COMMERCIAL LOANS

6 Months Ended

Jun. 30, 2024

Receivables [Abstract]

COMMERCIAL LOANS

4. COMMERCIAL LOANS

Loans Receivable

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

At June 30, 2024, the Company was committed to $9,057,307 in construction loans that can be drawn by the borrowers when certain conditions are met.

At June 30, 2024, no entity had loans outstanding representing more than 10% of the total balance of the loans outstanding.

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

Credit Risk

Credit risk profile based on loan activity as of June 30, 2024 and December 31, 2023:

Performing loans	Developers- Residential		Developers- Commercial		Developers- Mixed Use		Total outstanding loans
June 30, 2024	$	57,210,156	$	8,204,577	$	1,445,000	$	66,859,733
December 31, 2023 (audited)	$	64,729,403	$	7,300,000	$	1,019,000	$	73,048,403

At June 30, 2024, the Company’s loans receivable consisted of loans in the amount of $26,213, $760,433, $1,760,250, $120,000, $5,265,000 and $16,615,666, originally due or committed to lend to borrowers in 2016, 2019, 2020, 2021, 2022 and 2023, respectively. The loans receivable also includes loans in the amount of $11,446,000 originally due in the first six months of 2024.

Generally, borrowers are paying their interest, and the Company receives a fee in connection with the extension of the loans. In all instances, the borrower has either signed an extension agreement or is in the process of signing the extension. Accordingly, at June 30, 2024, no loan impairments exist and there are no provisions for impairments of loans or recoveries thereof.

During February 2023, the Company sold one of its loans receivable at its face value of $485,000. Mr. Assaf Ran, the Company’s President and Chief Executive Officer, participated in such acquisition in the amount of $152,000. In addition, in June 2023, the Company filed a foreclosure lawsuit relating to one property, as a result of a deed transfer from a borrower to a buyer without the Company’s consent. In that instance, the buyer of the property on which the Company had a valid mortgage suffered a data breach which resulted in the failure of the buyer to remit the funds needed for the loan payoff. In October 2023, the Company received the entire payoff amount for the loan receivable, including all unpaid fees, to rectify the situation.

Subsequent to the balance sheet date, $600,000 of the loans receivable at June 30, 2024 were paid off.