, 2022, cash flows used in financing activities were $3.0 million, primarily related to distributions paid to members.

2021 — For the three months ended March 31, 2021, cash flows used in financing activities was $3.0 million, primarily related to distributions paid to members.

Critical Accounting Policies and Use of Estimates

    Our financial statements are prepared in conformity with United States generally accepted accounting principles, which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Critical accounting policies are those that require the application of management’s most difficult, subjective or complex judgments, often because of the need to make estimates about the effect of matters that are inherently uncertain and that may change in subsequent periods. In preparing the financial statements, management has made estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. In preparing the financial statements, management has utilized available information, including industry standards and the current economic environment, among other factors, in forming its estimates and judgments, giving due consideration to materiality. Actual results may differ from these estimates. In addition, other companies may utilize different estimates, which may impact the comparability of our results of operations to those of companies in similar businesses. As we execute our expected operating plans, we will describe additional critical accounting policies in the notes to our future financial statements in addition to those discussed below.

Fair Value Measurements

    The fair value of our investment is categorized based on the priority of the inputs to the valuation technique and categorized into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

    Our investment was recorded at fair value on our statements of assets and liabilities and were categorized based on the inputs valuation techniques as follows:

•Level 1. Quoted prices for identical assets or liabilities in an active market.

•Level 2. Financial assets and liabilities whose values are based on the following:

◦Quoted prices for similar assets or liabilities in active markets.

◦Quoted prices for identical or similar assets or liabilities in non-active markets.

◦Pricing models whose inputs are observable for substantially the full term of the asset or liability.

◦Pricing models whose inputs are derived principally from or corroborated by observable market data for substantially full term of the asset or liability.

•Level 3. Prices or valuation techniques based on inputs that are both unobservable and significant to the overall fair value measurement.

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    Unobservable inputs reflect our assumptions about the factors that market participants would use in pricing an asset or liability, and would be based on the best information available.

    Any changes to the valuation methodology will be reviewed by management to ensure the changes are appropriate. As markets and products develop and the pricing for certain products becomes more transparent, we will continue to refine our valuation methodologies. The methods used may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while we anticipate that our valuation methods will be appropriate and consistent with other market participants, the use of different methodologies, or assumptions, to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. We will use inputs that are current as of the measurement date, which may include periods of market dislocation, during which price transparency may be reduced.

Management Agreement with Terra REIT Advisors

    Terra Property Trust currently pays the following fees to Terra REIT Advisors pursuant to a management agreement:

    Origination and Extension Fee. An origination fee in the amount of 1.0% of the amount used to originate, acquire, fund, acquire or structure real estate-related investments, including any third-party expenses related to such loan. In the event that the term of any real estate-related loan is extended, Terra REIT Advisors also receives an extension fee equal to the lesser of (i) 1.0% of the principal amount of the loan being extended or (ii) the amount of fee paid by the borrower in connection with such extension.

    Asset Management Fee. A monthly asset management fee at an annual rate equal to 1.0% of the aggregate funds under management, which includes the loan origination amount or aggregate gross acquisition cost, as applicable, for each real estate-related loan and cash held by Terra Property Trust.

    Asset Servicing Fee. A monthly asset servicing fee at an annual rate equal to 0.25% of the aggregate gross origination price or aggregate gross acquisition price for each real estate related loan then held by Terra Property Trust (inclusive of closing costs and expenses).

    Disposition Fee. A disposition fee in the amount of 1.0% of the gross sale price received by Terra Property Trust from the disposition of each loan, but not upon the maturity, prepayment, workout, modification or extension of a loan unless there is a corresponding fee paid by the borrower, in which case the disposition fee will be the lesser of (i) 1.0% of the principal amount of the loan and (ii) the amount of the fee paid by the borrower in connection with such transaction. If Terra Property Trust takes ownership of a property as a result of a workout or foreclosure of a loan, Terra Property Trust will pay a disposition fee upon the sale of such property equal to 1.0% of the sales price.

    Transaction Breakup Fee. In the event that Terra Property Trust receives any “breakup fees,” “busted-deal fees,” termination fees, or similar fees or liquidated damages from a third-party in connection with the termination or non-consummation of any loan or disposition transaction, Terra REIT Advisors will be entitled to receive one-half of such amounts, in addition to the reimbursement of all out-of-pocket fees and expenses incurred by Terra REIT Advisors with respect to its evaluation and pursuit of such transactions.

    In addition to the fees described above, Terra Property Trust reimburses Terra REIT Advisors for operating expenses incurred in connection with services provided to the operations of Terra Property Trust, including Terra Property Trust’s allocable share of Terra REIT Advisors’s overhead, such as rent, employee costs, utilities, and technology costs.

34

The following table presents a summary of fees paid and costs reimbursed to Terra REIT Advisors in the aggregate in connection with providing services to Terra Property Trust:

	Three Months Ended March 31,
	2022		2021
Origination and extension fee expense (1)(2)	$	686,365	$	345,384
Asset management fee	1,488,095		1,156,543
Asset servicing fee	349,329		273,207
Operating expenses reimbursed to Manager	1,928,563		1,342,758
Disposition fee (3)	—		250,988
Total	$	4,452,352	$	3,368,880

_______________

(1)Origination and extension fee expense is generally offset with origination and extension fee income. Any excess is deferred and amortized to interest income over the term of the loan.

(2)Amount for the three months ended March 31, 2022 excluded $0.2 million of origination fee paid to Terra Property Trust’s Manager in connection with its equity investment in an unconsolidated investment. This origination fee was capitalized to the carrying value of the unconsolidated investment as a transaction cost.

(3)Disposition fee is generally offset with exit fee income and included in interest income on the consolidated statements of operations.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We may be subject to financial market risks, including changes in interest rates. To the extent that we borrow money to make investments, our net investment income will be dependent upon the difference between the rate at which we borrow funds and the rate at which we invest these funds. In periods of rising interest rates, our cost of funds would increase, which may reduce our net investment income. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income.

    As of March 31, 2022, Terra Property Trust had 15 investments with an aggregate principal balance of $358.5 million, net of obligations under participation agreements and secured borrowing, that provide for interest income at an annual rate of LIBOR plus a spread, 13 of which are subject to a LIBOR floor. A decrease of 100 basis points in LIBOR would decrease Terra Property Trust’s annual interest income, net of interest expense on participation agreements, by approximately $0.6 million, and an increase of 100 basis points in LIBOR would increase Terra Property Trust’s annual interest income, net of interest expense on participation agreements, by approximately $2.1 million. Additionally, Terra Property Trust had three investments with an aggregate principal balance of $52.6 million that provide for interest income at an annual rate of SOFR plus a spread, all of which were subject to a SOFR floor. A decrease of 100 basis points in SOFR would decrease Terra Property Trust’s annual interest income by $0.04 million, and an increase of 100 basis points would increase Terra Property Trust’s annual interest income by $0.5 million.

    Additionally, as of March 31, 2022, Terra Property Trust had $31.8 million of borrowings outstanding under a mortgage loan payable that bear interest at an annual rate of LIBOR plus a spread that is collateralized by an office building; a revolving line of credit with an outstanding balance of $65.0 million that bears interest at an annual rate of LIBOR plus a spread that is collateralized by $102.8 million of first mortgages; a repurchase agreement with an outstanding balance of $58.2 million that bears interest at an annual rate of LIBOR or Term SOFR, as applicable, plus a spread that is collateralized by $84.5 million of first mortgages; and another repurchase agreement with an outstanding balance of $118.3 million that bears interest at an annual rate of Term SOFR plus a spread that is collateralized by $163.8 million of first mortgages. A decrease of 100 basis points in LIBOR and Term SOFR would decrease Terra Property Trust’s annual interest expense by approximately $0.4 million, and an increase of 100 basis points in LIBOR and Term SOFR would increase Terra Property Trust’s annual interest expense by approximately $1.6 million.

    In July 2017, the U.K. Financial Conduct Authority, which regulates the LIBOR administrator, IBA, announced that it would cease to compel banks to participate in setting LIBOR as a benchmark by the end of 2021, which has subsequently been delayed to June 30, 2023. The Alternative Reference Rates Committee, a steering committee comprised of large U.S. financial institutions convened by the U.S. Federal Reserve, has recommended SOFR as a more robust reference rate alternative to U.S. dollar LIBOR. SOFR is calculated based on overnight transactions under repurchase agreements, backed by Treasury securities. SOFR is observed and backward looking, which stands in contrast with LIBOR under the current methodology, which is an estimated forward-looking rate and relies, to some degree, on the expert judgment of submitting panel members. Given that

35

SOFR is a secured rate backed by government securities, it will be a rate that does not take into account bank credit risk (as is the case with LIBOR). SOFR is therefore likely to be lower than LIBOR and is less likely to correlate with the funding costs of financial institutions. Whether or not SOFR attains market traction as a LIBOR replacement tool remains in question. As such, the future of LIBOR at this time is uncertain.

    Potential changes, or uncertainty related to such potential changes, may adversely affect the market for LIBOR-based loans, including Terra Property Trust’s portfolio of LIBOR-indexed, floating-rate loans, or the cost of its borrowings. In addition, changes or reforms to the determination or supervision of LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR, which could have an adverse impact on the market for LIBOR-based loans, including the value of the LIBOR-indexed, floating-rate loans in Terra Property Trust’s portfolio, or the cost of its borrowings. In the event LIBOR is unavailable, Terra Property Trust’s investment documents provide for a substitute index, on a basis generally consistent with market practice, intended to put us in substantially the same economic position as LIBOR.

We may hedge against interest rate fluctuations by using standard hedging instruments, such as futures, options and forward contracts, subject to the requirements of the 1940 Act. While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in benefits of lower interest rates with respect to our portfolio of investments with fixed interest rates. For the three months ended March 31, 2022 and 2021, we did not engage in interest rate hedging activities.

In addition, we may have risks regarding portfolio valuation. See “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies — Fair Value Measurements” in this quarterly report on Form 10-Q.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) under the Exchange Act, we carried out an evaluation, under the supervision and with the participation of our management, including the chief executive officer and chief financial officer of our Manager (performing functions equivalent to those a principal executive officer and principal financial officer of our company would perform if we had any officers), of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2022. Based on that evaluation, the chief executive officer and chief financial officer of our Manager concluded that our disclosure controls and procedures were effective to provide reasonable assurance that we would meet our disclosure obligations. Notwithstanding the foregoing, a control system, no matter how well designed and operated, can provide only reasonable, not absolute assurance that it will detect or uncover failures within our company to disclose material information otherwise required to be set forth in our periodic reports.

Changes in Internal Control Over Financial Reporting

    During the most recent fiscal quarter, there was no change in our internal controls over financial reporting, as defined under

Rule 13a-15(f) under the Exchange Act, that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we, Terra Property Trust, Terra JV and our Manager may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of Terra Property Trust’s rights under contracts with its portfolio companies. Additionally, as of March 31, 2022, Terra Property Trust owned a multi-tenant office building that is subject to a ground lease. The ground lease provides for a new base rent every 5 years based on the greater of the annual base rent for the prior lease year or 9% of the fair market value of the land. The next rent reset on the ground lease is scheduled for November 1, 2025. Terra Property Trust is currently litigating with the landlord with respect to the appropriate method for determining the fair value of the land for purposes of setting the ground rent – Terra Ocean Ave., LLC v. Ocean Avenue Santa Monica Realty LLC, Superior Court of California, Los Angeles County, Case No. 20STCV34217. Terra Property Trust believes this determination should be based on comparable sales, while the landlord insists that the rent under the ground lease itself is also relevant. Terra Property Trust’s position has prevailed in all three of the prior arbitrations to reset the ground rent. Terra Property Trust intends vigorously to pursue the litigation. While Terra Property Trust believes its arguments will likely prevail, the outcome of the legal proceeding cannot be predicted with certainty. If the landlord prevails, the future rent reset determinations could result in significantly higher ground rent, which would likely result in a significant diminution in the value of Terra Property Trust’s interest in the ground lease and the office building.

Item 1A. Risk Factors.

There have been no material changes from the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2021.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Not applicable.

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6.  Exhibits.

    The following exhibits are filed with this report. Documents other than those designated as being filed herewith are incorporated herein by reference.

Exhibit No.	Description and Method of Filing
2.1	Agreement and Plan of Merger by and among the registrant, Terra Capital Advisors, LLC, Terra Secured Income Fund Merger Sub, LLC, and Terra Secured Income Fund, dated January 1, 2016 (incorporated by reference to Exhibit 2.1 to the Registration Statement on Form 10 (File No. 000-55780) filed with the SEC on April 28, 2017).
2.2	Agreement and Plan of Merger by and among the registrant, Terra Capital Advisors, LLC, Terra Secured Income Fund Merger Sub 2, LLC, and Terra Secured Income Fund 2, LLC, dated January 1, 2016 (incorporated by reference to Exhibit 2.2 to the Registration Statement on Form 10 (File No. 000-55780) filed with the SEC on April 28, 2017).
2.3	Agreement and Plan of Merger by and among the registrant, Terra Capital Advisors, LLC, Terra Secured Income Fund Merger Sub 3, LLC, and Terra Secured Income Fund 3, LLC, dated January 1, 2016 (incorporated by reference to Exhibit 2.3 to the Registration Statement on Form 10 (File No. 000-55780) filed with the SEC on April 28, 2017).

37

Exhibit No.	Description and Method of Filing
2.4	Agreement and Plan of Merger by and among the registrant, Terra Capital Advisors, Terra Capital Advisors 2, Terra Secured Income Fund 4, LLC, and Terra Secured Income Fund 4, LLC, dated January 1, 2016 (incorporated by reference to Exhibit 2.4 to the Registration Statement on Form 10 (File No. 000-55780) filed with the SEC on April 28, 2017).
2.5	Contribution Agreement by and among Terra Secured Income Fund, LLC, Terra Secured Income Fund 2, LLC, Terra Secured Income Fund 3, LLC, Terra Secured Income Fund 4, LLC, the registrant, and Terra Property Trust, Inc., dated January 1, 2016 (incorporated by reference to Exhibit 2.5 to the Registration Statement on Form 10 (File No. 000-55780) filed with the SEC on April 28, 2017).
2.6	Amendment No. 1 to the Contribution Agreement by and among Terra Secured Income Fund, LLC, Terra Secured Income Fund 2, LLC, Terra Secured Income Fund 3, LLC, Terra Secured Income Fund 4, LLC, the registrant, and Terra Property Trust, Inc., dated December 31, 2016 (incorporated by reference to Exhibit 2.6 to the Registration Statement on Form 10 (File No. 000-55780) filed with the SEC on April 28, 2017).
2.7	Agreement and Plan of Merger, dated February 28, 2020, by and among Terra Property Trust, Inc., Terra Property Trust 2, Inc. and Terra Secured Income Fund 7, LLC (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K (File No. 000-56117) filed with the SEC on March 5, 2020).
3.1	Amended and Restated Limited Liability Company Agreement of the registrant, dated January 1, 2016 (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form 10 (File No. 000-55780) filed with the SEC on April 28, 2017).
10.1	Second Amendment to Loan Documents dated as of January 4, 2022, by and amount Terra Mortgage Portfolio II, LLC, as Borrower, Terra Property Trust, Inc., as Guarantor, and Western Alliance Bank, as Lender (incorporated by reference to Exhibit 10.15 to the Company's Annual Report on Form 10-K (File No 000-55780) filed with the SEC on March 11, 2022).
10.2	Uncommitted Master Repurchase and Securities Contract Agreement dated as of February 18, 2022, by and amount Terra Mortgage Capital I, LLC, as Seller, Goldman Sachs Bank USA, as Buyer (incorporated by reference to Exhibit 10.16 to the Company's Annual Report on Form 10-K (File No 000-55780) filed with the SEC on March 11, 2022).
10.3	Guarantee Agreement dated as of February 18, 2022, by and amount Terra Property Trust, Inc., as Guarantor, in favor of Goldman Sachs Bank USA, as Buyer (incorporated by reference to Exhibit 10.17 to the Company's Annual Report on Form 10-K (File No 000-55780) filed with the SEC on March 11, 2022).
31.1*	Certification of Chief Executive Officer pursuant to Rule 13a-14 under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Chief Financial Officer pursuant to Rule 13a-14 under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32**	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS**	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH**	XBRL Taxonomy Extension Schema Document
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB**	XBRL Taxonomy Extension Label Linkbase Document
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File Included as Exhibit 101 (embedded within the Inline XBRL document)

_______________

* Filed herewith.

