UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q


QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2021


TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to ___________

Commission File Number: 001-39995



AFC GAMMA, INC.
(Exact name of registrant as specified in its charter)
Maryland
(State or other jurisdiction of incorporation or organization)
 
85-1807125
(I.R.S. Employer Identification Number)
525 Okeechobee Blvd., Suite 1770, West Palm Beach, FL 33401
(Address of principal executive offices) (Zip Code)

(561) 510-2390
(Registrant’s telephone number, including area code)

N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Common Stock, $0.01 par value per share
Trading Symbol(s)
AFCG
Name of each exchange on which registered
Nasdaq

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒  No ☐
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒  No ☐
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”   “smaller reporting company,” and "emerging growth company"  in Rule 12b-2 of the Exchange Act. ☐
 
Large accelerated filer ☐
Accelerated filer ☐
Non-accelerated filer
Smaller reporting company
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No  ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
 
Class
Common stock, $0.01 par value
Outstanding at August 5, 2021
16,386,527



AFC GAMMA, INC.
 
TABLE OF CONTENTS
 
INDEX
 
Part I.
 
Item 1.
1
 
1
  2
  3
  4
  5
Item 2.
22
Item 3.
38
Item 4.
42
Part II.
43
Item 1.
43
Item 1A.
43
Item 2.
43
Item 3.
44
Item 4.
44
Item 5.
44
Item 6.
44

PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
AFC GAMMA, INC.
BALANCE SHEETS

   
As Of
 
   
June 30, 2021
   
December 31, 2020
 
   
(unaudited)
       
Assets
           
Loans held for investment at fair value (cost of $43,916,537 and $46,994,711 at June 30, 2021 and December 31, 2020, respectively, net)
 
$
44,852,315
   
$
48,558,051
 
 
               
Loans held for investment at carrying value
   
105,404,185
     
31,837,031
 
Loan receivable at carrying value
   
3,011,140
     
3,348,263
 
Current expected credit loss reserve
   
(701,143
)
   
(404,860
)
Loans held for investment at carrying value and loan receivable at carrying value, net of current expected credit loss reserve
   
107,714,182
     
34,780,434
 
 
               
Cash and cash equivalents
   
124,604,872
     
9,623,820
 
Interest receivable
   
1,150,669
     
927,292
 
Prepaid expenses and other assets
   
189,000
     
72,095
 
Total assets
 
$
278,511,038
   
$
93,961,692
 
                 
Liabilities
               
Interest reserve
 
$
5,547,863
   
$
1,325,750
 
Current expected credit loss reserve
   
476,140
     
60,537
 
Accrued management and incentive fees
   
2,078,871
     
222,127
 
Accrued direct administrative expenses
   
530,939
     
550,671
 
Accounts payable and other liabilities
   
1,420,503
     
154,895
 
Total liabilities
   
10,054,316
     
2,313,980
 
Commitments and contingencies (Note 10)
   
     
 
Stockholders' Equity
               
Preferred stock, par value $0.01 per share, 10,000 shares authorized at June 30, 2021 and December 31, 2020 and 125 shares issued and outstanding at June 30, 2021 and December 31, 2020
   
1
     
1
 
Common stock, par value $0.01 per share, 25,000,000 and 15,000,000 shares authorized at June 30, 2021 and December 31, 2020, respectively, and 16,116,877 and 6,179,392 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively
   
161,169
     
61,794
 
Additional paid-in-capital
   
269,061,069
     
91,068,197
 
Accumulated earnings (deficit)
   
(765,517
)
   
517,720
 
Total stockholders' equity
   
268,456,722
     
91,647,712
 
                 
Total liabilities and stockholders' equity
 
$
278,511,038
   
$
93,961,692
 

(See accompanying notes to the Financial Statements)

AFC GAMMA, INC.
STATEMENTS OF OPERATIONS

   
For the three
months ended
June 30, 2021
   
For the six
months ended
June 30, 2021
 
   
(unaudited)
   
(unaudited)
 
Revenue
           
Interest Income
 
$
8,748,519
   
$
13,433,524
 
Total revenue
   
8,748,519
     
13,433,524
 
Expenses
               
Management and incentive fees, net (less rebate of $182,707 and $420,450, respectively)
   
2,078,871
     
2,955,533
 
General and administrative expenses
   
706,865
     
1,169,383
 
Stock-based compensation
   
11,457
     
1,610,572
 
Professional fees
   
194,594
     
330,047
 
Total expenses
   
2,991,787
     
6,065,535
 
Provision for current expected credit losses
   
(645,786
)
   
