Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2022 | May 09, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Document Transition Report | false | |
Entity File Number | 001-39995 | |
Entity Registrant Name | AFC GAMMA, INC. | |
Entity Central Index Key | 0001822523 | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 85-1807125 | |
Entity Address, Address Line One | 525 Okeechobee Blvd. | |
Entity Address, Address Line Two | Suite 1770 | |
Entity Address, City or Town | West Palm Beach | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33401 | |
City Area Code | 561 | |
Local Phone Number | 510-2390 | |
Title of 12(b) Security | Common Stock, $0.01 par value per share | |
Trading Symbol | AFCG | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 19,742,940 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 | |
Assets | |||
Loans held for investment at fair value (cost of $92,808,827 and $74,913,157 at March 31, 2022 and December 31, 2021, respectively, net) | [1] | $ 95,072,832 | $ 77,096,319 |
Debt securities available for sale held at fair value (cost of $0 and $16,050,000 at March 31, 2022 and December 31, 2021, respectively) | 0 | 15,881,250 | |
Loans held for investment at carrying value, net | [2] | 265,151,482 | 257,163,496 |
Loan receivable at carrying value, net | 2,279,324 | 2,530,588 | |
Current expected credit loss reserve | (3,390,676) | (2,431,558) | |
Loans held for investment at carrying value and loan receivable at carrying value, net of current expected credit loss reserve | 264,040,130 | 257,262,526 | |
Cash and cash equivalents | 63,615,179 | 109,246,048 | |
Receivable for loans and securities sold | 26,500,000 | 0 | |
Interest receivable | 4,235,265 | 4,412,938 | |
Prepaid expenses and other assets | 604,177 | 949,279 | |
Total assets | 454,067,583 | 464,848,360 | |
Liabilities and Stockholders' Equity: | |||
Interest reserve | 607,163 | 4,782,271 | |
Accrued interest | 2,409,723 | 991,840 | |
Due to affiliate | 23,122 | 0 | |
Dividends payable | 10,858,617 | 8,221,406 | |
Current expected credit loss reserve | 629,188 | 683,177 | |
Accrued management and incentive fees | 3,847,213 | 2,823,044 | |
Accrued direct administrative expenses | 906,717 | 1,324,457 | |
Accounts payable and other liabilities | 1,615,812 | 1,528,980 | |
Senior notes payable, net | 96,659,635 | 96,572,656 | |
Line of credit payable to affiliate, net | 0 | 74,845,355 | |
Total liabilities | 117,557,190 | 191,773,186 | |
Commitments and contingencies (Note 10) | |||
Stockholders' Equity | |||
Preferred stock, par value $0.01 per share, 10,000 shares authorized at March 31, 2022 and December 31, 2021 and 125 shares issued and outstanding at March 31, 2022 and December 31, 2021 | 1 | 1 | |
Common stock, par value $0.01 per share, 50,000,000 and 25,000,000 shares authorized at March 31, 2022 and December 31, 2021, respectively, and 19,742,940 and 16,442,812 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively | 196,784 | 163,866 | |
Additional paid-in-capital | 338,102,982 | 274,172,934 | |
Accumulated other comprehensive income (loss) | 0 | (168,750) | |
Accumulated (deficit) earnings | (1,789,374) | (1,092,877) | |
Total stockholders' equity | 336,510,393 | 273,075,174 | |
Total liabilities and stockholders' equity | $ 454,067,583 | $ 464,848,360 | |
[1] | Refer to Note 14 to the Company’s unaudited consolidated financial statements. | ||
[2] | The difference between the Carrying Value and the Outstanding Principal amount of the loans consists of unaccreted OID and loan origination costs. |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 | ||
Assets [Abstract] | ||||
Loans held for investment at cost | [2] | $ 92,808,827 | [1] | $ 74,913,157 |
Available for Sale Debt Securities at Carrying Value | $ 0 | $ 16,050,000 | ||
Shareholders' Equity | ||||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||
Preferred stock, shares authorized (in shares) | 10,000 | 10,000 | ||
Preferred stock, shares issued (in shares) | 125 | 125 | ||
Preferred stock, shares outstanding (in shares) | 125 | 125 | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||
Common stock, shares authorized (in shares) | 50,000,000 | 25,000,000 | ||
Common stock, shares issued (in shares) | 19,742,940 | 16,442,812 | ||
Common stock, shares outstanding (in shares) | 19,742,940 | 16,442,812 | ||
[1] | The difference between the Carrying Value and the Outstanding Principal amount of the loans consists of OID and loan origination costs. | |||
[2] | 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 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenue | ||
Interest income | $ 18,635,853 | $ 4,685,005 |
Interest Expense | (1,700,115) | 0 |
Net interest income | 16,935,738 | 4,685,005 |
Expenses | ||
Management and incentive fees, net (less rebate of $387,493 and $237,743, respectively) | 3,847,213 | 876,662 |
General and administrative expenses | 1,144,444 | 462,518 |
Stock-based compensation | 990,023 | 1,599,115 |
Professional fees | 399,368 | 135,453 |
Total expenses | 6,381,048 | 3,073,748 |
Provision for current expected credit losses | (905,129) | (66,100) |
Realized gains (losses) on sales of investments, net | 450,000 | 0 |
Change in unrealized gains (losses) on loans at fair value, net | 80,843 | (144,402) |
Net income before income taxes | 10,180,404 | 1,400,755 |
Income tax expense | 18,284 | 0 |
Net income | $ 10,162,120 | $ 1,400,755 |
Earnings per common share: | ||
Basic earnings per common share (in dollars per share) | $ 0.53 | $ 0.20 |
Diluted earnings per common share (in dollars per share) | $ 0.52 | $ 0.19 |
Weighted average number of common shares outstanding: | ||
Basic weighted average shares of common stock outstanding (in shares) | 19,319,993 | 7,144,670 |
Diluted weighted average shares of common stock outstanding (in shares) | 19,591,472 | 7,485,048 |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Expenses | ||
Management and incentive fees, net rebate | $ 387,493 | $ 237,743 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract] | ||
Net income | $ 10,162,120 | $ 1,400,755 |
Other comprehensive income (loss): | ||
Reversal of unrealized loss to recognized loss on debt securities available for sale held at fair value | 168,750 | 0 |
Total other comprehensive income (loss) | 168,750 | 0 |
Total comprehensive income | $ 10,330,870 | $ 1,400,755 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In-Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Accumulated Earnings (Deficit) [Member] | Total |
Balance at Dec. 31, 2020 | $ 1 | $ 61,794 | $ 91,068,197 | $ 0 | $ 517,720 | $ 91,647,712 |
Balance (in shares) at Dec. 31, 2020 | 6,179,392 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock, net of offering cost | 0 | $ 71,875 | 123,837,414 | 0 | 0 | 123,909,289 |
Issuance of common stock, net of offering cost (in shares) | 7,187,485 | |||||
Stock-based compensation | 0 | $ 0 | 1,599,115 | 0 | 0 | 1,599,115 |
Stock-based compensation (in shares) | 0 | |||||
Dividends declared on common shares | 0 | $ 0 | 0 | 0 | (2,224,866) | (2,224,866) |
Other comprehensive income (loss) | 0 | |||||
Net income | 0 | 0 | 0 | 0 | 1,400,755 | 1,400,755 |
Balance at Mar. 31, 2021 | 1 | $ 133,669 | 216,504,726 | 0 | (306,391) | 216,332,005 |
Balance (in shares) at Mar. 31, 2021 | 13,366,877 | |||||
Balance at Dec. 31, 2020 | 1 | $ 61,794 | 91,068,197 | 0 | 517,720 | 91,647,712 |
Balance (in shares) at Dec. 31, 2020 | 6,179,392 | |||||
Balance at Dec. 31, 2021 | 1 | $ 163,866 | 274,172,934 | (168,750) | (1,092,877) | 273,075,174 |
Balance (in shares) at Dec. 31, 2021 | 16,442,812 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock, net of offering cost | 0 | $ 32,918 | 62,940,025 | 0 | 0 | 62,972,943 |
Issuance of common stock, net of offering cost (in shares) | 3,291,832 | |||||
Stock-based compensation | 0 | $ 0 | 990,023 | 0 | 0 | 990,023 |
Stock-based compensation (in shares) | 8,296 | |||||
Dividends declared on common shares | 0 | $ 0 | 0 | 0 | (10,858,617) | (10,858,617) |
Other comprehensive income (loss) | 0 | 0 | 0 | 168,750 | 0 | 168,750 |
Net income | 0 | 0 | 0 | 0 | 10,162,120 | 10,162,120 |
Balance at Mar. 31, 2022 | $ 1 | $ 196,784 | $ 338,102,982 | $ 0 | $ (1,789,374) | $ 336,510,393 |
Balance (in shares) at Mar. 31, 2022 | 19,742,940 |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Dividends declared and paid on common shares (in dollars per share) | $ 0.55 | $ 0.36 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Operating activities: | ||
Net income | $ 10,162,120 | $ 1,400,755 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Provision for current expected credit losses | 905,129 | 66,100 |
Realized (gains) losses on sales of investments, net | (450,000) | 0 |
Change in unrealized (gains) losses on loans at fair value, net | (80,843) | 144,402 |
Accretion of deferred loan original issue discount and other discounts | (3,965,878) | (707,751) |
Amortization of deferred financing costs - revolving credit facility | 50,982 | 0 |
Amortization of offering costs - senior notes | 161,979 | 0 |
Stock-based compensation | 990,023 | 1,599,115 |
Payment-in-kind interest | (1,618,761) | (559,004) |
Changes in operating assets and liabilities | ||
Interest reserve | (4,175,108) | (82,266) |
Interest receivable | 177,673 | (278,012) |
Prepaid expenses and other assets | 373,765 | 67,971 |
Accrued interest | 1,417,883 | 0 |
Accrued management and incentive fees, net | 1,024,169 | 654,535 |
Accrued direct administrative expenses | (417,740) | (185,104) |
Accounts payable and other liabilities | 109,954 | 250,044 |
Net cash provided by (used in) operating activities | 4,665,347 | 2,370,785 |
Cash flows from investing activities: | ||
Issuance of and fundings on loans | (50,463,213) | (7,096,075) |
Proceeds from sales of Assigned Rights | 0 | 103,302 |
Principal repayment of loans | 20,415,460 | 107,717 |
Net cash provided by (used in) investing activities | (30,047,753) | (6,885,056) |
Cash flows from financing activities: | ||
Proceeds from sale of common stock | 63,939,722 | 127,003,125 |
Payment of offering costs - equity offering | (966,779) | (3,093,836) |
Dividends paid to common stockholders | (8,221,406) | (2,224,866) |
Repayments on the line of credit | (75,000,000) | 0 |
Net cash provided by (used in) financing activities | (20,248,463) | 121,684,423 |
Net increase (decrease) in cash and cash equivalents | (45,630,869) | 117,170,152 |
Cash and cash equivalents, beginning of period | 109,246,048 | 9,623,820 |
Cash and cash equivalents, end of period | 63,615,179 | 126,793,972 |
Supplemental disclosure of non-cash activity | ||
Interest reserve withheld from funding of loans | 0 | 2,000,000 |
OID withheld from funding of loans | 1,067,675 | 1,967,596 |
Sale of Assigned Rights | 0 | 1,104,914 |
Change in other comprehensive income (loss) during the period | 168,750 | 0 |
Dividends declared and not yet paid | 10,858,617 | 0 |
Receivable in connection with sale of loan | 10,600,000 | 0 |
Receivable in connection with sale of securities | 15,900,000 | 0 |
Supplemental information: | ||
Interest paid during the period | 69,271 | 0 |
Income taxes paid during the period | $ 0 | $ 0 |
ORGANIZATION
ORGANIZATION | 3 Months Ended |
Mar. 31, 2022 | |
ORGANIZATION [Abstract] | |
ORGANIZATION | 1. ORGANIZATION AFC Gamma, Inc. (the “Company” or “AFCG”) is a commercial real estate finance company primarily engaged in originating, structuring, and underwriting senior secured loans and other types of loans. The Company was formed and commenced operations on July 31, 2020. The Company is a Maryland corporation and completed its initial public offering (the “IPO”) in March 2021. The Company is externally managed by AFC Management, LLC (the Company’s “Manager”), a Delaware limited liability company, pursuant to the terms of a management agreement (as amended, the “Management Agreement”). The Company’s wholly owned subsidiary, AFCG TRS1, LLC (“TRS1”), was formed under the laws of the State of Delaware on December 31, 2020, and operates as a taxable real estate investment trust (“REIT”) subsidiary (a “TRS”), TRS1 began operating in July 2021, and the financial statements of TRS1 have been consolidated within the Company’s consolidated financial statements beginning with the quarter ended September 30, 2021. The Company operates as one operating segment and is primarily focused on financing senior secured loans and other types of loans for established cannabis industry operators in states where medical and/or adult use cannabis is legal. These loans are generally held for investment and are secured, directly or indirectly, by real estate, equipment, the value associated with The Company has elected to be taxed as a REIT for United States federal income tax purposes under the Internal Revenue Code of 1986, as amended (the “Code”), commencing with its taxable year ended December 31, 2020. The Company generally will not be subject to United States federal income taxes on its REIT taxable income as long as it annually distributes all of its REIT taxable income prior to the deduction for dividends paid to stockholders and complies with various other requirements as a REIT. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2022 | |
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | 2. SIGNIFICANT ACCOUNTING POLICIES The accompanying unaudited interim consolidated financial statements should be read in conjunction with the audited financial statements and the related management’s discussion and analysis of financial condition and results of operations included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed with the Securities and Exchange Commission (“SEC”). Refer to Note 2 to the Company’s Annual Report on Form 10-K for a description of the Company’s significant accounting policies. The Company has included disclosures below regarding basis of presentation and other accounting policies that (i) are required to be disclosed quarterly, (ii) have material changes or (iii) the Company views as critical as of the date of this report. Basis of Presentation The accompanying unaudited interim consolidated financial statements and related notes have been prepared on the accrual basis of accounting in conformity with generally accepted accounting principles in the United States (“GAAP”) and in conformity with the rules and regulations of the SEC applicable to interim financial information. These unaudited interim consolidated financial statements reflect all adjustments that, in the opinion of management, are considered necessary for a fair statement of the Company’s results of operations and financial condition as of and for the periods presented. The current period’s results of operations will not necessarily be indicative of results that ultimately may be achieved for the year ending December 31, 2022. Investment in Marketable Securities Marketable debt securities are recorded at fair value and unrealized holding gains or losses are excluded from net income on the consolidated income statement and reported as a component of accumulated other comprehensive income within stockholders’ equity. Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Actual results could differ from those estimates. Significant estimates include the valuation of loans held for investment at fair value. Over the course of the coronavirus (“COVID-19”) pandemic, medical cannabis companies have been deemed “essential” by almost all states with legalized cannabis and stay-at-home orders. Consequently, the impact of the COVID-19 pandemic and the related regulatory and private sector response on our financial and operating results for the period ended March 31, 2022 was somewhat mitigated as all of our borrowers were permitted to continue to operate during this pandemic. Regardless, the full extent of the economic impact of the business disruptions caused by COVID-19 is uncertain. The outbreak of COVID-19 has severely impacted global economic activity and caused significant volatility and negative pressure in financial markets. The global impact of the outbreak has been rapidly evolving, and many countries, including the United States, have reacted by instituting quarantines, mandating business and school closures and restricting travel. As a result, the COVID-19 pandemic is negatively impacting almost every industry directly or indirectly, including the regulated cannabis industry. Although most of these measures have been lifted or scaled back, surges of COVID-19 in certain parts of the world, including the United States, have resulted and may in the future result in the re-imposition of certain restrictions and may lead to more restrictions to reduce the spread of COVID-19. The full effect that these disruptions may have on the operations and financial performance of the Company will depend on future developments, including possible impacts on the performance of the Company’s loans, general business activity, and ability to generate revenue, which cannot be determined. Recent Accounting Pronouncements In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. ASU No. 2020-04 is effective for all entities as of March 12, 2020 through December 31, 2022. The Company does not believe the adoption of this ASU will have a material impact on its consolidated financial statements. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope, which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. ASU No. 2021-01 is effective immediately for all entities. An entity may elect to apply the amendments on a full retrospective basis as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or on a prospective basis to new modifications from any date within an interim period that includes or is subsequent to the date of the issuance of a final update, up to the date that financial statements are available to be issued. If an entity elects to apply any of the amendments for an eligible hedging relationship, any adjustments as a result of those elections must be reflected as of the date the entity applies the election. They do not apply to contract modifications made after December 31, 2022, new hedging relationships entered into after December 31, 2022, and existing hedging relationships evaluated for effectiveness in periods after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that apply certain optional expedients in which the accounting effects are recorded through the end of the hedging relationship (including periods after December 31, 2022). The Company is currently evaluating the impact, if any, of this ASU on its consolidated financial statements. |
LOANS HELD FOR INVESTMENT AT FA
LOANS HELD FOR INVESTMENT AT FAIR VALUE | 3 Months Ended |
Mar. 31, 2022 | |
LOANS HELD FOR INVESTMENT AT FAIR VALUE [Abstract] | |