** Furnished herewith.

38

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned in the capacities indicated* thereunto duly authorized.

Date: May 12, 2022

TERRA SECURED INCOME FUND 5, LLC
By:	/s/ Vikram S. Uppal
	Vikram S. Uppal
	Chief Executive Officer
	(Principal Executive Officer)
By:	/s/ Gregory M. Pinkus
	Gregory M. Pinkus
	Chief Financial Officer and Chief Operating Officer,
	(Principal Financial and Accounting Officer)

___________

*  The registrant is a limited liability company managed by Terra Fund Advisors, LLC, its sole and managing member and the persons are signing in their respective capacities as officers of Terra Fund Advisors, LLC.

39

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO RULE 13a-14 OF THE SECURITIES EXCHANGE ACT OF 1934

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Vikram S. Uppal*, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Terra Secured Income Fund 5, LLC;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 12, 2022
		/s/ Vikram S. Uppal
		Vikram S. Uppal
		Chief Executive Officer
		(Principal Executive Officer)

___________

*  The registrant is a limited liability company managed by Terra Fund Advisors, LLC, its sole and managing member and the persons are signing in their respective capacities as officers of Terra Fund Advisors, LLC.

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO RULE 13a-14 OF THE SECURITIES EXCHANGE ACT OF 1934

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Gregory M. Pinkus*, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Terra Secured Income Fund 5, LLC;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 12, 2022
		/s/ Gregory M. Pinkus
		Gregory M. Pinkus
		Chief Financial Officer and Chief Operating Officer
		(Principal Financial and Principal Accounting Officer)

___________

*  The registrant is a limited liability company managed by Terra Fund Advisors, LLC, its sole and managing member and the persons are signing in their respective capacities as officers of Terra Fund Advisors, LLC.

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Terra Secured Income Fund 5, LLC. (the “Company”) for the quarterly period ended March 31, 2022, as filed with the Securities Exchange Commission on the date hereof (the “Report”), I, Vikram S. Uppal*, Chief Executive Officer of Terra Fund Advisors, LLC, and I, Gregory M. Pinkus*, Chief Financial Officer of Terra Fund Advisors, LLC, each certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to our knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	May 12, 2022
		/s/ Vikram S. Uppal
		Vikram S. Uppal
		Chief Executive Officer
		(Principal Executive Officer)
		/s/ Gregory M. Pinkus
		Gregory M. Pinkus
		Chief Financial Officer and Chief Operating Officer
		(Principal Financial and Principal Accounting Officer)

___________

*  The registrant is a limited liability company managed by Terra Fund Advisors, LLC, its sole and managing member and the persons are signing in their respective capacities as officers of Terra Fund Advisors, LLC.

Pursuant to the Securities and Exchange Commission Release 33-8238, dated June 5, 2003, this certification is being furnished and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference in any registration statement of the Company filed under the Securities Act of 1933, as amended.

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	Mar. 31, 2022	May 12, 2022
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Entity Shell Company	false
Entity Interactive Data Current	Yes
Title of 12(g) Security	Units of Limited Liability Company Interests

XML

Consolidated Statements of Financial Condition - USD ($)	Mar. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Assets [Abstract]
Equity investment in Terra JV, LLC at fair value (cost of $217,482,964 and $219,704,515, respectively)	$ 216,121,691	$ 217,324,720
Cash and cash equivalents	777,694	836,052	$ 225,214
Other assets	31,586	33,830
Total assets	216,930,971	218,194,602
Liabilities
Accounts payable and accrued expenses	185,249	118,025
Total liabilities	185,249	118,025
Commitments and Contingencies
Members' capital:
Members' Capital	216,745,722	218,076,577	$ 235,417,419
Total liabilities and members' capital	$ 216,930,971	$ 218,194,602
Net asset value per unit	$ 32,659	$ 32,860	$ 35,467
Terra JV
Assets [Abstract]
Equity investment in Terra JV, LLC at fair value (cost of $217,482,964 and $219,704,515, respectively)	$ 216,121,691	$ 217,324,720
Managing member
Members' capital:
Members' Capital	0	0	$ 0
Non-managing member
Members' capital:
Members' Capital	$ 216,745,722	$ 218,076,577

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Consolidated Statements of Financial Condition (Parentheticals) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Amortized cost	$ 217,482,964	$ 219,704,515

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Consolidated Statements of Operations - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Dividend income	$ 758,110	$ 1,126,895
Other operating income	11	20
Total investment income	758,121	1,126,915
Operating expenses
Professional fees	127,060	120,135
Other	1,392	385
Total operating expenses	128,452	120,520
Net investment income	629,669	1,006,395
Net change in unrealized appreciation on investment	1,018,522	492,466
Net increase in members’ capital resulting from operations	$ 1,648,191	$ 1,498,861
Per unit data:
Net investment income per unit	$ 95	$ 152
Net increase in members’ capital resulting from operations per unit	$ 248	$ 226
Weighted average units outstanding	6,636.6	6,637.8

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Consolidated Statements of Changes in Members' Capital - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Changes in Members' Capital [Roll Forward]
Balance, beginning of period	$ 218,076,577	$ 235,417,419
Capital distributions	(2,979,046)	(2,979,582)
Increase in members' capital resulting from operations
Net investment income	629,669	1,006,395
Net change in unrealized appreciation on investment	1,018,522	492,466
Net increase in members’ capital resulting from operations	1,648,191	1,498,861
Balance, end of period	216,745,722	233,936,698
Managing member
Changes in Members' Capital [Roll Forward]
Balance, beginning of period	0	0
Capital distributions	0	0
Increase in members' capital resulting from operations
Net investment income	0	0
Net change in unrealized appreciation on investment	0	0
Net increase in members’ capital resulting from operations	0	0
Balance, end of period	0	0
Non-managing Members
Changes in Members' Capital [Roll Forward]
Balance, beginning of period	218,076,577	235,417,419
Capital distributions	(2,979,046)	(2,979,582)
Increase in members' capital resulting from operations
Net investment income	629,669	1,006,395
Net change in unrealized appreciation on investment	1,018,522	492,466
Net increase in members’ capital resulting from operations	1,648,191	1,498,861
Balance, end of period	$ 216,745,722	$ 233,936,698

XML

Consolidated Statements of Cash Flows - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Statement of Cash Flows [Abstract]
Net increase in members’ capital resulting from operations	$ 1,648,191	$ 1,498,861
Adjustments to reconcile net increase in members’ capital resulting from operations to net cash provided by operating activities:
Return of capital on investment	2,221,551	1,852,767
Net change in unrealized appreciation on investment	(1,018,522)	(492,466)
Changes in operating assets and liabilities:
Decrease in other assets	2,244	7,500
Increase in accounts payable and accrued expenses	67,224	23,360
Net cash provided by operating activities	2,920,688	2,890,022
Cash flows from financing activities:
Distributions paid	(2,979,046)	(2,979,582)
Net cash used in financing activities	(2,979,046)	(2,979,582)
Net decrease in cash and cash equivalents	(58,358)	(89,560)
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Beginning Balance	836,052	225,214
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents	$ 777,694	$ 135,654

