XML 32 R22.htm IDEA: XBRL DOCUMENT v3.23.1
Loans Held For Investment, Net (Tables)
 3 Months Ended
Mar. 31, 2023
Loans Held For Investment, Net [Abstract]  
Schedule of loans held for investment
   As of March 31, 2023 
   Outstanding
Principal (1)		   Original Issue
Discount		   Carrying Value (1)   Weighted
Average
Remaining Life
(Years) (2)		 
Senior Term Loans  $320,191,407   $(3,965,263)  $316,226,144    2.0 
Current expected credit loss reserve   
-
    
-
    (4,051,934)     
Total loans held at carrying value, net  $320,191,407   $(3,965,263)  $312,174,210      

 

   As of December 31, 2022 
   Outstanding
Principal (1)		   Original Issue
Discount		   Carrying
Value (1)		   Weighted
Average
Remaining Life
(Years) (2)		 
Senior Term Loans  $343,029,334   $(3,755,796)  $339,273,538    2.2 
Current expected credit loss reserve   
-
    
-
    (3,940,939)     
Total loans held at carrying value, net  $343,029,334   $(3,755,796)  $335,332,599      

 

(1)The difference between the Carrying Value and the Outstanding Principal amount of the loans consists of unaccreted original issue discount, deferred loan fees and other upfront fees. Outstanding principal balance includes capitalized PIK interest, if applicable.

 

(2)Weighted average remaining life is calculated based on the carrying value of the loans as of March 31, 2023 and December 31, 2022, respectively.

 

(1)The difference between the Carrying Value and the Outstanding Principal amount of the loans consists of unaccreted original issue discount, deferred loan fees and other upfront fees. Outstanding principal balance includes capitalized PIK interest, if applicable.

 

(2)One loan was reclassified as Held for sale from Loans held for investment as the decision was made to sell the loan during the three months ended March 31, 2023 to a syndicate of co-lenders which includes a third party and two affiliates under common control with our Manager.

 
Schedule of changes in loans held at carrying value
   Principal   Original
Issue
Discount		   Current
Expected
Credit Loss
Reserve		   Carrying
Value (1)		 
Balance at December 31, 2022  $343,029,334   $(3,755,796)  $(3,940,939)  $335,332,599 
New fundings   34,060,000    (1,118,340)   
-
    32,941,660 
Principal repayment of loans   (45,754,443)   
-
    
-
    (45,754,443)
Accretion of original issue discount   
-
    908,873    
-
    908,873 
Sale of loans (2)   (13,399,712)   
-
    
-
    (13,399,712)
PIK Interest   2,256,228    
-
    
-
    2,256,228 
Current expected credit loss reserve   
-
    
-
    (110,995)   (110,995)
Balance at March 31, 2023  $320,191,407   $(3,965,263)  $(4,051,934)  $312,174,210 

 

(1)The difference between the Carrying Value and the Outstanding Principal amount of the loans consists of unaccreted original issue discount, deferred loan fees and other upfront fees. Outstanding principal balance includes capitalized PIK interest, if applicable.

 

(2)One loan was reclassified as Held for sale from Loans held for investment as the decision was made to sell the loan during the three months ended March 31, 2023 to a syndicate of co-lenders which includes a third party and two affiliates under common control with our Manager.

 

   Principal   Original
Issue
Discount		   Current
Expected
Credit Loss
Reserve		   Carrying
Value (1)		 
Balance at December 31, 2021  $200,632,056   $(3,647,490)  $(134,542)  $196,850,024 
New fundings   86,725,308    (1,128,415)   
-
    85,596,893 
Principal repayment of loans   (5,619,201)   
-
    
-
    (5,619,201)
Accretion of original issue discount   
-
    894,087    
-
    894,087 
PIK Interest   970,569    
-
    
-
    970,569 
Provision for credit losses   
-
    
-
    (48,296)   (48,296)
Balance at March 31, 2022  $282,708,732   $(3,881,818)  $(182,838)  $278,644,076 

