Loans Held For Investment, Net (Tables)

6 Months Ended

Jun. 30, 2023

Loans Held For Investment, Net [Abstract]

Schedule of loans held for investment

	As of June 30, 2023
	Outstanding Principal (1)		Original Issue Discount			Carrying Value (1)			Weighted Average Remaining Life (Years) (2)
Senior Term Loans	$	317,977,743	$	(3,440,843	)	$	314,536,900			1.8
Current expected credit loss reserve		-		-			(5,121,577	)
Total loans held at carrying value, net	$	317,977,743	$	(3,440,843	)	$	309,415,323

	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 June 30, 2023 and December 31, 2022, respectively.

Schedule of changes in loans held at carrying value

	Principal (1)			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		35,910,000			(1,118,340	)		-			34,791,660
Principal repayment of loans		(51,907,313	)		-			-			(51,907,313	)
Accretion of original issue discount		-			1,433,293			-			1,433,293
Sale of loan (2)		(13,399,712	)		-			-			(13,399,712	)
PIK Interest		4,345,434			-			-			4,345,434
Current expected credit loss reserve		-			-			(1,180,638	)		(1,180,638	)
Balance at June 30, 2023	$	317,977,743		$	(3,440,843	)	$	(5,121,577	)	$	309,415,323

(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 six months ended June 30, 2023 to a syndicate of co-lenders which includes a third party and two affiliates under common control with our Manager. The sale was executed on March 31, 2023 (Note 7).

	Principal (1)			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		137,944,312			(1,835,592	)		-			136,108,720
Principal repayment of loans		(6,654,703	)		-			-			(6,654,703	)
Accretion of original issue discount		-			1,362,776			-			1,362,776
PIK Interest		2,400,627			-			-			2,400,627
Provision for credit losses		-			-			(1,068,882	)		(1,068,882	)
Balance at June 30, 2022	$	334,322,292		$	(4,120,306	)	$	(1,203,424	)	$	328,998,562