(711,886
)
Change in unrealized gains / (losses) on loans at fair value, net
   
(483,159
)
   
(627,561
)
Net income before income taxes
   
4,627,787
     
6,028,542
 
Income tax expense
   
-
     
-
 
Net income
 
$
4,627,787
   
$
6,028,542
 
                 
Earnings per common share:
               
Basic earnings per common share (in dollars per share)
 
$
0.34
   
$
0.58
 
Diluted earnings per common share (in dollars per share)
 
$
0.34
   
$
0.57
 
                 
Weighted average number of common shares outstanding:
               
Basic weighted average shares of common stock outstanding (in shares)
   
13,457,536
     
10,318,542
 
Diluted weighted average shares of common stock outstanding (in shares)
   
13,775,246
     
10,636,252
 

(See accompanying notes to the Financial Statements)

AFC GAMMA, INC.
STATEMENTS OF STOCKHOLDERS’ EQUITY
(unaudited)

Three months ended June 30, 2021
 
   
Preferred
Stock
   
Common Stock
   
Additional Paid-
In-Capital
   
Accumulated
Earnings
(Deficit)
   
Total
Stockholders'
Equity
 
 
Shares
   
Amount
 
Balance at March 31, 2021
 
$
1
     
13,366,877
   
$
133,669
   
$
216,504,726
   
$
(306,391
)
 
$
216,332,005
 
Issuance of common stock, net of offering cost
   
-
     
2,750,000
     
27,500
     
52,544,886
     
-
     
52,572,386
 
Stock-based compensation
   
-
     
-
     
-
     
11,457
     
-
     
11,457
 
Dividends declared and paid on common shares ($0.38 per share)
   
-
     
-
     
-
     
-
     
(5,079,413
)
   
(5,079,413
)
Dividends declared and paid on preferred shares ($60 per share)
   
-
     
-
     
-
     
-
     
(7,500
)
   
(7,500
)
Net income
   
-
     
-
     
-
     
-
     
4,627,787
     
4,627,787
 
Balance at June 30, 2021
 
$
1
     
16,116,877
   
$
161,169
   
$
269,061,069
   
$
(765,517
)
 
$
268,456,722
 

Six months ended June 30, 2021
 
   
Preferred
Stock
   
Common Stock
   
Additional Paid-
In-Capital
   
Accumulated
Earnings
(Deficit)
   
Total
Stockholders'
Equity
 
 
Shares
   
Amount
 
Balance at December 31, 2020
 
$
1
     
6,179,392
   
$
61,794
   
$
91,068,197
   
$
517,720
   
$
91,647,712
 
Issuance of common stock, net of offering cost
   
-
     
9,937,485
     
99,375
     
176,382,300
     
-
     
176,481,675
 
Stock-based compensation
   
-
     
-
     
-
     
1,610,572
     
-
     
1,610,572
 
Dividends declared and paid on common shares ($0.74 per share)
   
-
     
-
     
-
     
-
     
(7,304,279
)
   
(7,304,279
)
Dividends declared and paid on preferred shares ($60 per share)
   
-
     
-
     
-
     
-
     
(7,500
)
   
(7,500
)
Net income
   
-
     
-
     
-
     
-
     
6,028,542
     
6,028,542
 
Balance at June 30, 2021
 
$
1
     
16,116,877
   
$
161,169
   
$
269,061,069
   
$
(765,517
)
 
$
268,456,722
 

(See accompanying notes to the Financial Statements)

AFC GAMMA, INC.
STATEMENT OF CASH FLOWS

    
For the six
months ended
June 30, 2021
 
Operating activities:
 
(unaudited)
 
Net income
 
$
6,028,542
 
Adjustments to reconcile net income / (loss) to net cash provided by / (used in) operating activities:
       
Provision for current expected credit losses
   
711,886
 
Change in unrealized gains / (losses) on loans at fair value, net
   
627,561
 
Accretion of deferred loan original issue discount and other discounts
   
(2,275,032
)
Stock-based compensation
   
1,610,572
 
PIK interest
   
(1,267,093
)
Changes in operating assets and liabilities:
       
