LOANS HELD FOR INVESTMENT AT CARRYING VALUE

3 Months Ended

Mar. 31, 2022

LOANS HELD FOR INVESTMENT AT CARRYING VALUE [Abstract]

LOANS HELD FOR INVESTMENT AT CARRYING VALUE

4.	LOANS HELD FOR INVESTMENT AT CARRYING VALUE

As of March 31, 2022 and December 31, 2021, the Company’s portfolio included ten and twelve loans, respectively, held at carrying value. The aggregate originated commitment under these loans was approximately $319.9 million and $324.3 million, respectively, and outstanding principal was approximately $275.8 million and $270.8 million, respectively, as of March 31, 2022 and December 31, 2021. For the three months ended March 31, 2022, the Company funded approximately $34.2 million of additional principal. As of March 31, 2022 and December 31, 2021, approximately 42% and 48%, respectively, of the Company’s loans held at carrying value have floating interest rates. These floating rates are subject to LIBOR floors, with a weighted average floor of 1.0%, calculated based on loans with LIBOR floors. References to LIBOR or “L” are to 30-day LIBOR (unless otherwise specifically stated).

The following tables summarize the Company’s loans held at carrying value as of March 31, 2022 and December 31, 2021:

	As of March 31, 2022
	Outstanding Principal ⁽¹⁾		Original Issue Discount			Carrying Value ⁽¹⁾		Weighted Average Remaining Life (Years)⁽²⁾

Senior term loans	$	275,839,406	$	(10,687,924	)	$	265,151,482		2.9
Total loans held at carrying value	$	275,839,406	$	(10,687,924	)	$	265,151,482		2.9

	As of December 31, 2021
	Outstanding Principal ⁽¹⁾		Original Issue Discount			Carrying Value ⁽¹⁾		Weighted Average Remaining Life (Years)⁽²⁾

Senior term loans	$	270,841,715	$	(13,678,219	)	$	257,163,496		3.4
Total loans held at carrying value	$	270,841,715	$	(13,678,219	)	$	257,163,496		3.4

(1)	The difference between the Carrying Value and the Outstanding Principal amount of the loans consists of unaccreted OID and loan origination costs.

(2)	Weighted average remaining life is calculated based on the carrying value of the loans as of March 31, 2022 and December 31, 2021.

The following table presents changes in loans held at carrying value as of and for the three months ended March 31, 2022:

	Principal			Original Issue Discount			Carrying Value

Total loans held at carrying value at December 31, 2021	$	270,841,715		$	(13,678,219	)	$	257,163,496
New fundings		34,245,888			(638,400	)		33,607,488
Accretion of original issue discount		-			3,628,695			3,628,695
Loan repayments		(20,010,726	)		-			(20,010,726	)
Sale of loans		(10,000,000	)		-			(10,000,000	)
PIK interest		915,688			-			915,688
Loan amortization payments		(153,159	)		-			(153,159	)
Total loans held at carrying value at March 31, 2022	$	275,839,406		$	(10,687,924	)	$	265,151,482

As of March 31, 2022, the Company had a receivable related to the sale of the Subsidiary of Public Company D that was sold during the three months ended March 31, 2022 in the amount of $10.6 million, which is recorded within receivable for loans and securities sold in the Company’s consolidated balance sheets.

A more detailed listing of the Company’s loans held at carrying value portfolio based on information available as of March 31, 2022 is as follows:

	Collateral Location	Collateral Type ⁽¹⁾		Outstanding Principal ⁽²⁾		Original Issue Discount			Carrying Value ⁽²⁾		Interest Rate				Maturity Date ⁽³⁾		Payment Terms ⁽⁴⁾

Private Co. C	PA		C, D	$	24,910,301	$	(706,591	)	$	24,203,710		17.0	%	⁽⁵⁾		12/1/2025		P/I
Private Co. D	OH, AR		D		12,138,516		(772,544	)		11,365,972		15.0	%	⁽⁶⁾		1/1/2026		P/I
Private Co. F	MO		C, D		12,811,265		(1,618,606	)		11,192,659		17.0	%	⁽⁷⁾		5/1/2026		P/I
Sub. of Private Co. G	NJ		C, D		50,398,475		(2,225,885	)		48,172,590		14.3	%	⁽⁸⁾		5/1/2026		P/I
Public Co. F	IL, FL, NV, OH, MA, MI, MD,AR, NV, AZ		C, D		86,600,000		(1,514,933	)		85,085,067		8.6	%	⁽⁹⁾		5/30/2023		I/O
Sub. of Private Co. H	IL		C		5,781,250		(86,751	)		5,694,499		15.0	%	⁽¹⁰⁾		5/11/2023		I/O
Private Co. K	MA		C, D		7,000,000		(684,667	)		6,315,333		13.0	%	⁽¹¹⁾		8/3/2026		P/I
Private Co. I	MD		C, D		10,490,498		(201,481	)		10,289,017		15.5	%	⁽¹²⁾		8/1/2026		P/I
Private Co. J	MO		C		23,209,101		(672,384	)		22,536,717		15.0	%	⁽¹³⁾		9/1/2025		P/I
Sub. of Public Co. H	IA, IL, MI, NJ, PA		C, D		42,500,000		(2,204,082	)		40,295,918		9.8	%	⁽¹⁴⁾		1/1/2026		I/O
Total loans held at carrying value				$	275,839,406	$	(10,687,924	)	$	265,151,482

(1)	C = Cultivation Facilities, D = Dispensaries.

(2)	The difference between the Carrying Value and the Outstanding Principal amount of the loans consists of unaccreted OID and loan origination costs.

(3)

Certain loans are subject to contractual extension options and may be subject to performance based or 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 paying a prepayment penalty. The Company may also extend contractual maturities and amend other terms of the loans in connection with loan modifications.

(4)	I/O = interest-only, P/I = principal and interest. P/I loans may include interest-only periods for a portion of the loan term.

(5)	Base interest rate of 12.0% plus LIBOR (LIBOR floor of 1.0%) and PIK interest rate of 4.0%.

(6)	Base interest rate of 13.0% and PIK interest rate of 2.0%.

(7)	Base interest rate of 13.0% and PIK interest rate of 4.0%.

(8)	Base interest rate of 11.5% plus LIBOR (LIBOR floor of 1.0%) and PIK interest rate of 1.8%.

(9)	Base interest rate of 8.6%.

(10)	Base interest rate of 15.0%.

(11)	Base interest rate of 12.0% plus LIBOR (LIBOR floor of 1.0%).

(12)	Base interest rate of 12.0% plus LIBOR (LIBOR floor of 1.0%) and PIK interest rate of 2.5%.

(13)	Base interest rate of 12.0% plus LIBOR (LIBOR floor of 1.0%) and PIK interest rate of 2.0%.

(14)	Base interest rate of 9.8%.