Equity Method Investments

3 Months Ended

Mar. 31, 2023

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments

Note 6 – Equity Method Investments

In March 2020, HGC Origination I LLC and HGC Funding I LLC were formed as joint ventures with a partner for purposes of conducting business relating to the sourcing, origination and funding of loans to debt purchasing clients. In April 2022, KNFH LLC, of which the Company holds a 25% share, was formed to purchase certain real estate assets and machinery and equipment among partners in a joint venture. In December 2022, DHC8 LLC, of which the Company holds a 13.33% share, was formed to provide funding and receive principal and interest payments as a result of the initial investment. KNFH LLC and DHC8 LLC are joint ventures formed in connection with the Company’s Industrial Assets Division, whereas HGC Origination I LLC and HGC Funding I LLC were formed in connection with the Financial Assets Division.

The table below details the Company’s joint venture revenues and earnings (in thousands):

	Three Months Ended March 31,
	2023			2022
Revenues:
KNFH LLC	$	440		$	—
DHC8 LLC		445			—
HGC Funding I LLC and Origination I LLC		1,297			327
Total revenues	$	2,182		$	327
Operating income (loss):
KNFH LLC	$	(10	)	$	—
DHC8 LLC		378			—
HGC Funding I LLC and Origination I LLC		1,304			327
Total operating income	$	1,672		$	327

The table below details the summarized components of assets and liabilities of the Company’s joint ventures, as of March 31, 2023 and December 31, 2022 (in thousands):

	March 31,		December 31,
	2023		2022
Assets:
KNFH LLC	$	528	$	—
DGC8 LLC		8,332		8,561
HGC Funding I LLC and Origination I LLC		49,547		53,385
Total assets	$	58,407	$	61,946
Liabilities:
KNFH LLC	$	385	$	47
DGC8 LLC		1,165		1,028
HGC Funding I LLC and Origination I LLC		21		1,504
Total liabilities	$	1,571	$	2,579