☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Maryland (State or other jurisdiction of incorporation or organization) | 85-1807125 (I.R.S. Employer Identification Number) |
Title of each class Common Stock, $0.01 par value per share | Trading Symbol(s) AFCG | Name of each exchange on which registered Nasdaq |
Large accelerated filer ☐ | Accelerated filer ☐ | Non-accelerated filer ☒ | Smaller reporting company ☐ | Emerging growth company ☒ |
Class Common stock, $0.01 par value | Outstanding at |
Part I. | ||
Item 1. | 1 | |
1 | ||
2 | ||
3 | ||
4 | ||
5 | ||
Item 2. | 22 | |
Item 3. | 38 | |
Item 4. | 42 | |
Part II. | 43 | |
Item 1. | 43 | |
Item 1A. | 43 | |
Item 2. | 43 | |
Item 3. | 44 | |
Item 4. | 44 | |
Item 5. | 44 | |
Item 6. | 44 |
As Of | As Of | |||||||||||||||
March 31, 2021 | December 31, 2020 | June 30, 2021 | December 31, 2020 | |||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
Assets | ||||||||||||||||
Loans held for investment at fair value (cost of $48,833,111 and $46,994,711 at March 31, 2021 and December 31, 2020, respectively, net) | $ | 50,252,049 | $ | 48,558,051 | ||||||||||||
Loans held for investment at fair value (cost of $43,916,537 and $46,994,711 at June 30, 2021 and December 31, 2020, respectively, net) | $ | 44,852,315 | $ | 48,558,051 | ||||||||||||
Loans held for investment at carrying value | 39,152,936 | 31,837,031 | 105,404,185 | 31,837,031 | ||||||||||||
Loan receivable at carrying value | 3,240,855 | 3,348,263 | 3,011,140 | 3,348,263 | ||||||||||||
Current expected credit loss reserve | (248,317 | ) | (404,860 | ) | (701,143 | ) | (404,860 | ) | ||||||||
Loans held for investment at carrying value and loan receivable at carrying value, net of current expected credit loss reserve | 42,145,474 | 34,780,434 | 107,714,182 | 34,780,434 | ||||||||||||
Cash and cash equivalents | 126,793,972 | 9,623,820 | 124,604,872 | 9,623,820 | ||||||||||||
Interest receivable | 1,205,304 | 927,292 | 1,150,669 | 927,292 | ||||||||||||
Prepaid expenses and other assets | 1,109,038 | 72,095 | 189,000 | 72,095 | ||||||||||||
Total assets | $ | 221,505,837 | $ | 93,961,692 | $ | 278,511,038 | $ | 93,961,692 | ||||||||
Liabilities | ||||||||||||||||
Interest reserve | $ | 3,243,484 | $ | 1,325,750 | $ | 5,547,863 | $ | 1,325,750 | ||||||||
Current expected credit loss reserve | 283,180 | 60,537 | 476,140 | 60,537 | ||||||||||||
Accrued management fees | 876,662 | 222,127 | ||||||||||||||
Accrued management and incentive fees | 2,078,871 | 222,127 | ||||||||||||||
Accrued direct administrative expenses | 365,567 | 550,671 | 530,939 | 550,671 | ||||||||||||
Accounts payable and other liabilities | 404,939 | 154,895 | 1,420,503 | 154,895 | ||||||||||||
Total liabilities | 5,173,832 | 2,313,980 | 10,054,316 | 2,313,980 | ||||||||||||
Commitments and contingencies (Note 10) | 0 | 0 | ||||||||||||||
Stockholders' Equity | ||||||||||||||||
Preferred stock, par value $0.01 per share, 10,000 shares authorized at March 31, 2021 and December 31, 2020 and 125 shares issued and outstanding at March 31, 2021 and December 31, 2020 | 1 | 1 | ||||||||||||||
Common stock, par value $0.01 per share, 25,000,000 and 15,000,000 shares authorized at March 31, 2021 and December 31, 2020, respectively, and 13,366,877 and 6,179,392 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively | 133,669 | 61,794 | ||||||||||||||
Preferred stock, par value $0.01 per share, 10,000 shares authorized at June 30, 2021 and December 31, 2020 and 125 shares issued and outstanding at June 30, 2021 and December 31, 2020 | 1 | 1 | ||||||||||||||
Common stock, par value $0.01 per share, 25,000,000 and 15,000,000 shares authorized at June 30, 2021 and December 31, 2020, respectively, and 16,116,877 and 6,179,392 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively | 161,169 | 61,794 | ||||||||||||||
Additional paid-in-capital | 216,504,726 | 91,068,197 | 269,061,069 | 91,068,197 | ||||||||||||
Accumulated earnings (deficit) | (306,391 | ) | 517,720 | (765,517 | ) | 517,720 | ||||||||||
Total stockholders' equity | 216,332,005 | 91,647,712 | 268,456,722 | 91,647,712 | ||||||||||||
Total liabilities and stockholders' equity | $ | 221,505,837 | $ | 93,961,692 | $ | 278,511,038 | $ | 93,961,692 |
For the three months ended March 31, 2021 | For the three months ended June 30, 2021 | For the six months ended June 30, 2021 | ||||||||||
(unaudited) | (unaudited) | (unaudited) | ||||||||||
Revenue | ||||||||||||
Interest Income | $ | 4,685,005 | $ | 8,748,519 | $ | 13,433,524 | ||||||
Total revenue | 4,685,005 | 8,748,519 | 13,433,524 | |||||||||
Expenses | ||||||||||||
Management and incentive fees, net (less rebate of $237,743) | 876,662 | |||||||||||
General and administrative expense | 462,518 | |||||||||||
Management and incentive fees, net (less rebate of $182,707 and $420,450, respectively) | 2,078,871 | 2,955,533 | ||||||||||
General and administrative expenses | 706,865 | 1,169,383 | ||||||||||
Stock-based compensation | 1,599,115 | 11,457 | 1,610,572 | |||||||||
Professional fees | 135,453 | 194,594 | 330,047 | |||||||||
Total expenses | 3,073,748 | 2,991,787 | 6,065,535 | |||||||||
Provision for current expected credit losses | (66,100 | ) | (645,786 | ) | (711,886 | ) | ||||||
Change in unrealized gains / (losses) on loans at fair value, net | (144,402 | ) | (483,159 | ) | (627,561 | ) | ||||||
Net income before income taxes | 1,400,755 | 4,627,787 | 6,028,542 | |||||||||
Income tax expense | - | 0 | 0 | |||||||||
Net income | $ | 1,400,755 | $ | 4,627,787 | $ | 6,028,542 | ||||||
Earnings per common share: | ||||||||||||
Basic earnings per common share (in dollars per share) | $ | 0.20 | $ | 0.34 | $ | 0.58 | ||||||
Diluted earnings per common share (in dollars per share) | $ | 0.19 | $ | 0.34 | $ | 0.57 | ||||||
Weighted average number of common shares outstanding: | ||||||||||||
Basic weighted average shares of common stock outstanding (in shares) | 7,144,670 | 13,457,536 | 10,318,542 | |||||||||
Diluted weighted average shares of common stock outstanding (in shares) | 7,485,048 | 13,775,246 | 10,636,252 |
Three months ended June 30, 2021 | ||||||||||||||||||||||||
Preferred Stock | Common Stock | Additional Paid- In-Capital | Accumulated Earnings (Deficit) | Total Stockholders' Equity | ||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||
Balance at March 31, 2021 | $ | 1 | 13,366,877 | $ | 133,669 | $ | 216,504,726 | $ | (306,391 | ) | $ | 216,332,005 | ||||||||||||
Issuance of common stock, net of offering cost | 0 | 2,750,000 | 27,500 | 52,544,886 | 0 | 52,572,386 | ||||||||||||||||||
Stock-based compensation | 0 | - | 0 | 11,457 | 0 | 11,457 | ||||||||||||||||||
Dividends declared and paid on common shares ($0.38 per share) | 0 | - | 0 | 0 | (5,079,413 | ) | (5,079,413 | ) | ||||||||||||||||
Dividends declared and paid on preferred shares ($60 per share) | 0 | - | 0 | 0 | (7,500 | ) | (7,500 | ) | ||||||||||||||||
Net income | 0 | - | 0 | 0 | 4,627,787 | 4,627,787 | ||||||||||||||||||
