LOANS HELD FOR INVESTMENT AT FAIR VALUE

6 Months Ended

Jun. 30, 2025

LOANS HELD FOR INVESTMENT AT FAIR VALUE [Abstract]

As of June 30, 2025 and December 31, 2024, the Company’s portfolio included one loan held at fair value. The aggregate commitment under this loan was approximately $42.5 million and $44.4 million, respectively, and outstanding principal was approximately $51.2 million and $53.1 million as of June 30, 2025 and December 31, 2024, respectively. For the six months ended June 30, 2025, the Company received approximately $1.9 million of principal repayments of loans held at fair value. As of June 30, 2025 and December 31, 2024, the Company’s loan held at fair value did not have a floating interest rate.

The following tables summarize the Company’s loans held at fair value as of June 30, 2025 and December 31, 2024:


	As of June 30, 2025
	Fair Value(1)		Carrying Value(2)		Outstanding Principal(2)		Weighted Average Remaining Life (Years)(3)

Senior term loan	$	26,847,222	$	48,318,884	$	51,186,315	0.0
Total loan held at fair value	$	26,847,222	$	48,318,884	$	51,186,315	0.0


	As of December 31, 2024
	Fair Value(1)		Carrying Value(2)		Outstanding Principal(2)		Weighted Average Remaining Life (Years)(3)

Senior term loan	$	30,510,804	$	50,241,018	$	53,108,449	0.0
Total loan held at fair value	$	30,510,804	$	50,241,018	$	53,108,449	0.0

(1)Refer to Note 13.

(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)As of June 30, 2025 and December 31, 2024, the maturity date passed on the credit facility with Private Company A without repayment.

The following table presents changes in loans held at fair value as of and for the six months ended June 30, 2025:


	Principal		Original Issue Discount		Unrealized Gains (Losses)		Fair Value

Total loan held at fair value at December 31, 2024	$	53,108,449	$	(2,867,431)	$	(19,730,214)	$	30,510,804

Change in unrealized gains (losses) on loans at fair value, net	—		—		(1,741,448)		(1,741,448)


Loan repayments	(1,922,134)		—		—		(1,922,134)


Total loan held at fair value at June 30, 2025	$	51,186,315	$	(2,867,431)	$	(21,471,662)	$	26,847,222

As of June 30, 2025 and December 31, 2024, the Company had one loan held at fair value on nonaccrual status. Effective March 1, 2024, the Company placed Private Company A on nonaccrual status. As of June 30, 2025, the loan with Private Company A had an outstanding principal balance of approximately $51.2 million and an unrealized loss of approximately $(21.5) million. During the three and six months ended June 30, 2025, approximately $0.7 million and $1.9 million of payments were received and applied as a reduction to the amortized cost of the Private Company A loan.

A more detailed listing of the Company’s loan held at fair value portfolio based on information available as of June 30, 2025 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, MA, NM	C, D	$	26,847,222	$	48,318,884	$	51,186,315	15.5	%	(6)	5/8/2024	I/O


Total loan held at fair value			$	26,847,222	$	48,318,884	$	51,186,315

(1)C = Cultivation Facilities, D = Dispensary/Retail Facilities.

(2)Refer to Note 13.

(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 weighted average interest rate of 13.0% and payment-in-kind (“PIK”) weighted average interest rate of 2.5%. In October 2023, AFC Agent LLC (“AFC Agent”) delivered a notice of default to Private Company A based on certain financial and other covenant defaults and began charging additional default interest of 5.0%, beginning as of July 1, 2023, in accordance with the terms of the Private Company A Credit Facility. Effective March 1, 2024, the Company placed the borrower on nonaccrual status. The maturity date passed on the credit facility to Private Company A without repayment. In November 2023, Private Company A was placed into receivership to maintain the borrower’s operations and maximize value for the benefit of its creditors. The court-appointed receiver is determining the amount of principal payments the borrower is able to repay on a monthly basis either from operations or from sale of collateral assets.