LOANS HELD FOR INVESTMENT AT FAIR VALUE | 3. LOANS HELD FOR INVESTMENT AT FAIR VALUE As of March 31, 2022 and December 31, 2021, the Company’s portfolio included three loans held at fair value. The aggregate originated commitment under these loans was approximately $96.2 million and $75.9 million, respectively, and outstanding principal was approximately $95.6 million and $77.6 million, as of March 31, 2022 and December 31, 2021, respectively. For the three months ended March 31, 2022, the Company funded approximately $17.3 million of additional principal and had no repayments. As of March 31, 2022 and December 31, 2021, none of the Company’s loans held at fair value had floating interest rates. The following tables summarize the Company’s loans held at fair value as of March 31, 2022 and December 31, 2021: As of March 31, 2022 Fair Value (1) Carrying Value (2) Outstanding Principal (2) Weighted Average Remaining Life (Years) (3) Senior term loans $ 95,072,832 $ 92,808,827 $ 95,618,815 2.0 Total loans held at fair value $ 95,072,832 $ 92,808,827 $ 95,618,815 2.0 As of December 31, 2021 Fair Value (1) Carrying Value (2) Outstanding Principal (2) Weighted Average Remaining Life (Years) (3) Senior term loans $ 77,096,319 $ 74,913,157 $ 77,630,742 2.2 Total loans held at fair value $ 77,096,319 $ 74,913,157 $ 77,630,742 2.2 (1) Refer to Note 14 to the Company’s unaudited consolidated financial statements. (2) 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 (3) Weighted average remaining life is calculated based on the fair value of the loans as of March 31, 2022 and December 31, 2021 The following table presents changes in loans held at fair value as of and for the three months ended March 31, 2022: Principal Original Issue Discount Unrealized Gains (Losses) Fair Value Total loans held at fair value at December 31, 2021 $ 77,630,742 $ (2,717,584 ) $ 2,183,161 $ 77,096,319 Change in unrealized gains (losses) on loans at fair value, net - - 80,843 80,843 New fundings 17,285,000 (429,275 ) - 16,855,725 Accretion of original issue discount - 336,872 - 336,872 PIK interest 703,073 - - 703,073 Total loans held at fair value at March 31, 2022 $ 95,618,815 $ (2,809,987 ) $ 2,264,004 $ 95,072,832 A more detailed listing of the Company’s loans held at fair value portfolio based on information available as of March 31, 2022 is as follows: Collateral Location Collateral Type (1) Fair Value (2) Carrying Value (3) Outstanding Principal (3) Interest Rate Maturity Date (4) Payment Terms (5) Private Co. A AZ, MI, MD, MA C, D $ 79,312,373 $ 77,486,750 $ 79,744,238 15.5 % (6) 5/8/2024 P/I Public Co. A NV C 2,970,654 2,994,612 2,994,612 14.0 % (7) 1/26/2023 I/O Private Co. B MI C 12,789,805 12,327,465 12,879,965 17.0 % (8) 9/1/2023 P/I Total loans held at fair value $ 95,072,832 $ 92,808,827 $ 95,618,815 (1) C = Cultivation Facilities, D = Dispensaries. (2) Refer to Note 14 to the Company’s unaudited consolidated financial statements. (3) The difference between the Carrying Value and the Outstanding Principal amount of the loans consists of OID and loan origination costs. (4) 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. (5) I/O = interest-only, P/I = principal and interest. P/I loans may include interest-only periods for a portion of the loan term. (6) Base interest rate of 12.8% and payment-in-kind (“PIK”) interest rate of 2.7%. (7) Base interest rate of 10% and PIK interest rate of 4%. (8) Base interest rate of 13% and PIK interest rate of 4%. |
LOANS HELD FOR INVESTMENT AT CA
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 (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%. |
LOAN RECEIVABLE AT CARRYING VAL
LOAN RECEIVABLE AT CARRYING VALUE | 3 Months Ended |
Mar. 31, 2022 | |
LOAN RECEIVABLE AT CARRYING VALUE [Abstract] | |
LOAN RECEIVABLE AT CARRYING VALUE | 5. LOAN RECEIVABLE AT CARRYING VALUE As of March 31, 2022 and December 31, 2021, the Company’s portfolio included one loan receivable at carrying value. The originated commitment under this loan was approximately $4.0 million and outstanding principal was approximately $2.3 million and $2.5 million as of March 31, 2022 and December 31, 2021, respectively. During the three months ended March 31, 2022, the Company received repayments of approximately $0.3 million of outstanding principal. The following table presents changes in loans receivable as of and for the three months ended March 31, 2022: Principal Original Issue Discount Carrying Value Total loans receivable at carrying value at December 31, 2021 $ 2,533,266 $ (2,678 ) $ 2,530,588 Principal repayment of loans (251,574 ) - (251,574 ) Accretion of original issue discount - 310 310 Total loans receivable at carrying value at March 31 2022 $ 2,281,692 $ (2,368 ) $ 2,279,324 |
CURRENT EXPECTED CREDIT LOSSES
CURRENT EXPECTED CREDIT LOSSES | 3 Months Ended |
Mar. 31, 2022 | |
CURRENT EXPECTED CREDIT LOSSES [Abstract] | |
CURRENT EXPECTED CREDIT LOSSES | 6. CURRENT EXPECTED CREDIT LOSSES The Company estimates its current expected credit losses (“CECL”) on both the outstanding balances and unfunded commitments on loans held for investment and requires consideration of a broader range of historical experience adjusted for current conditions and reasonable and supportable forecast information to inform credit loss estimates (the “CECL Reserve”) using a model that considers multiple datapoints and methodologies that may include the likelihood of default and expected loss given default for each individual loan, discounted cash flows (“DCF”), and other inputs which may include the risk rating of the loan, how recently the loan was originated compared to the measurement date, and expected prepayment if applicable. Calculation of the CECL Reserve requires loan specific data, which includes fixed charge coverage ratio, loan-to-value, property type and geographic location. Estimating the CECL Reserve also requires significant judgment with respect to various factors, including (i) the appropriate historical loan loss reference data, (ii) the expected timing of loan repayments, (iii) calibration of the likelihood of default to reflect the risk characteristics of the Company’s loan portfolio and (iv) the Company’s current and future view of the macroeconomic environment. The Company may consider loan-specific qualitative factors on certain loans to estimate its CECL Reserve, which may include (i) whether cash from the borrower’s operations is sufficient to cover the debt service requirements currently and into the future, (ii) the ability of the borrower to refinance the loan and (iii) the liquidation value of collateral. For loans where the Company has deemed the borrower/sponsor to be experiencing financial difficulty, the Company may elect to apply a practical expedient in which the fair value of the underlying collateral is compared to the amortized cost of the loan in determining a specific CECL allowance. In order to estimate the future expected loan losses relevant to the Company’s portfolio, the Company may consider historical market loan loss data provided by a third-party data service. The third party’s loan database includes historical loss data for commercial mortgage-backed securities, or CMBS which the Company believes is a reasonably comparable and available data set to its type of loans. The CECL Reserve takes into consideration the macroeconomic impact of the COVID-19 pandemic on commercial real estate properties and is not specific to any loan losses or impairments on the Company’s loans held for investment. As of March 31, 2022 and December 31, 2021, the Company’s CECL Reserve for its loans held at carrying value and loans receivable at carrying value is approximately $4.0 million and $3.1 million, respectively, or 150 and 120 basis points, respectively, of the Company’s total loans held at carrying value and loans receivable at carrying value of approximately $267.4 million and $259.7 million, respectively, and is bifurcated between the current expected credit loss reserve (contra-asset) related to outstanding balances on loans held at carrying value and loans receivable at carrying value of approximately $3.4 million and $2.4 million, respectively, and a liability for unfunded commitments of approximately $0.6 million and $0.7 million, respectively. The liability was based on the unfunded portion of the loan commitment over the full contractual period over which the Company is exposed to credit risk through a current obligation to extend credit. Management considered the likelihood that funding will occur, and if funded, the expected credit loss on the funded portion. Activity related to the CECL Reserve for outstanding balances and unfunded commitments on the Company’s loans held at carrying value and loans receivable at carrying value as of and for the three months ended March 31, 2022 was as follows: Outstanding (1) Unfunded (2) Total Balance at December 31, 2021 $ 2,431,558 $ 683,177 $ 3,114,735 Provision for current expected credit losses 959,118 (53,989 ) 905,129 Write-offs - - - Recoveries - - - Balance at March 31, 2022 $ 3,390,676 $ 629,188 $ 4,019,864 (1) As of March 31, 2022 and December 31, 2021, the CECL Reserve related to outstanding balances on loans at carrying value and loans receivable at carrying value is recorded within current expected credit loss reserve in the Company’s consolidated balance sheets. (2) As of March 31 The Company continuously evaluates the credit quality of each loan by assessing the risk factors of each loan and assigning a risk rating based on a variety of factors. Risk factors include property type, geographic and local market dynamics, physical condition, projected cash flow, loan structure and exit plan, loan-to-value ratio, fixed charge coverage ratio, project sponsorship, and other factors deemed necessary. Based on a 5-point scale, the Company’s loans are rated “1” through “5,” from less risk to greater risk, which ratings are defined as follows: Rating Definition 1 Very Low Risk — Materially exceeds performance metrics included in original or current credit underwriting and business plan 2 Low Risk — Collateral and business performance exceeds substantially all performance metrics included in original or current credit underwriting and business plan 3 Medium Risk — Collateral and business performance meets, or is on track to meet underwriting expectations; business plan is met or can reasonably be achieved 4 High Risk/ Potential for Loss — Collateral performance falls short of underwriting, material differences from business plans, defaults may exist, or may soon exist absent material improvement. Risk of recovery of interest exists 5 Impaired/Loss Likely — Performance is significantly worse than underwriting with major variances from business plan observed. Loan covenants or financial milestones have been breached; exit from loan or refinancing is uncertain. Full recovery of principal is unlikely The risk ratings are primarily based on historical data as well as taking into account future economic conditions. As of March 31, 2022 the carrying value, excluding the CECL Reserve, of the Company’s loans held at carrying value and loans receivable at carrying value within each risk rating by year of origination is as follows: Risk Rating: 2022 2021 2020 Total 1 $ - $ - $ - $ - 2 25,997,066 59,088,000 - 85,085,066 3 - 134,207,717 37,849,005 172,056,722 4 - 10,289,018 - 10,289,018 5 - - - - Total $ 25,997,066 $ 203,584,735 $ 37,849,005 $ 267,430,806 |
INTEREST RECEIVABLE
INTEREST RECEIVABLE | 3 Months Ended |
Mar. 31, 2022 | |
INTEREST RECEIVABLE [Abstract] | |
INTEREST RECEIVABLE | 7. INTEREST RECEIVABLE The following table summarizes the interest receivable by the Company as of March 31, 2022 and December 31, 2021: As of March 31, 2022 As of December 31, 2021 Interest receivable $ 3,128,116 $ 3,562,566 PIK receivable 541,834 554,357 Unused fees receivable 565,315 296,015 Total interest receivable $ 4,235,265 $ 4,412,938 |
INTEREST RESERVE
INTEREST RESERVE | 3 Months Ended |
Mar. 31, 2022 | |
INTEREST RESERVE [Abstract] | |
INTEREST RESERVE | 8. INTEREST RESERVE At March 31, 2022 and December 31, 2021, the Company had four and seven loans, respectively, that included a loan funded interest reserve. For the three months ended March 31, 2022, approximately $4.2 million of interest income was earned and disbursed from the interest reserve. The following table presents changes in interest reserve as of and for the three months ended March 31, 2022: Three months ended March 31, 2022 Beginning reserves $ 4,782,271 New reserves - Reserves disbursed (4,175,108 ) Ending reserves $ 607,163 |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2022 | |
DEBT [Abstract] | |
DEBT | 9. DEBT Revolving Credit Facility On April 29, 2022, the Company entered into the Loan and Security Agreement (the “Revolving Credit Agreement”) by and among the Company, the other loan parties from time to time party thereto, the lenders party thereto, and the Lead Arranger, Bookrunner and Agent party thereto, pursuant to which, the Company obtained a $60.0 million senior-secured revolving credit facility (the “Revolving Credit Facility”). The Revolving Credit Facility contains aggregate commitments of $60.0 million from two FDIC-insured banking institutions, which may be increased to up to $100.0 million in aggregate (subject to available borrowing base and additional commitments), and contains a maturity date of April 29, 2025, which may be borrowed, repaid and redrawn, subject to a borrowing base based on eligible loan obligations held by the Company and subject to the satisfaction of other conditions provided under the Revolving Credit Facility. Interest is payable on the Revolving Credit Facility at the greater of (1) the applicable base rate plus 0.50% and (2) 4.50%, as provided in the Revolving Credit Agreement, payable in cash in arrears. The Company incurred a one-time commitment fee expense of approximately $0.4 million, which will be amortized over the life of the facility. Commencing on the six-month anniversary of the closing date, the Revolving Credit Facility has an unused line fee of 0.25% per annum, to be paid semi-annually in arrears, which will be included within interest expense in the Company’s consolidated statements of operations. The obligations of the Company under the Revolving Credit Facility are secured by certain assets of the Company comprising of or relating to loan obligations designated for inclusion in the borrowing base. In addition, the Company is subject to various financial and other covenants, including: (1) liquidity of at least $5.0 million, (2) annual debt service coverage of at least 1.50 to 1.0 and (3) secured debt not to exceed 25% of total consolidated assets of the Company and its subsidiaries. Termination of AFC Finance Credit Facility with Affiliate In July 2020, the Company obtained a secured revolving credit loan (the “AFCF Revolving Credit Facility”) from AFC Finance, LLC, an affiliate of the Company’s management secured by the assets of the Company. The AFCF Revolving Credit Facility had a loan commitment of $40.0 million at an interest rate of 8% per annum, payable in cash in arrears. The maturity date of the AFCF Revolving Credit Facility was the earlier of (i) July 31, 2021 and (ii) the date of the closing of any credit facility where the proceeds are incurred to refund, refinance or replace the AFCF Revolving Credit Agreement (as defined below) with an aggregate principal amount equal to or greater than $50.0 million (any such financing, a “Refinancing Credit Facility”) in accordance with terms of the credit agreement governing the AFCF Revolving Credit Facility (the “AFCF Revolving Credit Agreement”). On May 7, 2021, the Company amended the AFCF Revolving Credit Agreement (the “First Amendment”). The First Amendment (i) increased the loan commitment from $40.0 million to $50.0, million (ii) decreased the interest rate from 8% per annum to 6% per annum, (iii) removed Gamma Lending Holdco LLC as a lender and (iv) extended the maturity date from July 31, 2021 to the earlier of (A) December 31, 2021 or (B) the date of the closing of any Refinancing Credit Facility. On November 3, 2021, the Company entered into the Second Amendment to the AFCF Revolving Credit Agreement (the “Second Amendment”). Under the Second Amendment, payments to AFC Finance, LLC for interest, commitment fees and unused fees (net applicable taxes) are required to be paid directly or indirectly through AFC Finance, LLC to charitable organizations designated by AFC Finance, LLC. The Second Amendment (i) increased the loan commitment from $50.0 million to $75.0 million; (ii) decreased the interest rate from 6% per annum to 4.75% per annum; (iii) introduced a one-time commitment fee of 0.25%, to be paid in three equal quarterly installments, and an unused line fee of 0.25% per annum, to be paid quarterly in arrears; (iv) provided an optional buyout provision for the holders of the Company’s 2027 Senior Notes (as defined above) upon an event of default under the AFCF Revolving Credit Agreement; (v) extended the fixed element of the maturity date from December 31, 2021 to September 30, 2022 and (vi) provided that a Refinancing Credit Facility (as defined in the Second Amendment) may be any credit facility where the proceeds are incurred to refund, refinance or replace the AFCF Revolving Credit Agreement. Pursuant to the Second Amendment, the Company incurred a one-time commitment fee expense of $187,500 in November 2021, payable in three quarterly installments that began in the first quarter of 2022, which is amortized over the life of the loan. As of March 31, 2022 and December 31, 2021, the outstanding loan balance under the AFCF Revolving Credit Facility was $0.0 million and $75.0 million, respectively. All borrowings that were previously outstanding as of December 31, 2021 were repaid in full on January 3, 2022. The Company incurred interest expense on the AFCF Revolving Credit Facility of $19,792 and $0 for the three months ended March 31, 2022 and 2021, respectively. On April 29, 2022, upon the Company’s entry into the Revolving Credit Facility, the Company terminated the AFCF Revolving Credit Agreement. 