Balance at June 30, 2021 | $ | 1 | 16,116,877 | $ | 161,169 | $ | 269,061,069 | $ | (765,517 | ) | $ | 268,456,722 |
Six months ended June 30, 2021 | ||||||||||||||||||||||||
Preferred Stock | Common Stock | Additional Paid- In-Capital | Accumulated Earnings (Deficit) | Total Stockholders' Equity | ||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||
Balance at December 31, 2020 | $ | 1 | 6,179,392 | $ | 61,794 | $ | 91,068,197 | $ | 517,720 | $ | 91,647,712 | |||||||||||||
Issuance of common stock, net of offering cost | 0 | 9,937,485 | 99,375 | 176,382,300 | 0 | 176,481,675 | ||||||||||||||||||
Stock-based compensation | 0 | - | 0 | 1,610,572 | 0 | 1,610,572 | ||||||||||||||||||
Dividends declared and paid on common shares ($0.74 per share) | 0 | - | 0 | 0 | (7,304,279 | ) | (7,304,279 | ) | ||||||||||||||||
Dividends declared and paid on preferred shares ($60 per share) | 0 | - | 0 | 0 | (7,500 | ) | (7,500 | ) | ||||||||||||||||
Net income | 0 | - | 0 | 0 | 6,028,542 | 6,028,542 | ||||||||||||||||||
Balance at June 30, 2021 | $ | 1 | 16,116,877 | $ | 161,169 | $ | 269,061,069 | $ | (765,517 | ) | $ | 268,456,722 |
For the six months ended June 30, 2021 | ||||
Operating activities: | (unaudited) | |||
Net income | $ | 6,028,542 | ||
Adjustments to reconcile net income / (loss) to net cash provided by / (used in) operating activities: | ||||
Provision for current expected credit losses | 711,886 | |||
Change in unrealized gains / (losses) on loans at fair value, net | 627,561 | |||
Accretion of deferred loan original issue discount and other discounts | (2,275,032 | ) | ||
Stock-based compensation | 1,610,572 | |||
PIK interest | (1,267,093 | ) | ||
Changes in operating assets and liabilities: | ||||
Interest reserve | (702,887 | ) | ||
Interest receivable | (223,377 | ) | ||
Prepaid expenses and other assets | (116,905 | ) | ||
Accrued management fees, net | 1,856,744 | |||
Accrued direct administrative expenses | (19,732 | ) | ||
Accounts payable and other liabilities | 1,265,608 | |||
Net cash provided by / (used in) operating activities | 7,495,887 | |||
Cash flows from investing activities: | ||||
Issuance of and fundings on loans | (76,918,926 | ) | ||
Proceeds from sales of Assigned Rights | 2,313,130 | |||
Principal repayment of loans | 12,921,065 | |||
Net cash provided by / (used in) investing activities | (61,684,731 | ) | ||
Cash flows from financing activities: | ||||
Proceeds from sale of common stock | 180,277,500 | |||
Payment of offering costs | (3,795,825 | ) | ||
Dividends paid | (7,311,779 | ) | ||
Net cash provided by / (used in) financing activities | 169,169,896 | |||
Change in cash, cash equivalents and restricted cash | 114,981,052 | |||
Cash, cash equivalents and restricted cash, beginning of period | 9,623,820 | |||
Cash, cash equivalents and restricted cash, end of period | $ | 124,604,872 | ||
Supplemental disclosure of non-cash financing and investing activity: | ||||
Interest reserve withheld from funding of loan | $ | 4,925,000 | ||
Supplemental information: | ||||
Interest paid during the period | $ | 0 | ||
Income taxes paid during the period | $ | 0 |
Preferred Stock | Common Stock | Additional Paid- In-Capital | Accumulated Earnings (Deficit) | Total Stockholders' Equity | ||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||
Balance at December 31, 2020 | $ | 1 | 6,179,392 | $ | 61,794 | $ | 91,068,197 | $ | 517,720 | $ | 91,647,712 | |||||||||||||
Issuance of common stock, net of offering cost | - | 7,187,485 | 71,875 | 123,837,414 | - | 123,909,289 | ||||||||||||||||||
Stock-based compensation | - | - | - | 1,599,115 | - | 1,599,115 | ||||||||||||||||||
Dividends declared and paid on common shares ($0.36 per share) | - | - | - | - | (2,224,866 | ) | (2,224,866 | ) | ||||||||||||||||
Net income | - | - | - | - | 1,400,755 | 1,400,755 | ||||||||||||||||||
Balance at March 31, 2021 (unaudited) | $ | 1 | 13,366,877 | $ | 133,669 | $ | 216,504,726 | $ | (306,391 | ) | $ | 216,332,005 |
For the three months ended March 31, 2021 | ||||
Operating activities: | (unaudited) | |||
Net income | $ | 1,400,755 | ||
Adjustments to reconcile net income / (loss) to net cash provided by / (used in) operating activities: | ||||
Provision for current expected credit losses | 66,100 | |||
Change in unrealized gains / (losses) on loans at fair value, net | 144,402 | |||
Accretion of deferred loan original issue discount and other discounts | (707,751 | ) | ||
Stock-based compensation | 1,599,115 | |||
PIK interest | (559,004 | ) | ||
Changes in operating assets and liabilities: | ||||
Interest reserve | (82,266 | ) | ||
Interest receivable | (278,012 | ) | ||
Prepaid expenses and other assets | 67,971 | |||
Accrued management fees, net | 654,535 | |||
Accrued direct administrative expenses | (185,104 | ) | ||
Accounts payable and other liabilities | 250,044 | |||
Net cash provided by / (used in) operating activities | 2,370,785 | |||
Cash flows from investing activities: | ||||
Issuance of and fundings on loans | (7,096,075 | ) | ||
Proceeds from sales of Assigned Rights | 103,302 | |||
Principal repayment of loans | 107,717 | |||
Net cash provided by / (used in) investing activities | (6,885,056 | ) | ||
Cash flows from financing activities: | ||||
Proceeds from sale of common stock | 127,003,125 | |||
Payment of offering costs | (3,093,836 | ) | ||
Dividends paid | (2,224,866 | ) | ||
Net cash provided by / (used in) financing activities | 121,684,423 | |||
Change in cash, cash equivalents and restricted cash | 117,170,152 | |||
Cash, cash equivalents and restricted cash, beginning of period | 9,623,820 | |||
Cash, cash equivalents and restricted cash, end of period | $ | 126,793,972 | ||
Supplemental disclosure of non-cash financing and investing activity: | ||||
Interest reserve withheld from funding of loan | $ | 2,000,000 | ||
Sale of Assigned Rights | $ | 1,104,914 | ||
Supplemental information: | ||||
Interest paid during the period | $ | - | ||
Income taxes paid during the period | $ | - |
1. | ORGANIZATION |
2. | SIGNIFICANT ACCOUNTING POLICIES |
3. | LOANS HELD FOR INVESTMENT AT FAIR VALUE |
As of March 31, 2021 | As of June 30, 2021 | |||||||||||||||||||||||||||||||
Fair Value (2) | Carrying Value (1) | Outstanding Principal (1) | Weighted Average Remaining Life (Years)(3) | Fair Value (2) | Carrying Value (1) | Outstanding Principal (1) | Weighted Average Remaining Life (Years)(3) | |||||||||||||||||||||||||
Senior Term Loans | $ | 50,252,049 | $ | 48,833,111 | $ | 52,212,608 | 3.1 | $ | 44,852,315 | $ | 43,916,537 | $ | 46,653,209 | 2.6 | ||||||||||||||||||
Total loans held at fair value | $ | 50,252,049 | $ | 48,833,111 | $ | 52,212,608 | 3.1 | $ | 44,852,315 | $ | 43,916,537 | $ | 46,653,209 | 2.6 |
As of December 31, 2020 | ||||||||||||||||
Fair Value (2) | Carrying Value (1) | Outstanding Principal (1) | Weighted Average Remaining Life (Years)(3) | |||||||||||||
Senior Term Loans | $ | 48,558,051 | $ | 46,994,711 | $ | 50,831,235 | 3.3 | |||||||||
Total loans held at fair value | $ | 48,558,051 | $ | 46,994,711 | $ | 50,831,235 | 3.3 |
