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Index
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, 2022
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)
Maryland85-1807125
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification Number)
525 Okeechobee Blvd., Suite 1650, 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 classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par value per shareAFCGThe Nasdaq Stock Market LLC
Securities registered pursuant to Section 12(g) of the Act: None
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
Class
Outstanding at August 8, 2022
Common stock, $0.01 par value per share19,857,872


Index
AFC GAMMA, INC.
TABLE OF CONTENTS
INDEX
4


Index
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
AFC GAMMA, INC.
CONSOLIDATED BALANCE SHEETS
As of
June 30, 2022December 31, 2021
(unaudited)
Assets
Loans held for investment at fair value (cost of $93,940,582 and $74,913,157 at June 30, 2022 and December 31, 2021, respectively, net)
$95,199,132 $77,096,319 
Debt securities available for sale held at fair value (cost of $16,050,000 at December 31, 2021)
 15,881,250 
Loans held for investment at carrying value, net315,882,044 257,163,496 
Loan receivable at carrying value, net2,220,279 2,530,588 
Current expected credit loss reserve(5,018,072)(2,431,558)
Loans held for investment at carrying value and loan receivable at carrying value, net of current expected credit loss reserve313,084,251 257,262,526 
Cash and cash equivalents45,583,533 109,246,048 
Interest receivable4,797,315 4,412,938 
Prepaid expenses and other assets619,973 949,279 
Total assets$459,284,204 $464,848,360 
Liabilities
Interest reserve$5,186,615 $4,782,271 
Accrued interest958,333 991,840 
Due to affiliate6,140  
Dividends payable11,120,409 8,221,406 
Current expected credit loss reserve594,840 683,177 
Accrued management and incentive fees4,201,567 2,823,044 
Accrued direct administrative expenses1,205,793 1,324,457 
Accounts payable and other liabilities986,728 1,528,980 
Senior notes payable, net96,823,414 96,572,656 
Line of credit payable to affiliate, net 74,845,355 
Total liabilities121,083,839 191,773,186 
Commitments and contingencies (Note 10)
Shareholders’ equity
Preferred stock, par value $0.01 per share, 10,000 shares authorized at June 30, 2022 and December 31, 2021 and 125 shares issued and outstanding at June 30, 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 June 30, 2022 and December 31, 2021, respectively, and 19,857,872 and 16,442,812 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively
197,933 163,866 
Additional paid-in-capital339,568,041 274,172,934 
Accumulated other comprehensive income (loss) (168,750)
Accumulated (deficit) earnings(1,565,610)(1,092,877)
Total shareholders’ equity338,200,365 273,075,174 
Total liabilities and shareholders’ equity$459,284,204 $464,848,360 
(See accompanying notes to the consolidated financial statements)
1

Index
AFC GAMMA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three months ended
June 30,
Six months ended
June 30,
 20222021 20222021
Revenue
Interest income$21,651,207 $8,748,519 $40,287,060 $13,433,524 
Interest expense(1,747,004) (3,447,119) 
Net interest income19,904,203 8,748,519 36,839,941 13,433,524 
Expenses
Management and incentive fees, net (less rebate of $488,050, $182,707, $875,543 and $420,450, respectively)
4,201,568 2,078,871 8,048,781 2,955,533 
General and administrative expenses1,177,437 706,865 2,321,881 1,169,383 
Stock-based compensation117,397 11,457 1,107,420 1,610,572 
Professional fees293,311 194,594 692,679 330,047 
Total expenses5,789,713 2,991,787 12,170,761 6,065,535 
Provision for current expected credit losses(1,593,048)(645,786)(2,498,177)(711,886)
Realized gains (losses) on sales of investments, net  450,000  
Change in unrealized (losses) gains on loans at fair value, net(1,005,454)(483,159)(924,611)(627,561)
Net income before income taxes11,515,988 4,627,787 21,696,392 6,028,542 
Income tax expense164,315  182,599  
Net income$11,351,673 $4,627,787 $21,513,793 $6,028,542 
Earnings per common share:
Basic earnings per common share (in dollars per share)$0.58 $0.34 $1.10 $0.58 
Diluted earnings per common share (in dollars per share)$0.57 $0.34 $1.10 $0.57 
Weighted average number of common shares outstanding:
Basic weighted average shares of common stock outstanding (in shares)19,715,749 13,457,536 19,518,964 10,318,542 
Diluted weighted average shares of common stock outstanding (in shares)19,811,594 13,775,246 19,614,809 10,636,252 
(See accompanying notes to the consolidated financial statements)
2