Interest reserve
   
(702,887
)
Interest receivable
   
(223,377
)
Prepaid expenses and other assets
   
(116,905
)
Accrued management fees, net
   
1,856,744
 
Accrued direct administrative expenses
   
(19,732
)
Accounts payable and other liabilities
   
1,265,608
 
Net cash provided by / (used in) operating activities
   
7,495,887
 
         
Cash flows from investing activities:
       
Issuance of and fundings on loans
   
(76,918,926
)
Proceeds from sales of Assigned Rights
   
2,313,130
 
Principal repayment of loans
   
12,921,065
 
Net cash provided by / (used in) investing activities
   
(61,684,731
)
         
Cash flows from financing activities:
       
Proceeds from sale of common stock
   
180,277,500
 
Payment of offering costs
   
(3,795,825
)
Dividends paid
   
(7,311,779
)
Net cash provided by / (used in) financing activities
   
169,169,896
 
         
Change in cash, cash equivalents and restricted cash
   
114,981,052
 
Cash, cash equivalents and restricted cash, beginning of period
   
9,623,820
 
Cash, cash equivalents and restricted cash, end of period
 
$
124,604,872
 
         
Supplemental disclosure of non-cash financing and investing activity:
       
Interest reserve withheld from funding of loan
 
$
4,925,000
 
         
Supplemental information:
       
Interest paid during the period
 
$
-
 
Income taxes paid during the period
 
$
-
 

(See accompanying notes to the Financial Statements)
 
AFC GAMMA, INC.
NOTES TO FINANCIAL STATEMENTS
As of June 30, 2021
(unaudited)
 
1.
ORGANIZATION
 
AFC Gamma, Inc. (the “Company” or “AFCG”) is a commercial real estate (“CRE”) 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 (“AFC Management” or the Company’s “Manager”), a Delaware limited liability company, pursuant to the terms of a management agreement (as amended, the “Management Agreement”).

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, licenses and/or other assets of borrowers depending on the applicable laws and regulations governing such borrowers.

The Company intends to elect to be taxed as a real estate investment trust (“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.

2.
SIGNIFICANT ACCOUNTING POLICIES
 
The accompanying unaudited interim 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 final prospectus relating to our follow-on public offering filed with the Securities and Exchange Commission (“SEC”) in accordance with Rule 424(b) of the Securities Act of 1933, as amended (the “Securities Act”) on June 24, 2021 (the “Final Prospectus”).

Refer to Note 2 to the Company’s financial statements in the Final Prospectus for a description of the Company’s significant accounting policies. The Company has included disclosure below regarding basis of presentation and other accounting policies that (i) are required to be disclosed quarterly, (ii) have material changes or (ii) the Company views as critical as of the date of this report.

Basis of Presentation

The accompanying unaudited interim financial statements and related notes have been prepared on the accrual basis of accounting in conformity with United States generally accepted accounting principles (“GAAP”) and in conformity with the rules and regulations of the SEC applicable to interim financial information.  These unaudited interim financial statements reflect all adjustments and reclassifications that, in the opinion of management, are considered necessary for a fair statement of the balance sheets, statements of operations, statements of stockholders’ equity, and statement of cash flows 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, 2021.

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.

The spread of a novel strain of coronavirus (“COVID-19”) has caused significant business disruptions in the United States beginning in the first quarter of 2020 and has resulted in governmental authorities implementing numerous measures to try to contain the virus, such as quarantines, shelter-in-place or total lock-down orders and business limitations and shutdowns (subject to exceptions for certain “essential” operations and businesses). Over the course of the 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 June 30, 2021 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 some of these measures have been lifted or scaled back, a recent resurgence of COVID-19 in certain parts of the world, including the United States, has resulted in the re-imposition of certain restrictions and may lead to more restrictions to reduce the spread of COVID-19. The extent of any 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 Financial Accounting Standards Board (“FASB”) issued Accounting Standards Updated (“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 is currently evaluating the impact of adopting this ASU on its 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. The amendments 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 financial statements.
 
In October 2020, the FASB issued ASU No. 2020-08, Codification Improvements to Subtopic 310-20, Receivables-Nonrefundable Fees and Other Costs, which is an update to clarify that an entity should reevaluate whether a callable debt security is within the scope of 310-20-35-33 for each reporting period.  ASU No. 2020-08 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020.  Early application is not permitted.  For all other entities, the amendments in ASU No. 2020-08 are effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early application is permitted for all other entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. All entities should apply the amendments in this update on a prospective basis as of the beginning of the period of adoption for existing or newly purchased callable debt securities. The Company has adopted this new standard on January 1, 2021.  The adoption of this standard did not have a material impact on the Company’s financial statements.
 