2027 Senior Notes On November 3, 2021, the Company issued $100.0 million in aggregate principal amount of senior unsecured notes due in 2027 The net proceeds from the offering were approximately $97.0 million, after deducting the initial purchasers’ discounts and commissions and estimated offering fees and expenses payable by the Company. The Company intends to use the proceeds from the issuance of the 2027 Senior Notes (i) to fund loans related to unfunded commitments to existing borrowers, (ii) to originate and participate in commercial loans to companies operating in the cannabis industry that are consistent with our investment strategy and (iii) for working capital and other general corporate purposes. The terms of the 2027 Senior Notes are governed by an indenture, dated November 3, 2021, among us, as issuer, and TMI Trust Company, as trustee (the “Indenture”). Under the Indenture governing the 2027 Senior Notes, we are required to cause all of our existing and future subsidiaries to guarantee the 2027 Senior Notes, other than certain immaterial subsidiaries as set forth in the Indenture. As of March 31, 2022, the 2027 Senior Notes are not guaranteed by any of our subsidiaries. Prior to February 1, 2027, we may redeem the 2027 Senior Notes in whole or in part at a price equal to the greater of 100% of the principal amount of the 2027 Senior Notes being redeemed or a make-whole premium set forth in the Indenture, plus accrued and unpaid interest thereon to, but excluding, the applicable redemption date. On or after February 1, 2027, we may redeem the 2027 Senior Notes in whole or in part at a price equal to 100% of the principal amount of the 2027 Senior Notes being redeemed, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date. The Indenture also requires us to offer to purchase all of the 2027 Senior Notes at a purchase price equal to 101% of the principal amount of the 2027 Senior Notes, plus accrued and unpaid interest if a ‘‘change of control triggering event’’ (as defined in the Indenture) occurs. The Indenture governing the 2027 Senior Notes contains customary terms and restrictions, subject to a number of exceptions and qualifications, including restrictions on the Company’s ability to (1) incur additional indebtedness unless the Annual Debt Service Charge (as defined in the Indenture) is no less than 1.5 to 1.0, (2) incur or maintain total debt in an aggregate principal amount greater than 60% of the Company’s consolidated Total Assets (as defined in the Indenture), (3) incur or maintain secured debt in an aggregate principal amount greater than 25% of the Company’s consolidated Total Assets (as defined in the Indenture); and (4) merge, consolidate or sell substantially all of the Company’s assets. In addition, the Indenture also provides for customary events of default. If any event of default occurs, any amount then outstanding under the Indenture may immediately become due and payable. These events of default are subject to a number of important exceptions and qualifications set forth in the Indenture. The 2027 Senior Notes are due on May 1, 2027. Scheduled principal payments on the senior unsecured notes as of March 31, 2022 Senior Unsecured Notes Year 2022 (remaining) $ - 2023 - 2024 - 2025 - 2026 - Thereafter 100,000,000 Total principal $ 100,000,000 The following table reflects a summary of interest expense incurred during the three months ended March 31, 2022 Three months ended March 31, 2022 Senior Unsecured Notes Line of Credit Total Borrowings Interest expense $ 1,421,529 $ 19,792 $ 1,441,321 Unused fee expense - 45,833 45,833 Amortization of deferred financing costs 161,979 50,982 212,961 Total interest expense $ 1,583,508 $ 116,607 $ 1,700,115 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 10. COMMITMENTS AND CONTINGENCIES As of March 31, 2022 and December 31, 2021, the Company had the following commitments to fund various senior term loans, investment in debt securities, equipment loans and bridge loans: As of March 31, 2022 As of December 31, 2021 Total original loan commitments $ 420,083,125 $ 419,198,125 Less: drawn commitments (370,645,105 ) (363,659,505 ) Total undrawn commitments $ 49,438,020 $ 55,538,620 The Company from time to time may be a party to litigation in the normal course of business. As of March 31, 2022, the Company is not aware of any legal claims that could materially impact its business, financial condition or results of operations. The Company provides loans to established companies operating in the cannabis industry which involves significant risks, including the risk of strict enforcement against the Company’s borrowers of the federal illegality of cannabis, the Company’s borrowers’ inability to renew or otherwise maintain their licenses or other requisite authorizations for their cannabis operations, and such loans lack of liquidity, and the Company could lose all or part of any of the Company’s loans. The Company’s ability to grow or maintain our business depends on state laws pertaining to the cannabis industry. New laws that are adverse to the Company’s borrowers may be enacted, and current favorable state or national laws or enforcement guidelines relating to cultivation, production and distribution of cannabis may be modified or eliminated in the future, which would impede the Company’s ability to grow and could materially adversely affect the Company’s business. Management’s plan to mitigate risks include monitoring the legal landscape as deemed appropriate. Also, should a loan default or otherwise be seized, the Company may be prohibited from owning cannabis assets and thus could not take possession of collateral, in which case the Company would look to sell the loan, which could result in the Company realizing a loss on the transaction. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2022 | |
STOCKHOLDERS' EQUITY [Abstract] | |
STOCKHOLDERS' EQUITY | 11. STOCKHOLDERS’ EQUITY Series A Preferred Stock As of March 31, 2022 and December 31, 2021, the Company has authorized 10,000 preferred shares and issued 125 of the preferred shares designated as 12.0% Series A Cumulative Non-Voting Preferred Stock, par value $0.01 per share (the “Series A Preferred Stock”). The Series A Preferred Stock entitles the holders thereof to receive cumulative cash dividends at a rate per annum of 12.0% of the liquidation preference of $1,000 per share plus all accumulated and unpaid dividends thereon. The Company generally may not declare or pay, or set apart for payment, any dividend or other distribution on any shares of the Company’s stock ranking junior to the Series A Preferred Stock as to dividends, including the Company’s common stock, or redeem, repurchase or otherwise make payments on any such shares, unless full, cumulative dividends on all outstanding shares of Series A Preferred Stock have been declared and paid or set apart for payment for all past dividend periods. The holders of the Series A Preferred Stock generally have no voting rights except in limited circumstances, including certain amendments to the Company’s charter and the authorization or issuance of equity securities senior to or on parity with the Series A Preferred Stock. The Series A Preferred Stock is not convertible into shares of any other class or series of our stock. The Series A Preferred Stock is senior to all other classes and series of shares of the Company’s stock as to dividend and redemption rights and rights upon the Company’s liquidation, dissolution and winding up. Upon written notice to each record holder of the Series A Preferred Stock as to the effective date of redemption, the Company may redeem the shares of the outstanding Series A Preferred Stock at the Company’s option, in whole or in part, at any time for cash at a redemption price equal to $1,000 per share, for a total of $125,000 for the 125 shares outstanding, plus all accrued and unpaid dividends thereon to and including the date fixed for redemption. Shares of the Series A Preferred Stock that are redeemed shall no longer be deemed outstanding shares of the Company and all rights of the holders of such shares will terminate. Common Stock The Board of Directors of the Company (the “Board”) approved a seven-for-one stock split of the Company’s common stock effective on January 25, 2021. All common shares, stock options, and per share information presented in the consolidated financial statements have been adjusted to reflect the stock split on a retroactive basis for all periods presented, including reclassifying an amount equal to the increase in par value of common stock from additional paid-in capital. There was no change in the par value of the Company’s common stock. Upon consummation of the Company’s IPO, any stockholder that held fractional shares received cash in lieu of such fractional shares based on the public offering price of the shares of the Company’s common stock at IPO. This resulted in the reduction of 15 shares issued and outstanding. On March 23, 2021, the Company completed its IPO of 6,250,000 shares of its common stock at a price of $19.00 per share, raising approximately $118.8 million in gross proceeds. The underwriters also exercised their over-allotment option to purchase up to an additional 937,500 shares of the Company’s common stock at a price of $19.00 per share, which was completed on March 26, 2021, raising approximately $17.8 million in additional gross proceeds. The underwriting commissions of approximately $8.3 million and $1.25 million, respectively, are reflected as a reduction of additional paid-in capital on the consolidated statements of stockholders’ equity. The Company incurred approximately $3.1 million of expenses in connection with the IPO, which is reflected as a reduction in additional paid-in capital. The net proceeds to the Company totaled approximately $123.9 million. On June 28, 2021, the Company completed an offering of 2,750,000 shares of its common stock at a price of $20.50 per share, raising approximately $56.4 million in gross proceeds. The underwriting commissions of approximately $3.1 million are reflected as a reduction of additional paid-in capital on the consolidated statements of stockholders’ equity. The Company incurred approximately $0.7 million of expenses in connection with the offering, which is reflected as a reduction in additional paid-in capital. The net proceeds to the Company totaled approximately $52.6 million. On July 6, 2021, the underwriters partially exercised their over-allotment option to purchase 269,650 shares of the Company’s common stock at a price of $20.50 per share raising approximately $5.5 million in additional gross proceeds or approximately $5.2 million in net proceeds after underwriting commissions of approximately $0.3 million, which is reflected as a reduction of additional paid-in capital on the consolidated statements of stockholders’ equity. On January 10, 2022, the Company completed an underwritten offering of 3,000,000 shares of our common stock, at a price to the public of $20.50 per share. The gross proceeds to the Company from the offering were $61.5 million, before deducting underwriting discounts and commissions, a structuring fee and offering expenses payable by the Company. In connection with the offering, the underwriters were granted an over-allotment option to purchase up to an additional 450,000 shares of the Company’s common stock. On January 14, 2022, the underwriters partially exercised the over-allotment option with respect to 291,832 shares of common stock, which was completed on January 19, 2022. The underwriting commissions of approximately $3.5 million are reflected as a reduction of additional paid-in capital in the first quarter of fiscal year 2022. The Company incurred approximately $1.0 million of expenses in connection with the offering. After giving effect to the partial exercise of the over-allotment option, the total number of shares sold by the Company in the public offering was 3,291,832 shares and total gross proceeds, before deducting underwriting discounts and commissions, a structuring fee and other offering expenses payable by the Company, were approximately $67.5 million. The net proceeds to the Company totaled approximately $63.0 million. Pursuant to the Articles of Amendment, dated March 10, 2022, the Company increased the number of authorized shares of common stock to 50,000,000 shares at $0.01 par value per share. Shelf Registration On April 5, 2022, the Company filed a shelf registration statement on Form S-3 (File No. 333-264144) (the “Shelf Registration Statement”). Under the Shelf Registration Statement, the Company may, from time to time, issue and sell up to $1.0 billion of the Company’s common stock, preferred stock, debt securities, warrants and rights (including as part of a unit) to purchase shares of the Company’s At-the-Market Stock Offering Program (“ATM”) On April 5, 2022, the Company entered into an Open Market Sale Agreement (the “Sales Agreement”) with Jefferies LLC and JMP Securities LLC, as Sales Agents, under which the Company may, from time to time, offer and sell shares of common stock, par value $0.01 per share, having an aggregate offering price of up to $75.0 million. Under the terms of the Sales Agreement, the Company has agreed to pay the Sales Agents a commission of up to 3.0% of the gross proceeds from each sale of common stock sold through the Sales Agents under the Sales Agreement. Sales of common stock, if any, may be made in transactions that are deemed to be “at the market” offerings, as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended (the “Securities Act”). As of May 9, 2022, the Company has not issued or sold any shares of common stock under the Sales Agreement. Equity Incentive Plan The Company has established an equity incentive compensation plan (the “2020 Plan”). The 2020 Plan authorizes stock options, stock appreciation rights, restricted stock, stock bonuses, stock units and other forms of awards granted or denominated in the Company’s common stock or units of common stock. The 2020 Plan retains flexibility to offer competitive incentives and to tailor benefits to specific needs and circumstances. Any award may be structured to be paid or settled in cash. The Company has, and currently intends to continue to grant stock options to participants in the 2020 Plan, but it may also grant any other type of award available under the 2020 Plan in the future. Persons eligible to receive awards under the 2020 Plan include officers or employees of the Company or any of its subsidiaries, directors of the Company, employees of the Manager and certain directors and consultants and other service providers to the Company or any of its subsidiaries. During the quarter ended March 31, 2022, the Company’s Board of Directors approved grants of restricted stock and stock options to the Company’s directors and officers, as well as employees of the Manager. As of March 31, 2022, there were 2,380,687 shares of common stock outstanding under the 2020 Plan, underlying 2,316,106 options and 64,581 shares of restricted stock. On January 11, 2022, the Company granted an aggregate of 8,296 shares of restricted stock and 737,000 stock options to certain of our officers and other eligible persons. The restricted stock granted under the 2020 Stock Incentive Plan vest over a four-year period with approximately 33% vesting on each of the second, third and fourth anniversaries of the vesting commencement date. The stock options granted under the 2020 Stock Incentive Plan vest over various periods from immediately upon issuance to a four-year period. As of March 31, 2022, the maximum number of shares of the Company common stock that may be delivered pursuant to awards under the 2020 Plan (the “Share Limit”) equals 2,731,148 shares, which is an increase of 329,183 shares compared to December 31, 2021 under the evergreen provision in the 2020 Plan in connection with the public offering of an additional 3,000,000 shares of common stock by the Company in January 2022 and an additional 291,832 shares of common stock issued by the Company to the underwriters in connection with their partial exercise of an over-allotment option in January 2022 The exercise price of any options granted under the 2020 Plan will be at net asset value or greater; provided, however, the exercise price will be at least equal to the market price of the underlying shares on the grant date. The options granted under the 2020 Plan have an ordinary term of up to 10 years. An option may either be an incentive stock option or a nonqualified stock option. Options generally may not be transferred to third parties for value and do not include dividend equivalent rights. The following table summarizes the (i) non-vested options granted, (ii) vested options granted and (iii) forfeited options granted for the Company’s directors and officers and employees of the Manager as of March 31, 2022 and December 31, 2021: As of March 31, 2022 As of December 31, 2021 Non-vested 320,114 183,114 Vested 2,049,518 1,449,518 Forfeited (53,526 ) (28,396 ) Balance 2,316,106 1,604,236 The Company uses the Black-Scholes option pricing model to value stock options in determining the share-based compensation expense. Forfeitures are recognized as they occur. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the date of grant. The expected dividend yield was based on the Company’s expected dividend yield at grant date. Expected volatility is based on the estimated average volatility of similar companies due to the lack of historical volatilities of the Company’s common stock. Restricted stock grant expense is based on the Company’s stock price at the time of the grant and amortized over the vesting period. The share-based compensation expense for the Company was approximately $990,023 and $1,599,115 for the three months ended March 31, 2022 and 2021, respectively. The following table presents the assumptions used in the option pricing model of options granted under the 2020 Plan: Assumptions Range Expected volatility 40% - 50 % Expected dividend yield 10% - 20 % Risk-free interest rate 0.5% - 2.0 % Expected forfeiture rate 0 % The following tables summarize the stock option activity during the three months ended March 31, 2022 and 2021: Three months ended March 31, 2022 Weighted-Average Grant Date Fair Value Per Option Balance as of December 31, 2021 1,604,236 $ 1.08 Granted 737,000 1.46 Exercised - - Forfeited (25,130 ) 0.98 Balance as of March 31 2022 2,316,106 $ 1.09 Three months ended March 31, 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 - - Forfeited - - Balance as of March 31, 2021 1,616,098 $ 1.08 The following table summarizes the (i) non-vested restricted stock granted, (ii) vested restricted stock granted and (iii) forfeited restricted stock granted for the Company’s directors and officers and employees of the Manager as of March 31, 2022 and December 31, 2021: As of March 31, 2022 As of December 31, 2021 Non-vested 64,581 56,285 Vested - - Forfeited - - Balance 64,581 56,285 The fair value of the Company’s restricted stock awards is based on the Company’s stock price on the date of grant. The following tables summarize the restricted stock activity during the three months ended March 31, 2022 and 2021: Three months ended March 31, 2022 Balance as of December 31, 2021 56,285 Granted 8,296 Exercised - Forfeited - Balance as of March 31, 2022 64,581 Three months ended March 31, 2021 Balance as of December 31, 2020 - Granted - Exercised - Forfeited - Balance as of March 31, 2021 - |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2022 | |