(1) | The difference between the Carrying Value and the Outstanding Principal amount of the loans consists of unaccreted purchase discount, deferred loan fees and loan origination costs. |
(2) | Refer to Footnote 14 to our unaudited financial statements. |
(3) | Weighted average remaining life is calculated based on the fair value of the loans as of |
Principal | Original Issue Discount | Unrealized Gains / (Losses) | Fair Value | Principal | Original Issue Discount | Unrealized Gains / (Losses) | Fair Value | |||||||||||||||||||||||||
Total loans held at fair value at December 31, 2020 | $ | 50,831,235 | $ | (3,836,524 | ) | $ | 1,563,340 | $ | 48,558,051 | $ | 50,831,235 | $ | (3,836,524 | ) | $ | 1,563,340 | $ | 48,558,051 | ||||||||||||||
Change in unrealized gains / (losses) on loans at fair value, net | - | - | (144,402 | ) | (144,402 | ) | 0 | 0 | (627,561 | ) | (627,561 | ) | ||||||||||||||||||||
New fundings | 992,000 | (142,982 | ) | - | 849,018 | 7,677,701 | (501,346 | ) | 0 | 7,176,355 | ||||||||||||||||||||||
Loan repayments | (12,000,000 | ) | 0 | 0 | (12,000,000 | ) | ||||||||||||||||||||||||||
Loan amortization payments | (583,324 | ) | 0 | 0 | (583,324 | ) | ||||||||||||||||||||||||||
Accretion of original issue discount | - | 600,009 | - | 600,009 | 0 | 1,601,197 | 0 | 1,601,197 | ||||||||||||||||||||||||
PIK Interest | 389,373 | - | - | 389,373 | 727,597 | 0 | 0 | 727,597 | ||||||||||||||||||||||||
Total loans held at fair value at March 31, 2021 | $ | 52,212,608 | $ | (3,379,497 | ) | $ | 1,418,938 | $ | 50,252,049 | |||||||||||||||||||||||
Total loans held at fair value at June 30, 2021 | $ | 46,653,209 | $ | (2,736,673 | ) | $ | 935,779 | $ | 44,852,315 |
Collateral Location | Collateral Type (9) | Fair Value (2) | Carrying Value (1) | Outstanding Principal (1) | Interest Rate | Maturity Date (3) | Payment Terms (4) | |||||||||||||||||||||
Private Co. A | AZ, MI, MD, MA | C , D | $ | 32,834,697 | $ | 32,384,888 | $ | 34,672,331 | 17.0 | % | (5) | 5/8/2024 | P/I | |||||||||||||||
Private Co. B | MI | C | 2,495,922 | 2,290,381 | 2,548,159 | 17.0 | % | (6) | 9/1/2023 | P/I | ||||||||||||||||||
Public Co. A | NV | C | 2,874,629 | 2,840,108 | 2,945,317 | 14.0 | % | (7) | 12/21/2021 | I/O | ||||||||||||||||||
Sub. Of Public Co. C | FL | C | 12,046,801 | 11,317,734 | 12,046,801 | 18.0 | % | (8) | 2/18/2025 | P/I | ||||||||||||||||||
Total loans held at fair value | $ | 50,252,049 | $ | 48,833,111 | $ | 52,212,608 |
Collateral Location | Collateral Type (8) | Fair Value (2) | Carrying Value (1) | Outstanding Principal (1) | Interest Rate | Maturity Date (3) | Payment Terms (4) | |||||||||||||||||||||
Private Co. A | AZ, MI, MD, MA | C , D | $ | 33,059,982 | $ | 32,543,647 | $ | 34,654,069 | 17.0 | % | (5) | 5/8/2024 | P/I | |||||||||||||||
Private Co. B | MI | C | 8,909,663 | 8,503,029 | 9,059,140 | 17.0 | % | (6) | 9/1/2023 | P/I | ||||||||||||||||||
Public Co. A - Real Estate Loan | NV | C | 2,882,670 | 2,869,861 | 2,940,000 | 14.0 | % | (7) | 1/26/2023 | I/O | ||||||||||||||||||
Total loans held at fair value | $ | 44,852,315 | $ | 43,916,537 | $ | 46,653,209 |
(1) | The difference between the Carrying Value and the Outstanding Principal amount of the loans consists of unaccreted original issue discount (“OID”) and loan origination costs. |
(2) | Refer to Footnote 14 to our unaudited financial statements. |
(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 13% and payment-in-kind (“PIK”) interest rate of 4%. |
(6) | Base interest rate of 13% and PIK interest rate of 4%. |
(7) | Base interest rate of 12% and PIK interest rate of 2%. |
(8) |
C = Cultivation Facilities, D = |
4. | LOANS HELD FOR INVESTMENT AT CARRYING VALUE |
As of March 31, 2021 | ||||||||||||||||
Outstanding Principal (1) | Original Issue Discount | Carrying Value (1) | Weighted Average Remaining Life (Years)(2) | |||||||||||||
�� | ||||||||||||||||
Senior Term Loans | $ | 42,940,850 | $ | (3,787,914 | ) | $ | 39,152,936 | 4.5 | ||||||||
Total loans held at carrying value | $ | 42,940,850 | $ | (3,787,914 | ) | $ | 39,152,936 | 4.5 |
As of December 31, 2020 | As of June 30, 2021 | |||||||||||||||||||||||||||||||
Outstanding Principal (1) | Original Issue Discount | Carrying Value (1) | Weighted Average Remaining Life (Years)(2) | Outstanding Principal (1) | Original Issue Discount | Carrying Value (1) | Weighted Average Remaining Life (Years)(2) | |||||||||||||||||||||||||
Senior Term Loans | $ | 33,907,763 | $ | (2,070,732 | ) | $ | 31,837,031 | 4.7 | $ | 114,376,084 | $ | (8,971,899 | ) | $ | 105,404,185 | 3.8 | ||||||||||||||||
Total loans held at carrying value | $ | 33,907,763 | $ | (2,070,732 | ) | $ | 31,837,031 | 4.7 | $ | 114,376,084 | $ | (8,971,899 | ) | $ | 105,404,185 | 3.8 |
As of December 31, 2020 | ||||||||||||||||
Outstanding Principal (1) | Original Issue Discount | Carrying Value (1) | Weighted Average Remaining Life (Years)(2) | |||||||||||||
Senior Term Loans | $ | 33,907,763 | $ | (2,070,732 | ) | $ | 31,837,031 | 4.7 | ||||||||
Total loans held at carrying value | $ | 33,907,763 | $ | (2,070,732 | ) | $ | 31,837,031 | 4.7 |
(1) | The difference between the Carrying Value and the Outstanding Principal amount of the loans consists of unaccreted original issue discount and loan origination costs. |
(2) | Weighted average remaining life is calculated based on the carrying value of the loans as of |
Principal | Original Issue Discount | Carrying Value | ||||||||||
Total loans held at carrying value at December 31, 2020 | $ | 33,907,763 | $ | (2,070,732 | ) | $ | 31,837,031 | |||||
New Fundings | 8,863,455 | (1,824,614 | ) | 7,038,841 | ||||||||
Accretion of original issue discount | - | 107,432 | 107,432 | |||||||||
PIK Interest | 169,632 | 169,632 | ||||||||||
Total loans held at carrying value at March 31, 2021 | $ | 42,940,850 | $ | (3,787,914 | ) | $ | 39,152,936 |
Principal | Original Issue Discount | Carrying Value | ||||||||||
Total loans held at carrying value at December 31, 2020 | $ | 33,907,763 | $ | (2,070,732 | ) | $ | 31,837,031 | |||||
New fundings | 79,928,825 | (7,574,384 | ) | 72,354,441 | ||||||||
Accretion of original issue discount | - | 673,217 | 673,217 | |||||||||
PIK interest | 539,496 | - | 539,496 | |||||||||
Total loans held at carrying value at June 30, 2021 | $ | 114,376,084 | $ | (8,971,899 | ) | $ | 105,404,185 |
Collateral Location | Collateral Type (8) | Outstanding Principal (1) | Original Issue Discount | Carrying Value (1) | Interest Rate | Maturity Date (2) | Payment Terms (3) | Collateral Location | Collateral Type (4) | Outstanding Principal (1) | Original Issue Discount | Carrying Value (1) | Interest Rate | Maturity Date (2) | Payment Terms (3) | ||||||||||||||||||||||||||||||||||||||
Private Co. C | PA | C , D | $ | 13,895,465 | $ | (807,869 | ) | $ | 13,087,596 | 17.0 | % | (4) | 12/1/2025 | P/I | PA | C , D | $ | 16,571,443 | $ | (764,590 | ) | $ | 15,806,853 | 17.0 | % | (5) | 12/1/2025 | P/I | |||||||||||||||||||||||||