3.
LOANS HELD FOR INVESTMENT AT FAIR VALUE
 
As of June 30, 2021 and December 31, 2020, the Company’s portfolio included three and four loans held at fair value, respectively. The aggregate originated commitment under these loans was approximately $47.4 million and $59.9 million, respectively, and outstanding principal was approximately $46.7 million and $50.8 million, respectively, as of June 30, 2021 and December 31, 2020.  For the six months ended June 30, 2021, the Company funded approximately $7.7 million of outstanding principal and had repayments of approximately $12.6 million. As of June 30, 2021 and December 31, 2020, approximately 0% and 6.0%, respectively, of the Company’s loans held at fair value have floating interest rates.  As of December 31, 2020, these floating rates were subject to LIBOR floors, with a weighted average floor of 2.5%, 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 fair value as of June 30, 2021 and December 31, 2020:
 
   
As of June 30, 2021
 
   
Fair Value (2)
   
Carrying Value (1)
   
Outstanding
Principal (1)
   
Weighted Average
Remaining Life
(Years)(3)
 
                         
Senior Term Loans
 
$
44,852,315
   
$
43,916,537
   
$
46,653,209
     
2.6
 
Total loans held at fair value
 
$
44,852,315
   
$
43,916,537
   
$
46,653,209
     
2.6
 

   
As of December 31, 2020
 
   
Fair Value (2)
   
Carrying Value (1)
   
Outstanding
Principal (1)
   
Weighted Average
Remaining Life
(Years)(3)
 
                         
Senior Term Loans
 
$
48,558,051
   
$
46,994,711
   
$
50,831,235
     
3.3
 
Total loans held at fair value
 
$
48,558,051
   
$
46,994,711
   
$
50,831,235
     
3.3
 
 
(1)
The difference between the Carrying Value and the Outstanding Principal amount of the loans consists of unaccreted purchase discount, deferred loan fees and loan origination costs.
 
(2)
Refer to Footnote 14 to our unaudited financial statements.
 
(3)
Weighted average remaining life is calculated based on the fair value of the loans as of June 30, 2021 and December 31, 2020.
 
The following table presents changes in loans held at fair value as of and for the six months ended June 30, 2021:
 
   
Principal
   
Original Issue
Discount
   
Unrealized Gains
/ (Losses)
   
Fair Value
 
                         
Total loans held at fair value at December 31, 2020
 
$
50,831,235
   
$
(3,836,524
)
 
$
1,563,340
   
$
48,558,051
 
Change in unrealized gains / (losses) on loans at fair value, net
   
-
     
-
     
(627,561
)
   
(627,561
)
New fundings
   
7,677,701
     
(501,346
)
   
-
     
7,176,355
 
Loan repayments
    (12,000,000 )     -       -       (12,000,000 )
Loan amortization payments
    (583,324 )     -       -       (583,324 )
Accretion of original issue discount
   
-
     
1,601,197
     
-
     
1,601,197
 
PIK Interest
   
727,597
     
-
     
-
     
727,597
 
Total loans held at fair value at June 30, 2021
 
$
46,653,209
   
$
(2,736,673
)
 
$
935,779
   
$
44,852,315
 

A more detailed listing of the Company’s loans held at fair value portfolio based on information available as of June 30, 2021 is as follows:
 

Collateral Location  
Collateral
Type (8)
   
Fair Value (2)
   
Carrying
Value (1)
   
Outstanding
Principal (1)
   
Interest
Rate
     
Maturity Date (3)
 
Payment
Terms (4)
 
                                             
Private Co. A
 AZ, MI, MD, MA
   
C , D

 
$
33,059,982
   
$
32,543,647
   
$
34,654,069
     
17.0
%
(5) 
 
5/8/2024
   
P/I

Private Co. B
 MI
    C

   
8,909,663
     
8,503,029
     
9,059,140
     
17.0
%
(6) 
 
9/1/2023
    P/I

Public Co. A - Real Estate Loan
 NV
    C

   
2,882,670
     
2,869,861
     
2,940,000
     
14.0
%
(7) 
 
1/26/2023
   
I/O

Total loans held at fair value
           
$
44,852,315
   
$
43,916,537
   
$
46,653,209
                       

(1)
The difference between the Carrying Value and the Outstanding Principal amount of the loans consists of unaccreted original issue discount (“OID”) and loan origination costs.
 