EARNINGS PER SHARE [Abstract] | |
EARNINGS PER SHARE | 12. EARNINGS PER SHARE The following information sets forth the computations of basic weighted average earnings per common share for the three months ended March 31, 2022 and 2021: Three months ended March 31, 2022 2021 Net income (loss) attributable to common stockholders $ 10,162,120 $ 1,400,755 Divided by: Basic weighted average shares of common stock outstanding 19,319,993 7,144,670 Diluted weighted average shares of common stock outstanding 19,591,472 7,485,048 Basic weighted average earnings per common share $ 0.53 $ 0.20 Diluted weighted average earnings per common share $ 0.52 $ 0.19 |
INCOME TAX
INCOME TAX | 3 Months Ended |
Mar. 31, 2022 | |
INCOME TAX [Abstract] | |
INCOME TAX | 13. INCOME TAX A TRS is an entity taxed as a corporation that has not elected to be taxed as a REIT, in which a REIT directly or indirectly holds equity, and that has made a joint election with such REIT to be treated as a TRS. A TRS generally may engage in any business, including investing in assets and engaging in activities that could not be held or conducted directly by the Company without jeopardizing its qualification as a REIT. A TRS is subject to applicable United States federal, state and local income tax on its taxable income. In addition, as a REIT, the Company also may be subject to a 100% excise tax on certain transactions between it and its TRS that are not conducted on an arm’s-length basis. The income tax provision is included in the line item income tax expense, including excise tax in the consolidated statements of operations included in these unaudited interim consolidated financial statements. The income tax provision for the Company was $18,284 and $0 for the three months ended March 31, 2022 and 2021, respectively. For the three months ended March 31, 2022 The Company does not have any unrecognized tax benefits and the Company does not expect that to change in the next 12 months. |
FAIR VALUE
FAIR VALUE | 3 Months Ended |
Mar. 31, 2022 | |
FAIR VALUE [Abstract] | |
FAIR VALUE | 14. FAIR VALUE Loans Held for Investment The Company’s loans are typically valued using a yield analysis, which is typically performed for non-credit impaired loans to borrowers where the Company does not own a controlling equity position. To determine fair value using a yield analysis, a current price is imputed for the loan based upon an assessment of the expected market yield for a similarly structured loan with a similar level of risk. In the yield analysis, the Company considers the current contractual interest rate, the maturity and other terms of the loan relative to risk of the company and the specific loan. A key determinant of risk, among other things, is the leverage through the loan relative to the enterprise value of the borrower. As loans held by the Company are substantially illiquid with no active loan market, the Company depends on primary market data, including newly funded loans, as well as secondary market data with respect to high yield debt instruments and syndicated loans, as inputs in determining the appropriate market yield, as applicable. The following tables present fair value measurements of loans held at fair value as of March 31, 2022 and December 31, 2021: Fair Value Measurement as of March 31, 2022 Total Level 1 Level 2 Level 3 Loans held at fair value $ 95,072,832 $ - $ - $ 95,072,832 Total $ 95,072,832 $ - $ - $ 95,072,832 Fair Value Measurement as of December 31, 2021 Total Level 1 Level 2 Level 3 Loans held at fair value $ 77,096,319 $ - $ - $ 77,096,319 Total $ 77,096,319 $ - $ - $ 77,096,319 The following table presents changes in loans that use Level 3 inputs as of and for the three months ended March 31, 2022: Three months ended March 31, 2022 Total loans using Level 3 inputs at December 31 2021 $ 77,096,319 Change in unrealized gains (losses) on loans at fair value, net 80,843 Additional fundings 17,285,000 Original issue discount and other discounts, net of costs (429,275 ) Accretion of original issue discount 336,872 PIK interest 703,073 Total loans using Level 3 inputs at March 31 2022 $ 95,072,832 The change in unrealized appreciation included in the unaudited interim consolidated statement of operations attributable to loans held at fair value, categorized as Level 3, held at March 31, 2022 is $80,843. The following tables summarize the significant unobservable inputs the Company used to value the loans categorized within Level 3 as of March 31, 2022 and December 31, 2021. The tables are not intended to be all-inclusive, but instead capture the significant unobservable inputs relevant to the Company’s determination of fair values. As of March 31, 2022 Unobservable Input Fair Value Primary Valuation Techniques Input Estimated Range Weighted Average Senior Term Loans $ 95,072,832 Yield analysis Market Yield 16.26% - 21.73 % 17.41 % Total Investments $ 95,072,832 As of December 31, 2021 Unobservable Input Fair Value Primary Valuation Techniques Input Estimated Range Weighted Average Senior Term Loans $ 77,096,319 Yield analysis Market Yield 17.71% - 20.96 % 18.22 % Total Investments $ 77,096,319 Changes in market yields may change the fair value of certain of the Company’s loans. Generally, an increase in market yields may result in a decrease in the fair value of certain of the Company’s loans. Due to the inherent uncertainty of determining the fair value of loans that do not have a readily available market value, the fair value of the Company’s loans may fluctuate from period to period. Additionally, the fair value of the Company’s loans may differ significantly from the values that would have been used had a ready market existed for such loans and may differ materially from the values that the Company may ultimately realize. Further, such loans are generally subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities. If the Company was required to liquidate a loan in a forced or liquidation sale, it could realize significantly less than the value at which the Company has recorded it. In addition, changes in the market environment and other events that may occur over the life of the loans may cause the gains or losses ultimately realized on these loans to be different than the unrealized gains or losses reflected in the valuations currently assigned. Investment in Marketable Securities As of March 31, 2022, the Company’s portfolio did not include any debt securities. As of December 31, 2021, the Company’s portfolio included one investment in debt securities held at fair value of approximately $15.9 million. The Company sold the investment in debt securities during the quarter ended March 31, 2022, which was previously designated as available-for-sale as of December 31, 2021. For the period ended March 31, 2022, the realized loss on the sale of debt securities was approximately $0.2 million. As of March 31, 2022, the Company had a receivable related to the sale of Public Company G that was sold during the three months ended March 31, 2022 in the amount of approximately $15.9 million, which is recorded within The following table presents changes in debt securities held at fair value as of and for the three months ended March 31, 2022: Principal Original Issue Discount Unrealized Gains (Losses) Fair Value Total debt securities held at fair value at December 31, 2021 $ 15,000,000 $ 1,050,000 $ (168,750 ) $ 15,881,250 Realized gains (losses) on securities at fair value, net - (150,000 ) - (150,000 ) Change in accumulated other comprehensive income - - 168,750 168,750 Sale of securities (15,000,000 ) (900,000 ) - (15,900,000 ) Total debt securities held at fair value at March 31, 2022 $ - $ - $ - $ - The following table presents fair value measurements of debt securities held at fair value as of March 31, 2022 and December 31, 2021. Fair Value Measurement as of March 31, 2022 Total Level 1 Level 2 Level 3 Debt securities held at fair value $ - $ - $ - $ - Total $ - $ - $ - $ - Fair Value Measurement as of December 31, 2021 Total Level 1 Level 2 Level 3 Debt securities held at fair value $ 15,881,250 $ - $ 15,881,250 $ - Total $ 15,881,250 $ - $ 15,881,250 $ - Fair Value of Financial Instruments GAAP requires disclosure of fair value information about financial instruments, whether or not recognized at fair value in the balance sheet, for which it is practicable to estimate that value. The following table details the book value and fair value of the Company’s financial instruments not recognized at fair value in the consolidated balance sheets: As of March 31, 2022 Carrying Value Fair Value Financial assets Cash and cash equivalents $ 63,615,179 $ 63,615,179 Loans held for investment at carrying value $ 265,151,482 $ 265,006,706 Loan receivable at carrying value $ 2,279,324 $ 2,229,213 Estimates of fair value for cash and cash equivalents are measured using observable, quoted market prices, or Level 1 inputs. The Company’s loans held for investment are measured using unobservable inputs, or Level 3 inputs. The Company’s investments in debt securities are measured using readily available quoted prices for similar assets, or Level 2 inputs. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2022 | |
RELATED PARTY TRANSACTIONS [Abstract] | |
RELATED PARTY TRANSACTIONS | 15. RELATED PARTY TRANSACTIONS Management Agreement Pursuant to the Management Agreement, the Manager manages the loans and day-to-day operations of the Company, subject at all times to the further terms and conditions set forth in the Management Agreement and such further limitations or parameters as may be imposed from time to time by the Company’s Board. The Manager will receive base management fees (the “Base Management Fee”) that are calculated and payable quarterly in arrears, in an amount equal to 0.375% of the Company’s Equity (as defined below), subject to certain adjustments, less 50% of the aggregate amount of any other fees (“Outside Fees”), including any agency fees relating to our loans, but excluding the Incentive Compensation (as defined below) and any diligence fees paid to and earned by the Manager and paid by third parties in connection with the Manager’s due diligence of potential loans. Prior to the IPO, the quarterly base management fee was equal to 0.4375% of the Company’s Equity, subject to certain adjustments, less 100% of the aggregate amount of any Outside Fees, including any agency fees relating to our loans, but excluding the Incentive Compensation and any diligence fees paid to and earned by the Manager and paid by third parties in connection with the Manager’s due diligence of potential loans. In addition to the Base Management Fee, the Manager is entitled to receive incentive compensation (the “Incentive Compensation” or “Incentive Fees”) under the Management Agreement. Under the Management Agreement, the Company will pay Incentive Fees to the Manager based upon the Company’s achievement of targeted levels of Core Earnings. “Core Earnings” is defined in the Management Agreement as, for a given period means the net income (loss) for such period, computed in accordance with GAAP, excluding (i) non-cash equity compensation expense, (ii) the Incentive Compensation, (iii) depreciation and amortization, (iv) any unrealized gains or losses or other non-cash items that are included in net income for the applicable reporting period, regardless of whether such items are included in other comprehensive income or loss, or in net income and (v) one-time events pursuant to changes in GAAP and certain non-cash charges, in each case after discussions between the Manager and the Company’s independent directors and approved by a majority of the independent directors. The Incentive Compensation for the three months ended March 31, 2022 and 2021 was approximately $3.0 million and $0.7 million, respectively. The Company shall pay all of its costs and expenses and shall reimburse the Manager or its affiliates for expenses of the Manager and its affiliates paid or incurred on behalf of the Company, excepting only those expenses that are specifically the responsibility of the Manager pursuant to the Management Agreement. The following table summarizes the related party costs incurred by the Company for the three months ended March 31, 2022 and 2021: Three months ended March 31, 2022 2021 Affiliate Costs Management fees $ 1,255,867 $ 451,675 Less outside fees earned (387,493 ) (237,743 ) Base management fees 868,374 213,932 Incentive fees earned 2,978,839 662,730 General and administrative expenses reimbursable to Manager 906,717 365,567 Total $ 4,753,930 $ 1,242,229 Amounts payable to the Company’s Manager as of March 31, 2022 and December 31, 2021 were $4,753,930 and $4,147,501, respectively. Due to Affiliate Amounts due to an affiliate of the Company as of March 31, 2022 and December 31, 2021 were $23,122 and $0, respectively. Investments in Loans From time to time, the Company may co-invest with other investment vehicles managed by the Company’s Manager or its affiliates, including the Manager, and their portfolio companies, including by means of splitting loans, participating in loans or other means of syndicating loans. The Company is not obligated to provide, nor has it provided, any financial support to the other managed investment vehicles. As such, the Company’s risk is limited to the carrying value of its investment in any such loan. As of March 31, 2022, there were five co-invested loans held by the Company and an affiliate of the Company. In March 2022, the Company entered into the fourth amendment of the Amended and Restated Credit Agreement with Public Company F to, among other things, increase the total loan commitments by $100 million, with approximately (i) $26.6 million of the new loan commitments allocated to us; (ii) $15.0 million of the new loan commitments allocated to Flower Loan Holdco LLC, an affiliated entity in which Leonard Tannenbaum, our Chief Executive Officer and Chairman of our Board, is the majority ultimate beneficial owner In connection with investments in loans, the Company may receive the option to assign the right (the “Assigned Right”) to acquire warrants and/or equity of the borrower. The Company may sell the Assigned Right, and the sale may be to an affiliate of the Company. During the three months ended March 31, 2022, the Company neither received nor sold any Assigned Right. For the three months ended March 31, 2021, the Company sold approximately $1.2 million of Assigned Rights to an affiliate which are accounted for as additional original issue discount and accreted over the life of the loans. Secured Revolving Credit Facility From Affiliate In April 2022, the Company terminated the AFCF Revolving Credit Facility. Refer to Note 9 to the Company’s unaudited consolidated financial statements for more information. |
DIVIDENDS AND DISTRIBUTIONS
DIVIDENDS AND DISTRIBUTIONS | 3 Months Ended |
Mar. 31, 2022 | |
DIVIDENDS AND DISTRIBUTIONS [Abstract] | |
DIVIDENDS AND DISTRIBUTIONS | 16. DIVIDENDS AND DISTRIBUTIONS The following table summarizes the Company’s dividends declared during the three months ended March 31, 2022 and 2021: 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 Regular cash dividend 3/31/2022 4/15/2022 $ 0.55 $ 0.55 $ - $ 0.55 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2022 | |
SUBSEQUENT EVENTS [Abstract] | |
SUBSEQUENT EVENTS | 17. SUBSEQUENT EVENTS The Company has evaluated subsequent events through the date the financial statements were available to be issued. There were no material subsequent events, other than those described below, that required disclosure in these financial statements. Subsequent to the end of the first quarter, the Company closed two loans with new commitments of approximately $107.3 million, and funded approximately $79.9 million of principal amount of new and existing commitments. In April 2022, each of the loans to Private Company D and Private Company F were repaid in full in connection with the Company’s new loan to Private Company L, an affiliate of Private Company D and Private Company F. The loans to Private Company D and Private Company F had original maturity dates of January 2026 May 2026 In April 2022, the loan to Private Company K was repaid in connection with the Company’s refinancing and restructuring the loan under a new credit facility with Private Company K. Under the new credit facility with Private Company K, the Company increased its total loan commitment to approximately $24.8 million, from $19.8 million, and restructured the construction obligations of the borrowers, among other things. As restructured, the Private Company K loan accrues interest at a floating rate, with a floor of 13%, and matures in May 2027 In April 2022, the Company filed its shelf registration statement on Form S-3 with the SEC registering up to $1.0 billion of securities, including shares of common stock, preferred stock, debt securities, warrants, rights, as well as units that include any of these securities (the “Shelf Registration Statement”). The Shelf Registration Statement included a prospectus for an at-the-market offering program to sell up to an aggregate of $75.0 million of shares of common stock that may be issued and sold from time to time under the Sales Agreement with Jefferies LLC and JMP Securities LLC, as Sales Agents. No securities were issued under the Shelf Registration Statement through the date of this filing. Please refer to Note 11 to the Company’s unaudited consolidated financial statements for more information . On April 1, 2022, the Company’s investment in the senior secured loan to Private Company I was transferred to TRS1, the Company’s wholly-owned subsidiary. On April 29, 2022, the Company entered into the Revolving Credit Facility. The Revolving Credit Facility contains aggregate commitments of $60.0 million from two FDIC-insured banking institutions, with a maturity date of April 29, 2025, which may be borrowed, repaid and redrawn (subject to a borrowing base based on eligible loan obligations held by the Company and subject to the satisfaction of other conditions provided under the Revolving Credit Facility). Interest is payable on the Revolving Credit Facility at the greater of (1) the applicable base rate plus 0.50% and (2) 4.50%, as provided in the Revolving Credit Agreement, payable in cash in arrears. In connection with entering into the Revolving Credit Facility, the Company incurred a one-time commitment fee expense of approximately $0.4 million. Commencing on the six-month anniversary of the closing date, the Revolving Credit Facility has an unused line fee of 0.25% per annum, which will be included within interest expense in the Company’s consolidated statements of operations. Upon the Company’s entry into the Revolving Credit Facility, the Company terminated the AFCF Revolving Credit Agreement. The amount of total commitments under the Revolving Credit Facility may be increased to up to $100.0 million in aggregate, subject to available borrowing base and lenders’ willingness to provide additional commitments. The obligations of the Company under the Revolving Credit Facility are secured by certain assets of the Company comprising of or relating to loan obligations designated for inclusion in the borrowing base. In addition, the Company is subject to various financial and other covenants, including: (1) liquidity of at least $5.0 million, (2) annual debt service coverage of at least 1.50 to 1.0 and (3) secured debt not to exceed 25% of total consolidated assets of the Company and its subsidiaries. Please refer to Note 9 to the Company’s unaudited consolidated financial statements for more information. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim consolidated financial statements and related notes have been prepared on the accrual basis of accounting in conformity with generally accepted accounting principles in the United States (“GAAP”) and in conformity with the rules and regulations of the SEC applicable to interim financial information. These unaudited interim consolidated financial statements reflect all adjustments that, in the opinion of management, are considered necessary for a fair statement of the Company’s results of operations and financial condition as of and for the periods presented. The current period’s results of operations will not necessarily be indicative of results that ultimately may be achieved for the year ending December 31, 2022. |