XML

Consolidated Schedules of Investments Statement - USD ($)		3 Months Ended		12 Months Ended
		Mar. 31, 2022		Dec. 31, 2021
Schedule of Investments
Amortized cost		$ 217,482,964		$ 219,704,515
Fair Value		216,121,691		217,324,720
Minimum
Schedule of Investments
Principal Amount		10,000,000
Maximum
Schedule of Investments
Principal Amount		50,000,000
US | Terra Property Trust
Schedule of Investments
Principal Amount		567,520,973		480,151,151
Amortized cost		571,727,777		483,331,795
Fair Value	[1]	557,006,957		467,201,619
US | Pro Rata | Terra Property Trust
Schedule of Investments
Fair Value	[2]	$ 426,110,321		$ 357,409,238
% of Members Capital		196.60%	[3]	163.80%	[4]
US | Obligations Under Participation Agreements | Terra Property Trust
Schedule of Investments
Principal Amount	[5]	$ 95,283,106	[6]	$ 76,569,398	[7],[8]
Amortized cost	[5]	96,090,690	[6]	76,818,156	[7],[8]
Fair Value	[1],[5]	95,483,175	[6]	75,900,089	[7],[8]
US | Obligations Under Participation Agreements | Pro Rata | Terra Property Trust
Schedule of Investments
Fair Value	[2],[5]	$ 73,044,629	[6]	$ 58,063,568	[7],[8]
% of Members Capital	[5]	33.70%	[3],[6]	26.60%	[4],[7],[8]
US | Investment Net | Terra Property Trust
Schedule of Investments
Principal Amount		$ 472,237,867		$ 403,581,753
Amortized cost		461,928,310		392,855,158
Fair Value	[1]	461,523,782		391,301,530
Allowance for Loan and Lease Losses, Real Estate		(13,708,777)	[5],[6],[8]	(13,658,481)
US | Investment Net | Pro Rata | Terra Property Trust
Schedule of Investments
Fair Value	[2]	$ 353,065,692		$ 299,345,670
% of Members Capital		162.90%	[3]	137.20%	[4]
Revolving Credit Facility | US | Terra Property Trust
Schedule of Investments
Principal Amount		$ 46,000,000		$ 25,000,000
Amortized cost		46,885,375		25,206,964
Fair Value	[1]	46,885,377		25,206,965
Encumbrance		65,000,000		38,600,000
Revolving Credit Facility | US | Pro Rata | Terra Property Trust
Schedule of Investments
Fair Value	[2]	$ 35,867,314		$ 19,283,328
% of Members Capital		16.50%	[3]	8.80%	[4]
Revolving Credit Facility | Post Brothers Holdings LLC | US | Minimum | Terra Property Trust
Schedule of Investments
Exit Fee		4.60%
Revolving Credit Facility | Post Brothers Holdings LLC | US | Maximum | Terra Property Trust
Schedule of Investments
Exit Fee		8.90%
Revolving Credit Facility | Post Brothers Holdings LLC | US | PA | Terra Property Trust
Schedule of Investments
Collateral Location	[6],[8]	US
Coupon Rate	[6],[8]	15.00%
Current Interest Rate	[6],[8]	15.00%
Acquisition Date	[6],[8]	Mar. 29, 2022
Maturity Date	[6],[8]	Mar. 29, 2025
Principal Amount	[6],[8]	$ 21,000,000
Amortized cost	[6],[8]	21,670,442
Fair Value	[1],[6],[8]	21,670,443
Revolving Credit Facility | Post Brothers Holdings LLC | US | PA | Pro Rata | Terra Property Trust
Schedule of Investments
Fair Value	[2],[6],[8]	$ 16,577,889
% of Members Capital	[3],[6],[8]	7.60%
Revolving Credit Facility | William A. Shopoff and Cindy L. Shopoff | US | CA | Industrial | Terra Property Trust
Schedule of Investments
Collateral Location	[8]	US	[6]	US	[7]
Coupon Rate	[8]	15.00%	[6]	15.00%	[7]
Current Interest Rate	[8]	15.00%	[6]	15.00%	[7]
Exit Fee	[8]	1.00%	[6]	1.00%	[7]
Acquisition Date	[8]	Oct. 04, 2021	[6]	Oct. 04, 2021	[7]
Maturity Date	[8]	Apr. 04, 2023	[6]	Apr. 04, 2023	[7]
Principal Amount	[8]	$ 25,000,000	[6]	$ 25,000,000	[7]
Amortized cost	[8]	25,214,933	[6]	25,206,964	[7]
Fair Value	[1],[8]	25,214,934	[6]	25,206,965	[7]
Revolving Credit Facility | William A. Shopoff and Cindy L. Shopoff | US | CA | Industrial | Pro Rata | Terra Property Trust
Schedule of Investments
Fair Value	[2],[8]	$ 19,289,425	[6]	$ 19,283,328	[7]
% of Members Capital	[8]	8.90%	[3],[6]	8.80%	[4],[7]
Mezzanine Loan | US | Terra Property Trust
Schedule of Investments
Principal Amount		$ 17,444,357		$ 17,444,357
Amortized cost		17,615,889		17,622,804
Fair Value	[1]	17,371,312		17,518,902
Mezzanine Loan | US | Pro Rata | Terra Property Trust
Schedule of Investments
Fair Value	[2]	$ 13,289,053		$ 13,401,959
% of Members Capital		6.10%	[3]	6.10%	[4]
Mezzanine Loan | 150 Blackstone River Road, LLC | US | MA | Industrial | Terra Property Trust
Schedule of Investments
Collateral Location		US		US
Coupon Rate		8.50%		8.50%
Current Interest Rate		8.50%		8.50%
Exit Fee		0.00%		0.00%
Acquisition Date		Sep. 21, 2017		Sep. 21, 2017
Maturity Date		Sep. 06, 2027		Sep. 06, 2027
Principal Amount		$ 7,000,000		$ 7,000,000
Amortized cost		7,000,000		7,000,000
Fair Value	[1]	6,862,858		6,982,101
Mezzanine Loan | 150 Blackstone River Road, LLC | US | MA | Industrial | Pro Rata | Terra Property Trust
Schedule of Investments
Fair Value	[2]	$ 5,250,086		$ 5,341,307
% of Members Capital		2.40%	[3]	2.40%	[4]
Mezzanine Loan | High Pointe Mezzanine Investments,, LLC | US | SC | Student Housing | Terra Property Trust
Schedule of Investments
Collateral Location		US		US
Coupon Rate		13.00%		13.00%
Current Interest Rate		13.00%		13.00%
Exit Fee		1.00%		1.00%
Acquisition Date		Dec. 27, 2013		Dec. 27, 2013
Maturity Date		Jan. 06, 2024		Jan. 06, 2024
Principal Amount		$ 3,000,000		$ 3,000,000
Amortized cost		3,137,435		3,145,614
Fair Value	[1]	3,030,000		3,059,611
Mezzanine Loan | High Pointe Mezzanine Investments,, LLC | US | SC | Student Housing | Pro Rata | Terra Property Trust
Schedule of Investments
Fair Value	[2]	$ 2,317,950		$ 2,340,602
% of Members Capital		1.10%	[3]	1.10%	[4]
Mezzanine Loan | UNJ Sole Member, LLC | US | CA | Mixed use | Terra Property Trust
Schedule of Investments
Collateral Location	[9]	US		US
Coupon Rate	[9]	15.00%		15.00%
Current Interest Rate	[9]	15.00%		15.00%
Exit Fee	[9]	1.00%		1.00%
Acquisition Date	[9]	Nov. 24, 2021		Nov. 24, 2021
Maturity Date	[9]	Jun. 01, 2017		Jun. 01, 2017
Principal Amount	[9]	$ 7,444,357		$ 7,444,357
Amortized cost	[9]	7,478,454		7,477,190
Fair Value	[1],[9]	7,478,454		7,477,190
Mezzanine Loan | UNJ Sole Member, LLC | US | CA | Mixed use | Pro Rata | Terra Property Trust
Schedule of Investments
Fair Value	[2],[9]	$ 5,721,017		$ 5,720,050
% of Members Capital	[9]	2.60%	[3]	2.60%	[4]
Preferred Equity Investment | US | Terra Property Trust
Schedule of Investments
Principal Amount		$ 93,441,580		$ 92,252,340
Amortized cost		93,607,463		92,400,572
Fair Value	[1]	78,932,071		77,315,271
Preferred Equity Investment | US | Pro Rata | Terra Property Trust
Schedule of Investments
Fair Value	[2]	$ 60,383,034		$ 59,146,183
% of Members Capital		27.90%	[3]	27.10%	[4]
Preferred Equity Investment | 370 Lex Part Deux, LLC | US | NY | Office Building | Terra Property Trust
Schedule of Investments
Collateral Location	[8]	US	[6]	US	[7]
Current Interest Rate	[8]	10.70%	[6]	10.70%	[7]
Exit Fee	[8]	0.00%	[6]	0.00%	[7]
Acquisition Date	[8]	Dec. 17, 2018	[6]	Dec. 17, 2018	[7]
Maturity Date	[8]	Jan. 09, 2023	[6]	Jan. 09, 2023	[7]
Principal Amount	[8]	$ 60,583,057	[6]	$ 60,012,639	[7]
Amortized cost	[8]	60,583,057	[6]	60,012,639	[7]
Fair Value	[1],[8]	$ 58,835,209	[6]	$ 57,858,019	[7]
Description of variable rate basis	[8]	LIBOR	[6]	LIBOR	[7]
Preferred Equity Investment | 370 Lex Part Deux, LLC | US | NY | Office Building | Pro Rata | Terra Property Trust
Schedule of Investments
Fair Value	[2],[8]	$ 45,008,935	[6]	$ 44,261,385	[7]
% of Members Capital	[8]	20.80%	[3],[6]	20.30%	[4],[7]
Preferred Equity Investment | 370 Lex Part Deux, LLC | US | NY | Office Building | LIBOR | Terra Property Trust
Schedule of Investments
Basis spread on variable rate	[8]	8.25%	[6]	8.25%	[7]
LIBOR Floor	[8]	2.44%	[6]	2.44%	[7]
Preferred Equity Investment | REEC Harlem Holdings Company LLC | US | NY | Mixed use | Terra Property Trust
Schedule of Investments
Collateral Location		US	[10]	US	[11]
Current Interest Rate		13.00%	[10]	12.60%	[11]
Exit Fee		0.00%	[10]	0.00%	[11]
Acquisition Date		Mar. 09, 2018	[10]	Mar. 09, 2018	[11]
Maturity Date		Mar. 09, 2023	[10]	Mar. 09, 2023	[11]
Principal Amount		$ 15,925,032	[10]	$ 16,633,292	[11]
Amortized cost		15,925,032	[10]	16,633,292	[11]
Fair Value	[1]	$ 2,998,624	[10]	$ 3,708,310	[11]
Description of variable rate basis		LIBOR	[10]	LIBOR	[11]
Preferred Equity Investment | REEC Harlem Holdings Company LLC | US | NY | Mixed use | Pro Rata | Terra Property Trust
Schedule of Investments
Fair Value	[2]	$ 2,293,947	[10]	$ 2,836,857	[11]
% of Members Capital		1.10%	[3],[10]	1.30%	[4],[11]
Preferred Equity Investment | REEC Harlem Holdings Company LLC | US | NY | Mixed use | LIBOR | Terra Property Trust
Schedule of Investments
Basis spread on variable rate		12.50%	[10]	12.50%	[11]
Preferred Equity Investment | RS JZ Driggs, LLC | US | NY | Multifamily | Terra Property Trust
Schedule of Investments
Collateral Location	[8]	US	[6],[12]	US	[7],[13]
Coupon Rate	[8]	12.30%	[6],[12]	12.30%	[7],[13]
Current Interest Rate	[8]	12.30%	[6],[12]	12.30%	[7],[13]
Exit Fee	[8]	1.00%	[6],[12]	1.00%	[7],[13]
Acquisition Date	[8]	May 01, 2018	[6],[12]	May 01, 2018	[7],[13]
Maturity Date	[8]	Jan. 01, 2021	[6],[12]	Jan. 01, 2021	[7],[13]
Principal Amount	[8]	$ 16,933,491	[6],[12]	$ 15,606,409	[7],[13]
Amortized cost	[8]	17,099,374	[6],[12]	15,754,641	[7],[13]
Fair Value	[1],[8]	17,098,238	[6],[12]	15,748,942	[7],[13]
Preferred Equity Investment | RS JZ Driggs, LLC | US | NY | Multifamily | Pro Rata | Terra Property Trust
Schedule of Investments
Fair Value	[2],[8]	$ 13,080,152	[6],[12]	$ 12,047,941	[7],[13]
% of Members Capital	[8]	6.00%	[3],[6],[12]	5.50%	[4],[7],[13]
First Mortgage | US | Terra Property Trust
Schedule of Investments
Principal Amount		$ 410,635,036		$ 345,454,454
Amortized cost		413,619,050		348,101,455
Fair Value	[1]	413,818,197		347,160,481
First Mortgage | US | Pro Rata | Terra Property Trust
Schedule of Investments
Fair Value	[2]	$ 316,570,920		$ 265,577,768
% of Members Capital		146.10%	[3]	121.80%	[4]
First Mortgage | 14th & Alice Street Owner LLC | US | CA | Multifamily | Terra Property Trust
Schedule of Investments
Collateral Location		US	[14]	US	[15]
Current Interest Rate		4.50%	[14]	4.30%	[15]
Exit Fee		2.00%	[14]	2.00%	[15]
Acquisition Date		Oct. 15, 2021	[14]	Oct. 15, 2021	[15]
Maturity Date		Apr. 15, 2023	[14]	Apr. 15, 2023	[15]
Principal Amount		$ 39,468,000	[14]	$ 39,384,000	[15]
Amortized cost		40,197,784	[14]	40,089,153	[15]
Fair Value	[1]	$ 40,222,586	[14]	$ 40,130,448	[15]
Description of variable rate basis		LIBOR	[14]	LIBOR	[15]
First Mortgage | 14th & Alice Street Owner LLC | US | CA | Multifamily | Pro Rata | Terra Property Trust
Schedule of Investments
Fair Value	[2]	$ 30,770,278	[14]	$ 30,699,793	[15]
% of Members Capital		14.20%	[3],[14]	14.10%	[4],[15]
First Mortgage | 14th & Alice Street Owner LLC | US | CA | Multifamily | LIBOR | Terra Property Trust
Schedule of Investments
Basis spread on variable rate		4.00%	[14]	4.00%	[15]
LIBOR Floor		0.25%	[14]	0.25%	[15]
First Mortgage | 1389 Peachtree St LP; 1401 Peachtree St LP; 1409 Peachtree St LP | US | GA | Office Building | Terra Property Trust
Schedule of Investments
Collateral Location		US	[16]	US	[17]
Current Interest Rate		5.00%	[16]	4.60%	[17]
Exit Fee		0.50%	[16]	0.50%	[17]
Acquisition Date		Feb. 22, 2019	[16]	Feb. 22, 2019	[17]
Maturity Date		Aug. 10, 2023	[16]	Aug. 10, 2023	[17]
Principal Amount		$ 53,970,491	[16]	$ 53,289,288	[17]
Amortized cost		54,221,854	[16]	53,536,884	[17]
Fair Value	[1]	$ 53,083,178	[16]	$ 52,031,363	[17]
Description of variable rate basis		LIBOR	[16]	LIBOR	[17]
First Mortgage | 1389 Peachtree St LP; 1401 Peachtree St LP; 1409 Peachtree St LP | US | GA | Office Building | Pro Rata | Terra Property Trust
Schedule of Investments
Fair Value	[2]	$ 40,608,631	[16]	$ 39,803,993	[17]
% of Members Capital		18.70%	[3],[16]	18.30%	[4],[17]
First Mortgage | 1389 Peachtree St LP; 1401 Peachtree St LP; 1409 Peachtree St LP | US | GA | Office Building | LIBOR | Terra Property Trust
Schedule of Investments
Basis spread on variable rate		4.50%	[16]	4.50%	[17]
First Mortgage | 330 Tryon DE LLC | US | NC | Office Building | Terra Property Trust
Schedule of Investments
Collateral Location		US	[16]	US	[17]
Current Interest Rate		4.70%	[16]	4.40%	[17]
Exit Fee		0.50%	[16]	0.50%	[17]
Acquisition Date		Feb. 07, 2019	[16]	Feb. 07, 2019	[17]
Maturity Date		Mar. 01, 2024	[16]	Mar. 01, 2024	[17]
Principal Amount		$ 22,800,000	[16]	$ 22,800,000	[17]
Amortized cost		22,903,651	[16]	22,902,354	[17]
Fair Value	[1]	$ 22,638,331	[16]	$ 22,594,654	[17]
Description of variable rate basis		LIBOR	[16]	LIBOR	[17]
First Mortgage | 330 Tryon DE LLC | US | NC | Office Building | Pro Rata | Terra Property Trust
Schedule of Investments
Fair Value	[2]	$ 17,318,323	[16]	$ 17,284,910	[17]
% of Members Capital		8.00%	[3],[16]	7.90%	[4],[17]
First Mortgage | 330 Tryon DE LLC | US | NC | Office Building | LIBOR | Terra Property Trust
Schedule of Investments
Basis spread on variable rate		4.25%	[16]	4.25%	[17]
LIBOR Floor		0.10%	[16]	0.10%	[17]
First Mortgage | 606 Fayetteville LLC and 401 E, Lakewood LLC | US | NC | Land | Terra Property Trust
Schedule of Investments
Collateral Location		US	[18]	US	[19]
Coupon Rate		9.00%	[18]	9.00%	[19]
Current Interest Rate		9.00%	[18]	9.00%	[19]
Exit Fee		1.00%	[18]	1.00%	[19]
Acquisition Date		Aug. 16, 2021	[18]	Aug. 16, 2021	[19]
Maturity Date		Aug. 01, 2023	[18]	Aug. 01, 2023	[19]
Principal Amount		$ 17,536,492	[18]	$ 16,829,962	[19]
Amortized cost		17,663,959	[18]	16,935,803	[19]
Fair Value	[1]	17,690,666	[18]	16,974,601	[19]
First Mortgage | 606 Fayetteville LLC and 401 E, Lakewood LLC | US | NC | Land | Pro Rata | Terra Property Trust
Schedule of Investments
Fair Value	[2]	$ 13,533,359	[18]	$ 12,985,570	[19]
% of Members Capital		6.20%	[3],[18]	6.00%	[4],[19]
First Mortgage | 870 Santa Cruz, LLC | US | CA | Office Building | Terra Property Trust
Schedule of Investments
Collateral Location		US	[18]	US
Current Interest Rate		7.30%	[18]	7.30%
Exit Fee		1.00%	[18]	1.00%
Acquisition Date		Dec. 15, 2020	[18]	Dec. 15, 2020
Maturity Date		Dec. 15, 2023	[18]	Dec. 15, 2023
Principal Amount		$ 19,760,033	[18]	$ 17,540,875
Amortized cost		19,934,619	[18]	17,669,303
Fair Value	[1]	$ 19,993,943	[18]	$ 17,781,285
Description of variable rate basis		LIBOR	[18]	LIBOR	[19]
First Mortgage | 870 Santa Cruz, LLC | US | CA | Office Building | Pro Rata | Terra Property Trust
Schedule of Investments
Fair Value	[2]	$ 15,295,366	[18]	$ 13,602,683
% of Members Capital		7.10%	[3],[18]	6.20%	[4]
First Mortgage | 870 Santa Cruz, LLC | US | CA | Office Building | LIBOR | Terra Property Trust
Schedule of Investments
Basis spread on variable rate		6.75%	[18]	6.75%	[19]
LIBOR Floor		0.50%	[18]	0.50%	[19]
First Mortgage | AARSHW Property LLC | US | NJ | Industrial | Terra Property Trust
Schedule of Investments
Collateral Location	[18]	US
Current Interest Rate	[18]	7.70%
Exit Fee	[18]	0.90%
Acquisition Date	[18]	Mar. 07, 2022
Maturity Date	[18]	Mar. 07, 2024
Principal Amount	[18]	$ 18,771,608
Amortized cost	[18]	18,541,648
Fair Value	[1],[18]	$ 18,911,932
Description of variable rate basis	[18]	SOFR
First Mortgage | AARSHW Property LLC | US | NJ | Industrial | Pro Rata | Terra Property Trust
Schedule of Investments
Fair Value	[2],[18]	$ 14,467,628
% of Members Capital	[3],[18]	6.70%
First Mortgage | AARSHW Property LLC | US | NJ | Industrial | SOFR | Terra Property Trust
Schedule of Investments