(2)
Refer to Footnote 14 to our unaudited financial statements.
 
(3)
Certain loans are subject to contractual extension options and may be subject to performance based or other conditions as stipulated in the loan agreement. Actual maturities may differ from contractual maturities stated herein as certain borrowers may have the right to prepay with or without paying a prepayment penalty. The Company may also extend contractual maturities and amend other terms of the loans in connection with loan modifications.
 
(4)
I/O = interest only, P/I = principal and interest. P/I loans may include interest only periods for a portion of the loan term.
 
(5)
Base interest rate of 13% and payment-in-kind (“PIK”) interest rate of 4%.
 
(6)
Base interest rate of 13% and PIK interest rate of 4%.
 
(7)
Base interest rate of 12% and PIK interest rate of 2%.

(8)
C = Cultivation Facilities, D = Dispensaries.

4.
LOANS HELD FOR INVESTMENT AT CARRYING VALUE
 
As of June 30, 2021 and December 31, 2020, the Company’s portfolio included ten and three loans, respectively, held at carrying value. The aggregate originated commitment under these loans was approximately $136.3 million and $44.0 million, respectively, and outstanding principal was approximately $114.4 million and $33.9 million, respectively, as of June 30, 2021 and December 31, 2020. For the six months ended June 30, 2021, the Company funded approximately $79.9 million of outstanding principal. As of June 30, 2021 and December 31, 2020, approximately 44% and 35%, 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%, 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 June 30, 2021 and December 31, 2020:
 
   
As of June 30, 2021
 
   
Outstanding
Principal (1)
   
Original
Issue
Discount
   
Carrying
Value (1)
   
Weighted Average
Remaining Life
(Years)(2)
 
                         
Senior Term Loans
 
$
114,376,084
   
$
(8,971,899
)
 
$
105,404,185
     
3.8
 
Total loans held at carrying value
 
$
114,376,084
   
$
(8,971,899
)
 
$
105,404,185
      3.8
 

   
As of December 31, 2020
 
   
Outstanding
Principal (1)
   
Original
Issue
Discount
   
Carrying
Value (1)
   
Weighted Average
Remaining Life
(Years)(2)
 
                         
Senior Term Loans
 
$
33,907,763
   
$
(2,070,732
)
 
$
31,837,031
      4.7
 
Total loans held at carrying value
 
$
33,907,763
   
$
(2,070,732
)
 
$
31,837,031
      4.7
 

(1)
The difference between the Carrying Value and the Outstanding Principal amount of the loans consists of unaccreted original issue discount and loan origination costs.
 
(2)
Weighted average remaining life is calculated based on the carrying value of the loans as of June 30, 2021 and December 31, 2020.
 
The following table presents changes in loans held at carrying value as of and for the six months ended June 30, 2021:
 
   
Principal
   
Original Issue
Discount
   
Carrying Value
 
                   
Total loans held at carrying value at December 31, 2020
 
$
33,907,763
   
$
(2,070,732
)
 
$
31,837,031
 
New fundings
    79,928,825
      (7,574,384 )     72,354,441
 
Accretion of original issue discount
   
-
      673,217
      673,217
 
PIK interest     539,496       -       539,496  
Total loans held at carrying value at June 30, 2021
 
$
114,376,084
   
$
(8,971,899
)
 
$
105,404,185
 

A more detailed listing of the Company’s loans held at carrying value portfolio based on information available as of June 30, 2021 is as follows:
 

Collateral Location
 
Collateral
Type (4)
 
Outstanding
Principal (1)
   
Original Issue
Discount
   
Carrying
Value (1)
   
Interest
Rate
   
Maturity Date (2)
 
Payment
Terms (3)
 
                                         
Private Co. C
 PA
 
C , D
 
$
16,571,443
   
$
(764,590
)
 
$
15,806,853
     
17.0
%
(5)
12/1/2025
   
P/I
Private Co. D
 OH, AR
  D
    12,107,055
      (930,564 )     11,176,491
      15.0  %
(6)

1/1/2026
    P/I
Sub. of Public Co. D
 PA
  C
   
10,000,000
      (160,714 )    
9,839,286
      12.9  % (7)
12/18/2024
   
I/O
Private Co. E
 OH
 
C , D
   

11,174,533
     
(2,936,883
)
   