Investment in Marketable Securities | Investment in Marketable Securities Marketable debt securities are recorded at fair value and unrealized holding gains or losses are excluded from net income on the consolidated income statement and reported as a component of accumulated other comprehensive income within stockholders’ equity. |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Actual results could differ from those estimates. Significant estimates include the valuation of loans held for investment at fair value. Over the course of the coronavirus (“COVID-19”) pandemic, medical cannabis companies have been deemed “essential” by almost all states with legalized cannabis and stay-at-home orders. Consequently, the impact of the COVID-19 pandemic and the related regulatory and private sector response on our financial and operating results for the period ended March 31, 2022 was somewhat mitigated as all of our borrowers were permitted to continue to operate during this pandemic. Regardless, the full extent of the economic impact of the business disruptions caused by COVID-19 is uncertain. The outbreak of COVID-19 has severely impacted global economic activity and caused significant volatility and negative pressure in financial markets. The global impact of the outbreak has been rapidly evolving, and many countries, including the United States, have reacted by instituting quarantines, mandating business and school closures and restricting travel. As a result, the COVID-19 pandemic is negatively impacting almost every industry directly or indirectly, including the regulated cannabis industry. Although most of these measures have been lifted or scaled back, surges of COVID-19 in certain parts of the world, including the United States, have resulted and may in the future result in the re-imposition of certain restrictions and may lead to more restrictions to reduce the spread of COVID-19. The full effect that these disruptions may have on the operations and financial performance of the Company will depend on future developments, including possible impacts on the performance of the Company’s loans, general business activity, and ability to generate revenue, which cannot be determined. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. ASU No. 2020-04 is effective for all entities as of March 12, 2020 through December 31, 2022. The Company does not believe the adoption of this ASU will have a material impact on its consolidated financial statements. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope, which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. ASU No. 2021-01 is effective immediately for all entities. An entity may elect to apply the amendments on a full retrospective basis as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or on a prospective basis to new modifications from any date within an interim period that includes or is subsequent to the date of the issuance of a final update, up to the date that financial statements are available to be issued. If an entity elects to apply any of the amendments for an eligible hedging relationship, any adjustments as a result of those elections must be reflected as of the date the entity applies the election. They do not apply to contract modifications made after December 31, 2022, new hedging relationships entered into after December 31, 2022, and existing hedging relationships evaluated for effectiveness in periods after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that apply certain optional expedients in which the accounting effects are recorded through the end of the hedging relationship (including periods after December 31, 2022). The Company is currently evaluating the impact, if any, of this ASU on its consolidated financial statements. |
LOANS HELD FOR INVESTMENT AT _2
LOANS HELD FOR INVESTMENT AT FAIR VALUE (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
LOANS HELD FOR INVESTMENT AT FAIR VALUE [Abstract] | |
Loans Held at Fair Value | The following tables summarize the Company’s loans held at fair value as of March 31, 2022 and December 31, 2021: As of March 31, 2022 Fair Value (1) Carrying Value (2) Outstanding Principal (2) Weighted Average Remaining Life (Years) (3) Senior term loans $ 95,072,832 $ 92,808,827 $ 95,618,815 2.0 Total loans held at fair value $ 95,072,832 $ 92,808,827 $ 95,618,815 2.0 As of December 31, 2021 Fair Value (1) Carrying Value (2) Outstanding Principal (2) Weighted Average Remaining Life (Years) (3) Senior term loans $ 77,096,319 $ 74,913,157 $ 77,630,742 2.2 Total loans held at fair value $ 77,096,319 $ 74,913,157 $ 77,630,742 2.2 (1) Refer to Note 14 to the Company’s unaudited consolidated financial statements. (2) 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 (3) Weighted average remaining life is calculated based on the fair value of the loans as of March 31, 2022 and December 31, 2021 |
Changes in Loans Held at Fair Value | The following table presents changes in loans held at fair value as of and for the three months ended March 31, 2022: Principal Original Issue Discount Unrealized Gains (Losses) Fair Value Total loans held at fair value at December 31, 2021 $ 77,630,742 $ (2,717,584 ) $ 2,183,161 $ 77,096,319 Change in unrealized gains (losses) on loans at fair value, net - - 80,843 80,843 New fundings 17,285,000 (429,275 ) - 16,855,725 Accretion of original issue discount - 336,872 - 336,872 PIK interest 703,073 - - 703,073 Total loans held at fair value at March 31, 2022 $ 95,618,815 $ (2,809,987 ) $ 2,264,004 $ 95,072,832 |
Loans Held at Fair Value Portfolio | A more detailed listing of the Company’s loans held at fair value portfolio based on information available as of March 31, 2022 is as follows: Collateral Location Collateral Type (1) Fair Value (2) Carrying Value (3) Outstanding Principal (3) Interest Rate Maturity Date (4) Payment Terms (5) Private Co. A AZ, MI, MD, MA C, D $ 79,312,373 $ 77,486,750 $ 79,744,238 15.5 % (6) 5/8/2024 P/I Public Co. A NV C 2,970,654 2,994,612 2,994,612 14.0 % (7) 1/26/2023 I/O Private Co. B MI C 12,789,805 12,327,465 12,879,965 17.0 % (8) 9/1/2023 P/I Total loans held at fair value $ 95,072,832 $ 92,808,827 $ 95,618,815 (1) C = Cultivation Facilities, D = Dispensaries. (2) Refer to Note 14 to the Company’s unaudited consolidated financial statements. (3) The difference between the Carrying Value and the Outstanding Principal amount of the loans consists of OID and loan origination costs. (4) 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. (5) I/O = interest-only, P/I = principal and interest. P/I loans may include interest-only periods for a portion of the loan term. (6) Base interest rate of 12.8% and payment-in-kind (“PIK”) interest rate of 2.7%. (7) Base interest rate of 10% and PIK interest rate of 4%. (8) Base interest rate of 13% and PIK interest rate of 4%. |
LOANS HELD FOR INVESTMENT AT _3
LOANS HELD FOR INVESTMENT AT CARRYING VALUE (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
LOANS HELD FOR INVESTMENT AT CARRYING VALUE [Abstract] | |
Loans Held at Carrying Value | 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. |
Changes in Loans Held at Carrying Value | 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 |
Loans Held at Carrying Value Portfolio | 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 (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%. |
LOAN RECEIVABLE AT CARRYING V_2
LOAN RECEIVABLE AT CARRYING VALUE (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
LOAN RECEIVABLE AT CARRYING VALUE [Abstract] | |
Changes in Loans Receivable | The following table presents changes in loans receivable as of and for the three months ended March 31, 2022: Principal Original Issue Discount Carrying Value Total loans receivable at carrying value at December 31, 2021 $ 2,533,266 $ (2,678 ) $ 2,530,588 Principal repayment of loans (251,574 ) - (251,574 ) Accretion of original issue discount - 310 310 Total loans receivable at carrying value at March 31 2022 $ 2,281,692 $ (2,368 ) $ 2,279,324 |
CURRENT EXPECTED CREDIT LOSSES
CURRENT EXPECTED CREDIT LOSSES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
CURRENT EXPECTED CREDIT LOSSES [Abstract] | |
Financing Receivable, Allowance for Credit Loss | Activity related to the CECL Reserve for outstanding balances and unfunded commitments on the Company’s loans held at carrying value and loans receivable at carrying value as of and for the three months ended March 31, 2022 was as follows: Outstanding (1) Unfunded (2) Total Balance at December 31, 2021 $ 2,431,558 $ 683,177 $ 3,114,735 Provision for current expected credit losses 959,118 (53,989 ) 905,129 Write-offs - - - Recoveries - - - Balance at March 31, 2022 $ 3,390,676 $ 629,188 $ 4,019,864 (1) As of March 31, 2022 and December 31, 2021, the CECL Reserve related to outstanding balances on loans at carrying value and loans receivable at carrying value is recorded within current expected credit loss reserve in the Company’s consolidated balance sheets. (2) As of March 31 |
Risk Rating by Year of Origination | As of March 31, 2022 the carrying value, excluding the CECL Reserve, of the Company’s loans held at carrying value and loans receivable at carrying value within each risk rating by year of origination is as follows: Risk Rating: 2022 2021 2020 Total 1 $ - $ - $ - $ - 2 25,997,066 59,088,000 - 85,085,066 3 - 134,207,717 37,849,005 172,056,722 4 - 10,289,018 - 10,289,018 5 - - - - Total $ 25,997,066 $ 203,584,735 $ 37,849,005 $ 267,430,806 |
INTEREST RECEIVABLE (Tables)
INTEREST RECEIVABLE (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
INTEREST RECEIVABLE [Abstract] | |
Interest Receivable | The following table summarizes the interest receivable by the Company as of March 31, 2022 and December 31, 2021: As of March 31, 2022 As of December 31, 2021 Interest receivable $ 3,128,116 $ 3,562,566 PIK receivable 541,834 554,357 Unused fees receivable 565,315 296,015 Total interest receivable $ 4,235,265 $ 4,412,938 |
INTEREST RESERVE (Tables)
INTEREST RESERVE (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
INTEREST RESERVE [Abstract] | |
Changes in Interest Reserve | The following table presents changes in interest reserve as of and for the three months ended March 31, 2022: Three months ended March 31, 2022 Beginning reserves $ 4,782,271 New reserves - Reserves disbursed (4,175,108 ) Ending reserves $ 607,163 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
DEBT [Abstract] | |
Scheduled of Principal Payments on Senior Unsecured Notes | The 2027 Senior Notes are due on May 1, 2027. Scheduled principal payments on the senior unsecured notes as of March 31, 2022 Senior Unsecured Notes Year 2022 (remaining) $ - 2023 - 2024 - 2025 - 2026 - Thereafter 100,000,000 Total principal $ 100,000,000 |
Summary of Interest Expense Incurred | The following table reflects a summary of interest expense incurred during the three months ended March 31, 2022 Three months ended March 31, 2022 Senior Unsecured Notes Line of Credit Total Borrowings Interest expense $ 1,421,529 $ 19,792 $ 1,441,321 Unused fee expense - 45,833 45,833 Amortization of deferred financing costs 161,979 50,982 212,961 Total interest expense $ 1,583,508 $ 116,607 $ 1,700,115 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
Commitments to Fund Various Senior Term Loans, Investment in Debt securities, Equipment Loans and Bridge Loans | As of March 31, 2022 and December 31, 2021, the Company had the following commitments to fund various senior term loans, investment in debt securities, equipment loans and bridge loans: As of March 31, 2022 As of December 31, 2021 Total original loan commitments $ 420,083,125 $ 419,198,125 Less: drawn commitments (370,645,105 ) (363,659,505 ) Total undrawn commitments $ 49,438,020 $ 55,538,620 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
STOCKHOLDERS' EQUITY [Abstract] | |
Summary of Options Granted | The following table summarizes the (i) non-vested options granted, (ii) vested options granted and (iii) forfeited options granted for the Company’s directors and officers and employees of the Manager as of March 31, 2022 and December 31, 2021: As of March 31, 2022 As of December 31, 2021 Non-vested 320,114 183,114 Vested 2,049,518 1,449,518 Forfeited (53,526 ) (28,396 ) Balance 2,316,106 1,604,236 |
Assumptions used in the Option Pricing Model of Options Granted | The following table presents the assumptions used in the option pricing model of options granted under the 2020 Plan: Assumptions Range Expected volatility 40% - 50 % Expected dividend yield 10% - 20 % Risk-free interest rate 0.5% - 2.0 % Expected forfeiture rate 0 % |
Summary of Stock Option Activity | The following tables summarize the stock option activity during the three months ended March 31, 2022 and 2021: Three months ended March 31, 2022 Weighted-Average Grant Date Fair Value Per Option Balance as of December 31, 2021 1,604,236 $ 1.08 Granted 737,000 1.46 Exercised - - Forfeited (25,130 ) 0.98 Balance as of March 31 2022 2,316,106 $ 1.09 Three months ended March 31, 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 - - Forfeited - - Balance as of March 31, 2021 1,616,098 $ 1.08 |
Summary of Restricted Stock Granted | The following table summarizes the (i) non-vested restricted stock granted, (ii) vested restricted stock granted and (iii) forfeited restricted stock granted for the Company’s directors and officers and employees of the Manager as of March 31, 2022 and December 31, 2021: As of March 31, 2022 As of December 31, 2021 Non-vested 64,581 56,285 Vested - - Forfeited - - Balance 64,581 56,285 |
Summary of Restricted Stock Activity | The fair value of the Company’s restricted stock awards is based on the Company’s stock price on the date of grant. The following tables summarize the restricted stock activity during the three months ended March 31, 2022 and 2021: Three months ended March 31, 2022 Balance as of December 31, 2021 56,285 Granted 8,296 Exercised - Forfeited - Balance as of March 31, 2022 64,581 Three months ended March 31, 2021 Balance as of December 31, 2020 - Granted - Exercised - Forfeited - Balance as of March 31, 2021 - |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
EARNINGS PER SHARE [Abstract] | |
Computations of Basic Weighted Average Earnings per Common Share | The following information sets forth the computations of basic weighted average earnings per common share for the three months ended March 31, 2022 and 2021: Three months ended March 31, 2022 2021 Net income (loss) attributable to common stockholders $ 10,162,120 $ 1,400,755 Divided by: Basic weighted average shares of common stock outstanding 19,319,993 7,144,670 Diluted weighted average shares of common stock outstanding 19,591,472 7,485,048 Basic weighted average earnings per common share $ 0.53 $ 0.20 Diluted weighted average earnings per common share $ 0.52 $ 0.19 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
FAIR VALUE [Abstract] | |
Fair Value Measurements of Loans Held at Fair Value | The following tables present fair value measurements of loans held at fair value as of March 31, 2022 and December 31, 2021: Fair Value Measurement as of March 31, 2022 Total Level 1 Level 2 Level 3 Loans held at fair value $ 95,072,832 $ - $ - $ 95,072,832 Total $ 95,072,832 $ - $ - $ 95,072,832 Fair Value Measurement as of December 31, 2021 Total Level 1 Level 2 Level 3 Loans held at fair value $ 77,096,319 $ - $ - $ 77,096,319 Total $ 77,096,319 $ - $ - $ 77,096,319 |
Fair Value Measurements of Changes in Loans using Level 3 inputs | The following table presents changes in loans that use Level 3 inputs as of and for the three months ended March 31, 2022: Three months ended March 31, 2022 Total loans using Level 3 inputs at December 31 2021 $ 77,096,319 Change in unrealized gains (losses) on loans at fair value, net 80,843 Additional fundings 17,285,000 Original issue discount and other discounts, net of costs (429,275 ) Accretion of original issue discount 336,872 PIK interest 703,073 Total loans using Level 3 inputs at March 31 2022 $ 95,072,832 |
Significant Unobservable Inputs | The following tables summarize the significant unobservable inputs the Company used to value the loans categorized within Level 3 as of March 31, 2022 and December 31, 2021. The tables are not intended to be all-inclusive, but instead capture the significant unobservable inputs relevant to the Company’s determination of fair values. As of March 31, 2022 Unobservable Input Fair Value Primary Valuation Techniques Input Estimated Range Weighted Average Senior Term Loans $ 95,072,832 Yield analysis Market Yield 16.26% - 21.73 % 17.41 % Total Investments $ 95,072,832 As of December 31, 2021 Unobservable Input Fair Value Primary Valuation Techniques Input Estimated Range Weighted Average Senior Term Loans $ 77,096,319 Yield analysis Market Yield 17.71% - 20.96 % 18.22 % Total Investments $ 77,096,319 |