Basis spread on variable rate	[18]	7.50%
LIBOR Floor	[18]	0.15%
First Mortgage | AAESUF Property LL | US | NJ | Industrial | Terra Property Trust
Schedule of Investments
Collateral Location	[18]	US
Current Interest Rate	[18]	12.10%
Acquisition Date	[18]	Mar. 15, 2022
Maturity Date	[18]	Mar. 01, 2024
Principal Amount	[18]	$ 16,800,000
Amortized cost	[18]	16,849,956
Fair Value	[1],[18]	$ 17,456,207
Description of variable rate basis	[18]	SOFR
First Mortgage | AAESUF Property LL | US | NJ | Industrial | Pro Rata | Terra Property Trust
Schedule of Investments
Fair Value	[2],[18]	$ 13,353,998
% of Members Capital	[3],[18]	6.20%
First Mortgage | AAESUF Property LL | US | NJ | Industrial | Minimum | Terra Property Trust
Schedule of Investments
Exit Fee	[18]	5.00%
First Mortgage | AAESUF Property LL | US | NJ | Industrial | Maximum | Terra Property Trust
Schedule of Investments
Exit Fee	[18]	10.00%
First Mortgage | AAESUF Property LL | US | NJ | Industrial | SOFR | Terra Property Trust
Schedule of Investments
Basis spread on variable rate	[18]	11.95%
LIBOR Floor	[18]	0.05%
First Mortgage | AGRE DCP Palm Springs, LLC | US | CA | Hotel | Terra Property Trust
Schedule of Investments
Collateral Location		US	[16]	US	[17],[20]
Current Interest Rate		6.80%	[16]	6.80%	[17],[20]
Exit Fee		1.50%	[16]	1.50%	[17],[20]
Acquisition Date		Dec. 12, 2019	[16]	Dec. 12, 2019	[17],[20]
Maturity Date		Jan. 01, 2024	[16]	Jan. 01, 2024	[17],[20]
Principal Amount		$ 43,222,381	[16]	$ 43,222,381	[17],[20]
Amortized cost		43,696,133	[16]	43,669,992	[17],[20]
Fair Value	[1]	$ 43,738,712	[16]	$ 43,829,842	[17],[20]
Description of variable rate basis		LIBOR	[16]	LIBOR	[17],[20]
Basis spread on variable rate				5.00%
First Mortgage | AGRE DCP Palm Springs, LLC | US | CA | Hotel | Pro Rata | Terra Property Trust
Schedule of Investments
Fair Value	[2]	$ 33,460,115	[16]	$ 33,529,829	[17],[20]
% of Members Capital		15.40%	[3],[16]	15.50%	[4],[17],[20]
First Mortgage | AGRE DCP Palm Springs, LLC | US | CA | Hotel | LIBOR | Terra Property Trust
Schedule of Investments
Basis spread on variable rate		5.00%	[16]	5.00%	[17],[20]
LIBOR Floor		1.80%	[16]	1.80%	[17],[20]
First Mortgage | Austin H. I. Borrower LLC | US | TX | Hotel | Terra Property Trust
Schedule of Investments
Collateral Location		US	[18]	US	[19],[21]
Current Interest Rate		8.00%	[18]	7.80%	[19],[21]
Exit Fee		1.00%	[18]	1.00%	[19],[21]
Acquisition Date		Sep. 21, 2021	[18]	Sep. 21, 2021	[19],[21]
Maturity Date		Oct. 01, 2024	[18]	Oct. 01, 2024	[19],[21]
Principal Amount		$ 13,695,947	[18]	$ 13,625,000	[19],[21]
Amortized cost		13,824,587	[18]	13,725,690	[19],[21]
Fair Value	[1]	$ 13,832,906	[18]	$ 13,735,569	[19],[21]
Description of variable rate basis		LIBOR		LIBOR
First Mortgage | Austin H. I. Borrower LLC | US | TX | Hotel | Pro Rata | Terra Property Trust
Schedule of Investments
Fair Value	[2]	$ 10,582,173	[18]	$ 10,507,710	[19],[21]
% of Members Capital		4.90%	[3],[18]	4.80%	[4],[19],[21]
First Mortgage | Austin H. I. Borrower LLC | US | TX | Hotel | LIBOR | Terra Property Trust
Schedule of Investments
Basis spread on variable rate		7.50%		7.50%
LIBOR Floor		0.25%		0.25%
First Mortgage | D-G Acquisition #6, LLC and D-G Quimisa, LLC | US | CA | Land | Terra Property Trust
Schedule of Investments
Collateral Location		US	[18]	US	[19]
Current Interest Rate		7.50%	[18]	7.30%	[19]
Exit Fee		0.50%	[18]	0.50%	[19]
Acquisition Date		Jul. 21, 2021	[18]	Jul. 21, 2021	[19]
Maturity Date		Jul. 21, 2023	[18]	Jul. 21, 2023	[19]
Principal Amount		$ 8,846,216	[18]	$ 8,607,092	[19]
Amortized cost		8,854,524	[18]	8,605,341	[19]
Fair Value	[1]	$ 8,886,221	[18]	$ 8,645,413	[19]
Description of variable rate basis		LIBOR	[18]	LIBOR
First Mortgage | D-G Acquisition #6, LLC and D-G Quimisa, LLC | US | CA | Land | Pro Rata | Terra Property Trust
Schedule of Investments
Fair Value	[2]	$ 6,797,959	[18]	$ 6,613,741	[19]
% of Members Capital		3.10%	[3],[18]	3.00%	[4],[19]
First Mortgage | D-G Acquisition #6, LLC and D-G Quimisa, LLC | US | CA | Land | LIBOR | Terra Property Trust
Schedule of Investments
Basis spread on variable rate		7.00%	[18]	7.00%
LIBOR Floor		0.25%	[18]	0.25%
First Mortgage | Grandviews Madison Place, LLC | US | WA | Multifamily | Terra Property Trust
Schedule of Investments
Collateral Location	[14]	US
Current Interest Rate	[14]	4.60%
Exit Fee	[14]	0.80%
Acquisition Date	[14]	Feb. 10, 2022
Maturity Date	[14]	Feb. 10, 2025
Principal Amount	[14]	$ 17,000,000
Amortized cost	[14]	17,111,299
Fair Value	[1],[14]	$ 17,111,299
Description of variable rate basis	[14]	SOFR
First Mortgage | Grandviews Madison Place, LLC | US | WA | Multifamily | Pro Rata | Terra Property Trust
Schedule of Investments
Fair Value	[2],[14]	$ 13,090,144
% of Members Capital	[3],[14]	6.00%
First Mortgage | Grandviews Madison Place, LLC | US | WA | Multifamily | SOFR | Terra Property Trust
Schedule of Investments
Basis spread on variable rate	[14]	4.45%
LIBOR Floor	[14]	0.05%
First Mortgage | Hillsborough Owners LLC | US | NC | Mixed use | Terra Property Trust
Schedule of Investments
Collateral Location	[22]	US		US
Current Interest Rate	[22]	8.50%		8.30%
Exit Fee	[22]	1.00%		1.00%
Acquisition Date	[22]	Oct. 27, 2021		Oct. 27, 2021
Maturity Date	[22]	Nov. 01, 2023		Nov. 01, 2023
Principal Amount	[22]	$ 5,444,696		$ 4,863,009
Amortized cost	[22]	5,458,850		4,866,542
Fair Value	[1],[22]	$ 5,468,477		$ 4,883,878
Description of variable rate basis		LIBOR	[22]	LIBOR
First Mortgage | Hillsborough Owners LLC | US | NC | Mixed use | Pro Rata | Terra Property Trust
Schedule of Investments
Fair Value	[2],[22]	$ 4,183,385		$ 3,736,167
% of Members Capital	[22]	1.90%	[3]	1.70%	[4]
First Mortgage | Hillsborough Owners LLC | US | NC | Mixed use | LIBOR | Terra Property Trust
Schedule of Investments
Basis spread on variable rate		8.00%	[22]	8.00%
LIBOR Floor		0.25%	[22]	0.25%
First Mortgage | NB Factory TIC 1, LLC, etc | US | UT | Student Housing | Terra Property Trust
Schedule of Investments
Collateral Location		US	[14]	US	[15]
Current Interest Rate		5.50%	[14]	5.30%	[15]
Exit Fee		3.30%	[14]	3.30%	[15]
Acquisition Date		Aug. 16, 2021	[14]	Aug. 16, 2021	[15]
Maturity Date		Mar. 05, 2023	[14]	Mar. 05, 2023	[15]
Principal Amount		$ 28,000,000	[14]	$ 28,000,000	[15]
Amortized cost		28,529,857	[14]	28,420,056	[15]
Fair Value	[1]	$ 28,861,172	[14]	$ 28,851,547	[15]
Description of variable rate basis		LIBOR	[14]	LIBOR
First Mortgage | NB Factory TIC 1, LLC, etc | US | UT | Student Housing | Pro Rata | Terra Property Trust
Schedule of Investments
Fair Value	[2]	$ 22,078,797	[14]	$ 22,071,433	[15]
% of Members Capital		10.30%	[3],[14]	10.10%	[4],[15]
First Mortgage | NB Factory TIC 1, LLC, etc | US | UT | Student Housing | LIBOR | Terra Property Trust
Schedule of Investments
Basis spread on variable rate		5.00%	[14]	5.00%
LIBOR Floor		0.25%	[14]	0.25%
First Mortgage | Patrick Henry Recovery Acquisition, LLC | US | CA | Office Building | Terra Property Trust
Schedule of Investments
Collateral Location		US	[16]	US	[17]
Current Interest Rate		4.50%	[16]	4.50%	[17]
Exit Fee		0.30%	[16]	0.30%	[17]
Acquisition Date		Nov. 25, 2019	[16]	Nov. 25, 2019	[17]
Maturity Date		Dec. 01, 2023	[16]	Dec. 01, 2023	[17]
Principal Amount		$ 18,000,000	[16]	$ 18,000,000	[17]
Amortized cost		18,041,590	[16]	18,041,124	[17]
Fair Value	[1]	$ 18,049,540	[16]	$ 18,055,377	[17]
Description of variable rate basis		LIBOR	[16]	LIBOR
First Mortgage | Patrick Henry Recovery Acquisition, LLC | US | CA | Office Building | Pro Rata | Terra Property Trust
Schedule of Investments
Fair Value	[2]	$ 13,807,898	[16]	$ 13,812,363	[17]
% of Members Capital		6.40%	[3],[16]	6.30%	[4],[17]
First Mortgage | Patrick Henry Recovery Acquisition, LLC | US | CA | Office Building | LIBOR | Terra Property Trust
Schedule of Investments
Basis spread on variable rate		2.95%	[16]	2.95%
LIBOR Floor		1.50%	[16]	1.50%
First Mortgage | The Lux Washington, LLC | US | WA | Land | Terra Property Trust
Schedule of Investments
Collateral Location		US	[18]	US	[19]
Current Interest Rate		7.80%	[18]	7.80%	[19]
Exit Fee		1.00%	[18]	1.00%	[19]
Acquisition Date		Jul. 22, 2021	[18]	Jul. 22, 2021	[19]
Maturity Date		Jan. 22, 2024	[18]	Jan. 22, 2024	[19]
Principal Amount		$ 7,424,855	[18]	$ 3,523,401	[19]
Amortized cost		7,376,668	[18]	3,382,683	[19]
Fair Value	[1]	$ 7,489,172	[18]	$ 3,553,330	[19]
Description of variable rate basis		LIBOR	[18]	LIBOR
First Mortgage | The Lux Washington, LLC | US | WA | Land | Pro Rata | Terra Property Trust
Schedule of Investments
Fair Value	[2]	$ 5,729,217	[18]	$ 2,718,297	[19]
% of Members Capital		2.60%	[3],[18]	1.20%	[4],[19]
First Mortgage | The Lux Washington, LLC | US | WA | Land | LIBOR | Terra Property Trust
Schedule of Investments
Basis spread on variable rate		7.00%	[18]	7.00%
LIBOR Floor		0.75%	[18]	0.75%
First Mortgage | University Park Berkeley LLC | US | CA | Multifamily | Terra Property Trust
Schedule of Investments
Collateral Location		US	[16]	US	[17],[23]
Current Interest Rate		5.70%	[16]	5.70%	[17],[23]
Exit Fee		0.80%	[16]	0.80%	[17],[23]
Acquisition Date		Feb. 27, 2020	[16]	Feb. 27, 2020	[17],[23]
Maturity Date		Mar. 01, 2023	[16]	Mar. 01, 2023	[17],[23]
Principal Amount		$ 25,815,378	[16]	$ 25,815,378	[17],[23]
Amortized cost		25,995,342	[16]	25,991,962	[17],[23]
Fair Value	[1]	$ 26,008,381	[16]	$ 26,015,500	[17],[23]
Description of variable rate basis		LIBOR	[16]	LIBOR
First Mortgage | University Park Berkeley LLC | US | CA | Multifamily | Pro Rata | Terra Property Trust
Schedule of Investments
Fair Value	[2]	$ 19,896,411	[16]	$ 19,901,858	[17],[23]
% of Members Capital		9.20%	[3],[16]	9.10%	[4],[17],[23]
First Mortgage | University Park Berkeley LLC | US | CA | Multifamily | LIBOR | Terra Property Trust
Schedule of Investments
Basis spread on variable rate		4.20%	[16]	4.20%
LIBOR Floor		1.50%	[16]	1.50%
First Mortgage | Windy Hill Pv Five Cm LLC | US | CA | Office Building | Terra Property Trust
Schedule of Investments
Collateral Location	[5]	US		US
Current Interest Rate	[5]	8.10%		8.10%
Exit Fee	[5]	0.50%		0.50%
Acquisition Date	[5]	Sep. 20, 2019		Sep. 20, 2019
Maturity Date	[5]	Sep. 20, 2022		Sep. 20, 2022
Principal Amount	[5]	$ 54,078,939		$ 49,954,068
Amortized cost	[5]	54,416,729		50,264,568
Fair Value	[1],[5]	$ 54,375,474		$ 50,077,674
Description of variable rate basis		LIBOR	[5]	LIBOR
First Mortgage | Windy Hill Pv Five Cm LLC | US | CA | Office Building | Pro Rata | Terra Property Trust
Schedule of Investments
Fair Value	[2],[5]	$ 41,597,238		$ 38,309,421
% of Members Capital	[5]	19.20%	[3]	17.60%	[4]
First Mortgage | Windy Hill Pv Five Cm LLC | US | CA | Office Building | LIBOR | Terra Property Trust
Schedule of Investments
Basis spread on variable rate		6.00%	[5]	6.00%
LIBOR Floor		2.05%	[5]	2.05%
Operating real estate | US | Terra Property Trust
Schedule of Investments
Fair Value		$ 73,438,122	[1]	$ 75,043,111
Encumbrance		31,757,725		31,962,692
Net Real Estate Investment		$ 41,680,397		$ 43,080,419
Operating real estate | US | Pro Rata | Terra Property Trust
Schedule of Investments
% of Members Capital		14.70%	[3],[24]	15.10%
Net Real Estate Investment		$ 31,885,503	[2]	$ 32,956,521
Operating real estate | US | CA | Office Building | Terra Property Trust
Schedule of Investments
Acquisition Date		Jul. 30, 2018	[25]	Jul. 30, 2018
Fair Value		$ 65,043,111	[1],[25]	$ 65,043,111
Encumbrance		31,757,725	[25]	31,962,692
Net Real Estate Investment		$ 33,285,386	[25]	$ 33,080,419
Operating real estate | US | CA | Office Building | Pro Rata | Terra Property Trust
Schedule of Investments
% of Members Capital		11.70%	[3],[24],[25]	11.60%
Net Real Estate Investment		$ 25,463,320	[2],[25]	$ 25,306,521
Operating real estate | US | PA | Land | Terra Property Trust
Schedule of Investments
Acquisition Date		Jan. 09, 2019	[26]	Jan. 09, 2019
Fair Value		$ 8,395,011	[1],[26]	$ 10,000,000
Encumbrance		0	[26]	0
Net Real Estate Investment		$ 8,395,011	[26]	$ 10,000,000
Operating real estate | US | PA | Land | Pro Rata | Terra Property Trust
Schedule of Investments
% of Members Capital		3.00%	[3],[24],[26]	3.50%
Net Real Estate Investment		$ 6,422,183	[2],[26]	$ 7,650,000
Marketable Securities
Schedule of Investments
Amortized cost	[27]	475,201		1,176,006
Fair Value	[27]	510,151		1,310,000
Marketable Securities | Pro Rata
Schedule of Investments
Fair Value	[2],[27]	$ 390,266		$ 1,002,150
% of Members Capital	[27]	0.20%	[3]	0.50%	[4]
Marketable Securities | Nextpoint Real Estate Finance, Inc | Series A Preferred Stock
Schedule of Investments
Dividend Yield	[27]	8.50%		8.50%
Acquisition Date	[27]	Jul. 30, 2020		Jul. 30, 2020
Maturity Date	[27]	Jul. 24, 2025		Jul. 24, 2025
Amortized cost	[27]	$ 475,201		$ 1,176,006
Fair Value	[27]	$ 510,151		$ 1,310,000
Preferred Stock, Shares Issued	[27]	20,204		50,000
Marketable Securities | Nextpoint Real Estate Finance, Inc | Series A Preferred Stock | Pro Rata
Schedule of Investments
Fair Value	[2],[27]	$ 390,266		$ 1,002,150
% of Members Capital	[27]	0.20%	[3]	0.50%	[4]
Equity Investments
Schedule of Investments
Amortized cost		$ 91,662,090		$ 69,713,793
Fair Value		95,947,859		68,898,535
Equity Investments | Pro Rata
Schedule of Investments
Fair Value	[2]	$ 73,400,112		$ 52,707,379
% of Members Capital		33.90%	[3]	24.20%	[4]
Equity Investments | Mavik Real Estate Special Opportunities Fund, LP
Schedule of Investments
Equity Method Investment, Ownership Percentage		44.00%	[28]	50.00%	[29]
Amortized cost		$ 40,245,914	[28]	$ 40,458,282	[29]
Fair Value		44,531,683	[28]	39,643,024	[29]
Equity Investments | Mavik Real Estate Special Opportunities Fund, LP | Pro Rata
Schedule of Investments
Fair Value	[2]	$ 34,066,737	[28]	$ 30,326,913	[29]
% of Members Capital		15.70%	[3],[28]	13.90%	[4],[29]
Equity Investments | LEL Arlington JV LLC
Schedule of Investments
Equity Method Investment, Ownership Percentage		80.00%	[30]	80.00%	[31]
Amortized cost		$ 23,962,388	[30]	$ 23,949,044	[31]
Fair Value		23,962,388	[30]	23,949,044	[31]
Equity Investments | LEL Arlington JV LLC | Pro Rata
Schedule of Investments
Fair Value	[2]	$ 18,331,227	[30]	$ 18,321,019	[31]
% of Members Capital		8.50%	[3],[30]	8.40%	[4],[31]
Equity Investments | LEL NW 49th LV LLC
Schedule of Investments
Equity Method Investment, Ownership Percentage		80.00%	[30]	80.00%	[31]
Amortized cost		$ 4,838,353	[30]	$ 5,306,467	[31]
Fair Value		4,838,353	[30]	5,306,467	[31]
Equity Investments | LEL NW 49th LV LLC | Pro Rata
Schedule of Investments
Fair Value	[2]	$ 3,701,340	[30]	$ 4,059,447	[31]
% of Members Capital		1.70%	[3],[30]	1.90%	[4],[31]
Equity Investments | TCG Corinthian FL Portfolio JV LLC
Schedule of Investments
Equity Method Investment, Ownership Percentage	[30]	90.00%
Amortized cost	[30]	$ 22,615,435
Fair Value	[30]	22,615,435
Equity Investments | TCG Corinthian FL Portfolio JV LLC | Pro Rata
Schedule of Investments
Fair Value	[2],[30]	$ 17,300,808
% of Members Capital	[3],[30]	8.00%
Terra JV
Schedule of Investments
Acquisition Date		Mar. 02, 2020		Mar. 02, 2020
Equity Method Investment, Ownership Percentage		87.60%		87.60%
Amortized cost		$ 217,482,964		$ 219,704,515
Fair Value		$ 216,121,691		$ 217,324,720
% of Members Capital		99.70%		99.70%