8,237,650
   
17.0
 % (8)
4/1/2026


P/I
Private Co. F
 MO   C , D
    6,166,025
      (1,915,902 )     4,250,123
      17.0  % (9) 5/1/2026
    P/I
Public Co. E  MI   C
    15,000,000
      (985,714 )     14,014,286
      13.0  % (10) 4/29/2025
    P/I
Sub. of Private Co. G
 NJ   C , D
    22,075,778
      (836,722 )     21,239,056
      17.0  % (11) 5/1/2026
    P/I
Public Co. F
 IL, FL, NV,
OH, MA, MI, MD,
AR, NV, AZ
  C , D     10,000,000
      (184,000 )     9,816,000
      9.8  % (12)
5/30/2023
    I/O
Sub. of Private Co. H
 IL   C
    5,781,250
      (146,810 )     5,634,440
      15.0  % (13) 5/11/2023
    I/O
Private Co. I
 MD   C , D
    5,500,000
      (110,000 )     5,390,000
      13.0  % (14) 7/9/2021
    I/O
Total loans held at carry value
        $ 114,376,084     $ (8,971,899 )  
$
105,404,185
                     

(1)
The difference between the Carrying Value and the Outstanding Principal amount of the loans consists of unaccreted purchase discount, deferred loan fees and loan origination costs.
 
(2)
Certain loans are subject to contractual extension options and may be subject to performance based or other conditions as stipulated in the loan agreement. Actual maturities may differ from contractual maturities stated herein as certain borrowers may have the right to prepay with or without paying a prepayment penalty. The Company may also extend contractual maturities and amend other terms of the loans in connection with loan modifications.
 
(3)
I/O = interest only, P/I = principal and interest. P/I loans may include interest only periods for a portion of the loan term.
 
(4)
C = Cultivation Facilities, D = Dispensaries.
 
(5)
Base interest rate of 12% plus LIBOR (LIBOR floor of 1%) and PIK interest rate of 4%.
 
(6)
Base interest rate of 13% and PIK interest rate of 2%.
 
(7)
Base interest rate of 12.9%.
 
(8)
Base interest rate of 12% plus LIBOR (LIBOR floor of 1%) and PIK interest rate of 4%.
 
(9)
Base interest rate of 13% and PIK interest rate of 4%.

(10)
Base interest rate of 13%.

(11)
Base interest rate of 12% plus LIBOR (LIBOR floor of 1%) and PIK interest rate of 4%.

(12)
Base interest rate of 9.8%.

(13)
Base interest rate of 15%.

(14)
Base interest rate of 13%.

10

5.
LOAN RECEIVABLE AT CARRYING VALUE
 
As of June 30, 2021 and December 31, 2020, 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 $3.0 million and $3.4 million as of June 30, 2021 and December 31, 2020, respectively.  During the six months ended June 30, 2021, the Company received repayments of $337,741 of outstanding principal.
 
The following table presents changes in loans receivable as of and for the six months ended June 30, 2021:
 
   
Principal
   
Original Issue
Discount
   
Carrying
Value
 
                   
Total loans receivable at carrying value at December 31, 2020
 
$
3,352,176
   
$
(3,913
)
 
$
3,348,263
 
Principal repayment of loans
   
(337,741
)
   
-
     
(337,741
)
Accretion of original issue discount     -       618       618  
Total loans receivable at carrying value at June 30, 2021
 
$
3,014,435
   
$
(3,295
)
 
$
3,011,140
 

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 we have deemed the borrower/sponsor to be experiencing financial difficulty, we 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 Company utilized macroeconomic data that reflects a current recession; however, the short and long-term economic implications of the COVID-19 pandemic and its financial impact on the Company are highly uncertain. The CECL Reserve takes into consideration the macroeconomic impact of the COVID-19 pandemic on CRE properties and is not specific to any loan losses or impairments on the Company’s loans held for investment.

As of June 30, 2021 and December 31, 2020, the Company’s CECL Reserve for its loans held at carrying value and loans receivable at carrying value is $1,177,283 and $465,397, respectively, or 109 and 132 basis points, respectively, of the Company’s total loans held at carrying value and loans receivable at carrying value of $108,415,325 and $35,185,294, 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 $701,143 and $404,860, respectively, and a liability for unfunded commitments of $476,140 and $60,537, 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.