Debt Securities Held at Fair Value | The following table presents changes in debt securities held at fair value as of and for the three months ended March 31, 2022: Principal Original Issue Discount Unrealized Gains (Losses) Fair Value Total debt securities held at fair value at December 31, 2021 $ 15,000,000 $ 1,050,000 $ (168,750 ) $ 15,881,250 Realized gains (losses) on securities at fair value, net - (150,000 ) - (150,000 ) Change in accumulated other comprehensive income - - 168,750 168,750 Sale of securities (15,000,000 ) (900,000 ) - (15,900,000 ) Total debt securities held at fair value at March 31, 2022 $ - $ - $ - $ - |
Changes in Loans Held at Fair Value | The following table presents fair value measurements of debt securities held at fair value as of March 31, 2022 and December 31, 2021. Fair Value Measurement as of March 31, 2022 Total Level 1 Level 2 Level 3 Debt securities held at fair value $ - $ - $ - $ - Total $ - $ - $ - $ - Fair Value Measurement as of December 31, 2021 Total Level 1 Level 2 Level 3 Debt securities held at fair value $ 15,881,250 $ - $ 15,881,250 $ - Total $ 15,881,250 $ - $ 15,881,250 $ - |
Book Value and Fair Value of the Financial Instruments | The following table details the book value and fair value of the Company’s financial instruments not recognized at fair value in the consolidated balance sheets: As of March 31, 2022 Carrying Value Fair Value Financial assets Cash and cash equivalents $ 63,615,179 $ 63,615,179 Loans held for investment at carrying value $ 265,151,482 $ 265,006,706 Loan receivable at carrying value $ 2,279,324 $ 2,229,213 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
RELATED PARTY TRANSACTIONS [Abstract] | |
Summary of Related Party Costs | The following table summarizes the related party costs incurred by the Company for the three months ended March 31, 2022 and 2021: Three months ended March 31, 2022 2021 Affiliate Costs Management fees $ 1,255,867 $ 451,675 Less outside fees earned (387,493 ) (237,743 ) Base management fees 868,374 213,932 Incentive fees earned 2,978,839 662,730 General and administrative expenses reimbursable to Manager 906,717 365,567 Total $ 4,753,930 $ 1,242,229 |
DIVIDENDS AND DISTRIBUTIONS (Ta
DIVIDENDS AND DISTRIBUTIONS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
DIVIDENDS AND DISTRIBUTIONS [Abstract] | |
Summary of Dividends Declared and Paid | The following table summarizes the Company’s dividends declared during the three months ended March 31, 2022 and 2021: 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 Regular cash dividend 3/31/2022 4/15/2022 $ 0.55 $ 0.55 $ - $ 0.55 |
ORGANIZATION (Details)
ORGANIZATION (Details) | 3 Months Ended |
Mar. 31, 2022Segment | |
ORGANIZATION [Abstract] | |
Number of operating segments | 1 |
LOANS HELD FOR INVESTMENT AT _4
LOANS HELD FOR INVESTMENT AT FAIR VALUE, Summary of Portfolio (Details) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2022USD ($)Loans | Dec. 31, 2021USD ($)Loans | |||
Loans held for Investment at Fair Value [Abstract] | ||||
Number of portfolio loans | Loans | 3 | 3 | ||
Loans held at fair value, aggregate commitments | $ 96,200,000 | $ 75,900,000 | ||
Loans held for investment at outstanding principal | [2] | 95,618,815 | [1] | $ 77,630,742 |
Loans held at fair value, funded of outstanding principal | 17,300,000 | |||
Loans held at fair value, repayments | $ 0 | |||
Loans held at fair value, floating interest rate | 0.00% | 0.00% | ||
[1] | The difference between the Carrying Value and the Outstanding Principal amount of the loans consists of OID and loan origination costs. | |||
[2] | 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 |
LOANS HELD FOR INVESTMENT AT _5
LOANS HELD FOR INVESTMENT AT FAIR VALUE, Summary of Loans Held at Fair Value (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2022 | Dec. 31, 2021 | |||
Loans held as investment, Fair Value Amount [Abstract] | ||||
Loans held for investment at fair value | [1] | $ 95,072,832 | $ 77,096,319 | |
Loans held for investment at carrying value | [3] | 92,808,827 | [2] | 74,913,157 |
Loans held for investment at outstanding principal | [3] | $ 95,618,815 | [2] | $ 77,630,742 |
Loans held at fair value, weighted average remaining life | [4] | 2 years | 2 years 2 months 12 days | |
Senior Term Loans [Member] | ||||
Loans held as investment, Fair Value Amount [Abstract] | ||||
Loans held for investment at fair value | [1] | $ 95,072,832 | $ 77,096,319 | |
Loans held for investment at carrying value | [3] | 92,808,827 | 74,913,157 | |
Loans held for investment at outstanding principal | [3] | $ 95,618,815 | $ 77,630,742 | |
Loans held at fair value, weighted average remaining life | [4] | 2 years | 2 years 2 months 12 days | |
[1] | Refer to Note 14 to the Company’s unaudited consolidated financial statements. | |||
[2] | The difference between the Carrying Value and the Outstanding Principal amount of the loans consists of OID and loan origination costs. | |||
[3] | 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 | |||
[4] | Weighted average remaining life is calculated based on the fair value of the loans as of March 31, 2022 and December 31, 2021 |
LOANS HELD FOR INVESTMENT AT _6
LOANS HELD FOR INVESTMENT AT FAIR VALUE, Changes in Loans Held at Fair Value (Details) | 3 Months Ended | |
Mar. 31, 2022USD ($) | ||
Loans Receivable, Principal [Roll Forward] | ||
Total loans held at fair value, beginning balance | $ 77,630,742 | [1] |
Loans held at fair value, change in unrealized gains (losses) on loans at fair value, net | 0 | |
Loans held at fair value, principal, new fundings | 17,285,000 | |
Loans held at fair value, principal, accretion of original issue discount | 0 | |
Loans held at fair value, principal, PIK interest | 703,073 | |
Total loans held at fair value, ending balance | 95,618,815 | [1],[2] |
Loans Held for Investment, Original Issue Cost [Roll Forward] | ||
Loans held for at fair value, original issue discount, beginning balance | (2,717,584) | |
Loans held at fair value, original issue discount, change in unrealized gains (losses) on loans at Fair value, net | 0 | |
Loans held at fair value, original issue discount, new fundings | (429,275) | |
Loans held at fair value, original issue discount, accretion of original issue discount | 336,872 | |
Loans held at fair value, original issue discount, PIK interest | 0 | |
Loans held for at fair value, original issue discount, ending balance | (2,809,987) | |
Loans Held for Investment, Unrealized Gains (Losses) [Roll Forward] | ||
Loans held at fair value, unrealized gains (losses), beginning balance | 2,183,161 | |
Loans held at fair value, unrealized gains (losses), change in unrealized gains (losses) on loans at fair value, net | 80,843 | |
Loans held at fair value, unrealized gains (losses), new fundings | 0 | |
Loans held at fair value, unrealized gains (losses), accretion of original issue discount | 0 | |
Loans held at fair value, unrealized gains (losses), PIK interest | 0 | |
Loans held at fair value, unrealized gains (losses), ending balance | 2,264,004 | |
Loans Held for Investment, Fair Value [Roll Forward] | ||
Loans held at fair value, beginning balance | 77,096,319 | [3] |
Loans held at fair value, change in unrealized gains (losses) on loans at fair value, net | 80,843 | |
Loans held for at fair value, new fundings | 16,855,725 | |
Loans held at fair value, Accretion of original issue discount | 336,872 | |
Loans held at fair value, PIK interest | 703,073 | |
Loans held at fair value, ending balance | $ 95,072,832 | [3] |
[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] | The difference between the Carrying Value and the Outstanding Principal amount of the loans consists of OID and loan origination costs. | |
[3] | Refer to Note 14 to the Company’s unaudited consolidated financial statements. |
LOANS HELD FOR INVESTMENT AT _7
LOANS HELD FOR INVESTMENT AT FAIR VALUE, Loans Held at Fair Value Portfolio (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2022 | Dec. 31, 2021 | |||
Loans Held at Fair Value Portfolio [Abstract] | ||||
Loans held at fair value | [1] | $ 95,072,832 | $ 77,096,319 | |
Loans held for investment at carrying value | [3] | 92,808,827 | [2] | 74,913,157 |
Outstanding principal | [3] | $ 95,618,815 | [2] | $ 77,630,742 |
Private Co. A [Member] | Multi State [Member] | ||||
Loans Held at Fair Value Portfolio [Abstract] | ||||
Base interest rate | 12.80% | |||
PIK interest rate | 2.70% | |||
Private Co. A [Member] | Multi State [Member] | Cultivation Facilities, Dispensaries [Member] | ||||
Loans Held at Fair Value Portfolio [Abstract] | ||||
Loans held at fair value | [1] | $ 79,312,373 | ||
Loans held for investment at carrying value | [2] | 77,486,750 | ||
Outstanding principal | [2] | $ 79,744,238 | ||
Interest rate | [4] | 15.50% | ||
Maturity date | [5] | May 8, 2024 | ||
Payment terms | [6] | P/I | ||
Private Co. B [Member] | MI [Member] | ||||
Loans Held at Fair Value Portfolio [Abstract] | ||||
Base interest rate | 13.00% | |||
PIK interest rate | 4.00% | |||
Private Co. B [Member] | MI [Member] | Cultivation Facilities [Member] | ||||
Loans Held at Fair Value Portfolio [Abstract] | ||||
Loans held at fair value | [1] | $ 12,789,805 | ||
Loans held for investment at carrying value | [2] | 12,327,465 | ||
Outstanding principal | [2] | $ 12,879,965 | ||
Interest rate | [7] | 17.00% | ||
Maturity date | [5] | Sep. 1, 2023 | ||
Payment terms | [6] | P/I | ||
Public Co. A [Member] | NV [Member] | ||||
Loans Held at Fair Value Portfolio [Abstract] | ||||
Base interest rate | 10.00% | |||
PIK interest rate | 4.00% | |||
Public Co. A [Member] | NV [Member] | Cultivation Facilities [Member] | ||||
Loans Held at Fair Value Portfolio [Abstract] | ||||
Loans held at fair value | [1] | $ 2,970,654 | ||
Loans held for investment at carrying value | [2] | 2,994,612 | ||
Outstanding principal | [2] | $ 2,994,612 | ||
Interest rate | [8] | 14.00% | ||
Maturity date | [5] | Jan. 26, 2023 | ||
Payment terms | [6] | I/O | ||
[1] | Refer to Note 14 to the Company’s unaudited consolidated financial statements. | |||
[2] | The difference between the Carrying Value and the Outstanding Principal amount of the loans consists of OID and loan origination costs. | |||
[3] | 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 | |||
[4] | Base interest rate of 12.8% and payment-in-kind (“PIK”) interest rate of 2.7%. | |||
[5] | 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. | |||
[6] | I/O = interest-only, P/I = principal and interest. P/I loans may include interest-only periods for a portion of the loan term. | |||
[7] | Base interest rate of 13% and PIK interest rate of 4%. | |||
[8] | Base interest rate of 10% and PIK interest rate of 4%. |
LOANS HELD FOR INVESTMENT AT _8
LOANS HELD FOR INVESTMENT AT CARRYING VALUE, Summary of Portfolio (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022USD ($)Loan | Dec. 31, 2021USD ($)Loan | ||
Loans Held as Investment, Carrying Amount Disclosure [Abstract] | |||
Number of loans held for investments in portfolio | Loan | 10 | 12 | |
Loans held for investments aggregate commitments | $ 319,900,000 | $ 324,300,000 | |
Loans held at carrying value, outstanding principal | [1] | 275,839,406 | $ 270,841,715 |
Loans held at carrying value, outstanding principal fundings | $ 34,200,000 | ||
Percentage of loans held at carrying value with floating interest rates | 42.00% | 48.00% | |
LIBOR period | 30 days | ||
LIBOR Weighted Average Floor Rate [Member] | |||
Loans Held as Investment, Carrying Amount Disclosure [Abstract] | |||
Loans held at carrying value, interest rate | 1.00% | 1.00% | |
[1] | The difference between the Carrying Value and the Outstanding Principal amount of the loans consists of unaccreted OID and loan origination costs. |
LOANS HELD FOR INVESTMENT AT _9
LOANS HELD FOR INVESTMENT AT CARRYING VALUE, Summary of Loans Held at Carrying Value (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | ||
Loans held as investment, Carrying Amount [Abstract] | |||
Loans held at carrying value, outstanding principal | [1] | $ 275,839,406 | $ 270,841,715 |
Loans held at carrying value, original issue discount | (10,687,924) | (13,678,219) | |
Loans held at carrying value | [1] | $ 265,151,482 | $ 257,163,496 |
Loans held at carrying value, weighted average remaining life | [2] | 2 years 10 months 24 days | 3 years 4 months 24 days |
Senior Term Loans [Member] | |||
Loans held as investment, Carrying Amount [Abstract] | |||
Loans held at carrying value, outstanding principal | [1] | $ 275,839,406 | $ 270,841,715 |
Loans held at carrying value, original issue discount | (10,687,924) | (13,678,219) | |
Loans held at carrying value | [1] | $ 265,151,482 | $ 257,163,496 |
Loans held at carrying value, weighted average remaining life | [2] | 2 years 10 months 24 days | 3 years 4 months 24 days |
[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. |
LOANS HELD FOR INVESTMENT AT_10
LOANS HELD FOR INVESTMENT AT CARRYING VALUE, Changes in Loans Held at Carrying Value (Details) | 3 Months Ended | |
Mar. 31, 2022USD ($) | ||
Principal [Abstract] | ||
Total loans held at carrying value, principal, beginning balance | $ 270,841,715 | [1] |
Total loans held at carrying value, principal, new fundings | 34,245,888 | |
Total loans held at carrying value, principal, loan repayments | (20,010,726) | |
Total loans held at carrying value, principal, sale of loans | (10,000,000) | |
Total loans held at carrying value, principal, PIK interest | 915,688 | |
Total loans held at carrying value, principal, loan amortization payments | (153,159) | |
Total loans held at carrying value, principal, ending balance | 275,839,406 | [1] |
Original Issue Discount [Abstract] | ||
Total loans held at carrying value, original issue discount, beginning balance | (13,678,219) | |
Total loans held at carrying value, original issue discount, new fundings | (638,400) | |
Total loans held at carrying value, original Issue discount, accretion of original issue discount | 3,628,695 | |
Total loans held at carrying value, original issue discount, ending balance | (10,687,924) | |
Carrying Value [Abstract] | ||
Total loans held at carrying value, beginning balance | 257,163,496 | [1] |
Total loans held at carrying value, new fundings | 33,607,488 | |
Total loans held at carrying value, accretion of original issue discount | 3,628,695 | |
Total loans held at carrying value, loan repayments | (20,010,726) | |
Total loans held at carrying value, sale of loans | (10,000,000) | |
Total loans held at carrying value, PIK Interest | 915,688 | |
Total loans held at carrying value, loan amortization payments | (153,159) | |
Total loans held at carrying value, ending balance | $ 265,151,482 | [1] |
[1] | The difference between the Carrying Value and the Outstanding Principal amount of the loans consists of unaccreted OID and loan origination costs. |
LOANS HELD FOR INVESTMENT AT_11
LOANS HELD FOR INVESTMENT AT CARRYING VALUE, Loans Held at Carrying Value portfolio (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | ||
Loans held at investment, Carrying Amount [Abstract] | ||||
Receivable for loans and securities sold | $ 26,500,000 | $ 0 | ||
Outstanding principal | [1] | 275,839,406 | 270,841,715 | |
Original issue discount | (10,687,924) | (13,678,219) | ||
Carrying value | [1] | $ 265,151,482 | $ 257,163,496 | |
Private Co. C [Member] | Base Interest Rate [Member] | ||||
Loans held at investment, Carrying Amount [Abstract] | ||||
Interest rate | 12.00% | |||
Private Co. C [Member] | LIBOR Floor Rate [Member] | ||||
Loans held at investment, Carrying Amount [Abstract] | ||||
Interest rate | 1.00% | |||
Private Co. C [Member] | PIK Interest Rate [Member] | ||||
Loans held at investment, Carrying Amount [Abstract] | ||||
Interest rate | 4.00% | |||
Private Co. C [Member] | PA [Member] | Cultivation Facilities, Dispensaries [Member] | ||||
Loans held at investment, Carrying Amount [Abstract] | ||||
Outstanding principal | [1] | $ 24,910,301 | ||
Original issue discount | (706,591) | |||
Carrying value | [1] | $ 24,203,710 | ||
Interest rate | [2] | 17.00% | ||
Maturity date | [3] | Dec. 1, 2025 | ||
Payment Terms | [4] | P/I | ||
Sub. of Public Co. D [Member] | ||||
Loans held at investment, Carrying Amount [Abstract] | ||||
Receivable for loans and securities sold | $ 10,600,000 | |||
Private Co. D [Member] | ||||
Loans held at investment, Carrying Amount [Abstract] | ||||
Maturity date | Jan. 1, 2026 | |||
Private Co. D [Member] | Base Interest Rate [Member] | ||||
Loans held at investment, Carrying Amount [Abstract] | ||||
Interest rate | 13.00% | |||
Private Co. D [Member] | PIK Interest Rate [Member] | ||||
Loans held at investment, Carrying Amount [Abstract] | ||||
Interest rate | 2.00% | |||
Private Co. D [Member] | Multi State [Member] | Dispensaries [Member] | ||||
Loans held at investment, Carrying Amount [Abstract] | ||||
Outstanding principal | [1] | $ 12,138,516 | ||
Original issue discount | (772,544) | |||
Carrying value | [1] | $ 11,365,972 | ||
Interest rate | [5] | 15.00% | ||
Maturity date | [3] | Jan. 1, 2026 | ||
Payment Terms | [4] | P/I | ||
Private Co. F [Member] | ||||
Loans held at investment, Carrying Amount [Abstract] | ||||
Maturity date | May 1, 2026 | |||
Private Co. F [Member] | Base Interest Rate [Member] | ||||
Loans held at investment, Carrying Amount [Abstract] | ||||
Interest rate | 13.00% | |||
Private Co. F [Member] | PIK Interest Rate [Member] | ||||
Loans held at investment, Carrying Amount [Abstract] | ||||
Interest rate | 4.00% | |||
Private Co. F [Member] | MO [Member] | Cultivation Facilities, Dispensaries [Member] | ||||
Loans held at investment, Carrying Amount [Abstract] | ||||
Outstanding principal | [1] | $ 12,811,265 | ||
Original issue discount | (1,618,606) | |||
Carrying value | [1] | $ 11,192,659 | ||
Interest rate | [6] | 17.00% | ||
Maturity date | [3] | May 1, 2026 | ||
Payment Terms | [4] | P/I | ||
Sub of Private Co. G [Member] | Base Interest Rate [Member] | ||||
Loans held at investment, Carrying Amount [Abstract] | ||||
Interest rate | 11.50% | |||
Sub of Private Co. G [Member] | LIBOR Floor Rate [Member] | ||||
Loans held at investment, Carrying Amount [Abstract] | ||||
Interest rate | 1.00% | |||
Sub of Private Co. G [Member] | PIK Interest Rate [Member] | ||||
Loans held at investment, Carrying Amount [Abstract] | ||||
Interest rate | 1.80% | |||
Sub of Private Co. G [Member] | NJ [Member] | Cultivation Facilities, Dispensaries [Member] | ||||
Loans held at investment, Carrying Amount [Abstract] | ||||
Outstanding principal | [1] | $ 50,398,475 | ||
Original issue discount | (2,225,885) | |||