Private Co. D | OH, AR | D | 12,045,385 | (983,237 | ) | 11,062,148 | 15.0 | % | (5) | 1/1/2026 | P/I | OH, AR | D | 12,107,055 | (930,564 | ) | 11,176,491 | 15.0 | % | (6) | 1/1/2026 | P/I | |||||||||||||||||||||||||||||||
Sub. of Public Co. D | PA | C | 10,000,000 | (172,194 | ) | 9,827,806 | 12.9 | % | (6) | 12/18/2024 | I/O | PA | C | 10,000,000 | (160,714 | ) | 9,839,286 | 12.9 | % | (7) | 12/18/2024 | I/O | |||||||||||||||||||||||||||||||
Private Co. E | OH | C , D | 7,000,000 | (1,824,614 | ) | 5,175,386 | 17.0 | % | (7) | 4/1/2026 | P/I | OH | C , D | 11,174,533 | (2,936,883 | ) | 8,237,650 | 17.0 | % | (8) | 4/1/2026 | P/I | |||||||||||||||||||||||||||||||
Private Co. F | MO | C , D | 6,166,025 | (1,915,902 | ) | 4,250,123 | 17.0 | % | (9) | 5/1/2026 | P/I | ||||||||||||||||||||||||||||||||||||||||||
Public Co. E | MI | C | 15,000,000 | (985,714 | ) | 14,014,286 | 13.0 | % | (10) | 4/29/2025 | P/I | ||||||||||||||||||||||||||||||||||||||||||
Sub. of Private Co. G | NJ | C , D | 22,075,778 | (836,722 | ) | 21,239,056 | 17.0 | % | (11) | 5/1/2026 | P/I | ||||||||||||||||||||||||||||||||||||||||||
Public Co. F | IL, FL, NV, OH, MA, MI, MD, AR, NV, AZ | C , D | 10,000,000 | (184,000 | ) | 9,816,000 | 9.8 | % | (12) | 5/30/2023 | I/O | ||||||||||||||||||||||||||||||||||||||||||
Sub. of Private Co. H | IL | C | 5,781,250 | (146,810 | ) | 5,634,440 | 15.0 | % | (13) | 5/11/2023 | I/O | ||||||||||||||||||||||||||||||||||||||||||
Private Co. I | MD | C , D | 5,500,000 | (110,000 | ) | 5,390,000 | 13.0 | % | (14) | 7/9/2021 | I/O | ||||||||||||||||||||||||||||||||||||||||||
Total loans held at carry value | $ | 42,940,850 | $ | (3,787,914 | ) | $ | 39,152,936 | $ | 114,376,084 | $ | (8,971,899 | ) | $ | 105,404,185 |
(1) | The difference between the Carrying Value and the Outstanding Principal amount of the loans consists of unaccreted purchase discount, deferred loan fees and loan origination costs. |
(2) | 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. |
(3) | I/O = interest only, P/I = principal and interest. P/I loans may include interest only periods for a portion of the loan term. |
(4) | C = Cultivation Facilities, D = Dispensaries. |
(5) | Base interest rate of 12% plus LIBOR (LIBOR floor of 1%) and PIK interest rate of 4%. |
(6) | Base interest rate of 13% and PIK interest rate of 2%. |
(7) | Base interest rate of 12.9%. |
(8) | Base interest rate of 12% plus LIBOR (LIBOR floor of 1%) and PIK interest rate of 4%. |
(9) | Base interest rate of 13% and PIK interest rate of 4%. |
(10) | Base interest rate of 13%. |
(11) | Base interest rate of 12% plus LIBOR (LIBOR floor of 1%) and PIK interest rate of 4%. |
Base interest rate of 9.8%. |
LOAN RECEIVABLE AT CARRYING VALUE |
Principal | Original Issue Discount | Carrying Value | Principal | Original Issue Discount | Carrying Value | |||||||||||||||||||
Total loans receivable at carrying value at December 31, 2020 | $ | 3,352,176 | $ | (3,913 | ) | $ | 3,348,263 | $ | 3,352,176 | $ | (3,913 | ) | $ | 3,348,263 | ||||||||||
Principal repayment of loans | (107,717 | ) | - | (107,717 | ) | (337,741 | ) | - | (337,741 | ) | ||||||||||||||
Accretion of original issue discount | - | 309 | 309 | - | 618 | 618 | ||||||||||||||||||
Total loans receivable at carrying value at March 31, 2021 | $ | 3,244,459 | $ | (3,604 | ) | $ | 3,240,855 | |||||||||||||||||
Total loans receivable at carrying value at June 30, 2021 | $ | 3,014,435 | $ | (3,295 | ) | $ | 3,011,140 |
6. | CURRENT EXPECTED CREDIT LOSSES |
Outstanding (1) | Unfunded (2) | Total | Outstanding (1) | Unfunded (2) | Total | |||||||||||||||||||
Balance at December 31, 2020 | $ | 404,860 | $ | 60,537 | $ | 465,397 | ||||||||||||||||||
Balance at March 31, 2021 | $ | 248,317 | $ | 283,180 | $ | 531,497 | ||||||||||||||||||
Provision for current expected credit losses | (156,543 | ) | 222,643 | 66,100 | 452,826 | 192,960 | 645,786 | |||||||||||||||||
Write-offs | - | - | - | 0 | 0 | 0 | ||||||||||||||||||
Recoveries | - | - | - | 0 | 0 | 0 | ||||||||||||||||||
Balance at March 31, 2021 | $ | 248,317 | $ | 283,180 | $ | 531,497 | ||||||||||||||||||
Balance at June 30, 2021 | $ | 701,143 | $ | 476,140 | $ | 1,177,283 |
Outstanding (1) | Unfunded (2) | Total | ||||||||||
Balance at December 31, 2020 | $ | 404,860 | $ | 60,537 | $ | 465,397 | ||||||
Provision for current expected credit losses | 296,283 | 415,603 | 711,886 | |||||||||
Write-offs | 0 | 0 | 0 | |||||||||
Recoveries | 0 | 0 | 0 | |||||||||
Balance at June 30, 2021 | $ | 701,143 | $ | 476,140 | $ | 1,177,283 |
(1) | As of |
(2) | As of |
Rating | Definition | ||
1 | Very Low Risk | ||
2 | Low Risk | ||
3 | Medium Risk | ||
4 | High Risk/ Potential for Loss | ||
5 | Impaired/Loss Likely |
Risk Rating: | 2021 | 2020 | Total | ||||||||||
1 | $ | - | $ | - | $ | - | |||||||
2 | - | - | - | ||||||||||
3 | 5,175,386 | 33,977,550 | 39,152,936 | ||||||||||
4 | - | 3,240,855 | 3,240,855 | ||||||||||
5 | - | - | - | ||||||||||
Total | $ | 5,175,386 | $ | 37,218,405 | $ | 42,393,791 |
Risk Rating: | 2021 | 2020 | Total | ||||||||||
1 | $ | 0 | $ | 0 | $ | 0 | |||||||
2 | 23,830,286 | 0 | 23,830,286 | ||||||||||
3 | 36,513,621 | 45,060,278 | 81,573,899 | ||||||||||
4 | 0 | 3,011,140 | 3,011,140 | ||||||||||
5 | 0 | 0 | 0 | ||||||||||
Total | $ | 60,343,907 | $ | 48,071,418 | $ | 108,415,325 |
7. | INTEREST RECEIVABLE |
As of March 31, 2021 | As of December 31, 2020 | As of June 30, 2021 | As of December 31, 2020 | |||||||||||||
Interest receivable | $ | 954,349 | $ | 675,795 | $ | 722,716 | $ | 675,795 | ||||||||
PIK receivable | 210,588 | 177,183 | 362,040 | 177,183 | ||||||||||||
Unused fees | 40,367 | 74,314 | ||||||||||||||
Unused fees receivable | 65,913 | 74,314 | ||||||||||||||
Total interest receivable | $ | 1,205,304 | $ | 927,292 | $ | 1,150,669 | $ | 927,292 |
8. | INTEREST RESERVE |
Three months ended March 31, 2021 | Three months ended June 30, 2021 | Six months ended June 30, 2021 | ||||||||||
Initial reserves | $ | 1,325,750 | ||||||||||
Beginning reserves | $ | 3,243,484 | $ | 1,325,750 | ||||||||
New reserves | 2,000,000 | 2,925,000 | 4,925,000 | |||||||||
Reserves disbursed | (82,266 | ) | (620,621 | ) | (702,887 | ) | ||||||
Total Interest reserve | $ | 3,243,484 | ||||||||||
Ending reserves | $ | 5,547,863 | $ | 5,547,863 |
9. | DEBT |
10. | COMMITMENTS AND CONTINGENCIES |
As of March 31, 2021 | As of December 31, 2020 | As of June 30, 2021 | As of December 31, 2020 | |||||||||||||
Total original loan commitments | $ | 130,684,459 | $ | 107,292,176 | $ | 187,721,250 | $ | 107,292,176 | ||||||||
Less: drawn commitments | (97,214,795 | ) | (87,467,057 | ) | (163,721,408 | ) | (87,467,057 | ) | ||||||||
Total undrawn commitments | $ | 33,469,664 | $ | 19,825,119 | $ | 23,999,842 | $ | 19,825,119 |
11. | STOCKHOLDERS’ EQUITY |
As of March 31, 2021 | As of December 31, 2020 | As of June 30, 2021 | As of December 31, 2020 | |||||||||||||
Non-vested | 183,114 | 142,814 | 183,114 | 142,814 | ||||||||||||
Vested | 1,449,518 | 800,618 | 1,449,518 | 800,618 | ||||||||||||
Forfeited | (16,534 | ) | (16,534 | ) | (19,534 | ) | (16,534 | ) | ||||||||