11

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 and six months ended June 30, 2021 was as follows:

   
Outstanding (1)
   
Unfunded (2)
   
Total
 
Balance at March 31, 2021
 
$
248,317
   
$
283,180
   
$
531,497
 
Provision for current expected credit losses
   
452,826

   
192,960
     
645,786
 
Write-offs
   
-
     
-
     
-
 
Recoveries
   
-
     
-
     
-
 
Balance at June 30, 2021
 
$
701,143
   
$
476,140
   
$
1,177,283
 

 
 
Outstanding (1)
   
Unfunded (2)
   
Total
 
Balance at December 31, 2020
 
$
404,860
   
$
60,537
   
$
465,397
 
Provision for current expected credit losses
   
296,283
   
415,603
     
711,886
 
Write-offs
   
-
     
-
     
-
 
Recoveries
   
-
     
-
     
-
 
Balance at June 30, 2021
 
$
701,143
   
$
476,140
   
$
1,177,283
 

(1)
As of June 30, 2021 and December 31, 2020, 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 balance sheets.
(2)
As of June 30, 2021 and December 31, 2020, the CECL Reserve related to unfunded commitments on loans held at carrying value is recorded within other liabilities in the Company's balance sheets.

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
 
2
 
Low Risk
 
3
 
Medium Risk
 
4
 
High Risk/ Potential for Loss
 
5
 
Impaired/Loss Likely
 
The risk ratings are primarily based on historical data as well as taking into account future economic conditions.

As of June 30, 2021, 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:
   
2021
   
2020
   
Total
 
1
   
$
-
   
$
-
   
$
-
 
2
     
23,830,286
     
-
     
23,830,286
 
3
     
36,513,621
     
45,060,278
     
81,573,899
 
4
     
-
     
3,011,140
     
3,011,140
 
5
     
-
     
-
     
-
 
Total
   
$
60,343,907
   
$
48,071,418
   
$
108,415,325
 

12

7.
INTEREST RECEIVABLE
 
The following table summarize the interest receivable by the Company as of June 30, 2021 and December 31, 2020:
 
   
As of
June 30, 2021
   
As of
December 31, 2020
 
             
Interest receivable
 
$
722,716
   
$
675,795
 
PIK receivable
   
362,040
     
177,183
 
Unused fees receivable
   
65,913
     
74,314
 
Total interest receivable
 
$
1,150,669
   
$
927,292


8.
INTEREST RESERVE
 
At June 30, 2021 and December 31, 2020, the Company had four and one loans, respectively, that included a loan funded interest reserve.  For the three and six months ended June 30, 2021, $620,621 and $702,887, respectively, 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 and six months ended June 30, 2021:
 
   
Three months ended
June 30, 2021
   
Six months ended
June 30, 2021
 
Beginning reserves
  $ 3,243,484    
$
1,325,750
 
New reserves
    2,925,000
      4,925,000
 
Reserves disbursed
    (620,621 )    
(702,887
)
Ending reserves
  $ 5,547,863    
$
5,547,863
 

9.
DEBT
 
In July 2020, the Company obtained a secured revolving credit loan (the “Revolving Loan”) from AFC Finance, LLC, an affiliate of the Company’s management.  The Revolving Loan had a loan commitment of $40,000,000 and had an interest rate of 8% per annum, payable in cash in arrears. The Company did not incur any fees or cost related to the origination of the Revolving Loan and the Revolving Loan did not have any unused fees.  The maturity date of the Revolving Loan 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 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 Revolving Loan (the “Revolving Credit Agreement”). The Revolving Loan was secured by the assets of the Company.

On May 7, 2021, the Company amended the Revolving Credit Agreement from AFC Finance, LLC, an affiliate of the Company’s management.  The amendment to the Revolving Credit Agreement increased the loan commitment from $40,000,000 to $50,000,000, decreased the interest rate from 8% per annum to 6% per annum, removed Gamma Lending Holdco LLC as a lender and extended the maturity date from July 31, 2021 to the earlier of (i) December 31, 2021 or (ii) the date of the closing of any Refinancing Credit Facility. The Company did not incur any fees or cost related to the amendment of the Revolving Loan and the Revolving Loan does not have any unused fees.  For the three and six months ended June 30, 2021, the Company has not drawn on the Revolving Loan or incurred any fees or interest expense related to the Revolving Loan.

13

10.
COMMITMENTS AND CONTINGENCIES
 
As of June 30, 2021 and December 31, 2020, the Company had the following commitments to fund various senior term loans, equipment loans and bridge loans.
 