Schedule of loans held at carrying value based on information

		Initial								Original						Percent of Our
Loan	Location(s)	Funding Date (1)		Maturity Date (2)		Total Commitment (3)		Principal Balance		Issue Discount			Carrying Value			Loan Portfolio			Future Fundings		Interest Rate (4)	Periodic Payment (5)	YTM IRR (6)
1	Various		10/27/2022		10/30/2026	$	30,000,000	$	30,000,000	$	(748,770	)	$	29,251,230			9.3	%		-	P+6.50% Cash, 0% PIK (10)	I/O		17.0	%
2	Michigan		3/5/2021		12/31/2024		35,891,667		38,001,475		(121,831	)		37,879,644			12.0	%		-	P+6.65% Cash, 4.25% PIK (7)(15)	P&I		18.0	%
3(17)	Various		3/25/2021		11/29/2024		20,105,628		20,392,227		(438,589	)		19,953,638			6.3	%		-	P+10.375% Cash, 2.75% PIK (7)	P&I		23.2	%
4(16)	Arizona		4/19/2021		12/31/2023		14,120,000		13,970,276		-			13,970,276			4.4	%		-	P+11.75% Cash (9)	I/O		17.5	%
5	Massachusetts		4/19/2021		4/30/2025		3,500,000		3,296,000		-			3,296,000			1.0	%		204,000	P+12.25% Cash (7)	P&I		22.4	%
6	Michigan		8/20/2021		2/20/2024		6,000,000		4,264,421		(2,464	)		4,261,957			1.4	%		1,500,000	P+9.00% Cash (7)	P&I		20.7	%
7	Illinois, Arizona		8/24/2021		6/30/2025		25,000,000		20,807,799		(171,792	)		20,636,007			6.6	%		-	P+6.00% Cash, 2% PIK (11)	P&I		18.5	%
8	West Virginia		9/1/2021		9/1/2024		9,500,000		11,030,188		(74,371	)		10,955,817			3.5	%		-	P+9.25% Cash, 2% PIK (7)	P&I		26.0	%
9(19)	Pennsylvania		9/3/2021		6/30/2024		15,000,000		16,155,903		-			16,155,903			5.1	%		-	P+10.75% Cash, 3% PIK (7)	P&I		19.2	%
10	Michigan		9/20/2021		9/30/2024		470,411		196,005		-			196,005			0.1	%		-	11% Cash	P&I		21.4	%
11	Maryland		9/30/2021		9/30/2024		32,000,000		32,975,433		(447,955	)		32,527,478			10.3	%		-	P+8.75% Cash, 2% PIK (7)	I/O		21.8	%
12	Various		11/8/2021		10/31/2024		13,574,667		12,628,000		(90,634	)		12,537,366			4.0	%		-	P+9.25% Cash (12)	P&I		19.5	%
13	Michigan		11/22/2021		11/1/2024		13,100,000		13,111,841		(91,308	)		13,020,533			4.1	%		-	P+6.00% Cash, 1.5% PIK (11)	I/O		18.7	%
14	Various		12/27/2021		12/27/2026		5,000,000		5,125,000		-			5,125,000			1.6	%		-	P+12.25% Cash, 2.5% PIK (8)	P&I		23.5	%
15	Michigan		12/29/2021		12/29/2023		6,000,000		3,884,077		(22,438	)		3,861,639			1.2	%		2,400,000	P+17.5% Cash, 5% PIK (9)	I/O		27.0	%
16	Florida		12/30/2021		12/31/2024		13,000,000		6,825,000		(37,603	)		6,787,397			2.2	%		5,500,000	P+9.25% Cash (7)	I/O		22.7	%
17	Florida		1/18/2022		1/31/2025		15,000,000		15,000,000		(200,009	)		14,799,991			4.7	%		-	P+4.75% Cash (10)	P&I		14.2	%
18	Ohio		2/3/2022		2/28/2025		11,662,050		12,837,973		(132,125	)		12,705,848			4.0	%		-	P+1.75% Cash, 3% PIK (11)	P&I		19.8	%
19	Florida		3/11/2022		8/29/2025		20,000,000		20,794,861		(62,431	)		20,732,430			6.6	%		-	11% Cash, 3% PIK	P&I		15.5	%
20	Missouri		5/9/2022		5/30/2025		17,000,000		17,513,744		(106,535	)		17,407,209			5.5	%		-	11% Cash, 3% PIK	P&I		14.7	%
21	Illinois		7/1/2022		6/30/2026		9,000,000		5,153,793		(67,999	)		5,085,794			1.6	%		4,000,000	P+8.50% Cash, 3% PIK	P&I		26.6	%
22	Maryland		1/24/2023		1/24/2026		11,250,000		11,093,727		(578,307	)		10,515,420			3.3	%		-	P+5.75% Cash, 1.4% PIK (10)	P&I		20.1	%
23	Arizona		3/27/2023		3/31/2026		2,000,000		1,980,000		(45,682	)		1,934,318			0.6	%		-	P+7.50% Cash, 0% PIK (13)	P&I		18.6	%
24	Oregon		3/31/2023		9/27/2026		1,000,000		940,000		-			940,000			0.3	%		-	P+10.50% Cash, 0% PIK (9)	P&I		21.5	%
25(18)	New York		-		-		-		-		-			-			0.0	%		-	15% Cash	P&I		16.3	%
Current expected credit loss reserve							-		-		-			(5,121,577	)
Total loans held at carrying value							329,174,423		317,977,743		(3,440,843	)		309,415,323			100.0	%		13,604,000		Wtd Average		19.2	%

(1) All loans originated prior to April 1, 2021 were purchased from affiliated entities at fair value plus accrued interest on or subsequent to April 1, 2021.