Balance | 1,616,098 | 926,898 | 1,613,098 | 926,898 |
Assumptions | Range | |||
Expected volatility | 40% - 50 | % | ||
Expected dividend yield | 10% - 20 | % | ||
Risk-free interest rate | 0.5% - 1.5 | % | ||
Expected forfeiture rate | 0 | % |
Three months ended March 31, 2021 | Weighted-Average Grant Date Fair Value Per Option | Three months ended June 30, 2021 | Weighted-Average Grant Date Fair Value Per Option | |||||||||||||
Balance as of December 31, 2020 | 926,898 | $ | 0.91 | |||||||||||||
Balance as of March 31, 2021 | 1,616,098 | $ | 1.08 | |||||||||||||
Granted | 689,200 | 1.31 | 0 | 0 | ||||||||||||
Exercised | - | - | 0 | 0 | ||||||||||||
Forfeited | - | - | (3,000 | ) | 1.31 | |||||||||||
Balance as of March 31, 2021 | 1,616,098 | $ | 1.08 | |||||||||||||
Balance as of June 30, 2021 | 1,613,098 | $ | 1.08 |
Six months ended June 30, 2021 | Weighted-Average Grant Date Fair Value Per Option | |||||||
Balance as of December 31, 2020 | 926,898 | $ | 0.91 | |||||
Granted | 689,200 | 1.31 | ||||||
Exercised | 0 | 0 | ||||||
Forfeited | (3,000 | ) | 1.31 | |||||
Balance as of June 30, 2021 | 1,613,098 | $ | 1.08 |
12. | EARNINGS PER SHARE |
Three months ended March 31, 2021 | Three months ended June 30, 2021 | Six months ended June 30, 2021 | ||||||||||
Net income / (loss) attributable to common stockholders | $ | 1,400,755 | $ | 4,627,787 | $ | 6,028,542 | ||||||
Divided by: | ||||||||||||
Basic weighted average shares of common stock outstanding | 7,144,670 | 13,457,536 | 10,318,542 | |||||||||
Diluted weighted average shares of common stock outstanding | 7,485,048 | 13,775,246 | 10,636,252 | |||||||||
Basic weighted average earnings per common share | $ | 0.20 | $ | 0.34 | $ | 0.58 | ||||||
Diluted weighted average earnings per common share | $ | 0.19 | $ | 0.34 | $ | 0.57 |
13. | INCOME TAX |
14. | FAIR VALUE |
As of March 31, 2021 | As of June 30, 2021 | |||||||||||||||||||||||||||||
Unobservable Input | Unobservable Input | |||||||||||||||||||||||||||||
Fair Value | Primary Valuation Techniques | Input | Estimated Range | Weighted Average | Fair Value | Primary Valuation Techniques | Input | Estimated Range | Weighted Average | |||||||||||||||||||||
Senior Term Loans | $ | 50,252,049 | Yield analysis | Market Yield | 17.07% - 20.61 | % | 20.33 | % | $ | 44,852,315 | Yield analysis | Market Yield | 17.21% - 20.47 | % | 20.24 | % | ||||||||||||||
Total Investments | $ | 50,252,049 | $ | 44,852,315 |
As of December 31, 2020 | |||||||||||||||
Unobservable Input | |||||||||||||||
Fair Value | Primary Valuation Techniques | Input | Estimated Range | Weighted Average | |||||||||||
Senior Term Loans | $ | 48,558,051 | Yield analysis | Market Yield | 15.79% - 20.75 | % | 20.20 | % | |||||||
Total Investments | $ | 48,558,051 |
Fair Value Measurement Using as of March 31, 2021 | ||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Loans held at fair value | $ | 50,252,049 | - | - | $ | 50,252,049 | ||||||||||
Total | $ | 50,252,049 | - | - | $ | 50,252,049 |
Fair Value Measurement Using as of December 31, 2020 | Fair Value Measurement Using as of June 30, 2021 | |||||||||||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | �� | Level 2 | Level 3 | ||||||||||||||||||||||||
Loans held at fair value | $ | 48,558,051 | - | - | $ | 48,558,051 | $ | 44,852,315 | 0 | 0 | $ | 44,852,315 | ||||||||||||||||||||
Total | $ | 48,558,051 | - | - | $ | 48,558,051 | $ | 44,852,315 | 0 | 0 | $ | 44,852,315 |
Fair Value Measurement Using as of December 31, 2020 | ||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Loans held at fair value | $ | 48,558,051 | 0 | 0 | $ | 48,558,051 | ||||||||||
Total | $ | 48,558,051 | 0 | 0 | $ | 48,558,051 |
Three months ended March 31, 2021 | Six months ended June 30, 2021 | |||||||
Total loans using Level 3 inputs at December 31, 2020 | $ | 48,558,051 | ||||||
Total loans using Level 3 inputs at December 31, 2020 | $ | 48,558,051 | ||||||
Change in unrealized gains / (losses) on loans at fair value, net | (144,402 | ) | (627,561 | ) | ||||
Additional funding | 992,000 | 7,677,701 | ||||||
Original issue discount and other discounts, net of costs | (142,982 | ) | (501,346 | ) | ||||
Loan repayments | (12,000,000 | ) | ||||||
Loan amortization payments | (583,324 | ) | ||||||
Accretion of original issue discount | 600,009 | 1,601,197 | ||||||
PIK Interest | 389,373 | 727,597 | ||||||
Total loans using Level 3 inputs at March 31, 2021 | $ | 50,252,049 | ||||||
Total loans using Level 3 inputs at June 30, 2021 | $ | 44,852,315 |
As of March 31, 2021 | As of June 30, 2021 | |||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||
Financial assets | ||||||||||||||||
Cash and cash equivalents | $ | 126,793,972 | $ | 126,793,972 | $ | 124,604,872 | $ | 124,604,872 | ||||||||
Loans held for investment at carrying value | $ | 39,152,936 | $ | 41,661,386 | $ | 105,404,185 | $ | 110,407,362 | ||||||||
Loan receivable at carrying value | $ | 3,240,855 | $ | 3,066,014 | $ | 3,011,140 | $ | 2,868,235 |
15. | RELATED PARTY TRANSACTIONS |
Three months ended March 31, 2021 | Three months ended June 30, 2021 | Six months ended June 30, 2021 | ||||||||||
Affiliate Payments | ||||||||||||
Affiliate Costs | ||||||||||||
Management fees | $ | 451,675 | $ | 819,531 | $ | 1,271,206 | ||||||
Less other fees earned | (237,743 | ) | (182,707 | ) | (420,450 | ) | ||||||
Incentive fees earned | 662,730 | 1,442,047 | 2,104,777 | |||||||||
General and administrative expenses reimbursable to Manager | 365,567 | 423,939 | 789,506 | |||||||||
Total | $ | 1,242,229 | $ | 2,502,810 | $ | 3,745,039 |
16. | DIVIDENDS AND DISTRIBUTIONS |
Record Date | Payment Date | Common Share distribution amount | Taxable Ordinary Income | Return of Capital | Section 199A Dividends | Record Date | Payment Date | Common Share Distribution Amount | Taxable Ordinary Income | Return of Capital | Section 199A Dividends | |||||||||||||||||||||||||||
Regular cash dividend | 3/15/2021 | 3/31/2021 | $ | 0.36 | $ | 0.36 | $ | - | $ | 0.36 | 3/15/2021 | 3/31/2021 | $ | 0.36 | $ | 0.36 | $ | 0 | $ | 0.36 | ||||||||||||||||||
Regular cash dividend | 6/15/2021 | 6/30/2021 | $ | 0.38 | $ | 0.38 | $ | 0 | $ | 0.38 | ||||||||||||||||||||||||||||
Total cash dividend | $ | 0.36 | $ | 0.36 | $ | - | $ | 0.36 | $ | 0.74 | $ | 0.74 | $ | 0 | $ | 0.74 |
17. | SUBSEQUENT EVENTS |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
For the three months ended March 31, 2021 | ||||
Net Income | $ | 1,400,755 | ||
Adjustments to net income | ||||
Non-Cash Equity compensation expense | 1,599,115 | |||
Depreciation and amortization | - | |||
Unrealized (gain), losses or other non-cash items | 144,402 | |||
Provision for current expected credit losses | 66,100 | |||
One-time events pursuant to changes in GAAP and certain non-cash charges | - | |||
Distributable Earnings | $ | 3,210,372 | ||
Adjustments to Distributable Earnings | ||||
Organizational expense | - | |||
Adjusted Distributable Earnings | $ | 3,210,372 | ||
Basic weighted average shares of common stock outstanding (in shares) | 7,144,670 | |||