 
Schedule of loans held at carrying value based on information
Loan  Location  Outstanding Principal(1)   Original Issue Premium/(Discount)   Carrying Value(1)   Contractual Interest Rate(4)  Maturity Date(2)  Payment Terms(3)  Initial
Funding
Date(1)
1  Various(7)  $30,000,000   $(804,164)  $29,195,836   P + 6.50%(5)  10/30/2026  I/O  10/27/2022
2  Michigan   37,596,132    (141,850)   37,454,282   P + 6.65%(5)(6) Cash, 4.25% PIK  12/31/2024  P&I  3/5/2021
3  Various(7)   20,942,803    (543,917)   20,398,886   13.91% Cash(5), 2.59% PIK(9)  11/29/2024  P&I  3/25/2021
4  Arizona   12,075,490    
-
    12,075,490   18.72%(5)(8)  12/31/2023  P&I  4/19/2021
5  Massachusetts   2,666,000    
-
    2,666,000   P + 12.25%(5)  4/30/2025  P&I  4/19/2021
6  Michigan   4,275,000    (3,567)   4,271,433   P + 9.00%(5) Cash, 12% PIK  2/20/2024  P&I  8/20/2021
7  Various(7)   25,623,762    (220,990)   25,402,772   P + 6.00%(5) Cash, 2.5% PIK  6/30/2025  P&I  8/24/2021
8  West Virginia   10,535,399    (90,064)   10,445,335   19.25% PIK  9/1/2024  P&I  9/1/2021
9  Pennsylvania   16,013,359    
-
    16,013,359   P + 10.75%(5) Cash, 6.0% PIK  6/30/2024  P&I  9/3/2021
10  Michigan   235,205    
-
    235,205   11.00%  9/30/2024  P&I  9/20/2021
11  Maryland   32,809,285    (536,959)   32,272,326   P + 8.75%(5) Cash, 2% PIK  9/30/2024  I/O  9/30/2021
12  Various(7)   13,038,000    (107,499)   12,930,501   P + 9.25%(5) Cash  10/31/2024  P&I  11/8/2021
13  Michigan   13,166,720    (108,112)   13,058,608   P + 6.00%(5) Cash, 1.5% PIK  11/1/2024  I/O  11/22/2021
14  Various(7)   5,194,514    
-
    5,194,514   P + 12.25%(5) Cash, 2.5% PIK  12/27/2026  P&I  12/27/2021
15  Michigan   3,835,398    (33,658)   3,801,740   P + 7.50%(5) Cash, 5% PIK  12/29/2023  I/O  12/29/2021
16  Various(7)   7,050,000    (43,824)   7,006,176   P + 9.25%(5)   12/31/2024  I/O  12/30/2021
17  Florida   15,000,000    (231,336)   14,768,664   P + 4.75%(5)   1/31/2025  P&I  1/18/2022
18  Ohio   12,677,075    (151,869)   12,525,206   P + 6.00%(5) Cash, 5% PIK  2/28/2025  P&I  2/3/2022
19  Florida   20,637,961    (70,061)   20,567,900   11.00% Cash, 3% PIK  8/29/2025  P&I  3/11/2022
20  Missouri   17,425,500    (120,385)   17,305,115   11.00% Cash, 2% PIK  5/30/2025  P&I  5/9/2022
21  Illinois   5,114,907    (73,499)   5,041,408   P + 8.50%(5) Cash, 3% PIK  6/30/2026  P&I  7/1/2022
22  Maryland   11,278,897    (633,736)   10,645,161   P + 5.75%(5) Cash, 1.4% PIK  1/24/2026  P&I  1/24/2023
23  Arizona   2,000,000    (49,773)   1,950,227   P + 7.50%(5)  3/31/2026  P&I  3/27/2023
24  Oregon   1,000,000    -    1,000,000   P + 10.50%(5)  9/27/2026  P&I  3/31/2023
                               
Current expected credit loss reserve   
-
    
-
    (4,051,934)            
Total loans held at carrying value  $320,191,407   $(3,965,263)  $312,174,210             

 

(1) The difference between the Carrying Value and the Outstanding Principal amount of the loans consists of unaccreted original issue discounts, deferred loan fees and other upfront fees. Outstanding principal balance includes capitalized PIK interest, if applicable.
(2) Certain loans are subject to contractual extension options and may be subject to performance based on other conditions as stipulated in the loan agreement. Actual maturities may differ from contractual maturities stated herein as certain borrowers may have the right to prepay with or without a contractual prepayment penalty. The Company may also extend contractual maturities and amend other terms of the loans in connection with loan modifications.

 

(3) P&I = principal and interest. I/O = interest only. P&I loans may include interest only periods for a portion of the loan term.
(4) P = Prime Rate and depicts floating rate loans that pay interest at the Prime Rate plus a specific percentage; “PIK” = paid-in-kind interest; subtotal represents weighted average interest rate.
(5) This Loan is subject to Prime Rate floor.
(6) This Loan is subject to an interest rate cap
(7) Loans with material collateral in multiple jurisdictions, namely multi-state operators, are disclosed as “various.”
(8) The aggregate loan commitment to Loan #4 includes a $10.9 million initial advance, which has a base interest rate of 15.00%, and a second advance of $2.0 million, which has an interest rate of 39%. The statistics presented reflect the weighted average of the terms under both advances for the total aggregate loan commitment.
(9) The aggregate loan commitment to Loan #3 includes a $15.9 million initial advance, which has a base interest rate of 13.625%, 2.75% PIK and a second advance of $4.2 million, which has an interest rate of 15.00%, 2.00% PIK. The statistics presented reflect the weighted average of the terms under both advances for the total aggregate loan commitment.

