Fair Value Measurements

6 Months Ended

Jun. 30, 2025

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

13. FAIR VALUE MEASUREMENTS

GAAP requires disclosure of fair value information about financial and non-financial assets and liabilities, whether or not recognized in the financial statements, for which it is practical to estimate the value. In cases where quoted market prices are not available, fair values are based upon the application of discount rates to estimated future cash flows using market yields, or other valuation methodologies. Any changes to the valuation methodology will be reviewed by the Company’s management to ensure the changes are appropriate. The methods used may produce a fair value calculation that is not indicative of net realizable value or reflective of future fair values. Furthermore, while the Company anticipates that the valuation methods are appropriate and consistent with other market participants, the use of different methodologies, or assumptions, to determine the fair value of certain financial and non-financial assets and liabilities could result in a different estimate of fair value at the reporting date. The Company uses inputs that are current as of the measurement date, which may fall within periods of market dislocation, during which price transparency may be reduced.

Recurring Fair Value Measurements

The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2025 and December 31, 2024:

	As of June 30, 2025
	Level 1		Level 2		Level 3		Total
Financial assets:
Loans, at fair value - related party	$	-	$	5,500,000	$	-	$	5,500,000
	As of December 31, 2024
	Level 1		Level 2		Level 3		Total
Financial assets:
Loans, at fair value - related party	$	-	$	-	$	5,335,000	$	5,335,000

The following table presents the changes in loans classified in Level 3 of the fair value hierarchy during the six months ended June 30, 2025 :

	For the six months ended June 30, 2025
	Loans, at fair value - related party
Balance at December 31, 2024	$	5,500,000
Purchases		—
Transfers out of Level 3		(5,500,000	)
Transfers into Level 3		-
Balance at June 30, 2025	$	-

During the six months ended June 30, 2025, Loan #39 was transferred from Level 3 to Level 2 due to the availability of observable market data. The fair value was based on the price at which the loan was repaid during the period subsequent to June 30, 2025 (Note 16).

Financial Assets and Liabilities Not Measured at Fair Value

As of June 30, 2025 and December 31, 2024, the carrying values and fair values of the Company’s financial assets and liabilities recorded at amortized cost are as follows:

			As of June 30,				As of December 31,
			2025				2024
	Level		Carrying  Value		Fair Value		Carrying Value		Fair Value
Financial assets:
Loans held for investment		3	$	413,975,484	$	413,473,042	$	402,477,046	$	399,771,293
Cash and cash equivalents		1		35,562,084		35,562,084		26,400,448		26,400,448
Interest receivable		2		3,295,906		3,295,906		1,453,823		1,453,823
Other receivables and assets, net		2		422,999		422,999		459,187		459,187
Related party receivables		2		879,200		879,200		3,370,339		3,370,339
Financial liabilities:
Revolving loan		2		71,200,000		70,996,618		55,000,000		54,694,925
Notes payable, net		2		49,215,015		49,383,526		49,096,250		49,306,996
Accounts payable and other liabilities		2		1,355,598		1,355,598		2,285,035		2,285,035
Interest reserve		2		243,435		243,435		1,297,878		1,297,878
Management and incentive fees payable		2		1,932,957		1,932,957		2,863,158		2,863,158
Related party payables		2		1,872,082		1,872,082		2,043,403		2,043,403
Investments payable		2		9,461,774		9,461,774		-		-
Dividend payable		2		9,905,074		9,905,074		13,605,153		13,605,153

Our loans are held for investment and are substantially secured by real estate, equipment, licenses and other assets of the borrowers to the extent permitted by the applicable laws and the regulations governing such borrowers. The aggregate fair value of the Company’s portfolio of loans held for investment was $413,473,042 and $399,771,293, with gross unrecognized holding losses of $0.5 million and $2.7 million as of June 30, 2025 and December 31, 2024, respectively. The fair values, which are classified as Level 3 in the fair value hierarchy, are estimated using discounted cash flow models based on current market inputs for similar types of arrangements. The primary sensitivity in these models is based on the selection of appropriate discount rates. Fluctuations in these assumptions could result in different estimates of fair value.