v3.26.1
Debt
 6 Months Ended
Jun. 30, 2026
Debt [Abstract]  
DEBT

7. DEBT

 

Revolving Loan

In May 2021, in connection with the Company's acquisition of its wholly-owned financing subsidiary, CAL, the Company was assigned a secured revolving credit facility (the "Revolving Loan"). As of December 31, 2024, the Revolving Loan was governed by the Sixth Amended and Restated Loan and Security Agreement (the "Sixth Amendment and Restatement"), had an aggregate commitment of $110.0 million, which may be increased to $150.0 million pursuant to its accordion feature, and had a maturity date of June 30, 2026. The Revolving Loan bore interest, payable in cash in arrears, at a per annum rate equal to the greater of (1) the Prime Rate plus the applicable margin and (2) 3.25%. The applicable margin is derived from a floating rate grid based upon the ratio of debt to book equity of CAL and increases from 0% at a ratio of 0.25 to 1 to 1.25% at a ratio of 1.5 to 1. The base interest rate in effect as of June 30, 2026 is 6.75%.

On August 5, 2025, CAL entered into the First Amendment to the Sixth Amended and Restated Loan and Security Agreement (the "August 2025 Amendment"). The August 2025 Amendment extended the contractual maturity date from June 30, 2026 to June 30, 2028. No other material terms were modified as a result of the execution of this amendment, and the Company incurred approximately $0.1 million in financing costs relating thereto.

As of June 30, 2026, the Revolving Loan has aggregate commitments of $110.0 million, which may be increased to $150.0 million pursuant to its accordion feature, and has a maturity date of June 30, 2028. The Revolving Loan bears interest, payable in cash in arrears, at a per annum rate equal to the greater of (1) the Prime Rate plus the applicable margin and (2) 3.25%. The applicable margin is derived from a floating rate grid based upon the ratio of debt to equity of CAL and increases from 0% at a ratio of 0.25 to 1 to 1.25% at a ratio of 1.5 to 1.

The Revolving Loan provides for certain affirmative covenants, including requiring us to deliver financial information and any notices of default, and conducting business in the normal course. Additionally, the Company must comply with certain financial covenants including: (1) maximum capital expenditures of $150,000, (2) maintaining a debt service coverage ratio greater than 1.35 to 1, and (3) maintaining a leverage ratio less than 1.50 to 1. As of June 30, 2026, the Company is in compliance with all financial covenants with respect to the Revolving Loan.

As of June 30, 2026 and December 31, 2025, unamortized debt issuance costs related to the Revolving Loan, including all amendments and restatements thereto, as applicable, of $197,297 and $246,620, respectively, are recorded in other receivables and assets, net on the consolidated balance sheets.

For the six months ended June 30, 2026, the Company received net proceeds of $42.0 million on the Revolving Loan. As of June 30, 2026, the Company had $91.1 million outstanding and $19.0 million of borrowing available under the Revolving Loan. Additionally, as of June 30, 2026, $216.9 million of loans held for investment, at principal, are pledged as collateral in the borrowing base of the Revolving Loan.

Notes Payable

On October 18, 2024 (the "Closing Date"), the Company entered into a Loan Agreement by and among the Company and the various financial institutions party thereto, for an aggregate commitment of $50.0 million in senior unsecured notes (the "Unsecured Notes"). The Unsecured Notes have a contractual four year term maturing on October 18, 2028 and bear a fixed interest rate of 9.00% per annum. The Company may prepay the Unsecured Notes at any time without penalty following the second anniversary of the Closing Date. A prepayment penalty of 3.00% and 2.00% would be due and payable in the event of prepayment prior to the first and second anniversary of the Closing Date, respectively.

The $50.0 million aggregate commitment was advanced on the closing date and proceeds were used to temporarily repay outstanding obligations on the Revolving Loan and for other working capital purposes. The Company incurred debt issuance costs of approximately $0.9 million related to the Unsecured Notes, which were capitalized and offset against the outstanding face value of the Unsecured Notes within the line item Notes Payable, net on the consolidated balance sheets. As of June 30, 2026 and December 31, 2025, the unamortized debt issuance costs associated with the Notes Payable were $547,449 and $665,541, respectively.

The Unsecured Notes provide for certain affirmative covenants, including requiring us to deliver certain financial information and any notices of default, and conducting business in the normal course. Additionally, the Company must comply with certain financial and non-financial covenants including but not limited to: (1) minimum stockholders' equity of $200.0 million, (2) maximum aggregate indebtedness of $225.0 million, subject to increase from time to time based upon ratable increases in stockholders' equity, and (3) maintenance of an investment-grade credit rating. As of June 30, 2026, the Company is in compliance with all financial covenants with respect to the Unsecured Notes.

The following table presents the mandatory scheduled principal payments on the Unsecured Notes:

 

Year

 

Notes Payable

 

2025

 

$

-

 

2026

 

 

-

 

2027

 

 

-

 

2028

 

 

50,000,000

 

Total principal

 

$

50,000,000

 

Deferred debt issuance costs included in notes payable

 

 

(547,449

)

Total notes payable, net

 

$

49,452,551

 

Interest Expense

The following table reflects a summary of interest expense incurred during the three and six months ended June 30, 2026 and 2025.

 

 

Three months ended June 30, 2026

 

 

Three months ended June 30, 2025

 

 

Notes Payable

 

 

Revolving Loan

 

 

Total Borrowings

 

 

Notes Payable

 

 

Revolving Loan

 

 

Total Borrowings

 

Interest expense

 

$

1,121,918

 

 

$

1,151,634

 

 

$

2,273,552

 

 

$

1,121,918

 

 

$

802,208

 

 

$

1,924,126

 

Unused fee expense

 

 

-

 

 

 

26,861

 

 

 

26,861

 

 

 

-

 

 

 

42,774

 

 

 

42,774

 

Amortization of debt issuance costs

 

 

59,302

 

 

 

24,662

 

 

 

83,964

 

 

 

59,302

 

 

 

50,846

 

 

 

110,148

 

Total interest expense

 

$

1,181,220

 

 

$

1,203,157

 

 

$

2,384,377

 

 

$

1,181,220

 

 

$

895,828

 

 

$

2,077,048

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the six months ended June 30, 2026

 

 

For the six months ended June 30, 2025

 

 

Notes Payable

 

 

Revolving Loan

 

 

Total Borrowings

 

 

Notes Payable

 

 

Revolving Loan

 

 

Total Borrowings

 

Interest expense

 

$

2,231,507

 

 

$

1,973,065

 

 

$

4,204,572

 

 

$

2,243,836

 

 

$

1,592,620

 

 

$

3,836,456

 

Unused fee expense

 

 

-

 

 

 

52,992

 

 

 

52,992

 

 

 

-

 

 

 

85,516

 

 

 

85,516

 

Amortization of debt issuance costs

 

 

118,092

 

 

 

49,323

 

 

 

167,415

 

 

 

118,766

 

 

 

101,692

 

 

 

220,458

 

Total interest expense

 

$

2,349,599

 

 

$

2,075,380

 

 

$

4,424,979

 

 

$

2,362,602

 

 

$

1,779,828

 

 

$

4,142,430