Index
AFC GAMMA, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)

Three months ended
June 30,
Six months ended
June 30,
 2022202120222021
Net income$11,351,673 $4,627,787 $21,513,793 $6,028,542 
Other comprehensive income (loss):
Reversal of unrealized loss to recognized loss on debt securities available for sale held at fair value
  168,750  
Total other comprehensive income (loss)  168,750  
Total comprehensive income$11,351,673 $4,627,787 $21,682,543 $6,028,542 
(See accompanying notes to the consolidated financial statements)
3

Index
AFC GAMMA, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(unaudited)
Three months ended June 30, 2022
Preferred
Stock
Common StockAdditional
Paid-In-
Capital
Accumulated Other Comprehensive Income (Loss)Accumulated
Earnings
(Deficit)
Total
Shareholders’
Equity
SharesAmount
Balance at March 31, 2022$1 19,742,940 $196,784 $338,102,982 $ $(1,789,374)$336,510,393 
Issuance of common stock, net of offering costs— 114,932 1,149 1,347,662 — — 1,348,811 
Stock-based compensation— — — 117,397 — — 117,397 
Dividends declared on common shares ($0.56 per share)
— — — — — (11,120,409)(11,120,409)
Dividends declared on preferred shares ($60 per share)
— — — — — (7,500)(7,500)
Net income— — — — — 11,351,673 11,351,673 
Balance at June 30, 2022$1 19,857,872 $197,933 $339,568,041 $ $(1,565,610)$338,200,365 
Three months ended June 30, 2021
Preferred
Stock
Common StockAdditional
Paid-In-
Capital
Accumulated Other Comprehensive Income (Loss)Accumulated
Earnings
(Deficit)
Total
Shareholders’
Equity
SharesAmount
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 costs— 2,750,000 27,500 52,544,886 — — 52,572,386 
Stock-based compensation— — — 11,457 — — 11,457 
Dividends declared on common shares ($0.38 per share)
— — — — — (5,079,413)(5,079,413)
Dividends declared 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 
(See accompanying notes to the consolidated financial statements)
4

Index
AFC GAMMA, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(unaudited)
Six months ended June 30, 2022
 Preferred
Stock
Common StockAdditional
Paid-In-
Capital
Accumulated Other Comprehensive Income (Loss)Accumulated
Earnings
(Deficit)
Total
Shareholders’
Equity
 SharesAmount
Balance at December 31, 2021$1 16,442,812 $163,866 $274,172,934 $(168,750)$(1,092,877)$273,075,174 
Issuance of common stock, net of offering costs— 3,406,764 34,067 64,287,687 — — 64,321,754 
Stock-based compensation— 8,296 — 1,107,420 — — 1,107,420 
Dividends declared on common shares ($1.11 per share)
— — — — — (21,979,026)(21,979,026)
Dividends declared on preferred shares ($60 per share)
— — — — — (7,500)(7,500)
Other comprehensive income (loss)— — — — 168,750 — 168,750 
Net income— — — — — 21,513,793 21,513,793 
Balance at June 30, 2022$1 19,857,872 $197,933 $339,568,041 $ $(1,565,610)$338,200,365 
Six months ended June 30, 2021
 Preferred
Stock
Common StockAdditional
Paid-In-
Capital
Accumulated Other Comprehensive Income (Loss)Accumulated
Earnings
(Deficit)
Total
Shareholders’
Equity
 SharesAmount
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 costs— 9,937,485 99,375 176,382,300 — — 176,481,675 
Stock-based compensation— — — 1,610,572 — — 1,610,572 
Dividends declared on common shares ($0.74 per share)
— — — — — (7,304,279)(7,304,279)
Dividends declared 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 consolidated financial statements)
5