Carrying value | [1] | $ 48,172,590 | ||
Interest rate | [7] | 14.30% | ||
Maturity date | [3] | May 1, 2026 | ||
Payment Terms | [4] | P/I | ||
Public Co. F [Member] | Base Interest Rate [Member] | ||||
Loans held at investment, Carrying Amount [Abstract] | ||||
Interest rate | 8.60% | |||
Public Co. F [Member] | Multi State [Member] | Cultivation Facilities, Dispensaries [Member] | ||||
Loans held at investment, Carrying Amount [Abstract] | ||||
Outstanding principal | [1] | $ 86,600,000 | ||
Original issue discount | (1,514,933) | |||
Carrying value | [1] | $ 85,085,067 | ||
Interest rate | [8] | 8.60% | ||
Maturity date | [3] | May 30, 2023 | ||
Payment Terms | [4] | I/O | ||
Sub of Private Co. H [Member] | Base Interest Rate [Member] | ||||
Loans held at investment, Carrying Amount [Abstract] | ||||
Interest rate | 15.00% | |||
Sub of Private Co. H [Member] | IL [Member] | Cultivation Facilities [Member] | ||||
Loans held at investment, Carrying Amount [Abstract] | ||||
Outstanding principal | [1] | $ 5,781,250 | ||
Original issue discount | (86,751) | |||
Carrying value | [1] | $ 5,694,499 | ||
Interest rate | [9] | 15.00% | ||
Maturity date | [3] | May 11, 2023 | ||
Payment Terms | [4] | I/O | ||
Private Co. K [Member] | Base Interest Rate [Member] | ||||
Loans held at investment, Carrying Amount [Abstract] | ||||
Interest rate | 12.00% | |||
Private Co. K [Member] | LIBOR Floor Rate [Member] | ||||
Loans held at investment, Carrying Amount [Abstract] | ||||
Interest rate | 1.00% | |||
Private Co. K [Member] | MA [Member] | Cultivation Facilities, Dispensaries [Member] | ||||
Loans held at investment, Carrying Amount [Abstract] | ||||
Outstanding principal | [1] | $ 7,000,000 | ||
Original issue discount | (684,667) | |||
Carrying value | [1] | $ 6,315,333 | ||
Interest rate | [10] | 13.00% | ||
Maturity date | [3] | Aug. 3, 2026 | ||
Payment Terms | [4] | P/I | ||
Private Co. I [Member] | Base Interest Rate [Member] | ||||
Loans held at investment, Carrying Amount [Abstract] | ||||
Interest rate | 12.00% | |||
Private Co. I [Member] | LIBOR Floor Rate [Member] | ||||
Loans held at investment, Carrying Amount [Abstract] | ||||
Interest rate | 1.00% | |||
Private Co. I [Member] | PIK Interest Rate [Member] | ||||
Loans held at investment, Carrying Amount [Abstract] | ||||
Interest rate | 2.50% | |||
Private Co. I [Member] | MD [Member] | Cultivation Facilities, Dispensaries [Member] | ||||
Loans held at investment, Carrying Amount [Abstract] | ||||
Outstanding principal | [1] | $ 10,490,498 | ||
Original issue discount | (201,481) | |||
Carrying value | [1] | $ 10,289,017 | ||
Interest rate | [11] | 15.50% | ||
Maturity date | [3] | Aug. 1, 2026 | ||
Payment Terms | [4] | P/I | ||
Private Co. J [Member] | Base Interest Rate [Member] | ||||
Loans held at investment, Carrying Amount [Abstract] | ||||
Interest rate | 12.00% | |||
Private Co. J [Member] | LIBOR Floor Rate [Member] | ||||
Loans held at investment, Carrying Amount [Abstract] | ||||
Interest rate | 1.00% | |||
Private Co. J [Member] | PIK Interest Rate [Member] | ||||
Loans held at investment, Carrying Amount [Abstract] | ||||
Interest rate | 2.00% | |||
Private Co. J [Member] | MO [Member] | Cultivation Facilities [Member] | ||||
Loans held at investment, Carrying Amount [Abstract] | ||||
Outstanding principal | [1] | $ 23,209,101 | ||
Original issue discount | (672,384) | |||
Carrying value | [1] | $ 22,536,717 | ||
Interest rate | [12] | 15.00% | ||
Maturity date | [3] | Sep. 1, 2025 | ||
Payment Terms | [4] | P/I | ||
Sub. of Public Co. H [Member] | Base Interest Rate [Member] | ||||
Loans held at investment, Carrying Amount [Abstract] | ||||
Interest rate | 9.80% | |||
Sub. of Public Co. H [Member] | Multi State [Member] | ||||
Loans held at investment, Carrying Amount [Abstract] | ||||
Outstanding principal | [1] | $ 42,500,000 | ||
Original issue discount | (2,204,082) | |||
Carrying value | [1] | $ 40,295,918 | ||
Interest rate | [13] | 9.80% | ||
Maturity date | [3] | Jan. 1, 2026 | ||
Payment Terms | [4] | I/O | ||
[1] | The difference between the Carrying Value and the Outstanding Principal amount of the loans consists of unaccreted OID and loan origination costs. | |||
[2] | Base interest rate of 12.0% plus LIBOR (LIBOR floor of 1.0%) and PIK interest rate of 4.0%. | |||
[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 13.0% and PIK interest rate of 2.0%. | |||
[6] | Base interest rate of 13.0% and PIK interest rate of 4.0%. | |||
[7] | Base interest rate of 11.5% plus LIBOR (LIBOR floor of 1.0%) and PIK interest rate of 1.8%. | |||
[8] | Base interest rate of 8.6%. | |||
[9] | Base interest rate of 15.0%. | |||
[10] | Base interest rate of 12.0% plus LIBOR (LIBOR floor of 1.0%). | |||
[11] | Base interest rate of 12.0% plus LIBOR (LIBOR floor of 1.0%) and PIK interest rate of 2.5%. | |||
[12] | Base interest rate of 12.0% plus LIBOR (LIBOR floor of 1.0%) and PIK interest rate of 2.0%. | |||
[13] | Base interest rate of 9.8%. |
LOAN RECEIVABLE AT CARRYING V_3
LOAN RECEIVABLE AT CARRYING VALUE (Details) | 3 Months Ended | |
Mar. 31, 2022USD ($)Loan | Dec. 31, 2021USD ($)Loan | |
Proceeds from Sale and Collection of Loans Receivable [Abstract] | ||
Number of portfolio loans | Loan | 1 | 1 |
Loans receivable at carrying value aggregate commitments | $ 4,000,000 | $ 4,000,000 |
Loans Receivable, Principal [Roll Forward] | ||
Total loans receivable at principal, beginning of period | 2,533,266 | |
Principal repayment of loans at principal | (251,574) | |
Total loans receivable at principal, end of period | 2,281,692 | |
Loans Receivable, Original Issue Discount [Roll Forward] | ||
Total loans receivable at original issue discount, beginning of period | (2,678) | |
Accretion of original issue discount at original issue discount | 310 | |
Total loans receivable at original issue discount, end of period | (2,368) | |
Loans Receivable, Carrying Value [Roll Forward] | ||
Total loans receivable at carrying value, beginning of period | 2,530,588 | |
Principal repayment of loans at carrying value | (251,574) | |
Accretion of original issue discount at carrying value | 310 | |
Total loans receivable at carrying value, end of period | $ 2,279,324 |
CURRENT EXPECTED CREDIT LOSSES,
CURRENT EXPECTED CREDIT LOSSES, CECL Reserve (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Dec. 31, 2021 | ||
Current Expected Credit Loss [Abstract] | |||
Allowance for credit losses | $ 3,390,676 | $ 2,431,558 | |
Current Expected Credit Loss Reserve for Funded and Unfunded Loan Commitments [Abstract] | |||
Beginning balance | 2,431,558 | ||
Ending balance | 3,390,676 | ||
CECL Reserve [Member] | |||
Current Expected Credit Loss [Abstract] | |||
Allowance for credit losses | $ 4,019,864 | $ 3,114,735 | |
Loans receivable variable spread rate | 1.50% | 1.20% | |
Loans receivable at carrying value, commitment balance | $ 267,400,000 | $ 259,700,000 | |
Current Expected Credit Loss Reserve for Funded and Unfunded Loan Commitments [Abstract] | |||
Beginning balance | 3,114,735 | ||
Provision for current expected credit losses | 905,129 | ||
Write-offs | 0 | ||
Recoveries | 0 | ||
Ending balance | 4,019,864 | ||
Funded Loan Commitment [Member] | CECL Reserve [Member] | |||
Current Expected Credit Loss [Abstract] | |||
Allowance for credit losses | [1] | 3,390,676 | 2,431,558 |
Current Expected Credit Loss Reserve for Funded and Unfunded Loan Commitments [Abstract] | |||
Beginning balance | [1] | 2,431,558 | |
Provision for current expected credit losses | [1] | 959,118 | |
Write-offs | [1] | 0 | |
Recoveries | [1] | 0 | |
Ending balance | [1] | 3,390,676 | |
Unfunded Loan Commitment [Member] | CECL Reserve [Member] | |||
Current Expected Credit Loss [Abstract] | |||
Allowance for credit losses | [2] | 629,188 | $ 683,177 |
Current Expected Credit Loss Reserve for Funded and Unfunded Loan Commitments [Abstract] | |||
Beginning balance | [2] | 683,177 | |
Provision for current expected credit losses | [2] | (53,989) | |
Write-offs | [2] | 0 | |
Recoveries | [2] | 0 | |
Ending balance | [2] | $ 629,188 | |
[1] | As of March 31, 2022 and December 31, 2021, the CECL Reserve related to outstanding balances on loans at carrying value and loans receivable at carrying value is recorded within current expected credit loss reserve in the Company’s consolidated balance sheets. | ||
[2] | As of March 31 |
CURRENT EXPECTED CREDIT LOSSE_2
CURRENT EXPECTED CREDIT LOSSES, Risk Rating by Year of Origination (Details) | Mar. 31, 2022USD ($) |
Risk Rating by Year of Origination [Abstract] | |
2022 | $ 25,997,066 |
2021 | 203,584,735 |
2020 | 37,849,005 |
Total | 267,430,806 |
Very Low Risk [Member] | |
Risk Rating by Year of Origination [Abstract] | |
2022 | 0 |
2021 | 0 |
2020 | 0 |
Total | 0 |
Low Risk [Member] | |
Risk Rating by Year of Origination [Abstract] | |
2022 | 25,997,066 |
2021 | 59,088,000 |
2020 | 0 |
Total | 85,085,066 |
Medium Risk [Member] | |
Risk Rating by Year of Origination [Abstract] | |
2022 | 0 |
2021 | 134,207,717 |
2020 | 37,849,005 |
Total | 172,056,722 |
High Risk/ Potential for Loss [Member] | |
Risk Rating by Year of Origination [Abstract] | |
2022 | 0 |
2021 | 10,289,018 |
2020 | 0 |
Total | 10,289,018 |
Impaired/Loss Likely [Member] | |
Risk Rating by Year of Origination [Abstract] | |
2022 | 0 |
2021 | 0 |
2020 | 0 |
Total | $ 0 |
INTEREST RECEIVABLE (Details)
INTEREST RECEIVABLE (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
INTEREST RECEIVABLE [Abstract] | ||
Interest receivable | $ 3,128,116 | $ 3,562,566 |
PIK receivable | 541,834 | 554,357 |
Unused fees receivable | 565,315 | 296,015 |
Total interest receivable | $ 4,235,265 | $ 4,412,938 |
INTEREST RESERVE (Details)
INTEREST RESERVE (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022USD ($)Loan | Dec. 31, 2021USD ($)Loan | |
INTEREST RESERVE [Abstract] | ||
Number of loans included in loan funded interest reserve | Loan | 4 | 7 |
Changes in Interest Reserve [Abstract] | ||
Beginning reserves | $ 4,782,271 | |
New reserves | 0 | |
Reserves disbursed | (4,175,108) | |
Ending reserves | $ 607,163 | $ 4,782,271 |
DEBT, Revolving Credit Facility
DEBT, Revolving Credit Facility (Details) | Apr. 29, 2022USD ($)Institution | Jan. 03, 2022USD ($) | Nov. 03, 2021USD ($)Intallment | May 07, 2021USD ($) | May 06, 2021USD ($) | Mar. 31, 2022USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | Jul. 31, 2021USD ($) |
Line of Credit Facility [Abstract] | |||||||||
Interest expense | $ 1,441,321 | ||||||||
AFCF Revolving Credit Facility [Member] | |||||||||
Line of Credit Facility [Abstract] | |||||||||
Interest expense | 19,792 | ||||||||
AFCF Revolving Credit Facility [Member] | Secured Debt [Member] | |||||||||
Line of Credit Facility [Abstract] | |||||||||
Loan commitment | $ 40,000,000 | ||||||||
Interest rate | 8.00% | ||||||||
Maturity date | Jul. 31, 2021 | ||||||||
Outstanding loan balance | 0 | $ 75,000,000 | |||||||
Repayment of line of credit | $ 75,000,000 | ||||||||
Interest expense | $ 19,792 | $ 0 | |||||||
AFCF Revolving Credit Facility [Member] | Secured Debt [Member] | Minimum [Member] | |||||||||
Line of Credit Facility [Abstract] | |||||||||
Loan commitment | $ 50,000,000 | ||||||||
First Amendment Revolving Credit Facility [Member] | Secured Debt [Member] | |||||||||
Line of Credit Facility [Abstract] | |||||||||
Loan commitment | $ 50,000,000 | ||||||||
Interest rate | 6.00% | ||||||||
Maturity date | Dec. 31, 2021 | ||||||||
Second Amendment Revolving Credit Facility [Member] | Secured Debt [Member] | |||||||||
Line of Credit Facility [Abstract] | |||||||||
Loan commitment | $ 75,000,000 | ||||||||
Interest rate | 4.75% | ||||||||
Maturity date | Sep. 30, 2022 | ||||||||
One-time commitment fee percentage | 0.25% | ||||||||
Number of installments | Intallment | 3 | ||||||||
Periodic payment | quarterly | ||||||||
Unused fee, percentage | 0.25% | ||||||||
One-time commitment fee | $ 187,500 | ||||||||
EWB Revolving Credit Facility [Member] | Subsequent Event [Member] | |||||||||
Line of Credit Facility [Abstract] | |||||||||
Loan commitment | $ 60,000,000 | ||||||||
Number of FDIC insured banking institutions | Institution | 2 | ||||||||
Interest rate | 4.50% | ||||||||
Maturity date | Apr. 29, 2025 | ||||||||
Unused fee, percentage | 0.25% | ||||||||
One-time commitment fee | $ 400,000 | ||||||||
Borrowing capacity, subject to available borrowing base and additional commitments | $ 100,000,000 | ||||||||
EWB Revolving Credit Facility [Member] | Base Rate [Member] | Subsequent Event [Member] | |||||||||
Line of Credit Facility [Abstract] | |||||||||
Variable rate | 0.50% | ||||||||
EWB Revolving Credit Facility [Member] | Maximum [Member] | Subsequent Event [Member] | |||||||||
Line of Credit Facility [Abstract] | |||||||||
Secured debt, percentage | 25.00% | ||||||||
EWB Revolving Credit Facility [Member] | Minimum [Member] | Subsequent Event [Member] | |||||||||
Line of Credit Facility [Abstract] | |||||||||
Liquidity | $ 5,000,000 | ||||||||
Debt service coverage ratio | 0.015% | ||||||||
EWB Revolving Credit Facility [Member] | Secured Debt [Member] | Subsequent Event [Member] | |||||||||
Line of Credit Facility [Abstract] | |||||||||
Loan commitment | $ 60,000,000 | ||||||||
Interest rate | 4.50% | ||||||||
Maturity date | Apr. 29, 2025 | ||||||||
Periodic payment | semi-annually | ||||||||
Unused fee, percentage | 0.25% | ||||||||
One-time commitment fee | $ 400,000 | ||||||||
Borrowing capacity, subject to available borrowing base and additional commitments | $ 100,000,000 | ||||||||
EWB Revolving Credit Facility [Member] | Secured Debt [Member] | Base Rate [Member] | Subsequent Event [Member] | |||||||||
Line of Credit Facility [Abstract] | |||||||||
Variable rate | 0.50% |
DEBT, 2027 Senior Notes (Detail
DEBT, 2027 Senior Notes (Details) - 2027 Senior Notes [Member] - USD ($) $ in Millions | Nov. 03, 2021 | Mar. 31, 2022 |
2027 Senior Notes [Abstract] | ||
Debt instrument, aggregate principal | $ 100 | |
Debt instrument maturity date | May 1, 2027 | |
Debt instrument, stated percentage | 5.75% | |
Periodic payment | semi-annually | |
Net proceeds from offering | $ 97 | |
Debt instrument, percentage of principal redeemed | 100.00% | |
Maximum [Member] | ||
2027 Senior Notes [Abstract] | ||
Debt instrument, percentage of principal redeemed | 101.00% | |
Debt service coverage ratio | 0.015% | |
Minimum [Member] | ||
2027 Senior Notes [Abstract] | ||
Percentage of debt in aggregate principal | 60.00% | |
Secured debt of percentage in aggregate principal | 25.00% |
DEBT, Scheduled of Principal Pa
DEBT, Scheduled of Principal Payments on Senior Unsecured Notes (Details) - Senior Unsecured Notes [Member] $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Scheduled of Principal Payments [Abstract] | |
Debt instrument maturity date | May 1, 2027 |
2022 (remaining) | $ 0 |
2023 | 0 |
2024 | 0 |
2025 | 0 |
2026 | 0 |
Thereafter | 100,000,000 |
Total principal | $ 100,000,000 |
DEBT, Summary of Interest Expen
DEBT, Summary of Interest Expense Incurred (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Interest Expense Incurred [Abstract] | ||
Interest expense | $ 1,441,321 | |
Unused fee expense | 45,833 | |
Amortization of deferred financing costs | 212,961 | |
Total interest expense | 1,700,115 | $ 0 |
Line of Credit [Member] | ||
Interest Expense Incurred [Abstract] | ||
Interest expense | 19,792 | |
Unused fee expense | 45,833 | |
Amortization of deferred financing costs | 50,982 | |
Total interest expense | 116,607 | |
Senior Unsecured Notes [Member] | ||
Interest Expense Incurred [Abstract] | ||
Interest expense | 1,421,529 | |
Unused fee expense | 0 | |
Amortization of deferred financing costs | 161,979 | |
Total interest expense | $ 1,583,508 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
COMMITMENTS AND CONTINGENCIES [Abstract] | ||
Total original loan commitments | $ 420,083,125 | $ 419,198,125 |
Less: drawn commitments | (370,645,105) | (363,659,505) |
Total undrawn commitments | $ 49,438,020 | $ 55,538,620 |
STOCKHOLDERS' EQUITY, Series A
STOCKHOLDERS' EQUITY, Series A Preferred Stock (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Preferred Stock [Abstract] | ||
Preferred stock, shares authorized (in shares) | 10,000 | 10,000 |
Preferred stock, shares issued (in shares) | 125 | 125 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares outstanding (in shares) | 125 | 125 |
Series A Preferred Stock [Member] | ||
Preferred Stock [Abstract] | ||
Preferred stock, shares authorized (in shares) | 10,000 | 10,000 |
Preferred stock, shares issued (in shares) | 125 | 125 |
Preferred stock, dividend rate | 12.00% | 12.00% |
Preferred stock, liquidation preference (in dollars per share) | $ 1,000 | $ 1,000 |
Preferred stock, redemption price (in dollars per share) | $ 1,000 | $ 1,000 |
Preferred stock, redemption amount | $ 125,000 | $ 125,000 |
Preferred stock, shares outstanding (in shares) | 125 | 125 |
STOCKHOLDERS' EQUITY, Common St
STOCKHOLDERS' EQUITY, Common Stock (Details) $ / shares in Units, $ in Thousands | Jan. 19, 2022USD ($)shares | Jan. 10, 2022USD ($)$ / sharesshares | Jul. 06, 2021USD ($)$ / sharesshares | Jun. 28, 2021USD ($)$ / sharesshares | Mar. 26, 2021USD ($)$ / sharesshares | Mar. 23, 2021USD ($)$ / sharesshares | Jan. 25, 2021 | Mar. 31, 2022USD ($)$ / sharesshares | Mar. 10, 2022$ / sharesshares | Dec. 31, 2021$ / sharesshares |
Common Stock [Abstract] | ||||||||||
Underwriting commissions | $ 3,500 | |||||||||
Net proceeds | $ 123,900 | |||||||||
Common stock, shares authorized (in shares) | shares | 50,000,000 | 50,000,000 | 25,000,000 | |||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||||||
IPO [Member] | ||||||||||
Common Stock [Abstract] | ||||||||||
Reduction of shares issued due to fractional shares based on the public offering price (in shares) | shares | 15 | |||||||||
Reduction of shares outstanding due to fractional shares based on the public offering price (in shares) | shares | 15 | |||||||||
Shares issues (in shares) | shares | 3,291,832 | |||||||||
Gross proceeds from offering | $ 67,500 | $ 118,800 | ||||||||
Underwriting commissions | 8,300 | |||||||||
Expenses incurred | $ 3,100 | |||||||||
Over-Allotment Option [Member] | ||||||||||
Common Stock [Abstract] | ||||||||||
Shares issues (in shares) | shares | 291,832 | 269,650 | ||||||||
Share price (in dollars per share) | $ / shares | $ 20.50 | |||||||||
Gross proceeds from offering | $ 5,500 | $ 17,800 | ||||||||
Underwriting commissions | 300 | $ 1,250 | ||||||||
Expenses incurred | $ 1,000 | |||||||||
Net proceeds | $ 5,200 | |||||||||
Additional Offering [Member] | ||||||||||
Common Stock [Abstract] | ||||||||||
Shares issues (in shares) | shares | 3,000,000 | 2,750,000 | ||||||||
Share price (in dollars per share) | $ / shares | $ 20.50 | $ 20.50 | ||||||||