[1] Because there is no readily available market for these investments, these loans were valued using significant unobservable inputs under Level 3 of the fair value hierarchy and were approved in good faith by Terra REIT Advisors, LLC (“Terra REIT Advisors”), Terra Property Trust’s manager, pursuant to Terra Property Trust’s valuation policy.

[2] Amount represents the Company’s portion, or 76.5%, of the fair value or net investment value.

[3] Percentage is based on the Company’s pro rata share of the fair value or net investment value over the Company’s total members’ capital of $216.7 million at March 31, 2022.

[4] Percentage is based on the Company’s pro rata share of the fair value or net investment value over the Company’s total members’ capital of $218.1 million at December 31, 2021.

[5] In March 2020, Terra Property Trust entered into a financing transaction where a third-party purchased an A-note position. Because the transaction does not qualify for sale accounting, the gross amount of the loan remains in the consolidated balance sheets. The liability is reflected as secured borrowing in Terra Property Trust’s consolidated balance sheets.

[6] Terra Property Trust sold a portion of its interest in this loan through a participation agreement to Terra Income Fund 6, Inc. (“Terra Fund 6”), an affiliated fund advised by Terra Income Advisors, LLC, an affiliate of our sponsor and Terra REIT Advisors.

[7] Terra Property Trust sold a portion of its interest in this loan through a participation agreement to Terra Fund 6, an affiliated fund advised by Terra Income Advisors, LLC, an affiliate of our sponsor and Terra REIT Advisors.

[8] The loan participations from Terra Property Trust do not qualify for sale accounting and therefore, the gross amount of these loans remain in Terra Property Trust’s consolidated balance sheets.

[9] Terra Property Trust purchased a portion of the interest in this loan from Mavik Real Estate Special Opportunities Fund REIT, LLC, a related-party real estate investment trust managed by Terra REIT Advisors, via a participation agreement.

[10] For the three months ended March 31, 2022, Terra Property Trust suspended interest income accrual of $0.6 million on this loan, because recovery of such income was doubtful. Additionally, the fair value of the loan declined as a result of a decline in the fair value of the collateral.

[11] For the year ended December 31, 2021, Terra Property Trust suspended interest income accrual of $2.3 million on this loan, because recovery of such income was doubtful. Additionally, the fair value of the loan declined as a result of a decline in the fair value of the collateral.

[12] This loan is in maturity default. Terra Property Trust has exercised its rights and is facilitating the completion of construction of the asset in anticipation of lease up and disposition of the asset. For the three months ended March 31, 2022, Terra Property Trust suspended interest income accrual of $0.5 million on this loan because recovery of such income was doubtful.

[13] This loan is in maturity default. Terra Property Trust has exercised its rights and is facilitating the completion of construction of the asset in anticipation of lease up and disposition of the asset. For the year ended December 31, 2021, Terra Property Trust suspended interest income accrual of $0.9 million on this loan because recovery of such income was doubtful.

[14] These loans were used as collateral for $58.2 million of borrowings under a repurchase agreement.

[15] These loans were used as collateral for $44.6 million of borrowings under a repurchase agreement.

[16] These loans were used as collateral for $118.3 million of borrowings under a repurchase agreement.

[17] These loans were used as collateral for $93.8 million of borrowings under a term loan payable.

[18] These loans were used as collateral for $65.0 million of borrowings under a revolving line of credit.

[19] These loans were used as collateral for $38.6 million of borrowings under a revolving line of credit.

[20] In March 2021, Terra Property Trust amended the loan agreement to change the spread on the interest rate to 5.0%, increased the exit fee to 1.5% and extended the maturity to January 1, 2024. Additionally, under the loan amendment, the borrower made a partial repayment of $2.6 million.

[21] In September 2021, Terra Property Trust refinanced a previously-defaulted mezzanine loan with a new first mortgage. This refinancing was accounted for as a troubled debt restructuring and Terra Property Trust recognized a loss of $0.3 million on the restructuring.

[22] Terra Property Trust purchased a portion of the interest in this loan from Terra Fund 6 via a participation agreement.

[23] In December 2020, Terra Property Trust entered into a forbearance agreement with the borrower pursuant to which interest accrues on the loan during the 90-day forbearance period from November 2020 to January 2021. In March 2021, the forbearance period was extended through August 2021.

[24] Percentage is based on Terra Property Trust’s net exposure on the property (real estate owned less encumbrance).

[25] Terra Property Trust acquired this property through foreclosure of a $54.0 million first mortgage.

[26] Terra Property Trust acquired the collateral for this loan pursuant to a deed in lieu of foreclosure. The land is currently vacant and the fair value reflects its estimated selling price. In March 2022, Terra Property Trust entered into a sales agreement to sell the land. As of March 31, 2022, the land was classified as assets held-for-sale on Terra Property Trust’s consolidated balance sheets.

[27] From time to time, Terra Property Trust may invest in short-term debt and equity securities. These securities are comprised of shares of common and preferred stock and bonds.

[28] On August 3, 2020, Terra Property Trust entered into a subscription agreement with Mavik Real Estate Special Opportunities Fund, LP (“RESOF”) whereby Terra Property Trust committed to fund up to $50.0 million to purchase a limited partnership interest in RESOF. RESOF’s primary investment objective is to generate attractive risk-adjusted returns by purchasing performing and non-performing mortgages, loans, mezzanines and other credit instruments supported by underlying commercial real estate assets. As of March 31, 2022, the unfunded commitment was $16.4 million.

[29] On August 3, 2020, Terra Property Trust entered into a subscription agreement with RESOF whereby Terra Property Trust committed to fund up to $50.0 million to purchase a limited partnership interest in RESOF. RESOF’s primary investment objective is to generate attractive risk-adjusted returns by purchasing performing and non-performing mortgages, loans, mezzanines and other credit instruments supported by underlying commercial real estate assets. As of December 31, 2021, the unfunded commitment was $15.1 million.

[30] In the fourth quarter of 2021 and the first quarter of 2022, Terra Property Trust purchased equity interests in three joint ventures that invest in real estate properties.

[31] In the fourth quarter of 2021, Terra Property Trust purchased equity interests in two joint ventures that invest in real estate properties.

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Consolidated Schedules of Investments Consolidated schedule of investment (Parenthetical 1) - USD ($)	Mar. 31, 2022	Dec. 31, 2021	Mar. 02, 2020	Jan. 01, 2016
Terra Property Trust
Schedule of Investments
Common Stock, Shares, Issued			4,574,470.35
Cash			$ 25,500,000
Common Stock, Value, Issued			$ 49,800,000
Equity Method Investment, Ownership Percentage	87.40%
Common Stock, Par or Stated Value Per Share				$ 0.01
Percent Of Common Stock Indirect Owned	76.50%	76.50%
% of Members Capital	100.00%
Terra JV
Schedule of Investments
Equity Method Investment, Ownership Percentage	87.60%	87.60%
% of Members Capital	99.70%	99.70%
Terra JV | Terra Fund Five
Schedule of Investments
Equity Method Investment, Ownership Percentage	87.60%	87.60%
Terra JV | Terra fund Seven
Schedule of Investments
Equity Method Investment, Ownership Percentage	12.40%	12.40%

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Consolidated Schedules of Investments Consolidated schedule of investment - subnotes (Parenthetical) - USD ($)		3 Months Ended		12 Months Ended
		Mar. 31, 2022		Dec. 31, 2021		Aug. 03, 2020
Investments
Members' Capital		$ 216,745,722		$ 218,076,577
Mavik Real Estate Special Opportunities Fund, LP | Equity Investments
Investments
Total Commitment						$ 50,000,000
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share, Unfunded Commitments		$ 16,400,000		$ 15,100,000
Terra Property Trust
Investments
% of Members Capital		100.00%
Percent Of Common Stock Indirect Owned		76.50%		76.50%
Terra Property Trust | US | Revolving Credit Facility
Investments
Mortgage loan payable		$ 65,000,000		$ 38,600,000
Terra Property Trust | US | Repurchase Agreements
Investments
Mortgage loan payable		58,200,000		44,600,000
Terra Property Trust | US | Repurchase Agreement
Investments
Mortgage loan payable		118,300,000
Terra Property Trust | US | Term loan
Investments
Mortgage loan payable				93,800,000
Terra Property Trust | US | Operating real estate
Investments
Mortgage loan payable		31,757,725		31,962,692
Terra Property Trust | US | CA | Office Building | Operating real estate
Investments
Real Estate Acquired Through Foreclosure		54,000,000		54,000,000
Mortgage loan payable		$ 31,757,725	[1]	31,962,692
Terra Property Trust | US | CA | Hotel | AGRE DCP Palm Springs, LLC | First Mortgage
Investments
Repayment of Loan				$ 2,600,000
Basis spread on variable rate				5.00%
Exit Fee		1.50%	[2]	1.50%	[3],[4]
Terra Property Trust | US | TX | Hotel | Austin H. I. Borrower LLC | First Mortgage
Investments
Gains (Losses) on Restructuring of Debt				$ 300,000
Exit Fee		1.00%	[5]	1.00%	[6],[7]
Terra Property Trust | US | NY | Mixed use | REEC Harlem Holdings Company LLC | Preferred Equity Investment
Investments
Interest Income accrual suspended		$ 600,000		$ 2,300,000
Terra Property Trust | US | NY | Multifamily | RS JZ Driggs, LLC | Preferred Equity Investment
Investments
Interest Income accrual suspended		$ 500,000		$ 900,000
Exit Fee	[9]	1.00%	[8],[10]	1.00%	[11],[12]

[1] Terra Property Trust acquired this property through foreclosure of a $54.0 million first mortgage.

[2] These loans were used as collateral for $118.3 million of borrowings under a repurchase agreement.

[3] In March 2021, Terra Property Trust amended the loan agreement to change the spread on the interest rate to 5.0%, increased the exit fee to 1.5% and extended the maturity to January 1, 2024. Additionally, under the loan amendment, the borrower made a partial repayment of $2.6 million.

[4] These loans were used as collateral for $93.8 million of borrowings under a term loan payable.

[5] These loans were used as collateral for $65.0 million of borrowings under a revolving line of credit.

[6] In September 2021, Terra Property Trust refinanced a previously-defaulted mezzanine loan with a new first mortgage. This refinancing was accounted for as a troubled debt restructuring and Terra Property Trust recognized a loss of $0.3 million on the restructuring.

[7] These loans were used as collateral for $38.6 million of borrowings under a revolving line of credit.

[8] Terra Property Trust sold a portion of its interest in this loan through a participation agreement to Terra Income Fund 6, Inc. (“Terra Fund 6”), an affiliated fund advised by Terra Income Advisors, LLC, an affiliate of our sponsor and Terra REIT Advisors.

[9] The loan participations from Terra Property Trust do not qualify for sale accounting and therefore, the gross amount of these loans remain in Terra Property Trust’s consolidated balance sheets.

[10] This loan is in maturity default. Terra Property Trust has exercised its rights and is facilitating the completion of construction of the asset in anticipation of lease up and disposition of the asset. For the three months ended March 31, 2022, Terra Property Trust suspended interest income accrual of $0.5 million on this loan because recovery of such income was doubtful.

[11] Terra Property Trust sold a portion of its interest in this loan through a participation agreement to Terra Fund 6, an affiliated fund advised by Terra Income Advisors, LLC, an affiliate of our sponsor and Terra REIT Advisors.

[12] This loan is in maturity default. Terra Property Trust has exercised its rights and is facilitating the completion of construction of the asset in anticipation of lease up and disposition of the asset. For the year ended December 31, 2021, Terra Property Trust suspended interest income accrual of $0.9 million on this loan because recovery of such income was doubtful.

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Business

3 Months Ended

Mar. 31, 2022

Limited Liability Companies LLCs [Abstract]

Business

Note 1. Business

    Terra Secured Income Fund 5, LLC (the “Company”), is a real estate credit focused company that originates, structures, funds and manages high yielding commercial real estate investments, including mezzanine loans, first mortgage loans, subordinated mortgage loans and preferred equity investments throughout the United States. The Company’s loans finance the acquisition, construction, development or redevelopment of quality commercial real estate in the United States. The Company focuses on the origination of middle market loans in the approximately $10 million to $50 million range, to finance properties in primary and secondary markets. The Company was formed as a Delaware limited liability company on April 24, 2013 and commenced operations on August 8, 2013. The Company makes substantially all of its investments and conducts substantially all of its real estate lending business through Terra Property Trust, which has elected to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes commencing with its taxable year ended December 31, 2016. The Company’s investment objectives are to (i) preserve its members’ capital contributions, (ii) realize income from its investments and (iii) make monthly distributions to its members from cash generated from investments. There can be no assurances that the Company will be successful in meeting its investment objectives.

    In December 2015, the members approved the merger of Terra Secured Income Fund, LLC (“Terra Fund 1”), Terra Secured Income Fund 2, LLC (“Terra Fund 2”), Terra Secured Income Fund 3, LLC (“Terra Fund 3”) and Terra Secured Income Fund 4, LLC (“Terra Fund 4”) with and into subsidiaries of the Company (individually, each a “Terra Fund” and collectively, the “Terra Funds”) through a series of separate mergers effective January 1, 2016 (collectively, the “Merger”). Following the Merger, the Company contributed the consolidated portfolio of net assets of the five Terra Funds to Terra Property Trust, a newly-formed and wholly-owned subsidiary of the Company that elected to be taxed as a REIT, in exchange for the shares of common stock of Terra Property Trust. Upon completion of the Merger, the Company became the parent company of Terra Funds 1 through 4 and the direct and indirect sole common stockholder of, and began conducting substantially all of its real estate lending business through, Terra Property Trust.

    On March 2, 2020, Terra Fund 1, Terra Fund 2 and Terra Fund 3 merged with and into Terra Fund 4, with Terra Fund 4 continuing as the surviving company (the “Terra Fund Merger”), and the Company consolidated its holdings of shares of common stock of Terra Property Trust in Terra Fund 4. Subsequent to the Terra Fund Merger, the legal name of Terra Fund 4 was changed to Terra JV. On March 2, 2020, Terra Property Trust engaged in a series of transactions pursuant to which Terra Property Trust issued an aggregate of 4,574,470.35 shares of its common stock in exchange for the settlement of an aggregate of $49.8 million of participation interests in loans that Terra Property Trust owned, cash of $25.5 million and other working capital. As of March 31, 2022, Terra JV held 87.4% of the issued and outstanding shares of Terra Property Trust’s common stock with the remainder held by Terra Offshore REIT, and the Company and Terra Fund 7 owned an 87.6% and 12.4% percentage interest, respectively, in Terra JV (Note 4). The Company does not consolidate Terra JV because the Company and Terra Fund 7 share joint approval rights with respect to certain major decisions that are taken by Terra JV and Terra Property Trust (Note 4).