Adjusted Distributable Earnings per weighted Average Share | $ | 0.45 |
For the three months ended June 30, 2021 | For the six months ended June 30, 2021 | |||||||
Net Income | $ | 4,627,787 | $ | 6,028,542 | ||||
Adjustments to net income | ||||||||
Non-Cash Equity compensation expense | 11,457 | 1,610,572 | ||||||
Depreciation and amortization | - | - | ||||||
Unrealized (gain), losses or other non-cash items | 483,159 | 627,561 | ||||||
Provision for current expected credit losses | 645,786 | 711,886 | ||||||
One-time events pursuant to changes in GAAP and certain non-cash charges | - | - | ||||||
Distributable Earnings | $ | 5,768,189 | $ | 8,978,561 | ||||
Adjustments to Distributable Earnings | ||||||||
Organizational expense | - | - | ||||||
Adjusted Distributable Earnings | $ | 5,768,189 | $ | 8,978,561 | ||||
Basic weighted average shares of common stock outstanding (in shares) | 13,457,536 | 10,318,542 | ||||||
Adjusted Distributable Earnings per weighted Average Share | $ | 0.43 | $ | 0.87 |
As of March 31, 2021 | As of June 30, 2021 | |||||||||||||||||||||||||||||||
Fair Value (2) | Carrying Value (1) | Outstanding Principal (1) | Weighted Average Remaining Life (Years)(3) | Fair Value (2) | Carrying Value (1) | Outstanding Principal (1) | Weighted Average Remaining Life (Years)(3) | |||||||||||||||||||||||||
Senior Term Loans | $ | 50,252,049 | $ | 48,833,111 | $ | 52,212,608 | 3.1 | $ | 44,852,315 | $ | 43,916,537 | $ | 46,653,209 | 2.6 | ||||||||||||||||||
Total loans held at fair value | $ | 50,252,049 | $ | 48,833,111 | $ | 52,212,608 | 3.1 | $ | 44,852,315 | $ | 43,916,537 | $ | 46,653,209 | 2.6 |
As of December 31, 2020 | ||||||||||||||||
Fair Value (2) | Carrying Value (1) | Outstanding Principal (1) | Weighted Average Remaining Life (Years)(3) | |||||||||||||
Senior Term Loans | $ | 48,558,051 | $ | 46,994,711 | $ | 50,831,235 | 3.3 | |||||||||
Total loans held at fair value | $ | 48,558,051 | $ | 46,994,711 | $ | 50,831,235 | 3.3 |
As of December 31, 2020 | ||||||||||||||||
Fair Value (2) | Carrying Value (1) | Outstanding Principal (1) | Weighted Average Remaining Life (Years)(3) | |||||||||||||
Senior Term Loans | $ | 48,558,051 | $ | 46,994,711 | $ | 50,831,235 | 3.3 | |||||||||
Total loans held at fair value | $ | 48,558,051 | $ | 46,994,711 | $ | 50,831,235 | 3.3 |
(1) | The difference between the Carrying Value and the Outstanding Principal amount of the loans consists of unaccreted purchase discount, deferred loan fees and loan origination costs. |
(2) | Refer to Footnote 14 to our unaudited financial statements included elsewhere in this quarterly report. |
(3) | Weighted average remaining life is calculated based on the fair value of the loans as of |
Principal | Original Issue Discount | Unrealized Gains / (Losses) | Fair Value | Principal | Original Issue Discount | Unrealized Gains / (Losses) | Fair Value | |||||||||||||||||||||||||
Total loans held at fair value at December 31, 2020 | $ | 50,831,235 | $ | (3,836,524 | ) | $ | 1,563,340 | $ | 48,558,051 | $ | 50,831,235 | $ | (3,836,524 | ) | $ | 1,563,340 | $ | 48,558,051 | ||||||||||||||
Change in unrealized gains / (losses) on loans at fair value, net | - | - | (144,402 | ) | (144,402 | ) | - | - | (627,561 | ) | (627,561 | ) | ||||||||||||||||||||
New fundings | 992,000 | (142,982 | ) | - | 849,018 | 7,677,701 | (501,346 | ) | - | 7,176,355 | ||||||||||||||||||||||
Loan repayments | (12,000,000 | ) | - | - | (12,000,000 | ) | ||||||||||||||||||||||||||
Loan amortization payments | (583,324 | ) | - | - | (583,324 | ) | ||||||||||||||||||||||||||
Accretion of original issue discount | - | 600,009 | - | 600,009 | - | 1,601,197 | - | 1,601,197 | ||||||||||||||||||||||||
PIK Interest | 389,373 | - | - | 389,373 | 727,597 | - | - | 727,597 | ||||||||||||||||||||||||
Total loans held at fair value at March 31, 2021 | $ | 52,212,608 | $ | (3,379,497 | ) | $ | 1,418,938 | $ | 50,252,049 | |||||||||||||||||||||||
Total loans held at fair value at June 30, 2021 | $ | 46,653,209 | $ | (2,736,673 | ) | $ | 935,779 | $ | 44,852,315 |
As of March 31, 2021 | As of June 30, 2021 | |||||||||||||||||||||||||||||||
Outstanding Principal (1) | Original Issue Discount | Carrying Value (1) | Weighted Average Remaining Life (Years)(2) | Outstanding Principal (1) | Original Issue Discount | Carrying Value (1) | Weighted Average Remaining Life (Years)(2) | |||||||||||||||||||||||||
Senior Term Loans | $ | 42,940,850 | $ | (3,787,914 | ) | $ | 39,152,936 | 4.5 | $ | 114,376,084 | $ | (8,971,899 | ) | $ | 105,404,185 | 3.8 | ||||||||||||||||
Total loans held at carrying value | $ | 42,940,850 | $ | (3,787,914 | ) | $ | 39,152,936 | 4.5 | $ | 114,376,084 | $ | (8,971,899 | ) | $ | 105,404,185 | 3.8 |
As of December 31, 2020 | ||||||||||||||||
Outstanding Principal (1) | Original Issue Discount | Carrying Value (1) | Weighted Average Remaining Life (Years)(2) | |||||||||||||
Senior Term Loans | $ | 33,907,763 | $ | (2,070,732 | ) | $ | 31,837,031 | 4.7 | ||||||||
Total loans held at carrying value | $ | 33,907,763 | $ | (2,070,732 | ) | $ | 31,837,031 | 4.7 |
As of December 31, 2020 | ||||||||||||||||
Outstanding Principal (1) | Original Issue Discount | Carrying Value (1) | Weighted Average Remaining Life (Years)(2) | |||||||||||||
Senior Term Loans | $ | 33,907,763 | $ | (2,070,732 | ) | $ | 31,837,031 | 4.7 | ||||||||
Total loans held at carrying value | $ | 33,907,763 | $ | (2,070,732 | ) | $ | 31,837,031 | 4.7 |
(3) | The difference between the Carrying Value and the Outstanding Principal amount of the loans consists of unaccreted original issue discount and loan origination costs. |
(4) | Weighted average remaining life is calculated based on the carrying value of the loans as of |
Principal | Original Issue Discount | Carrying Value | ||||||||||
Total loans held at carrying value at December 31, 2020 | $ | 33,907,763 | $ | (2,070,732 | ) | $ | 31,837,031 | |||||
New Fundings | 8,863,455 | (1,824,614 | ) | 7,038,841 | ||||||||
Accretion of original issue discount | - | 107,432 | 107,432 | |||||||||
PIK Interest | 169,632 | 169,632 | ||||||||||
Total loans held at carrying value at March 31, 2021 | $ | 42,940,850 | $ | (3,787,914 | ) | $ | 39,152,936 |
Principal | Original Issue Discount | Carrying Value | ||||||||||
Total loans held at carrying value at December 31, 2020 | $ | 33,907,763 | $ | (2,070,732 | ) | $ | 31,837,031 | |||||
New fundings | 79,928,825 | (7,574,384 | ) | 72,354,441 | ||||||||
Accretion of original issue discount | - | 673,217 | 673,217 | |||||||||
PIK interest | 539,496 | - | 539,496 | |||||||||
Total loans held at carrying value at June 30, 2021 | $ | 114,376,084 | $ | (8,971,899 | ) | $ | 105,404,185 |
Principal | Original Issue Discount | Carrying Value | Principal | Original Issue Discount | Carrying Value | |||||||||||||||||||
Total loans receivable at carrying value at December 31, 2020 | $ | 3,352,176 | $ | (3,913 | ) | $ | 3,348,263 | $ | 3,352,176 | $ | (3,913 | ) | $ | 3,348,263 | ||||||||||