Index
AFC GAMMA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Six months ended
June 30,
20222021
Operating activities: 
Net income$21,513,793 $6,028,542 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:  
Provision for current expected credit losses2,498,177 711,886 
Realized (gains) losses on sale of investments, net(450,000) 
Change in unrealized losses (gains) on loans at fair value, net924,611 627,561 
Accretion of deferred loan original issue discount and other discounts(8,337,513)(2,275,032)
Amortization of deferred financing costs507,883  
Stock-based compensation1,107,420 1,610,572 
Payment-in-kind interest(3,475,182)(1,267,093)
Changes in operating assets and liabilities  
Interest receivable(384,377)(223,377)
Prepaid expenses and other assets226,826 (116,905)
Interest reserve404,344 (702,887)
Accrued interest(33,507) 
Accrued management and incentive fees, net1,378,523 1,856,744 
Accrued direct administrative expenses(118,664)(19,732)
Accounts payable and other liabilities(536,112)1,265,608 
Net cash provided by (used in) operating activities15,226,222 7,495,887 
Cash flows from investing activities:  
Issuance of and fundings on loans(103,799,812)(76,918,926)
Proceeds from sales of Assigned Rights 2,313,130 
Proceeds from sales of loans10,600,000  
Sale of available-for-sale debt securities15,900,000  
Principal repayment of loans28,176,844 12,921,065 
Net cash provided by (used in) investing activities(49,122,968)(61,684,731)
Cash flows from financing activities:  
Proceeds from sale of common stock65,971,445 180,277,500 
Payment of offering costs - equity offering(1,649,691)(3,795,825)
Dividends paid to common and preferred shareholders(19,087,523)(7,311,779)
Repayment on the line of credit(75,000,000) 
Net cash provided by (used in) financing activities(29,765,769)169,169,896 
Net (decrease) increase in cash and cash equivalents(63,662,515)114,981,052 
Cash and cash equivalents, beginning of period109,246,048 9,623,820 
Cash and cash equivalents, end of period$45,583,533 $124,604,872 
Supplemental disclosure of non-cash activity:  
Interest reserve withheld from funding of loans$ $4,925,000 
OID withheld from funding of loans$4,682,675 $8,075,730 
Change in other comprehensive income (loss) during the period$168,750 $ 
Dividends declared and not yet paid$11,120,409 $ 
Supplemental information:  
Interest paid during the period$2,972,743 $ 
Income taxes paid during the period$40,588 $ 
(See accompanying notes to the consolidated financial statements)
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Index
AFC GAMMA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of June 30, 2022
(unaudited)
1.    ORGANIZATION
AFC Gamma, Inc. (the “Company” or “AFCG”) is an institutional lender to the cannabis industry that was founded in July 2020 by a veteran team of investment professionals. The Company originates, structures, underwrites, and invests in senior secured loans and other types of loans and debt securities for cannabis industry operators in states that have legalized medical and/or adult-use cannabis.
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 the Amended and Restated Management Agreement, dated March 10, 2022 (as amended, the “Management Agreement”). The Company’s wholly-owned subsidiary, AFCG TRS1, LLC (“TRS1”), a Delaware limited liability company, operates as a taxable real estate investment trust 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 to 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 licenses and/or other assets of borrowers depending on the applicable laws and regulations governing such borrowers.
The Company has elected 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 shareholders and complies with various other requirements as a REIT.
2.    SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements 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 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 in the Company’s portfolio are recorded at fair value and unrealized gains or losses are excluded from net income on the consolidated statement of operations and reported as a component of accumulated other comprehensive income within shareholders’ equity.