    The Company’s investment activities are externally managed by Terra Fund Advisors, LLC (“Terra Fund Advisors” or the “Manager”). The Company does not currently have any employees and does not expect to have any employees. Services necessary for the Company’s business are provided by individuals who are employees of the Manager or its affiliates or by individuals who were contracted by the Company or by the Manager or its affiliates to work on behalf of the Company pursuant to the terms of the operating agreement, as amended.

    The Company’s amended and restated operating agreement provides that the Company’s existence will continue until December 31, 2023, unless sooner terminated. However, the Company expects that prior to such date it will consummate a liquidity transaction, which could occur as early as this year and may include an orderly liquidation of its assets or an alternative liquidity event such as a strategic business combination, a sale of the Company or an initial public offering and listing of Terra Property Trust’s shares of common stock on a national securities exchange. The Manager would pursue an alternative liquidity event only if it believes such a transaction would be in the best interests of the Company’s members.

On April 1, 2021, Mavik Capital Management, LP (“Mavik”), an entity controlled by Vikram S. Uppal, the Chief Executive Officer of the Company, completed a series of related transactions that resulted in all of the outstanding interests in Terra Capital Partners, LLC, being acquired by Mavik for a combination of cash and interests in Mavik.

As described in greater detail in Note 8, on May 2, 2022, Terra Property Trust, Terra Fund 6, Terra Merger Sub, LLC, a wholly owned subsidiary of Terra Property Trust (“Merger Sub”), Terra Income Advisors, LLC and Terra REIT Advisors, LLC, entered into an Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which, subject to the terms and conditions therein, Terra Income Fund 6 will be merged with and into Merger Sub, with Merger Sub surviving as a wholly owned subsidiary of Terra Property Trust (such surviving company, the “Surviving Company” and such transaction, the “Merger”). The Merger is expected to close during the third quarter of 2022, subject to the required approvals by Terra Income Fund 6’s stockholders and other customary closing conditions. There can be no assurances that the Merger will close.

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

Significant Accounting Policies

Note 2. Summary of Significant Accounting Policies

Basis of Presentation

    The interim financial statements have been prepared in accordance with United States generally accepted accounting principles (U.S. GAAP”) and include all of the Company’s accounts. The accompanying interim financial statements of the Company and related financial information have been prepared pursuant to the requirements for reporting on Form 10-Q and Articles 6 or 10 of Regulation S-X. The Company is an investment company, as defined under U.S. GAAP, and applies accounting and reporting guidance in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, Financial Services — Investment Companies.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may ultimately differ from those estimates.

The coronavirus (“COVID-19”) pandemic has had a significant impact on local, national and global economies and has resulted in a world-wide economic slowdown. However, after two years into the COVID-19 pandemic, the real estate market has started to recover from the dislocation it experienced. A strong pace of vaccination along with aggressive fiscal stimulus, has improved the outlook for the real estate market. The Company continues to closely monitor the impact of the COVID-19 pandemic on all aspects of its investments and operations. The Company believes the estimates and assumptions underlying its financial statements are reasonable and supportable based on the information available as of March 31, 2022; however, the extent to which the COVID-19 pandemic may impact the Company’s investments and operations going forward will depend on future developments, which are highly uncertain and cannot be predicted with confidence. These developments include the duration of the outbreak, the impact of the global vaccination effort, any new strains of the virus that are resistant to available vaccines, the impact of government stimulus, new information that may emerge concerning the severity of the COVID-19 pandemic, and actions taken by federal, state and local agencies as well as the general public to contain the COVID-19 pandemic or treat its impact, among others. Accordingly, any estimates and assumptions as of March 31, 2022 are inherently less certain than they would be absent the current and potential impacts of the COVID-19 pandemic.

Equity Investment in Terra JV

    Equity investment in Terra JV represents the Company’s equity interest in Terra JV, which was initially recorded at cost. Subsequent to the asset contribution, the equity investment is reported, at each reporting date, at fair value on the statements of financial condition. Change in fair value is reported in net change in unrealized appreciation or depreciation on investment on the statements of operations.

Revenue Recognition

    Dividend Income: Dividend income associated with the Company’s ownership of Terra JV or Terra Property Trust is recognized on the record date as declared by Terra JV or Terra Property Trust. Any excess of distributions over Terra JV or Terra Property Trust’s cumulative taxable net income are recorded as return of capital.

    Other Operating Income: All other income is recognized when earned.

Cash and Cash Equivalents

The Company considers all highly liquid investments, with original maturities of ninety days or less when purchased, as cash equivalents. Cash and cash equivalents are exposed to concentrations of credit risk. The Company maintains all of its cash at financial institutions which, at times, may exceed the amount insured by the Federal Deposit Insurance Corporation.

Income Taxes

    No provision for U.S. federal and state income taxes has been made in the accompanying financial statements, as individual members are responsible for their proportionate share of the Company’s taxable income. The Company, however, may be liable for New York City Unincorporated Business Tax (the “NYC UBT”) and similar taxes of various other municipalities. New York City imposes the NYC UBT at a statutory rate of 4% on net income generated from ordinary business activities carried on in New York City. For the three months ended March 31, 2022 and 2021, none of the Company’s income was subject to the NYC UBT.

    Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statements and tax basis assets and liabilities using enacted tax rates in effect for the year in which differences are expected to reverse. Such deferred tax assets and liabilities were not material.

    The Company did not have any uncertain tax positions that met the recognition or measurement criteria of ASC 740-10-25, Income Taxes, nor did the Company have any unrecognized tax benefits as of the periods presented herein. The Company recognizes interest and penalties, if any, related to unrecognized tax liabilities as income tax expense in its statements of operations. For the three months ended March 31, 2022 and 2021, the Company did not incur any interest or penalties. Although the Company files federal and state tax returns, its primary tax jurisdiction is federal. The Company’s 2018-2020 federal tax years remain subject to examination by the Internal Revenue Service.

Recent Accounting Pronouncement

London Interbank Offered Rate (“LIBOR”) is a benchmark interest rate referenced in a variety of agreements that are used by all types of entities. In July 2017, the U.K. Financial Conduct Authority, which regulates the LIBOR administrator, ICE Benchmark Administration Limited (“IBA”), announced that it would cease to compel banks to participate in setting LIBOR as a benchmark by the end of 2021, which has subsequently been delay to June 30, 2023. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) — Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). The amendments in ASU 2020-04 provide optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848), which expanded the scope of Topic 848 to include derivative instruments impacted by discounting transition (“ASU 2021-01”). ASU 2020-04 and ASU 2021-01 are effective for all entities through December 31, 2022. The expedients and exceptions provided by the amendments do not apply to contract modifications and hedging relationships entered into or evaluated after December 31, 2022, except for hedging transactions as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. In the event LIBOR is unavailable, Terra Property Trust’s investment documents provide for a substitute index, on a basis generally consistent with market practice, intended to put the Terra Property Trust in substantially the same economic position as LIBOR. As a result, the Company does not expect the reference rate reform and the adoption of ASU 2020-04 and ASU 2021-01 to have a material impact on its financial statements and disclosures

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Investment and Fair Value

3 Months Ended

Mar. 31, 2022

Investments [Abstract]

Investments And Fair Value Measurements [Text Block]

Note 3. Investment and Fair Value

Equity Investment in Terra JV

The Company invested substantially all of its equity capital in the purchase of shares of common stock of Terra Property Trust. As of both March 31, 2022 and December 31, 2021, Terra JV held 87.4% of the issued and outstanding shares of Terra Property Trust’s common stock with the remainder held by Terra Offshore REIT, and the Company and Terra Fund 7 owned an 87.6% and 12.4% percentage interest, respectively, in Terra JV, and Terra JV became the Company’s only investment (Note 4).

The following tables present a summary of the Company’s investment at March 31, 2022 and December 31, 2021:

	March 31, 2022						December 31, 2021
Investment	Cost		Fair Value		% of Members’ Capital		Cost		Fair Value		% of Members’ Capital
87.6% interest in Terra JV, LLC	$	217,482,964	$	216,121,691	99.7	%	$	219,704,515	$	217,324,720	99.7	%

For the three months ended March 31, 2022 and 2021, the Company received approximately $3.0 million and $3.0 million of distributions from Terra JV, of which $2.2 million and $1.9 million were returns of capital, respectively.

        As of both March 31, 2022 and December 31, 2021, the Company indirectly beneficially owned 76.5% (Note 4) of the outstanding shares of common stock of Terra Property Trust. The following tables present the summarized financial information of Terra Property Trust:

	March 31, 2022		December 31, 2021
Carrying value of loans held for investment	$	558,019,000	$	469,673,314
Equity investment in unconsolidated investments	91,662,090		69,713,793
Real estate owned, net	62,448,945		65,776,839
Cash, cash equivalent and restricted cash	25,568,820		51,098,647
Other assets	34,897,190		37,279,565
Total assets	772,596,045		693,542,158
Term loan payable, unsecured notes payable, obligations under participation    agreements, repurchase agreement payable, mortgage loan payable, revolving    line of credit and secured borrowing	(448,176,646)		(364,910,392)
Accounts payable, accrued expenses and other liabilities	(45,804,851)		(45,078,478)
Lease intangible liabilities	(9,426,358)		(9,709,710)
Total liabilities	(503,407,855)		(419,698,580)
Stockholder’s equity	$	269,188,190	$	273,843,578

	Three Months Ended March 31,
	2022		2021
Revenues	$	12,112,270	$	10,289,252
Expenses	(14,241,581)		(10,136,375)
Realized gains on marketable securities	51,133		—
Unrealized losses on marketable securities	(99,044)		(14,608)
Equity income from unconsolidated investments	1,419,335		1,337,827
Net (loss) income	$	(757,887)	$	1,476,096

Fair Value Measurements

    The Company adopted the provisions of ASC 820, Fair Value Measurement (“ASC 820”), which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 established a fair value hierarchy that prioritizes and ranks the level of market price observability used in measuring investments at fair value. Market price observability is impacted by a number of factors, including the type of investment, the characteristics specific to the investment, and the state of the marketplace (including the existence and transparency of transactions between market participants). Investments with readily available, actively quoted prices or for which fair value can be measured from actively quoted prices in an orderly market will generally have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Investments measured and reported at fair value are classified and disclosed into one of the following categories based on the inputs as follows:

        Level 1 — Quoted prices (unadjusted) in active markets for identical assets and liabilities that the Company has the ability to access.

      Level 2 — Pricing inputs are other than quoted prices in active markets, including, but not limited to, quoted prices for similar assets and liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market corroborated inputs.

       Level 3 — Significant unobservable inputs are based on the best information available in the circumstances, to the extent observable inputs are not available, including the Company’s own assumptions used in determining the fair value of investments. Fair value for these investments are determined using valuation methodologies that consider a range of factors, including but not limited to the price at which the investment was acquired, the nature of the investment, local market conditions, trading values on public exchanges for comparable securities, current and projected operating performance, and financing transactions subsequent to the acquisition of the investment. The inputs into the determination of fair value require significant management judgment.

     In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment.

Assets and Liabilities Reported at Fair Value

    The following table summarizes the Company’s equity investment at fair value on a recurring basis as of March 31, 2022 and December 31, 2021:

	March 31, 2022
	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
Investment:
Equity investment in Terra JV	$	—	$	—	$	216,121,691	$	216,121,691

	December 31, 2021
	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
Investment:
Equity investment in Terra JV	$	—	$	—	$	217,324,720	$	217,324,720

    Changes in Level 3 investment for the three months ended March 31, 2022 and 2021 were as follows:

	Equity Investment in Terra JV
	Three Months Ended March 31,
	2022		2021
Beginning balance	$	217,324,720	$	235,357,977
Return of capital	(2,221,551)		(1,852,767)
Net change in unrealized appreciation on investment	1,018,522		492,466
Ending balance	$	216,121,691	$	233,997,676
Net change in unrealized appreciation on investment for the period relating to those    Level 3 assets that were still held by the Company	$	1,018,522	$	492,466

    Transfers between levels, if any, are recognized at the beginning of the period in which transfers occur. For the three months ended March 31, 2022 and 2021, there were no transfers.

The Company estimated that its other financial assets and liabilities had fair values that approximated their carrying values at March 31, 2022 and December 31, 2021 due to their short-term nature.

Valuation Process for Fair Value Measurement

    Market quotations are not readily available for the Company’s investment in Terra Property Trust or Terra JV, which is included in Level 3 of the fair value hierarchy. The fair value of the Company’s sole investment takes into consideration the fair value of Terra Property Trust’s assets and liabilities which are valued utilizing a yield approach, i.e. a discounted cash flow methodology. In following this methodology, loans are evaluated individually, and management takes into account, in determining the risk-adjusted discount rate for each of Terra Property Trust’s loans, relevant factors, which may include available current market data on applicable yields of comparable debt/preferred equity instruments; market credit spreads and yield curves; the investment’s yield; covenants of the investment, including prepayment provisions; the portfolio company’s ability to make payments, its net operating income, debt-service coverage ratio; construction progress reports and construction budget analysis; the nature, quality, and realizable value of any collateral (and loan-to-value ratio); and the forces that influence the local markets in which the asset (the collateral) is purchased and sold, such as capitalization rates, occupancy rates, rental rates, replacement costs and the anticipated duration of each real estate-related loan. Valuation of Terra Property Trust’s investment in a 4.9 acre development parcel is based on the estimated selling price. The fair value of Terra Property Trust’s investment in an office building is determined using the direct capitalization method.

The Manager designates a valuation committee to oversee the entire valuation process of Terra Property Trust’s Level 3 investments. The valuation committee is comprised of members of the Manager’s senior management, deal and portfolio management teams, who meet on a quarterly basis, or more frequently as needed, to review Terra Property Trust investments being valued as well as the inputs used in the proprietary valuation model. Valuations determined by the valuation committee are supported by pertinent data and, in addition to a proprietary valuation model, are based on market data, third-party valuation data and discount rates or other methods the valuation committee deems to be appropriate.

The following tables summarize the valuation techniques and significant unobservable inputs used by the Company to value the Level 3 investments as of March 31, 2022 and December 31, 2021. The tables are not intended to be all-inclusive, but instead identify the significant unobservable inputs relevant to the determination of fair values.

	Fair Value		Primary Valuation Technique	Unobservable Inputs	March 31, 2022
Asset Category					Minimum		Maximum		Weighted Average
Assets:
Equity investment in Terra JV	$	216,121,691	Discounted cash flow (1)(2)	Discount rate (1)(2)	1.90	%	15.00	%	14.74	%

	Fair Value		Primary Valuation Technique	Unobservable Inputs	December 31, 2021
Asset Category					Minimum		Maximum		Weighted Average
Assets:
Equity investment in Terra JV	$	217,324,720	Discounted cash flow (1)(2)	Discount rate (1)(2)	2.45	%	15.00	%	12.66	%

_______________

(1)Discounted cash flows and discount rates applied to Terra Property Trust’s assets and liabilities.

(2)The fair value of Terra Property Trust’s investment in an office building is determined using the direct capitalization method with cap rate ranges from 5.25% to 6.00% as of March 31, 2022 and December 31, 2021, respectively. Additionally, the fair value of Terra Property Trust’s investment in a 4.9 acre development parcel is based on the estimated selling price.

Risks and Uncertainties

    The Company’s investment in Terra Property Trust through Terra JV is highly illiquid and there is no assurance that the Company will achieve its investment objectives, including targeted returns. Terra Property Trust’s loans are highly illiquid. Due to the illiquidity of the loans, valuation of the loans may be difficult, as there generally will be no established markets for these loans.

The COVID-19 pandemic has resulted in extreme volatility in a variety of global markets, including the real estate-related debt markets. U.S. financial markets, in particular, are experiencing limited liquidity and forced selling by certain market

participants with insufficient liquidity available to meet current obligations, which puts further downward pressure on asset prices.As the Company’s investment is carried at fair value with fair value changes recognized in the statements of operations, any changes in fair value would directly affect the Company’s members’ capital.