Principal repayment of loans | (107,717 | ) | - | (107,717 | ) | (337,741 | ) | - | (337,741 | ) | ||||||||||||||
Accretion of original issue discount | - | 309 | 309 | - | 618 | 618 | ||||||||||||||||||
Total loans receivable at carrying value at March 31, 2021 | $ | 3,244,459 | $ | (3,604 | ) | $ | 3,240,855 | |||||||||||||||||
Total loans receivable at carrying value at June 30, 2021 | $ | 3,014,435 | $ | (3,295 | ) | $ | 3,011,140 |
Loan Names | Status | Original Funding Date(1) | Loan Maturity | AFCG Loan, net of Syndication | % of Total AFCG | Principal Balance as of 6/30/2021 | Cash Interest Rate | Paid In Kind (“PIK”) | Fixed/ Floating | Amortization During Term | YTM (2)(3) | |||||||||||||||||||||
Public Co. A - Real Estate Loan | Funded | 7/3/2019 | 1/26/2023 | $ | 2,940,000 | 1.6 | % | $ | 2,940,000 | 12.0 | % | 2.0 | % | Fixed | No | 19 | % | |||||||||||||||
Public Co. A - Equipment Loans | Funded | 8/5/2019 | 3/5/2024 | 4,000,000 | 2.1 | % | 3,014,435 | 12.0 | % | N/A | Fixed | Yes | 18 | % | ||||||||||||||||||
Private Co. A | Funded | 5/8/2020 | 5/8/2024 | 34,000,000 | 18.1 | % | 34,654,069 | 13.0 | % | 4.0 | % | Fixed | Yes | 24 | % | |||||||||||||||||
Private Co. B | Funded | 9/10/2020 | 9/1/2023 | 10,500,000 | 5.6 | % | 9,059,140 | 13.0 | % | 4.0 | % | Fixed | Yes | 26 | % | |||||||||||||||||
Private Co. C | Funded | 11/5/2020 | 12/1/2025 | 22,000,000 | 11.7 | % | 16,571,443 | 13.0 | % | 4.0 | % | Floating | Yes | 22 | % | |||||||||||||||||
Sub. of Public Co. D(4) | Funded | 12/18/2020 | 12/18/2024 | 10,000,000 | 5.3 | % | 10,000,000 | 12.9 | % | N/A | Fixed | No | 14 | % | ||||||||||||||||||
Private Co. D | Funded | 12/23/2020 | 1/1/2026 | 12,000,000 | 6.4 | % | 12,107,055 | 13.0 | % | 2.0 | % | Fixed | Yes | 20 | % | |||||||||||||||||
Private Co. E | Funded | 3/30/2021 | 4/1/2026 | 21,000,000 | 11.2 | % | 11,174,533 | 13.0 | % | 4.0 | % | Floating | Yes | 26 | % | |||||||||||||||||
Private Co. F | Funded | 4/27/2021 | 5/1/2026 | 13,000,000 | 6.9 | % | 6,166,025 | 13.0 | % | 4.0 | % | Fixed | Yes | 28 | % | |||||||||||||||||
Public Co. E(4) | Funded | 4/29/2021 | 4/29/2025 | 15,000,000 | 8.0 | % | 15,000,000 | 13.0 | % | N/A | Fixed | Yes | 17 | % | ||||||||||||||||||
Sub of Private Co. G | Funded | 4/30/2021 | 5/1/2026 | 22,000,000 | 11.7 | % | 22,075,778 | 13.0 | % | 4.0 | % | Floating | Yes | 18 | % | |||||||||||||||||
Sub of Private Co. H(5) | Funded | 5/11/2021 | 5/11/2023 | 5,781,250 | 3.1 | % | 5,781,250 | 15.0 | % | N/A | Fixed | No | 20 | % | ||||||||||||||||||
Public Co. F | Funded | 5/21/2021 | 5/30/2023 | 10,000,000 | 5.3 | % | 10,000,000 | 9.8 | % | N/A | Fixed | No | 12 | % | ||||||||||||||||||
Private Co. I - Bridge Loan(6) | Funded | 6/4/2021 | 7/9/2021 | 5,500,000 | 3.0 | % | 5,500,000 | 13.0 | % | N/A | Fixed | No | N/A | |||||||||||||||||||
SubTotal | $ | 187,721,250 | 100.0 | % | $ | 164,043,728 | 12.8 | % | 3.7 | % | 21 | % | ||||||||||||||||||||
Wtd Average |
Loan Names | Status | Original Funding Date(1) | Loan Maturity | Total Loan Commitment | % of Total AFCG | Principal Balance as of 3/31/2021 | Cash Interest Rate | Paid In Kind ("PIK") | Fixed/ Floating | Amortization During Term | YTM (2) | |||||||||||||||||||||||
Public Co. A - Real Estate Loan(3) | Funded: | 7/3/2019 | 1/26/2023 | $ | 2,940,000 | 2.3 | % | $ | 2,945,479 | 12.0 | % | 2.0 | % | Fixed | No | 20 | % | |||||||||||||||||
Public Co. A - Equipment Loan(3) | Funded: | 8/5/2019 | 3/5/2024 | 4,000,000 | 3.1 | % | 3,244,459 | 12.0 | % | N/A | Fixed | Yes | 17 | % | ||||||||||||||||||||
Sub. of Public Co. C(4)(5) | Funded: | 2/12/2020 | 2/18/2025 | 15,000,000 | 11.7 | % | 12,046,801 | 16.8 | % | 3.0 | % | Fixed | Yes | 49. | % | |||||||||||||||||||
Private Co. A | Funded: | 5/8/2020 | 5/8/2024 | 34,000,000 | 26.5 | % | 34,672,331 | 13.0 | % | 4.0 | % | Fixed | Yes | 24 | % | |||||||||||||||||||
Private Co. B | Funded: | 9/10/2020 | 9/1/2023 | 10,500,000 | 8.2 | % | 2,548,159 | 13.0 | % | 4.0 | % | Fixed | Yes | 26 | % | |||||||||||||||||||
Private Co. C | Funded: | 11/5/2020 | 12/1/2025 | 22,000,000 | 17.1 | % | 13,895,465 | 13.0 | % | 4.0 | % | Floating | Yes | 22 | % | |||||||||||||||||||
Sub. of Public Co. D(6) | Funded: | 12/18/2020 | 12/18/2024 | 10,000,000 | 7.8 | % | 10,000,000 | 12.9 | % | N/A | Fixed | No | 14 | % | ||||||||||||||||||||
Private Co. D | Funded: | 12/23/2020 | 1/1/2026 | 12,000,000 | 9.3 | % | 12,045,385 | 13.0 | % | 2.0 | % | Fixed | Yes | 20 | % | |||||||||||||||||||
Private Co. E | Funded: | 3/30/2021 | 4/1/2026 | 21,000,000 | 14.0 | % | 7,000,000 | 13.0 | % | 4.0 | % | Floating | Yes | 23 | % | |||||||||||||||||||
Subtotal | $ | 131,440,000 | 100.0 | % | $ | 98,398,079 | 13.4 | % | 3.0 | % | 23 | % | ||||||||||||||||||||||
Wtd Average |
Real Estate | ||||||||||||||||||||||||||||||||||
Borrower | Status | Date | AFCG Loan, net of Syndication | % of Total AFCG | Total Funded Debt Issuance | AFCG % of the Total Loan | Est. Real Estate Value (1) | Real Estate Collateral Coverage | Implied Real Estate Collateral for AFCG | AFCG Real Estate Collateral Coverage | ||||||||||||||||||||||||
Public Co. A - Real Estate Loan(2) | Funded | 7/3/2019 | $ | 2,940,000 | 1.6 | % | $ | 30,000,000 | 9.8 | % | $ | 72,000,000 | 2.40 | x | $ | 7,056,000 | 2.4 | x | ||||||||||||||||
Public Co. A - Equipment Loan | Funded | 8/5/2019 | $ | 4,000,000 | 2.1 | % | $ | 20,000,000 | 20.0 | % | $ | 0 | 0.00 | x | $ | 0 | 0.0 | x | ||||||||||||||||
Private Co. A(3) | Funded | 5/8/2020 | $ | 34,000,000 | 18.1 | % | $ | 42,500,000 | 80.0 | % | $ | 53,408,035 | 1.26 | x | $ | 42,726,428 | 1.3 | x | ||||||||||||||||
Private Co. B(4) | Funded | 9/10/2020 | $ | 10,500,000 | 5.6 | % | $ | 10,500,000 | 100.0 | % | $ | 19,536,098 | 1.86 | x | $ | 19,536,098 | 1.9 | x | ||||||||||||||||
Private Co. C(5) | Funded | 11/5/2020 | $ | 22,000,000 | 11.7 | % | $ | 22,000,000 | 100.0 | % | $ | 23,733,050 | 1.08 | x | $ | 23,733,050 | 1.1 | x | ||||||||||||||||
Subsidiary of Public Co. D(6) | Funded | 12/18/2020 | $ | 10,000,000 | 5.3 | % | $ | 120,000,000 | 8.3 | % | $ | 26,058,332 | 0.22 | x | $ | 2,171,528 | 0.2 | x | ||||||||||||||||
Private Co. D(7) | Funded | 12/23/2020 | $ | 12,000,000 | 6.4 | % | $ | 12,000,000 | 100.0 | % | $ | 7,538,589 | 0.63 | x | $ | 7,538,589 | 0.6 | x | ||||||||||||||||
Private Co. E(8) | Funded | 3/30/2021 | $ | 21,000,000 | 11.2 | % | $ | 21,000,000 | 100.0 | % | $ | 16,102,000 | 0.77 | x | $ | 16,102,000 | 0.8 | x | ||||||||||||||||
Private Co. F(9) | Funded | 4/27/2021 | $ | 13,000,000 | 6.9 | % | $ | 13,000,000 | 100.0 | % | $ | 8,062,097 | 0.62 | x | $ | 8,062,097 | 0.6 | x | ||||||||||||||||
Public Co. E(10) | Funded | 4/29/2021 | $ | 15,000,000 | 8.0 | % | $ | 71,000,000 | 21.1 | % | $ | 2,097,998 | 0.03 | x | $ | 443,239 | 0.0 | x | ||||||||||||||||
Sub of Private Co. G(11) | Funded | 4/30/2021 | $ | 22,000,000 | 11.7 | % | $ | 22,000,000 | 100.0 | % | $ | 43,713,935 | 1.99 | x | $ | 43,713,935 | 2.0 | x | ||||||||||||||||
Sub of Private Co. H(12) | Funded | 5/11/2021 | $ | 5,781,250 | 3.1 | % | $ | 37,000,000 | 15.6 | % | $ | 35,000,000 | 0.95 | x | $ | 5,468,750 | 0.9 | x | ||||||||||||||||