(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)	Total Commitment excludes future amounts to be advanced at sole discretion of the lender and reflects receipt of scheduled amortization payments as of June 30, 2023.
(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)	P&I = principal and interest. I/O = interest only. P&I loans may include interest only periods for a portion of the loan term.
(6)	Estimated YTM includes a variety of fees and features that affect the total yield, which may include, but is not limited to, OID, exit fees, prepayment fees, unused fees and contingent features. OID is recognized as a discount to the funded loan principal and is accreted to income over the term of the loan. The estimated YTM calculations require management to make estimates and assumptions, including, but not limited to, the timing and amounts of loan draws on delayed draw loans, the timing and collectability of exit fees, the probability and timing of prepayments and the probability of contingent features occurring. For example, certain credit agreements contain provisions pursuant to which certain PIK interest rates and fees earned by us under such credit agreements will decrease upon the satisfaction of certain specified criteria which we believe may improve the risk profile of the applicable borrower. To be conservative, we have not assumed any prepayment penalties or early payoffs in our estimated YTM calculation. Estimated YTM is based on current management estimates and assumptions, which may change. Actual results could differ from those estimates and assumptions.
(7)	This Loan is subject to a prime rate floor of 3.25%
(8)	This Loan is subject to a prime rate floor of 4.75%
(9)	This Loan is subject to a prime rate floor of 5.50%
(10)	This Loan is subject to a prime rate floor of 6.25%
(11)	This Loan is subject to a prime rate floor of 7.00%
(12)	This Loan is subject to a prime rate floor of 7.50%
(13)	This Loan is subject to a prime rate floor of 8.00%
(14)	This Loan is subject to a prime rate floor of 8.25%
(15)	This Loan is subject to a prime rate cap of 5.85%
(16)	The aggregate loan commitment to the borrower of Loan #4 includes a $10.9 million initial commitment advanced in April 2021, and a second loan commitment of $2.0 million which was advanced in December 2021.The weighted average yield presented reflects the weighted average of the terms under both advances for the total aggregate loan commitment.
(17)	The aggregate loan commitment to Loan #3 includes a $15.9 million initial commitment which has a base interest rate of 13.625%, 2.75% PIK and a second commitment 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 all advances for the total aggregate loan commitment.
(18)	The Company has an aggregate commitment of $50.0 million to the borrower of Loan #25. The funding of such commitment is subject to certain conditions precedent being met for which the Company, as lender, may exercise its sole discretion in determining if and when such proceeds are advanced. Accordingly, this commitment is not included in total contractual commitments as of June 30, 2023. During the period from July 1, 2023 through August 9, 2023, the Company advanced $18.7 million of the Loan #25 commitment (Note 13).
(19)	As of May 1, 2023, Loan #9 has been placed on non-accrual status.

Schedule of significant unobservable inputs

	As of June 30, 2023
			Primary	Unobservable Input
	Fair Value		Valuation Techniques	Input	Estimated Range		Weighted Average
Senior term loans	$	309,852,814	Yield analysis	Market yield		11.36% - 24.79%		16.31	%
Total Investments	$	309,852,814

Schedule of presents aging analyses of past due loans by amortized cost

	As of June 30, 2023
	Current Loans		31–60 Days Past Due		61–90  Days Past Due		90+ Days Past Due (and accruing)		Non- Accrual(2)		Total Past Due		Total Loans
Loans held for investment	$	298,380,997	$	16,155,903	$	-	$	-	$	-	$	16,155,903	$	314,536,900
Total	$	298,380,997	$	16,155,903	$	-	$	-	$	-	$	16,155,903	$	314,536,900

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 June 30, 2023(1)(2)												As of December 31, 2022(1)
Risk Rating		2023		2022		2021		2020		2019		Total		2022		2021		2020		2019		Total
	1	$	10,515,420	$	30,113,057	$	196,005	$	-	$	-	$	40,824,482	$	-	$	274,406	$	-	$	-	$	274,406
	2		2,874,319		102,663,294		66,147,544		-		-		171,385,157		94,467,449		88,444,868		29,140,546		-		212,052,863
	3		-		5,085,794		55,859,471		-		-		60,945,265		30,415,113		83,131,444		-		-		113,546,557
	4		-		-		41,081,996		-		-		41,081,996		-		13,399,712		-		-		13,399,712
	5		-		-		-		-		-		-		-		-		-		-		-
	Total	$	13,389,739	$	137,862,145	$	163,285,016	$	-	$	-	$	314,536,900	$	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.
(2)	Loan #9 placed on non-accrual status is included in risk rating category “4”.

Schedule of real estate collateral coverage

As of June 30, 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	$	-	$	-	$	20,732,430	$	17,407,209	$	-	$	196,005	$	38,335,644
Floating-rate		82,072,899		36,109,541		61,372,826		13,970,277		22,570,325		60,105,388		276,201,256
	$	82,072,899	$	36,109,541	$	82,105,256	$	31,377,486	$	22,570,325	$	60,301,393	$	314,536,900

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. The Company generally obtains new appraisal of all material real estate collateral at least once annually.

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		1,180,638		54,593		1,235,231
Balance at June 30, 2023	$	5,121,577	$	149,008	$	5,270,585

	Outstanding(1)		Unfunded(2)		Total
Balance at December 31, 2021	$	134,542	$	13,407	$	147,949
Provision for current expected credit losses		1,068,882		28,126		1,097,008
Balance at June 30, 2022	$	1,203,424	$	41,533	$	1,244,957

(1)	As of June 30, 2023 and December 31, 2022, 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 June 30, 2023 and December 31, 2022, 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.