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Related Party Transactions

3 Months Ended

Mar. 31, 2022

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

Note 4. Related Party Transactions

Operating Agreement

    The Company has an operating agreement, as amended, with Terra Fund Advisors. The operating agreement, as amended, is scheduled to terminate on December 31, 2023 unless the Company is dissolved earlier. Starting January 1, 2016, the Company conducts all of its real estate lending business through Terra Property Trust. As such, Terra Property Trust is responsible for management compensation paid and operating expenses reimbursed to its manager pursuant to a management agreement with the manager.

Dividend Income

    As discussed in Note 3, for the three months ended March 31, 2022 and 2021, the Company received approximately $3.0 million and $3.0 million of distributions from Terra JV, of which $2.2 million and $1.9 million were returns of capital, respectively.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Note 5. Commitments and Contingencies

The Company enters into contracts that contain a variety of indemnification provisions. The Company’s maximum exposure under these arrangements is unknown; however, the Company has not had prior claims or losses pursuant to these contracts. The Manager has reviewed the Company’s existing contracts and expects the risk of loss to the Company to be remote.

The Company is not currently subject to any material legal proceedings and, to the Company’s knowledge, no material legal proceedings are threatened against the Company. From time to time, the Company may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of the Company’s rights under contracts with its portfolio companies. While the outcome of any legal proceedings cannot be predicted with certainty, the Company does not expect that any such proceedings will have a material adverse effect upon its financial condition or results of operations.

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Members' Capital

3 Months Ended

Mar. 31, 2022

Limited Liability Company (LLC) Members' Equity [Abstract]

Members' Capital

Note 6. Members’ Capital

    As of both March 31, 2022 and December 31, 2021, the Company had 6,636.6 units outstanding. The net asset value per unit was $32,659 and $32,860 as of March 31, 2022 and December 31, 2021, respectively.

Capital Distributions

    At the discretion of the Manager, the Company may make distributions from net cash flow from operations, net disposition proceeds, or other cash available for distribution. Distributions are made to holders of Continuing Income Units (regular units of limited liability company interest in the Company) in proportion to their unit holdings until they receive a return of their initial Deemed Capital Contribution, as defined in the operating agreement, plus a preferred return ranging from 8.5% to 9.0% depending on the historical preferred return applicable to their Terra Fund units, after which time distributions are made 15% to the Manager which the Company refers to as the carried interest distribution, and 85% to the holders of Continuing Income Units. The preferred return applicable to the Continuing Income Units sold in the offering concurrent with the Merger is 8.5%.

For the three months ended March 31, 2022 and 2021, the Company made total distributions to non-managing members of $3.0 million and $3.0 million, respectively. For the three months ended March 31, 2022 and 2021, the Company did not make any carried interest distributions to the Manager.

Capital Redemptions

    At the discretion of the Manager, a reserve of 5% of cash from operations may be established in order to repurchase units from non-managing members. The Manager is under no obligation to redeem non-managing members’ units. As of March 31,

2022 and 2021, no such reserve was established. For the three months ended March 31, 2022 and 2021, the Company did not redeem any units.

Allocation of Income (Loss)

    Profits and losses are allocated to the members in proportion to the units held in a given calendar year.

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Financial Highlights

3 Months Ended

Mar. 31, 2022

Investment Company, Financial Highlights [Abstract]

Financial Highlights

Note 7. Financial Highlights

    The financial highlights represent the per unit operating performance, return and ratios for the non-managing members’ class, taken as a whole, for the three months ended March 31, 2022 and 2021. These financial highlights consist of the operating performance, the internal rate of return (“IRR”) since inception of the Company, and the expense and net investment income ratios which are annualized except for the non-recurring expenses.

    The IRR, net of all fees and carried interest (if any), is computed based on actual dates of the cash inflows (capital contributions), outflows (capital distributions), and the ending capital at the end of the respective period (residual value) of the non-managing members’ capital account.

    The following summarizes the Company’s financial highlights for the three months ended March 31, 2022 and 2021:

	Three Months Ended March 31,
	2022			2021
Per unit operating performance:
Net asset value per unit, beginning of period	$	32,860		$	35,467
Increase in members’ capital from operations (1):
Net investment income	95			152
Net change in unrealized appreciation on investment	153			74
Total increase in members’ capital from operations	248			226
Distributions to members (2):
Capital distributions	(449)			(449)
Net decrease in members’ capital resulting from distributions	(449)			(449)
Net asset value per unit, end of period	$	32,659		$	35,244
Ratios to average net assets:
Expenses	0.23		%	0.21		%
Net investment income	1.13		%	1.72		%
IRR, beginning of period	4.91		%	5.82		%
IRR, end of period	4.86		%	5.73		%

_______________

(1)The per unit data was derived by using the weighted average units outstanding during the applicable periods, which were 6,636.6 and 6,637.8 for the three months ended March 31, 2022 and 2021.

(2)The per unit data for distributions reflects the actual amount of distributions paid per unit during the periods.

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Subsequent Events

3 Months Ended

Mar. 31, 2022

Subsequent Events [Abstract]

Subsequent Events

Note 8. Subsequent Events

Management has evaluated subsequent events through the date the financial statements were available to be issued. Management has determined that there are no material events other than the one described below that would require adjustment to, or disclosure in, the Company’s financial statements.

On May 2, 2022, Terra Property Trust, Terra Fund 6, Merger Sub, Terra Income Advisors, LLC and Terra REIT Advisors, LLC, entered into the Merger Agreement pursuant to which, subject to the terms and conditions therein, Terra Fund 6 will be merged with and into Merger Sub, with Merger Sub surviving as a wholly owned subsidiary of Terra Property Trust.

Pursuant to the terms of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), except for any shares of common stock, par value $0.001 per share, of Terra Fund 6 (“Terra BDC Common Stock”) held by Terra Property Trust or any of its wholly owned subsidiary or Terra Fund 6, which will be automatically retired and cease to exist with no consideration paid therefor, each issued and outstanding share of Terra BDC Common Stock will be automatically cancelled and retired and converted into the right to receive (i) 0.595 shares (as such number may be adjusted in accordance with the Merger Agreement, the “Exchange Ratio”) of the newly designated Class B Common Stock, par value $0.01 per share, of Terra Property Trust (“Class B Common Stock”), and (ii) cash, without interest, in lieu of any fractional shares of Class B Common Stock otherwise issuable in an amount, rounded to the nearest whole cent, determined by multiplying (x) the fraction of a share of Class B Common to which such holder would otherwise be entitled by (y) $14.38.

Prior to the Effective Time, Terra Property Trust will file with the State Department of Assessments and Taxation of Maryland Articles of Amendment to the Articles of Amendment and Restatement of Terra Property Trust (the “Charter Amendment”). Pursuant to the Charter Amendment, (i) the authorized shares of stock which Terra Property Trust has authority to issue will be increased from 500,000,000 to 950,000,000, consisting of 450,000,000 shares of Class A Common Stock, $0.01 par value per share (“Class A Common Stock”), 450,000,000 shares of Class B Common Stock, and 50,000,000 shares of Preferred Stock, $0.01 par value per share, and (ii) each share of Terra Property Trust’s common stock issued and outstanding immediately prior to the Effective Time will be automatically changed into one issued and outstanding share of Class B Common Stock.

Except with respect to conversion, each share of Class B Common Stock will have identical preferences, rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications, and terms and conditions of redemption as each other share of Terra Property Trust’s common stock. On the date that is 180 calendar days (or, if such date is not a business day, the next business day) after the date of initial listing of shares of Class A Common Stock for trading on a national securities exchange or such earlier date as approved by Terra Property Trust’s board of directors (the “First Conversion Date”), one-third of the issued and outstanding shares of Class B Common Stock will automatically and without any action on the part of the holder thereof convert into an equal number of shares of Class A Common Stock. On the date that is 365 calendar days (or, if such date is not a business day, the next business day) after the date of initial listing of shares of Class A Common Stock for trading on a national securities exchange or such earlier date following the First Conversion Date as approved by Terra Property Trust’s board of directors (the “Second Conversion Date”), one-half of the issued and outstanding shares of Class B Common Stock will automatically and without any action on the part of the holder thereof convert into an equal number of shares of Class A Common Stock. On the date that is 545 calendar days (or, if such date is not a business day, the next business day) after the date of initial listing of shares of Class A Common Stock for trading on a national securities exchange or such earlier date following the Second Conversion Date as approved by Terra Property Trust’s board of directors, all of the issued and outstanding shares of Class B Common Stock will automatically and without any action on the part of the holder thereof convert into an equal number of shares of Class A Common Stock.

Pursuant to the Merger Agreement, Terra Property Trust has agreed to take all necessary corporate action so that upon and after the Effective Time, the size of Terra Property Trust’s board of directors is increased from three to six, and three individuals designated by Terra Fund 6 (the “Terra BDC Designees”) are elected to the Board. If a Terra BDC Designee is not able or willing to serve on Terra Property Trust’s board of directors as of the Effective Time, Terra Fund 6 will select a replacement within a reasonable period of time prior to the Effective Time, and Terra Property Trust’s board of directors will elect such replacement as a member of Terra Property Trust’s board of directors as of the Effective Time.

The Merger is expected to close during the third quarter of 2022, subject to the required approvals by Terra Fund 6’s stockholders and other customary closing conditions. There can be no assurances that the Merger will close.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

Basis of Presentation and Principles of Consolidation

Basis of Presentation     The interim financial statements have been prepared in accordance with United States generally accepted accounting principles (U.S. GAAP”) and include all of the Company’s accounts. The accompanying interim financial statements of the Company and related financial information have been prepared pursuant to the requirements for reporting on Form 10-Q and Articles 6 or 10 of Regulation S-X. The Company is an investment company, as defined under U.S. GAAP, and applies accounting and reporting guidance in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, Financial Services — Investment Companies.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may ultimately differ from those estimates.

The coronavirus (“COVID-19”) pandemic has had a significant impact on local, national and global economies and has resulted in a world-wide economic slowdown. However, after two years into the COVID-19 pandemic, the real estate market has started to recover from the dislocation it experienced. A strong pace of vaccination along with aggressive fiscal stimulus, has improved the outlook for the real estate market. The Company continues to closely monitor the impact of the COVID-19 pandemic on all aspects of its investments and operations. The Company believes the estimates and assumptions underlying its financial statements are reasonable and supportable based on the information available as of March 31, 2022; however, the extent to which the COVID-19 pandemic may impact the Company’s investments and operations going forward will depend on future developments, which are highly uncertain and cannot be predicted with confidence. These developments include the duration of the outbreak, the impact of the global vaccination effort, any new strains of the virus that are resistant to available vaccines, the impact of government stimulus, new information that may emerge concerning the severity of the COVID-19 pandemic, and actions taken by federal, state and local agencies as well as the general public to contain the COVID-19 pandemic or treat its impact, among others. Accordingly, any estimates and assumptions as of March 31, 2022 are inherently less certain than they would be absent the current and potential impacts of the COVID-19 pandemic.

Equity Investment

Equity Investment in Terra JV    Equity investment in Terra JV represents the Company’s equity interest in Terra JV, which was initially recorded at cost. Subsequent to the asset contribution, the equity investment is reported, at each reporting date, at fair value on the statements of financial condition. Change in fair value is reported in net change in unrealized appreciation or depreciation on investment on the statements of operations.

Revenue Recognition

Revenue Recognition

    Dividend Income: Dividend income associated with the Company’s ownership of Terra JV or Terra Property Trust is recognized on the record date as declared by Terra JV or Terra Property Trust. Any excess of distributions over Terra JV or Terra Property Trust’s cumulative taxable net income are recorded as return of capital.

    Other Operating Income: All other income is recognized when earned.

Cash and Cash Equivalents

Cash and Cash Equivalents The Company considers all highly liquid investments, with original maturities of ninety days or less when purchased, as cash equivalents. Cash and cash equivalents are exposed to concentrations of credit risk. The Company maintains all of its cash at financial institutions which, at times, may exceed the amount insured by the Federal Deposit Insurance Corporation.

Income Taxes

Income Taxes

    No provision for U.S. federal and state income taxes has been made in the accompanying financial statements, as individual members are responsible for their proportionate share of the Company’s taxable income. The Company, however, may be liable for New York City Unincorporated Business Tax (the “NYC UBT”) and similar taxes of various other municipalities. New York City imposes the NYC UBT at a statutory rate of 4% on net income generated from ordinary business activities carried on in New York City. For the three months ended March 31, 2022 and 2021, none of the Company’s income was subject to the NYC UBT.

    Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statements and tax basis assets and liabilities using enacted tax rates in effect for the year in which differences are expected to reverse. Such deferred tax assets and liabilities were not material.

    The Company did not have any uncertain tax positions that met the recognition or measurement criteria of ASC 740-10-25, Income Taxes, nor did the Company have any unrecognized tax benefits as of the periods presented herein. The Company recognizes interest and penalties, if any, related to unrecognized tax liabilities as income tax expense in its statements of operations. For the three months ended March 31, 2022 and 2021, the Company did not incur any interest or penalties. Although the Company files federal and state tax returns, its primary tax jurisdiction is federal. The Company’s 2018-2020 federal tax years remain subject to examination by the Internal Revenue Service.

Fair Value Measurement

The Company adopted the provisions of ASC 820, Fair Value Measurement (“ASC 820”), which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 established a fair value hierarchy that prioritizes and ranks the level of market price observability used in measuring investments at fair value. Market price observability is impacted by a number of factors, including the type of investment, the characteristics specific to the investment, and the state of the marketplace (including the existence and transparency of transactions between market participants). Investments with readily available, actively quoted prices or for which fair value can be measured from actively quoted prices in an orderly market will generally have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Investments measured and reported at fair value are classified and disclosed into one of the following categories based on the inputs as follows:

        Level 1 — Quoted prices (unadjusted) in active markets for identical assets and liabilities that the Company has the ability to access.

      Level 2 — Pricing inputs are other than quoted prices in active markets, including, but not limited to, quoted prices for similar assets and liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market corroborated inputs.

       Level 3 — Significant unobservable inputs are based on the best information available in the circumstances, to the extent observable inputs are not available, including the Company’s own assumptions used in determining the fair value of investments. Fair value for these investments are determined using valuation methodologies that consider a range of factors, including but not limited to the price at which the investment was acquired, the nature of the investment, local market conditions, trading values on public exchanges for comparable securities, current and projected operating performance, and financing transactions subsequent to the acquisition of the investment. The inputs into the determination of fair value require significant management judgment.

     In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment.