   
As of June 30, 2021
   
As of December 31, 2020
 
             
Total original loan commitments
 
$
187,721,250
   
$
107,292,176
 
Less: drawn commitments
   
(163,721,408
)
   
(87,467,057
)
Total undrawn commitments
 
$
23,999,842
   
$
19,825,119
 
 
The Company from time to time may be a party to litigation in the normal course of business. As of June 30, 2021, 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.
 
11.
STOCKHOLDERS’ EQUITY
 
Series A Preferred Stock

As of June 30, 2021 and December 31, 2020, 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, plus a redemption premium of $50 per share if the shares are redeemed on or before December 31, 2021. 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.

14

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 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 $118,750,000 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 $17,812,500 in additional gross proceeds.  The underwriting commissions of $8,312,500 and $1,246,875, respectively, are reflected as a reduction of additional paid-in capital on the statement of stockholders’ equity.  The Company incurred approximately $3,093,836 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 $123,909,289.

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 $56,375,000 in gross proceeds.  The underwriting commissions of $3,100,625 are reflected as a reduction of additional paid-in capital on the statement of stockholders’ equity.  The Company incurred approximately $701,989 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 $52,572,386.

Subsequent to the period ended June 30, 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, which was completed on July 6, 2021, raising $5,527,825 in additional gross proceeds or $5,223,795 in net proceeds after underwriting commissions of $304,030, which is reflected as a reduction of additional paid-in capital on the statement of stockholders’ equity.

The Company intends to use the net proceeds of the IPO and additional offering (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 the Company’s investment strategy and (iii) for working capital and other general corporate purposes.  Until appropriate investments can be identified, the Company may invest this balance in interest-bearing short-term investments, including money market accounts or funds, commercial mortgage-backed securities and corporate bonds, which are consistent with the Company’s intention to qualify as a REIT and to maintain our exclusion from registration under the Investment Company Act of 1940, as amended.

Equity Incentive Plan
 
The Company has established an equity incentive compensation plan (the “Plan”). The Company’s Board authorized the adoption of the Plan (as amended, the “2020 Plan”) and approved stock option grants of 1,616,098 shares of common stock as of June 30, 2021.  The Board or one or more committees appointed by the Board administers 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 currently intends 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.
 
15

As of June 30, 2021, 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 2,375,000 shares, which is an increase of 275,000 shares compared to March 31, 2021 under the evergreen provision in the 2020 Plan in connection with the public offering of common stock by the Company in June 2021.  Subsequent to the period ended June 30, 2021, the Company issued an additional 269,650 shares of common stock to the underwriters in connection with their partial exercise of an over-allotment option, which increased the Share Limit of the 2020 Plan by 26,965 under the evergreen provision in the 2020 Plan, for a total maximum Share Limit of 2,401,965. Shares that are subject to or underlie awards that expire or for any reason are cancelled or terminated, are forfeited, fail to vest, or for any other reason are not paid or delivered under the 2020 Plan will not be counted against the Share Limit and will again be available for subsequent awards under the 2020 Plan. Shares that are exchanged by a participant or withheld by the Company as full or partial payment in connection with any award granted under the 2020 Plan, as well as any shares exchanged by a participant or withheld by us to satisfy tax withholding obligations related to any award granted under the 2020 Plan, will not be counted against the Share Limit and will again be available for subsequent awards under the 2020 Plan. To the extent that an award is settled in cash or a form other than shares, the shares that would have been delivered had there been no such cash or other settlement will not be counted against the Share Limit and will again be available for subsequent awards under the 2020 Plan.
 
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 ten 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 June 30, 2021 and December 31, 2020:
 
   
As of
June 30, 2021
   
As of
December 31, 2020
 
Non-vested
    183,114       142,814  
Vested
    1,449,518       800,618  
Forfeited
   
(19,534
)
   
(16,534
)
Balance
    1,613,098       926,898  
 
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. The share-based compensation expense for the Company was approximately $11,457 and $1,610,572 for the three and six months ended June 30, 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% - 1.5
%
Expected forfeiture rate
   
0
%
 
The following tables summarizes stock option activity during the three and six months ended June 30, 2021:

   
Three months ended
June 30, 2021
   
Weighted-Average
Grant Date Fair
Value Per Option
 
Balance as of March 31, 2021
   
1,616,098
   
$
1.08
 
Granted