Public Co. F(13) | Funded | 5/21/2021 | $ | 10,000,000 | 5.3 | % | $ | 130,000,000 | 7.7 | % | $ | 127,890,000 | 0.98 | x | $ | 9,837,692 | 1.0 | x | ||||||||||||||||
Private Co. I - Bridge Loan(14) | Funded | 6/4/2021 | $ | 5,500,000 | 3.0 | % | $ | 5,500,000 | 100.0 | % | $ | 0 | 0.00 | x | $ | 0 | 0.0 | x | ||||||||||||||||
$ | 187,721,250 | 100.0 | % | $ | 556,500,000 | $ | 435,140,134 | 0.78 | x | $ | 186,389,406 | 1.0 | x |
(1) | To the extent the applicable loan is intended to fund any acquisitions and/or construction, the applicable figure includes expected total basis on such future construction and/or acquisitions plus appraised value. |
(2) | Public Company A real estate is based on total cost basis. |
(3) | Private Company A real estate is based on total cost basis |
(4) | Private Company B real estate is based on the expected total cost basis of a to-be-built facility, as completed. The anticipated completion date for the to-be-built facility is August 2021. |
(5) | Private Company C real estate is based on the cost basis of two facilities, including the capital expenditures for one facility that is being converted for cannabis cultivation purposes. The construction of the to-be-converted facility is divided into six phases. The first phase was completed in December 2020 and the anticipated completion date for the remaining phases of construction is November 2021. |
(6) | Subsidiary of Public Company D real estate is based on total cost basis. |
(7) | Private Company D real estate is based on our internal estimations of property values. |
(8) | Private Company E real estate is based on the expected total cost basis, including construction expected to be completed within 12 months of loan closing. |
(9) | Private Company F real estate is based on the expected total cost basis, including construction expected to be completed within 12 months of loan closing. |
(10) | Public Company E real estate is based on total cost basis. |
(11) | Subsidiary of Private Company G real estate is based on the expected total cost basis, including construction expected to be completed within 12 months of loan closing. |
(12) | Subsidiary of Private Company H real estate is based on appraised value. |
(13) | Public Company F real estate is based on appraised value. |
(14) | The bridge loan to Private Company I was refinanced in July 2021 by a larger credit facility. Refer to “—Recent Developments” for more information on this loan. |
Borrower | Status | Date | AFCG Commitment, net of Syndication | % of Total AFCG | Total Funded Debt Issuance | AFCG % of the Total Loan | Est. Real Estate Value (1) | Real Estate Collateral Coverage | Implied Real Estate Collateral for AFCG | �� | AFCG Real Estate Collateral Coverage | |||||||||||||||||||||||||
Public Co. A - Real Estate Loan(2) | Funded | 7/3/2019 | $ | 2,940,000 | 2.3 | % | $ | 30,000,000 | 9.8 | % | $ | 72,000,000 | 2.40 | x | $ | 7,056,000 | 2.40 | x | ||||||||||||||||||
Public Co. A - Equipment Loan | Funded | 8/5/2019 | $ | 4,000,000 | 3.1 | % | $ | 20,000,000 | 20.0 | % | $ | 0 | 0.00 | x | $ | 0 | 0.00 | x | ||||||||||||||||||
Subsidiary of Public Co. C(3) | Funded | 2/12/2020 | $ | 15,000,000 | 11.7 | % | $ | 15,000,000 | 100.0 | % | $ | 30,723,143 | 2.05 | x | $ | 30,723,143 | 2.05 | x | ||||||||||||||||||
Private Co. A(4) | Funded | 5/8/2020 | $ | 34,000,000 | 26.5 | % | $ | 42,500,000 | 80.0 | % | $ | 51,339,031 | 1.21 | x | $ | 41,071,225 | 1.21 | x | ||||||||||||||||||
Private Co. B(5) | Funded | 9/10/2020 | $ | 10,500,000 | 8.2 | % | $ | 10,500,000 | 100.0 | % | $ | 19,536,098 | 1.86 | x | $ | 19,536,098 | 1.86 | x | ||||||||||||||||||
Private Co. C(6) | Funded | 11/5/2020 | $ | 22,000,000 | 17.1 | % | $ | 22,000,000 | 100.0 | % | $ | 23,733,050 | 1.08 | x | $ | 23,733,050 | 1.08 | x | ||||||||||||||||||
Subsidiary of Public Co. D(7) | Funded | 12/18/2020 | $ | 10,000,000 | 7.8 | % | $ | 120,000,000 | 8.3 | % | $ | 26,058,332 | 0.22 | x | $ | 2,171,528 | 0.22 | x | ||||||||||||||||||
Private Co. D(8) | Funded | 12/23/2020 | $ | 12,000,000 | 9.3 | % | $ | 12,000,000 | 100.0 | % | $ | 7,538,589 | 0.63 | x | $ | 7,538,589 | 0.63 | x | ||||||||||||||||||
Private Co. E(9) | Funded | 3/30/2021 | $ | 21,000,000 | 14.0 | % | $ | 21,000,000 | 100.0 | % | $ | 16,102,000 | 0.89 | x | $ | 16,102,000 | 0.77 | x | ||||||||||||||||||
$ | 131,440,000 | 100.0 | % | $ | 293,000,000 | $ | 247,030,242 | 0.85 | x | $ | 147,931,632 | 1.13 | x |
For the three months ended March 31, 2021 | For the six months ended June 30, 2021 | |||||||
Net Income | $ | 1,400,755 | $ | 6,028,542 | ||||
Adjustments to reconcile net income to net cash provided by / (used in) operating activities and changes in operating assets and liabilities | 970,030 | 1,467,345 | ||||||
Net cash provided by operating activities | 2,370,785 | 7,495,887 | ||||||
Net cash used in investing activities | (6,885,056 | ) | (61,684,731 | ) | ||||
Net cash provided by financing activities | 121,684,423 | 169,169,896 | ||||||
Change in cash, cash equivalents and restricted cash | $ | 117,170,152 | $ | 114,981,052 |
As of March 31, 2021 | As of June 30, 2021 | |||||||||||||||||||||||||||||||||||||||
Less than 1 year | 1-3 years | 3-5 years | More than 5 years | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | Total | |||||||||||||||||||||||||||||||
Unfunded Commitments | $ | 33,469,664 | - | - | - | $ | 33,469,664 | $ | 23,999,842 | - | - | - | $ | 23,999,842 | ||||||||||||||||||||||||||
Total | $ | 33,469,664 | - | - | - | $ | 33,469,664 | $ | 23,999,842 | - | - | - | $ | 23,999,842 |
As of December 31, 2020 | ||||||||||||||||||||
Less than 1 year | 1-3 years | 3-5 years | More than 5 years | Total | ||||||||||||||||
Unfunded Commitments | $ | 19,825,119 | - | - | - | $ | 19,825,119 | |||||||||||||
Total | $ | 19,825,119 | - | - | - | $ | 19,825,119 |
Item 4. | Controls and Procedures |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Item 5. | Other Information |
Item 6. | Exhibits |
Articles of Amendment and Restatement of AFC Gamma, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-11, as amended (File No. 333-251762)). | |
Amended and Restated Bylaws of AFC Gamma, Inc. (incorporated by reference to Exhibit 3.4 to the Company’s Registration Statement on Form S-11, as amended (File No. 333-251762)). | |
Amendment dated May 7, 2021, to the Secured Revolving Credit Agreement, dated August 18, 2020, by and among AFC Gamma, Inc., as borrower, AFC Finance, LLC, as agent, and AFC Finance, LLC and Gamma Lending Holdco LLC, as | |
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
Inline XBRL Taxonomy Extension Schema Document. | |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. |
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
Date: | |||||
AFC GAMMA, INC. | |||||
By: | /s/ Leonard M Tannenbaum | ||||
Leonard M Tannenbaum Chief Executive Officer, Chairman and Director (Principal Executive Officer) |
By: | /s/ Thomas Geoffroy | ||
Thomas Geoffroy Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer) |