New Accounting Pronouncements

Recent Accounting Pronouncement

London Interbank Offered Rate (“LIBOR”) is a benchmark interest rate referenced in a variety of agreements that are used by all types of entities. In July 2017, the U.K. Financial Conduct Authority, which regulates the LIBOR administrator, ICE Benchmark Administration Limited (“IBA”), announced that it would cease to compel banks to participate in setting LIBOR as a benchmark by the end of 2021, which has subsequently been delay to June 30, 2023. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) — Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). The amendments in ASU 2020-04 provide optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848), which expanded the scope of Topic 848 to include derivative instruments impacted by discounting transition (“ASU 2021-01”). ASU 2020-04 and ASU 2021-01 are effective for all entities through December 31, 2022. The expedients and exceptions provided by the amendments do not apply to contract modifications and hedging relationships entered into or evaluated after December 31, 2022, except for hedging transactions as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. In the event LIBOR is unavailable, Terra Property Trust’s investment documents provide for a substitute index, on a basis generally consistent with market practice, intended to put the Terra Property Trust in substantially the same economic position as LIBOR. As a result, the Company does not expect the reference rate reform and the adoption of ASU 2020-04 and ASU 2021-01 to have a material impact on its financial statements and disclosures

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Investment and Fair Value (Tables) - Terra Property Trust

3 Months Ended

Mar. 31, 2022

Investments

Summary Investment Holdings

The following tables present a summary of the Company’s investment at March 31, 2022 and December 31, 2021:

	March 31, 2022						December 31, 2021
Investment	Cost		Fair Value		% of Members’ Capital		Cost		Fair Value		% of Members’ Capital
87.6% interest in Terra JV, LLC	$	217,482,964	$	216,121,691	99.7	%	$	219,704,515	$	217,324,720	99.7	%

Summary of financial information

The following tables present the summarized financial information of Terra Property Trust:

	March 31, 2022		December 31, 2021
Carrying value of loans held for investment	$	558,019,000	$	469,673,314
Equity investment in unconsolidated investments	91,662,090		69,713,793
Real estate owned, net	62,448,945		65,776,839
Cash, cash equivalent and restricted cash	25,568,820		51,098,647
Other assets	34,897,190		37,279,565
Total assets	772,596,045		693,542,158
Term loan payable, unsecured notes payable, obligations under participation    agreements, repurchase agreement payable, mortgage loan payable, revolving    line of credit and secured borrowing	(448,176,646)		(364,910,392)
Accounts payable, accrued expenses and other liabilities	(45,804,851)		(45,078,478)
Lease intangible liabilities	(9,426,358)		(9,709,710)
Total liabilities	(503,407,855)		(419,698,580)
Stockholder’s equity	$	269,188,190	$	273,843,578

	Three Months Ended March 31,
	2022		2021
Revenues	$	12,112,270	$	10,289,252
Expenses	(14,241,581)		(10,136,375)
Realized gains on marketable securities	51,133		—
Unrealized losses on marketable securities	(99,044)		(14,608)
Equity income from unconsolidated investments	1,419,335		1,337,827
Net (loss) income	$	(757,887)	$	1,476,096

Summary of Company's equity investment at fair value on a recurring basis

The following table summarizes the Company’s equity investment at fair value on a recurring basis as of March 31, 2022 and December 31, 2021:

	March 31, 2022
	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
Investment:
Equity investment in Terra JV	$	—	$	—	$	216,121,691	$	216,121,691

	December 31, 2021
	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
Investment:
Equity investment in Terra JV	$	—	$	—	$	217,324,720	$	217,324,720

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

Changes in Level 3 investment for the three months ended March 31, 2022 and 2021 were as follows:

	Equity Investment in Terra JV
	Three Months Ended March 31,
	2022		2021
Beginning balance	$	217,324,720	$	235,357,977
Return of capital	(2,221,551)		(1,852,767)
Net change in unrealized appreciation on investment	1,018,522		492,466
Ending balance	$	216,121,691	$	233,997,676
Net change in unrealized appreciation on investment for the period relating to those    Level 3 assets that were still held by the Company	$	1,018,522	$	492,466

Fair Value, Assets and Liabilities Measured on Nonrecurring Basis, Valuation Techniques

The following tables summarize the valuation techniques and significant unobservable inputs used by the Company to value the Level 3 investments as of March 31, 2022 and December 31, 2021. The tables are not intended to be all-inclusive, but instead identify the significant unobservable inputs relevant to the determination of fair values.

	Fair Value		Primary Valuation Technique	Unobservable Inputs	March 31, 2022
Asset Category					Minimum		Maximum		Weighted Average
Assets:
Equity investment in Terra JV	$	216,121,691	Discounted cash flow (1)(2)	Discount rate (1)(2)	1.90	%	15.00	%	14.74	%

	Fair Value		Primary Valuation Technique	Unobservable Inputs	December 31, 2021
Asset Category					Minimum		Maximum		Weighted Average
Assets:
Equity investment in Terra JV	$	217,324,720	Discounted cash flow (1)(2)	Discount rate (1)(2)	2.45	%	15.00	%	12.66	%

_______________

(1)Discounted cash flows and discount rates applied to Terra Property Trust’s assets and liabilities.

(2)The fair value of Terra Property Trust’s investment in an office building is determined using the direct capitalization method with cap rate ranges from 5.25% to 6.00% as of March 31, 2022 and December 31, 2021, respectively. Additionally, the fair value of Terra Property Trust’s investment in a 4.9 acre development parcel is based on the estimated selling price.

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Financial Highlights (Tables)

3 Months Ended

Mar. 31, 2022

Investment Company, Financial Highlights [Abstract]

Financial Highlights

The following summarizes the Company’s financial highlights for the three months ended March 31, 2022 and 2021:

	Three Months Ended March 31,
	2022			2021
Per unit operating performance:
Net asset value per unit, beginning of period	$	32,860		$	35,467
Increase in members’ capital from operations (1):
Net investment income	95			152
Net change in unrealized appreciation on investment	153			74
Total increase in members’ capital from operations	248			226
Distributions to members (2):
Capital distributions	(449)			(449)
Net decrease in members’ capital resulting from distributions	(449)			(449)
Net asset value per unit, end of period	$	32,659		$	35,244
Ratios to average net assets:
Expenses	0.23		%	0.21		%
Net investment income	1.13		%	1.72		%
IRR, beginning of period	4.91		%	5.82		%
IRR, end of period	4.86		%	5.73		%

_______________

(1)The per unit data was derived by using the weighted average units outstanding during the applicable periods, which were 6,636.6 and 6,637.8 for the three months ended March 31, 2022 and 2021.

(2)The per unit data for distributions reflects the actual amount of distributions paid per unit during the periods.

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Business (Details)	3 Months Ended	12 Months Ended
	Mar. 31, 2022 USD ($) Number_of_Funds	Dec. 31, 2021	Mar. 02, 2020 USD ($) shares
Subsidiary of Limited Liability Company or Limited Partnership
Operations Commenced Date	Aug. 08, 2013
Formation State	Delaware
Formation Date	Apr. 24, 2013
LLC Exit Date	Dec. 31, 2023
Minimum
Subsidiary of Limited Liability Company or Limited Partnership
Investment Owned, Balance, Principal Amount	$ 10,000,000
Maximum
Subsidiary of Limited Liability Company or Limited Partnership
Investment Owned, Balance, Principal Amount	$ 50,000,000
Terra JV
Subsidiary of Limited Liability Company or Limited Partnership
Equity Method Investment, Ownership Percentage	87.60%	87.60%
Terra Property Trust
Subsidiary of Limited Liability Company or Limited Partnership
Common Stock, Shares, Issued | shares			4,574,470.35
Common Stock, Value, Issued			$ 49,800,000
Cash			$ 25,500,000
Equity Method Investment, Ownership Percentage	87.40%	87.40%
Number Of Investment Funds | Number_of_Funds	5
Equity Method Investment, Ownership Percentage	87.40%
Terra fund Seven | Terra JV
Subsidiary of Limited Liability Company or Limited Partnership
Equity Method Investment, Ownership Percentage	12.40%	12.40%
Terra Fund Five | Terra JV
Subsidiary of Limited Liability Company or Limited Partnership
Equity Method Investment, Ownership Percentage		87.60%
Equity Method Investment, Ownership Percentage	87.60%	87.60%

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Summary of Significant Accounting Policies (Details)	3 Months Ended
	Mar. 31, 2022
Accounting Policies [Abstract]
UBT at statutory rate	4.00%
Open tax year start	2018
Open tax year end	2020

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Investment and Fair Value (Narratives) (Details)	3 Months Ended		12 Months Ended
	Mar. 31, 2022 USD ($) a	Mar. 31, 2021 USD ($)	Dec. 31, 2021 a
Fair Value, Investment
Return of capital on investment	$ 2,221,551	$ 1,852,767
Proceeds from Equity Method Investment, Distribution	$ 3,000,000	$ 3,000,000
Terra JV
Fair Value, Investment
Equity Method Investment, Ownership Percentage	87.60%		87.60%
Terra Property Trust
Fair Value, Investment
Equity Method Investment, Ownership Percentage	87.40%		87.40%
Equity Method Investment, Ownership Percentage	87.40%
Percent Of Common Stock Indirect Owned	76.50%		76.50%
Terra Property Trust | Estimated selling price method
Fair Value, Investment
Area of Land | a	4.9		4.9
Terra fund Seven | Terra JV
Fair Value, Investment
Equity Method Investment, Ownership Percentage	12.40%		12.40%
Terra Fund Five | Terra JV
Fair Value, Investment
Equity Method Investment, Ownership Percentage			87.60%
Equity Method Investment, Ownership Percentage	87.60%		87.60%

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Investment and Fair Value (Summary of the Investments) (Details) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Investments
Amortized Cost	$ 217,482,964	$ 219,704,515
Fair Value	216,121,691	217,324,720
Terra JV
Investments
Amortized Cost	217,482,964	219,704,515
Fair Value	$ 216,121,691	$ 217,324,720
% of Members Capital	99.70%	99.70%
Terra JV | Level 3
Investments
Fair Value	$ 216,121,691	$ 217,324,720

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Investment and Fair Value (Summary of Financial Information of Terra Property Trust) (Details) - USD ($)	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021	Dec. 31, 2020
Fair Value, Investment
Cash, cash equivalents and restricted cash	$ 777,694	$ 836,052	$ 135,654	$ 225,214
Total assets	216,930,971	218,194,602
Total liabilities	(185,249)	(118,025)
Terra Property Trust | Equity Method Investment - Investee
Fair Value, Investment
Carrying value of loans held for investment	558,019,000	469,673,314
Equity investment in unconsolidated investments	91,662,090	69,713,793
Real estate owned, net	62,448,945	65,776,839
Cash, cash equivalents and restricted cash	25,568,820	51,098,647
Other assets	34,897,190	37,279,565
Total assets	772,596,045	693,542,158
Term loan payable, unsecured notes payable, obligations under participation agreements, repurchase agreement payable, mortgage loan payable, revolving line of credit and secured borrowing	(448,176,646)	(364,910,392)
Accounts payable, accrued expenses and other liabilities	(45,804,851)	(45,078,478)
Lease intangible liabilities	(9,426,358)	(9,709,710)
Total liabilities	(503,407,855)	(419,698,580)
Stockholder’s equity	$ 269,188,190	$ 273,843,578

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Investment and Fair Value (Summary of Financial Information 2) (Details) - Terra Property Trust - Equity Method Investment - Investee - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Investments
Revenues	$ 12,112,270	$ 10,289,252
Operating Expenses	(14,241,581)	(10,136,375)
Realized gains on marketable securities	51,133	0
Unrealized losses on marketable securities	(99,044)	(14,608)
Equity income from unconsolidated investments	1,419,335	1,337,827
Net (loss) income	$ (757,887)	$ 1,476,096

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Investment and Fair Value (Equity Investment at Fair Value on a recurring basis) (Details) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value	$ 216,121,691	$ 217,324,720
Terra JV
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value	216,121,691	217,324,720
Level 1 | Terra JV
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value	0	0
Level 2 | Terra JV
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value	0	0
Level 3 | Terra JV
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value	$ 216,121,691	$ 217,324,720

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Investments and Fair Value (Changes in Level 3) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Net change in unrealized appreciation on investment	$ 1,018,522	$ 492,466
Terra JV | Level 3
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	217,324,720	235,357,977
Return of capital	(2,221,551)	(1,852,767)
Net change in unrealized appreciation on investment	1,018,522	492,466
Ending balance	216,121,691	233,997,676
Net change in unrealized appreciation on investment for the period relating to those Level 3 assets that were still held by the Company	$ 1,018,522	$ 492,466

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Investment and Fair Value (Valuation techniques and significant unobservable inputs) (Details)	Mar. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair Value	$ 216,121,691	$ 217,324,720
Terra JV
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair Value	216,121,691	217,324,720
Level 3 | Terra JV
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair Value	$ 216,121,691	$ 217,324,720
Level 3 | Terra JV | Discount Rate | Discounted Cash Flow | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Discount rate	0.0190	0.0245
Level 3 | Terra JV | Discount Rate | Discounted Cash Flow | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Discount rate	0.1500	0.1500
Level 3 | Terra JV | Discount Rate | Discounted Cash Flow | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Discount rate	0.1474	0.1266

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Investment and Fair Value (Valuation techniques and significant unobservable inputs) - subnote (Details)	Mar. 31, 2022 a	Dec. 31, 2021 a
Terra JV | Cap rate | Direct Capitalization Method | Office Building | Minimum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Discount rate	0.0525	0.0525
Terra JV | Cap rate | Direct Capitalization Method | Office Building | Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Discount rate	0.0600	0.0600
Terra Property Trust | Estimated selling price method
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Area of Land	4.9	4.9

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Related Party Transactions - Operating agreement and dividend income (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Investments
LLC Exit Date	Dec. 31, 2023
Proceeds from Equity Method Investment, Distribution	$ 3,000,000	$ 3,000,000
Return of capital on investment	$ 2,221,551	$ 1,852,767

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Members' Capital - Narratives (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021	Dec. 31, 2020
Members Capital
Net asset value per unit	$ 32,659	$ 35,244	$ 32,860	$ 35,467
Capital distributions	$ 2,979,046	$ 2,979,582
Common Unit, Outstanding	6,636.6		6,636.6
Managing
Members Capital
Carried interest distributions to the Manager	0	0
Distribution Percent	15.00%
Capital distributions	$ 0	$ 0
Non-managing Members
Members Capital
Percent Of Cash Repurchase Capital Units	5.00%
Cash repurchase reserve	$ 0	0
Capital distributions	$ 2,979,046	$ 2,979,582
Continuing Income Units Holder
Members Capital
Percent of distribution made to members depends on the historical preferred return applicale to Terra Fund units	8.50%
Distribution Percent	85.00%
Continuing Income Units Holder | Minimum
Members Capital
Percent of distribution made to members depends on the historical preferred return applicale to Terra Fund units	8.50%
Continuing Income Units Holder | Maximum
Members Capital
Percent of distribution made to members depends on the historical preferred return applicale to Terra Fund units	9.00%

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Financial Highlights (Details) - $ / shares	3 Months Ended		89 Months Ended	92 Months Ended	101 Months Ended	104 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2020	Mar. 31, 2021	Dec. 31, 2021	Mar. 31, 2022
Investment Company, Financial Highlights [Roll Forward]
Net asset value per unit	$ 32,860	$ 35,467
Increase in members’ capital from operations (1):
Net investment income	95	152
Net change in unrealized appreciation on investment	153	74
Total increase in members’ capital from operations	248	226
Distributions to members (2):
Capital distributions	(449)	(449)
Net decrease in members’ capital resulting from distributions	(449)	(449)
Net asset value per unit	$ 32,659	$ 35,244	$ 35,467	$ 35,244	$ 32,860	$ 32,659
Ratios to average net assets:
Expenses	0.23%	0.21%
Net investment income	1.13%	1.72%
Internal Rate of Return since Inception			5.82%	5.73%	4.91%	4.86%
Weighted average units outstanding	6,636.6	6,637.8

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Subsequent Events (Details) - USD ($)	May 02, 2022	May 01, 2022	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021	Dec. 31, 2020	Jan. 01, 2016
Subsequent Event
Cash and cash equivalents			$ 777,694	$ 836,052	$ 135,654	$ 225,214
Terra Property Trust
Subsequent Event
Common Stock, Par or Stated Value Per Share							$ 0.01
Subsequent Event | Terra Fund 6
Subsequent Event
Common Stock, Par or Stated Value Per Share		$ 0.001
Subsequent Event | Terra Property Trust
Subsequent Event
Common Stock, Shares Authorized	950,000,000	500,000,000
Preferred Stock, Shares Authorized	50,000,000
Preferred Stock, Par or Stated Value Per Share	$ 0.01
Subsequent Event | Terra Property Trust | Class A common shares
Subsequent Event
Common Stock, Shares Authorized	450,000,000
Common Stock, Par or Stated Value Per Share	$ 0.01
Subsequent Event | Terra Property Trust | Class B Common Share
Subsequent Event
Common Stock, Shares Authorized	450,000,000
Common Stock, Par or Stated Value Per Share	$ 0.01
Conversion of Stock, Shares Converted	0.595
Business Acquisition Share Conversion Rate	$ 14.38