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Index
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 and current expected credit losses (“CECL”).
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 periods ended June 30, 2022 and 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 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.
3.    LOANS HELD FOR INVESTMENT AT FAIR VALUE
As of June 30, 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 $96.4 million and $77.6 million, as of June 30, 2022 and December 31, 2021, respectively. For the six months ended June 30, 2022, the Company funded approximately $17.3 million of additional principal and had no repayments. As of June 30, 2022 and December 31, 2021, none of the Company’s loans held at fair value had floating interest rates.
8

Index
The following tables summarize the Company’s loans held at fair value as of June 30, 2022 and December 31, 2021:
As of June 30, 2022
Fair Value (1)
Carrying Value (2)
Outstanding
Principal (2)
Weighted Average
Remaining Life
(Years) (3)
Senior term loans$95,199,132 $93,940,582 $96,382,983 1.7
Total loans held at fair value$95,199,132 $93,940,582 $96,382,983 1.7
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 June 30, 2022 and December 31, 2021.
The following table presents changes in loans held at fair value as of and for the six months ended June 30, 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 (losses) gains on loans at fair value, net  (924,611)(924,611)
New fundings17,285,000 (429,275) 16,855,725 
Accretion of original issue discount 704,458  704,458 
PIK interest1,467,241   1,467,241 
Total loans held at fair value at June 30, 2022$96,382,983 $(2,442,401)$1,258,550 $95,199,132 
A more detailed listing of the Company’s loans held at fair value portfolio based on information available as of June 30, 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. AAZ, MI, MD, MAC, D$79,320,829 $78,314,293 $80,301,694 15.5 %
(6)
5/8/2024P/I
Public Co. ANVC3,009,582 3,069,437 3,069,437 14.0 %
(7)
1/26/2023I/O
Private Co. BMIC12,868,721 12,556,852 13,011,852 17.0 %
(8)
9/1/2023P/I
Total loans held at fair value$95,199,132 $93,940,582 $96,382,983   
(1)C = Cultivation Facilities, D = Dispensary/Retail Facilities.
(2)Refer to Note 14 to the Company’s unaudited consolidated financial statements.
9

Index
(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 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%.
4.    LOANS HELD FOR INVESTMENT AT CARRYING VALUE
As of June 30, 2022 and December 31, 2021, the Company’s portfolio included nine and twelve loans, respectively, held at carrying value. The aggregate originated commitment amount under these loans was approximately $383.0 million and $324.3 million, respectively, and outstanding principal was approximately $326.2 million and $270.8 million, as of June 30, 2022 and December 31, 2021, respectively. For the six months ended June 30, 2022, the Company funded approximately $116.2 million of outstanding principal. As of June 30, 2022 and December 31, 2021, approximately 38% and 48%, respectively, of the Company’s loans held at carrying value have floating interest rates. As of June 30, 2022, these floating benchmark rates include one-month LIBOR subject to a weighted average floor of 1.0% and quoted at 1.787%, one-month Secured Overnight Financing Rate (“SOFR”) subject to a weighted average floor of 1.0% and quoted at 1.686% and U.S. Prime Rate subjected to a weighted average floor of 4.0% quoted at 4.750%.
The following tables summarize the Company’s loans held at carrying value as of June 30, 2022 and December 31, 2021:
As of June 30, 2022
Outstanding
Principal (1)
Original
Issue
Discount
Carrying
Value (1)
Weighted
Average
Remaining Life
(Years) (2)
Senior term loans$326,181,229 $(10,299,185)$315,882,044 2.9
Total loans held at carrying value$326,181,229 $(10,299,185)$315,882,044 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 June 30, 2022 and December 31, 2021.