 
Schedule of significant unobservable inputs
   As of March 31, 2023 
          Unobservable Input 
   Fair
Value		   Primary
Valuation
Techniques		  Input  Estimated
Range		   Weighted
Average		 
Senior term loans  $307,260,513   Yield analysis  Market yield  11.36% - 24.79%    17.53%
Total Investments  $307,260,513                

 
Schedule of risk rating
Rating   Definition
1   Very low risk
2   Low risk
3   Moderate/average risk
4   High risk/potential for loss: a loan that has a risk of realizing a principal loss
5   Impaired/loss likely: a loan that has a high risk of realizing principal loss, has incurred principal loss or an impairment has been recorded

 
Schedule of carrying value of loans held for investment
   As of March 31, 2023   As of December 31, 2022 
Risk Rating  2023   2022   2021   2020   2019   Total   2022   2021   2020   2019   Total 
1  $-   $-   $235,205   $          -   $          -   $235,205   $-   $274,406   $-   $          -   $274,406 
2   13,595,388    124,333,205    71,790,767    
-
    
-
    209,719,360    94,467,449    88,444,868    29,140,546    
-
    212,052,863 
3   
-
    12,525,206    65,657,524    
-
    
-
    78,182,730    30,415,113    83,131,444    
-
    
-
    113,546,557 
4   
-
    
-
    28,088,849    
-
    
-
    28,088,849    
-
    13,399,712    
-
    
-
    13,399,712 
5   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
 
Total  $13,595,388   $136,858,411   $165,772,345   $
-
   $
-
   $316,226,144   $124,882,562   $185,250,430   $29,140,546   $
-
   $339,273,538 

 

(1)Amounts are presented by loan origination year with subsequent advances shown in the original year of origination.

 
Schedule of real estate collateral coverage
As of March 31, 2023 Real Estate Collateral Coverage (1)
   < 1.0x   1.0x - 1.25x   1.25x - 1.5x   1.50x - 1.75x   1.75x - 2.0x   > 2.0x   Total 
Fixed-rate  $
-
   $
-
   $20,567,900   $17,305,115   $
-
   $235,205   $38,108,220 
Floating-rate   66,411,639    48,285,685    23,375,836    37,454,282    12,075,490    90,514,992    278,117,924 
   $66,411,639   $48,285,685   $43,943,736   $54,759,397   $12,075,490   $90,750,197   $316,226,144 

 

As of December 31, 2022 Real Estate Collateral Coverage(1)
   < 1.0x   1.0x - 1.25x   1.25x - 1.5x   1.50x - 1.75x   1.75x - 2.0x   > 2.0x   Total 
Fixed-rate  $
-
   $
-
   $20,406,737   $17,203,138   $
-
   $20,089,663   $57,699,538 
Floating-rate   63,963,105    78,211,454    13,399,712    9,980,730    12,849,490    103,169,509    281,574,000 
   $63,963,105   $78,211,454   $33,806,449   $27,183,868   $12,849,490   $123,259,172   $339,273,538 

 

(1)Real estate collateral coverage is calculated based upon most recent third-party appraised values.

 
Schedule of activity related to the CECL Reserve for outstanding balances
   Outstanding(1)   Unfunded(2)   Total 
Balance at December 31, 2022  $3,940,939   $94,415   $4,035,354 
Provision for current expected credit losses   110,995    (14,876)   96,119 
Balance at March 31, 2023  $4,051,934   $79,539   $4,131,473 

 

   Outstanding(1)   Unfunded(2)   Total 
Balance at December 31, 2021  $134,542   $13,407   $147,949 
Provision for current expected credit losses   48,296    3,047    51,343 
Balance at March 31, 2022  $182,838   $16,454   $199,292 

 

(1)As of March 31, 2023, the CECL Reserve related to outstanding balances on loans at carrying value is recorded within current expected credit loss reserve in the Company’s consolidated balance sheets.

 

(2)As of March 31, 2023, the CECL Reserve related to unfunded commitments on loans at carrying value is recorded within accounts payable and other accrued liabilities in the Company’s consolidated balance sheets.