Gross proceeds from offering | $ 61,500 | $ 56,400 | ||||||||
Underwriting commissions | 3,100 | |||||||||
Expenses incurred | 700 | |||||||||
Net proceeds | $ 63,000 | $ 52,600 | ||||||||
Common Stock [Member] | ||||||||||
Common Stock [Abstract] | ||||||||||
Stock split | 7 | |||||||||
Common Stock [Member] | IPO [Member] | ||||||||||
Common Stock [Abstract] | ||||||||||
Shares issues (in shares) | shares | 6,250,000 | |||||||||
Share price (in dollars per share) | $ / shares | $ 19 | |||||||||
Common Stock [Member] | Over-Allotment Option [Member] | ||||||||||
Common Stock [Abstract] | ||||||||||
Shares issues (in shares) | shares | 937,500 | |||||||||
Share price (in dollars per share) | $ / shares | $ 19 | |||||||||
Common Stock [Member] | Over-Allotment Option [Member] | Maximum [Member] | ||||||||||
Common Stock [Abstract] | ||||||||||
Shares issues (in shares) | shares | 450,000 |
STOCKHOLDERS' EQUITY, Shelf Reg
STOCKHOLDERS' EQUITY, Shelf Registration (Details) - Subsequent Event [Member] - USD ($) $ in Billions | May 09, 2022 | Apr. 05, 2022 |
Shelf Registration [Abstract] | ||
Shelf registration statement | $ 1 | |
Shares issued or sold (in shares) | 0 |
STOCKHOLDERS' EQUITY, At-the-Ma
STOCKHOLDERS' EQUITY, At-the-Market Stock Offering Program ("ATM") (Details) - USD ($) $ / shares in Units, $ in Millions | Apr. 05, 2022 | May 09, 2022 | Mar. 31, 2022 | Mar. 10, 2022 | Dec. 31, 2021 |
At-the-Market Stock Offering Program [Abstract] | |||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | ||
Subsequent Event [Member] | |||||
At-the-Market Stock Offering Program [Abstract] | |||||
Shares issued or sold (in shares) | 0 | ||||
At-the-Market Stock Offering Program [Member] | Subsequent Event [Member] | |||||
At-the-Market Stock Offering Program [Abstract] | |||||
Common stock, par value (in dollars per share) | $ 0.01 | ||||
Stock authorized to issue, amount | $ 75 | ||||
Shares issued or sold (in shares) | 0 | ||||
At-the-Market Stock Offering Program [Member] | Maximum [Member] | Subsequent Event [Member] | |||||
At-the-Market Stock Offering Program [Abstract] | |||||
Commission percentage on gross proceeds from sale of stock | 3.00% |
STOCKHOLDERS' EQUITY, Equity In
STOCKHOLDERS' EQUITY, Equity Incentive Plan (Details) - USD ($) | Jan. 31, 2022 | Jan. 11, 2022 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 |
Equity Incentive Plan [Abstract] | |||||
Granted (in shares) | 737,000 | 689,200 | |||
Option activity of directors and officers and employees [Abstract] | |||||
Non-vested (in shares) | 320,114 | 183,114 | |||
Vested (in shares) | 2,049,518 | 1,449,518 | |||
Forfeited (in shares) | (53,526) | (28,396) | |||
Balance (in shares) | 2,316,106 | 1,616,098 | 1,604,236 | ||
Share based compensation | $ 990,023 | $ 1,599,115 | |||
Option Activity [Abstract] | |||||
Beginning balance (in shares) | 1,604,236 | 926,898 | 926,898 | ||
Granted (in shares) | 737,000 | 689,200 | |||
Exercised (in shares) | 0 | 0 | |||
Forfeited (in shares) | (25,130) | 0 | |||
Ending balance (in shares) | 2,316,106 | 1,616,098 | 1,604,236 | ||
Weighted-Average Grant Date Fair Value Per Option [Abstract] | |||||
Beginning balance (in dollars per share) | $ 1.08 | $ 0.91 | $ 0.91 | ||
Granted (in dollars per share) | 1.46 | 1.31 | |||
Exercised (in dollars per share) | 0 | 0 | |||
Forfeited (in dollars per share) | 0.98 | 0 | |||
Ending balance (in dollars per share) | $ 1.09 | $ 1.08 | $ 1.08 | ||
Restricted Stock [Member] | |||||
Option activity of directors and officers and employees [Abstract] | |||||
Non-vested (in shares) | 64,581 | 56,285 | |||
Vested (in shares) | 0 | 0 | |||
Forfeited (in shares) | 0 | 0 | |||
Balance (in shares) | 64,581 | 0 | 56,285 | ||
Restricted stock activity [Abstract] | |||||
Beginning balance (in shares) | 56,285 | 0 | 0 | ||
Granted (in shares) | 8,296 | 0 | |||
Exercised (in shares) | 0 | 0 | |||
Forfeitures (in shares) | 0 | 0 | |||
Ending Balance (in shares) | 64,581 | 0 | 56,285 | ||
2020 Plan [Member] | |||||
Equity Incentive Plan [Abstract] | |||||
Authorized (in shares) | 2,380,687 | ||||
Vesting period | 4 years | ||||
Percentage of vesting | 33.00% | ||||
Increase in share limit (in shares) | 329,183 | ||||
Shares issues (in shares) | 291,832 | 3,000,000 | |||
Assumptions [Abstract] | |||||
Expected forfeiture rate | 0.00% | ||||
2020 Plan [Member] | Minimum [Member] | |||||
Assumptions [Abstract] | |||||
Expected volatility | 40.00% | ||||
Expected dividend yield | 10.00% | ||||
Risk-free interest rate | 0.50% | ||||
2020 Plan [Member] | Maximum [Member] | |||||
Equity Incentive Plan [Abstract] | |||||
Share limit (in shares) | 2,731,148 | ||||
Options granted expiration period | 10 years | ||||
Assumptions [Abstract] | |||||
Expected volatility | 50.00% | ||||
Expected dividend yield | 20.00% | ||||
Risk-free interest rate | 2.00% | ||||
2020 Plan [Member] | Restricted Stock [Member] | |||||
Equity Incentive Plan [Abstract] | |||||
Authorized (in shares) | 64,581 | ||||
Granted (in shares) | 8,296 | ||||
Option Activity [Abstract] | |||||
Granted (in shares) | 8,296 | ||||
2020 Plan [Member] | Option [Member] | |||||
Equity Incentive Plan [Abstract] | |||||
Authorized (in shares) | 2,316,106 | ||||
Granted (in shares) | 737,000 | ||||
Option Activity [Abstract] | |||||
Granted (in shares) | 737,000 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Earnings Per Share Reconciliation [Abstract] | ||
Net income (loss) attributable to common stockholders | $ 10,162,120 | $ 1,400,755 |
Divided by [Abstract] | ||
Basic weighted average shares of common stock outstanding (in shares) | 19,319,993 | 7,144,670 |
Diluted weighted average shares of common stock outstanding (in shares) | 19,591,472 | 7,485,048 |
Basic weighted average earnings per common share (in dollars per share) | $ 0.53 | $ 0.20 |
Diluted weighted average earnings per common share (in dollars per share) | $ 0.52 | $ 0.19 |
INCOME TAX (Details)
INCOME TAX (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | ||
Percentage of excise tax on certain transactions | 100.00% | |
Provision for income taxes | $ 18,284 | $ 0 |
United stated federal excise tax expense | $ 0 | |
Exercise tax as a percentage of undistributed ordinary income and net capital gains | 4.00% | |
Unrecognized tax benefits | $ 0 |
FAIR VALUE, Fair Value Measurem
FAIR VALUE, Fair Value Measurements of Loans Held at Fair Value (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 | |
Fair Value Measurements of Loans Held at Fair Value [Abstract] | |||
Loans held at fair value | [1] | $ 95,072,832 | $ 77,096,319 |
Total | 95,072,832 | 77,096,319 | |
Level 1 [Member] | |||
Fair Value Measurements of Loans Held at Fair Value [Abstract] | |||
Loans held at fair value | 0 | 0 | |
Total | 0 | 0 | |
Level 2 [Member] | |||
Fair Value Measurements of Loans Held at Fair Value [Abstract] | |||
Loans held at fair value | 0 | 0 | |
Total | 0 | 0 | |
Level 3 [Member] | |||
Fair Value Measurements of Loans Held at Fair Value [Abstract] | |||
Loans held at fair value | 95,072,832 | 77,096,319 | |
Total | $ 95,072,832 | $ 77,096,319 | |
[1] | Refer to Note 14 to the Company’s unaudited consolidated financial statements. |
FAIR VALUE, Changes in Loans Us
FAIR VALUE, Changes in Loans Using Level 3 Inputs (Details) | 3 Months Ended | |
Mar. 31, 2022USD ($) | ||
Changes in Loans Using Level 3 Inputs [Abstract] | ||
Loans held at fair value, beginning balance | $ 77,096,319 | [1] |
Change in unrealized gains (losses) on loans at fair value, net | 80,843 | |
Additional fundings | 17,285,000 | |
Original issue discount and other discounts, net of costs | 429,275 | |
Accretion of original issue discount | 336,872 | |
PIK interest | 703,073 | |
Loans held at fair value, ending balance | 95,072,832 | [1] |
Level 3 [Member] | ||
Changes in Loans Using Level 3 Inputs [Abstract] | ||
Loans held at fair value, beginning balance | 77,096,319 | |
Change in unrealized gains (losses) on loans at fair value, net | 80,843 | |
Additional fundings | 17,285,000 | |
Original issue discount and other discounts, net of costs | (429,275) | |
Accretion of original issue discount | 336,872 | |
PIK interest | 703,073 | |
Loans held at fair value, ending balance | 95,072,832 | |
Unrealized gain on loans held at fair value | $ 80,843 | |
[1] | Refer to Note 14 to the Company’s unaudited consolidated financial statements. |
FAIR VALUE, Significant Unobser
FAIR VALUE, Significant Unobservable Inputs (Details) - Level 3 [Member] | Mar. 31, 2022USD ($) | Dec. 31, 2021USD ($) |
Fair Value [Abstract] | ||
Total Investments | $ 95,072,832 | $ 77,096,319 |
Senior Term Loans [Member] | ||
Fair Value [Abstract] | ||
Total Investments | $ 95,072,832 | $ 77,096,319 |
Senior Term Loans [Member] | Yield Analysis [Member] | Market Yield [Member] | Minimum [Member] | ||
Estimated Range and Weighted Average [Abstract] | ||
Investment measurement input | 0.1626 | 0.1771 |
Senior Term Loans [Member] | Yield Analysis [Member] | Market Yield [Member] | Maximum [Member] | ||
Estimated Range and Weighted Average [Abstract] | ||
Investment measurement input | 0.2173 | 0.2096 |
Senior Term Loans [Member] | Yield Analysis [Member] | Market Yield [Member] | Weighted Average [Member] | ||
Estimated Range and Weighted Average [Abstract] | ||
Investment measurement input | 0.1741 | 0.1822 |
FAIR VALUE, Debt Securities Hel
FAIR VALUE, Debt Securities Held at Fair Value (Details) | 3 Months Ended | |
Mar. 31, 2022USD ($)DebtSecurities | Dec. 31, 2021USD ($)DebtSecurities | |
Debt securities held at fair value [Abstract] | ||
Number of investment in debt securities held at fair value | DebtSecurities | 0 | 1 |
Debt securities held at fair value | $ 0 | $ 15,881,250 |
Realized losses on sale of debt securities | $ 200,000 |
FAIR VALUE, Changes in Loans He
FAIR VALUE, Changes in Loans Held at Fair Value (Details) | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Debt Securities Held at Fair Value, Outstanding Principal [Roll Forward] | |
Total debt securities held at fair value, beginning balance | $ 15,000,000 |
Realized gains (losses) on securities at fair value, net | 0 |
Change in accumulated other comprehensive income | 0 |
Sale of securities | (15,000,000) |
Total debt securities held at fair value, ending balance | 0 |
Debt Securities Held at Fair Value, Original Issue Discount [Roll Forward] | |
Debt securities held at fair value, original issue discount, beginning balance | 1,050,000 |
Realized gains (losses) on securities at fair value, net | (150,000) |
Change in accumulated other comprehensive income | 0 |
Sale of securities | (900,000) |
Debt securities held at fair value, original issue discount, ending balance | 0 |
Debt Securities Held at Fair Value, Unrealized Gains (Losses) [Roll Forward] | |
Debt securities held at fair value, unrealized gains / (losses), beginning balance | (168,750) |
Realized gains (losses) on securities at fair value, net | 0 |
Change in accumulated other comprehensive income | 168,750 |
Sale of securities | 0 |
Debt securities held at fair value, unrealized gains / (losses), ending balance | 0 |
Debt Securities Held at Fair Value [Roll Forward] | |
Debt securities held at fair value, beginning balance | 15,881,250 |
Change in unrealized gains / (losses) on securities at fair value, net | (150,000) |
Change in accumulated other comprehensive income | 168,750 |
Sale of securities | (15,900,000) |
Debt securities held at fair value, ending balance | 0 |
Subsidiary of Public Company G [Member] | |
Accounts Receivable [Abstract] | |
Receivable for loans and securities sold | $ 15,900,000 |
FAIR VALUE, Fair Value Measur_2
FAIR VALUE, Fair Value Measurements of Debt Securities Held at Fair Value (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Fair Value Measurements of Debt Securities Held at Fair Value [Abstract] | ||
Debt securities held at fair value | $ 0 | $ 15,881,250 |
Total debt securities held at fair value | 0 | 15,881,250 |
Level 1 [Member] | ||
Fair Value Measurements of Debt Securities Held at Fair Value [Abstract] | ||
Debt securities held at fair value | 0 | 0 |
Total debt securities held at fair value | 0 | 0 |
Level 2 [Member] | ||
Fair Value Measurements of Debt Securities Held at Fair Value [Abstract] | ||
Debt securities held at fair value | 0 | 15,881,250 |
Total debt securities held at fair value | 0 | 15,881,250 |
Level 3 [Member] | ||
Fair Value Measurements of Debt Securities Held at Fair Value [Abstract] | ||
Debt securities held at fair value | 0 | 0 |
Total debt securities held at fair value | $ 0 | $ 0 |
FAIR VALUE, Book Value and Fair
FAIR VALUE, Book Value and Fair Value of Financial Instruments (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 | |
Carrying Value [Abstract] | |||
Cash and cash equivalents | $ 63,615,179 | $ 109,246,048 | |
Loans held for investment at carrying value, net | [1] | 265,151,482 | 257,163,496 |
Loan receivable at carrying value, net | 2,279,324 | $ 2,530,588 | |
Fair Value [Abstract] | |||
Cash and cash equivalents, at fair value | 63,615,179 | ||
Loans held for investment at fair value | 265,006,706 | ||
Loan receivable at carrying value | $ 2,229,213 | ||
[1] | The difference between the Carrying Value and the Outstanding Principal amount of the loans consists of unaccreted OID and loan origination costs. |
RELATED PARTY TRANSACTIONS, Man
RELATED PARTY TRANSACTIONS, Management Agreement (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Affiliate Costs [Abstract] | |||
Management fees | $ 1,255,867 | $ 451,675 | |
Less outside fees earned | (387,493) | (237,743) | |
Base management fees | 868,374 | 213,932 | |
Incentive fees earned | 2,978,839 | 662,730 | |
General and administrative expenses reimbursable to Manager | 906,717 | 365,567 | |
Affiliate costs | 4,753,930 | $ 1,242,229 | |
Due to affiliate | $ 23,122 | $ 0 | |
Managers [Member] | |||
Management Agreement [Abstract] | |||
Percentage of base management fees | 0.375% | 0.4375% | |
Frequency of management fees payment | quarterly | ||
Percentage of aggregate amount of any outside fees | 50.00% | 100.00% | |
Affiliate Costs [Abstract] | |||
Amounts payable | $ 4,753,930 | $ 4,147,501 |
RELATED PARTY TRANSACTIONS, Inv
RELATED PARTY TRANSACTIONS, Investments in Loans (Details) | 3 Months Ended | |||
Mar. 31, 2022USD ($)Loan | Mar. 31, 2021USD ($) | Mar. 10, 2022USD ($) | Dec. 31, 2021USD ($) | |
Investments in Loans [Abstract] | ||||
Number of co-invested loans held | Loan | 5 | |||
Loan commitments | $ 420,083,125 | $ 419,198,125 | ||
Sale of assigned rights | 0 | $ 1,200,000 | ||
Receivable of assigned right | $ 0 | $ 1,104,914 | ||
Public Co. F [Member] | ||||
Investments in Loans [Abstract] | ||||
Loan commitments | $ 100,000,000 | |||
Public Co. F [Member] | AFC Gamma, Inc. [Member] | ||||
Investments in Loans [Abstract] | ||||
Loan commitments | 26,600,000 | |||
Public Co. F [Member] | FLH [Member] | ||||
Investments in Loans [Abstract] | ||||
Loan commitments | $ 15,000,000 |
DIVIDENDS AND DISTRIBUTIONS (De
DIVIDENDS AND DISTRIBUTIONS (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Dividends Declared and Paid [Abstract] | ||
Common share distribution amount (in dollars per share) | $ 0.55 | $ 0.36 |
Regular Cash Dividend [Member] | ||
Dividends Declared and Paid [Abstract] | ||
Record date | Mar. 31, 2022 | Mar. 15, 2021 |
Payment date | Apr. 15, 2022 | Mar. 31, 2021 |
Common share distribution amount (in dollars per share) | $ 0.55 | $ 0.36 |
Taxable ordinary income (in dollars per share) | 0.55 | 0.36 |
Return of capital (in dollars per share) | 0 | 0 |
Section 199A dividends (in dollars per share) | $ 0.55 | $ 0.36 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | Apr. 29, 2022USD ($)Institution | Apr. 30, 2022USD ($) | Mar. 31, 2021 | May 10, 2022USD ($)Loans | Mar. 31, 2022USD ($)Loans | Dec. 31, 2021USD ($) |
Subsequent Events [Abstract] | ||||||
Loan commitments | $ 420,083,125 | $ 419,198,125 | ||||
Number of loans repaid before maturity | Loans | 5 | |||||
Private Co. D [Member] | ||||||
Subsequent Events [Abstract] | ||||||
Maturity date | Jan. 1, 2026 | |||||
Private Co. F [Member] | ||||||
Subsequent Events [Abstract] | ||||||
Maturity date | May 1, 2026 | |||||
Private Co. K [Member] | ||||||
Subsequent Events [Abstract] | ||||||
Loan commitment | $ 19,800,000 | |||||
Subsequent Event [Member] | ||||||
Subsequent Events [Abstract] | ||||||
Number of loans closed | Loans | 2 | |||||
Loan commitments | $ 107,300,000 | |||||
Loan commitments funded | $ 79,900,000 | |||||
Subsequent Event [Member] | Maximum [Member] | ||||||
Subsequent Events [Abstract] | ||||||
Amount of stock registered with SEC in shelf registration statement | $ 1,000,000,000 | |||||
Subsequent Event [Member] | Private Co. D [Member] | ||||||
Subsequent Events [Abstract] | ||||||
Proceeds from repayment of loan | 12,100,000 | |||||
Proceeds from exit fee and other fees upon repayment of loans | 200,000 | |||||
Subsequent Event [Member] | Private Co. F [Member] | ||||||
Subsequent Events [Abstract] | ||||||
Proceeds from repayment of loan | 12,900,000 | |||||
Proceeds from exit fee and other fees upon repayment of loans | 2,000,000 | |||||
Subsequent Event [Member] | Private Co. K [Member] | ||||||
Subsequent Events [Abstract] | ||||||
Loan commitment | $ 24,800,000 | |||||
Maturity date | May 31, 2027 | |||||
Subsequent Event [Member] | Private Co. K [Member] | Base Rate [Member] | ||||||
Subsequent Events [Abstract] | ||||||
Variable rate | 13.00% | |||||
Subsequent Event [Member] | At-the-Market Stock Offering Program [Member] | Maximum [Member] | ||||||
Subsequent Events [Abstract] | ||||||
Aggregate value of common stock, may be issued and sold related to Shelf Registration Statement | $ 75,000,000 | |||||
Subsequent Event [Member] | EWB Revolving Credit Facility [Member] | ||||||
Subsequent Events [Abstract] | ||||||
Loan commitment | $ 60,000,000 | |||||
Number of FDIC insured banking institutions | Institution | 2 | |||||
Borrowing capacity, subject to available borrowing base and lenders' willingness to provide additional commitments | $ 100,000,000 | |||||
Maturity date | Apr. 29, 2025 | |||||
Interest rate | 4.50% | |||||
One-time commitment fee | $ 400,000 | |||||
Unused fee, percentage | 0.25% | |||||
Subsequent Event [Member] | EWB Revolving Credit Facility [Member] | Base Rate [Member] | ||||||
Subsequent Events [Abstract] | ||||||
Variable rate | 0.50% | |||||
Subsequent Event [Member] | EWB Revolving Credit Facility [Member] | Minimum [Member] | ||||||
Subsequent Events [Abstract] | ||||||
Liquidity | $ 5,000,000 | |||||
Debt service coverage ratio | 0.015% | |||||
Subsequent Event [Member] | EWB Revolving Credit Facility [Member] | Maximum [Member] | ||||||
Subsequent Events [Abstract] | ||||||
Secured debt, percentage | 25.00% |