10

Index
The following table presents changes in loans held at carrying value as of and for the six months ended June 30, 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 fundings116,200,972 (4,253,401)111,947,571 
Accretion of original issue discount 7,632,435 7,632,435 
Loan repayments(52,014,211) (52,014,211)
Sale of loans(10,000,000) (10,000,000)
PIK interest1,981,755  1,981,755 
Loan amortization payments(829,002) (829,002)
Total loans held at carrying value at June 30, 2022$326,181,229 $(10,299,185)$315,882,044 
A more detailed listing of the Company’s loans held at carrying value portfolio based on information available as of June 30, 2022 is as follows:
Collateral Location
Collateral
Type (1)
Outstanding
Principal (2)
Original
Issue
Discount
Carrying
Value (2)
Interest
Rate
Maturity
Date (3)
Payment
Terms (4)
Private Co. CPAC, D$24,534,371 $(658,414)$23,875,957 17.8 %
(5)
12/01/2025P/I
Sub. of Private Co. GNJC, D55,349,240 (2,089,607)53,259,633 14.9 %
(6)
05/01/2026P/I
Public Co. FAR, AZ, IL, FL, NV, OH, MA, MI, MD, NVC, D86,600,000 (1,184,533)85,415,467 8.6 %
(7)
05/30/2023I/O
Sub. of Private Co. HILC5,781,250 (66,732)5,714,518 15.0 %
(8)
05/11/2023I/O
Private Co. K MAC, D9,730,000 (965,656)8,764,344 13.7 %
(9)
05/03/2027P/I
Private Co. IMDC, D10,661,155 (189,629)10,471,526 16.3 %
(10)
08/01/2026P/I
Private Co. J MOC23,525,213 (623,185)22,902,028 17.8 %
(11)
09/01/2025P/I
Sub. of Public Co. HIA, IL, MI, NJ, PAC, D60,000,000 (2,057,143)57,942,857 9.8 %
(12)
01/01/2026I/O
Private Co. LMO, NJ, OHC, D50,000,000 (2,464,286)47,535,714 12.0 %
(13)
05/01/2026P/I
Total loans held at carrying value$326,181,229 $(10,299,185)$315,882,044 
(1)C = Cultivation Facilities, D = Dispensary/Retail Facilities.
(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 9.0% plus Prime (Prime floor of 4.0%) and PIK interest rate of 4.0%.
(6)Base weighted average interest rate of 11.5% plus LIBOR (LIBOR floor of 1.0%) and PIK interest rate of 1.8%.
(7)Base weighted average interest rate of 8.6%.
(8)Base interest rate of 15.0%.
(9)Base interest rate of 12.0% plus SOFR (SOFR floor of 1.0%)
(10)Base interest rate of 12.0% plus LIBOR (LIBOR floor of 1.0%) and PIK interest rate of 2.5%.
(11)Base interest rate of 12.0% plus LIBOR (LIBOR floor of 1.0%) and PIK interest rate of 4.0%.
(12)Base interest rate of 9.8%.
(13)Base interest rate of 12.0%.
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Index
5.    LOAN RECEIVABLE AT CARRYING VALUE
As of June 30, 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 $2.2 million and $2.5 million as of June 30, 2022 and December 31, 2021, respectively. During the six months ended June 30, 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 six months ended June 30, 2022:
Principal Original Issue
Discount
Carrying
Value
Total loan receivable at carrying value at December 31, 2021$2,533,266 $(2,678)$2,530,588 
Principal repayment of loans(337,114) (337,114)
Accretion of original issue discount 618 618 
PIK interest26,187  26,187 
Total loan receivable at carrying value at June 30, 2022$2,222,339 $(2,060)$2,220,279 
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 June 30, 2022 and December 31, 2021, the Company’s CECL Reserve for its loans held at carrying value and loan receivable at carrying value is approximately $5.6 million and $3.1 million, respectively, or 176 and 120 basis points, respectively, of the Company’s total loans held at carrying value and loans receivable at carrying value of approximately $318.1 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 $5.0 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.
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Index
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, 2022 was as follows:
Outstanding (1)
Unfunded (2)
Total
Balance at March 31, 2022$3,390,676 $629,188 $4,019,864 
Provision for current expected credit losses1,627,396 (34,348)1,593,048 
Write-offs   
Recoveries   
Balance at June 30, 2022$5,018,072 $594,840 $5,612,912 
Outstanding (1)
Unfunded (2)
Total
Balance at December 31, 2021$2,431,558 $683,177 $3,114,735 
Provision for current expected credit losses2,586,514 (88,337)2,498,177 
Write-offs