0001822523-24-000045 | 10-Q | XBRL Viewer | Advanced Flower Capital INC

INTEREST RECEIVABLE

9 Months Ended

Sep. 30, 2024

Interest Receivable and Other Assets [Abstract]

The following table summarizes the interest receivable by the Company as of September 30, 2024 and December 31, 2023:



	As of September 30, 2024		As of December 31, 2023

Interest receivable	$	1,397,114	$	2,680,188
PIK receivable	38,764		1,009,974
Unused fees receivable	37,766		25,833
Total interest receivable	$	1,473,644	$	3,715,995

SUBSEQUENT EVENTS (Details) - USD ($)		1 Months Ended
SUBSEQUENT EVENTS (Details) - USD ($)	Nov. 13, 2024	Oct. 31, 2024	Sep. 30, 2024	Dec. 31, 2023
Subsequent Event [Line Items]
Loans held at carrying value, outstanding principal			$ 242,802,878	$ 314,376,929
Subsidiary of Private Company R \| Subsequent Event
Subsequent Event [Line Items]
Loans held at carrying value, outstanding principal		$ 41,000,000
Interest Rate		2.00%
Subsidiary of Private Company R \| Subsequent Event \| Secured Overnight Financing Rate (SOFR)
Subsequent Event [Line Items]
Interest Rate		4.50%
Subsidiary of Private Company R \| Subsequent Event \| Base Rate
Subsequent Event [Line Items]
Interest Rate		7.50%
Subsidiary Of Private Company L \| Subsequent Event
Subsequent Event [Line Items]
Principal prepayment		$ 900,000
Prepayment premium		$ 17,800
Subsidiary of Private Company S \| Subsequent Event
Subsequent Event [Line Items]
Loans held at carrying value, outstanding principal	$ 10,000,000
Interest Rate	9.50%
Subsidiary of Private Company S \| Subsequent Event
Subsequent Event [Line Items]
Receivables cash payment amount	$ 300,000

DIVIDENDS AND DISTRIBUTIONS

9 Months Ended

Sep. 30, 2024

DIVIDENDS AND DISTRIBUTIONS [Abstract]

DIVIDENDS AND DISTRIBUTIONS

The following table summarizes the Company’s dividends declared during the nine months ended September 30, 2024 and 2023:


	Declaration Date	Record Date	Payment Date	Per Common Share Distribution Amount		Total Distribution Amount

Regular cash dividend	3/2/2023	3/31/2023	4/14/2023	$	0.56	$	11,473,971
Regular cash dividend	6/15/2023	6/30/2023	7/14/2023	0.48		9,819,695
Regular cash dividend	9/15/2023	9/30/2023	10/13/2023	0.48		9,819,695
2023 Period Subtotal				$	1.52	$	31,113,361
Regular cash dividend	3/4/2024	3/31/2024	4/15/2024	$	0.48	$	9,920,205
Regular cash dividend	6/13/2024	6/24/2024	7/15/2024	0.48		9,920,205
Special cash dividend	6/27/2024	7/8/2024	7/15/2024	0.15		3,100,064
Regular cash dividend	9/13/2024	9/30/2024	10/15/2024	0.33		7,221,076
2024 Period Subtotal				$	1.44	$	30,161,550

CURRENT EXPECTED CREDIT LOSSES - Narrative (Details) - USD ($)	Sep. 30, 2024	Jun. 30, 2024	Dec. 31, 2023
Financing Receivable, Past Due [Line Items]
Current expected credit loss reserve	$ 25,111,209		$ 26,309,450
CECL Reserve
Financing Receivable, Past Due [Line Items]
Current expected credit loss reserve	$ 25,275,873	$ 25,094,503	$ 26,424,923
Basis points of total loans and loans receivable at carrying value (in percent)	10.70%		8.71%
Loans receivable at carrying value, commitment balance	$ 236,300,000		$ 303,300,000
CECL Reserve \| Outstanding
Financing Receivable, Past Due [Line Items]
Current expected credit loss reserve	25,111,209	24,971,603	26,309,450
CECL Reserve \| Unfunded
Financing Receivable, Past Due [Line Items]
Current expected credit loss reserve	$ 164,664	$ 122,900	$ 115,473

- Definition

Amount of allowance for credit loss on financing receivable. Excludes allowance for financing receivable covered under loss sharing agreement.

+ References + Details

DEBT - Narrative (Details) - USD ($)			3 Months Ended		9 Months Ended
DEBT - Narrative (Details) - USD ($)	Apr. 29, 2022	Nov. 03, 2021	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Line of Credit Facility [Line Items]
Increase limit	$ 100,000,000.0
Line of credit payable, net			$ 60,000,000		$ 60,000,000		$ 42,000,000
Gain on extinguishment of debt			0	$ 0	0	$ 1,986,381
2027 Senior Notes
Line of Credit Facility [Line Items]
Total principal			88,461,936		88,461,936
2027 Senior Notes \| 2027 Senior Notes
Line of Credit Facility [Line Items]
Debt instrument, stated percentage		5.75%
Debt instrument, aggregate principal		$ 100,000,000
Net proceeds from offering		$ 97,000,000.0
Redemption price percentage		100.00%				77.40%
Redemption price percentage, change of control triggering event		101.00%
Debt service coverage ratio		1.5
Percentage of debt in aggregate principal		60.00%
Secured debt of percentage in aggregate principal		25.00%
Repurchased principal amount				$ 10,000,000.0		$ 10,000,000.0
Gain on extinguishment of debt						$ 2,000,000.0
Total principal			90,000,000.0		90,000,000.0
Revolving Credit Facility \| Amortization of deferred financing costs - revolving credit facility
Line of Credit Facility [Line Items]
Revolving credit loan commitment	$ 60,000,000.0
Basis spread on variable interest rate (in percent)	0.50%
Debt instrument, stated percentage	4.50%
Unamortized commitment fee	$ 500,000
Unused line fee percentage	0.25%
Line of credit payable, net			60,000,000.0		60,000,000.0		42,000,000.0
Line of credit, available to borrow			$ 0		$ 0		$ 18,000,000.0
Minimum liquidity covenant	$ 5,000,000.0
Minimum annual debt service coverage covenant	1.5
Maximum secured debt to total assets percentage covenant	25.00%

FAIR VALUE - Schedule of Book Value and Fair Value of the Financial Instruments (Details)	Sep. 30, 2024 USD ($)
Carrying Value
Financial assets:
Cash and cash equivalents	$ 122,163,732
Loans held for investment at carrying value	234,257,042
Loan receivable held at carrying value	2,040,058
Financial liabilities:
Senior notes payable, net	88,461,936
Fair Value
Financial assets:
Cash and cash equivalents	122,163,732
Loans held for investment at carrying value	211,040,795
Loan receivable held at carrying value	510,436
Financial liabilities:
Senior notes payable, net	$ 83,700,000

- Definition

Fair value portion of debt instrument payable, including, but not limited to, notes payable and loans payable.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 820
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-Name Accounting Standards Codification
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-URI https://asc.fasb.org/1943274/2147482907/825-10-50-10

+ Details

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (unaudited) - USD ($)	Total	Preferred Stock	Common Stock	Additional Paid-In Capital	Accumulated Earnings (Deficit)
Beginning balance at Dec. 31, 2022	$ 339,059,369	$ 1	$ 203,640	$ 348,817,914	$ (9,962,186)
Beginning balance (in shares) at Dec. 31, 2022			20,364,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation (in shares)			93,697
Stock-based compensation	693,441		$ 937	692,504
Dividends declared on common shares	(31,113,361)				(31,113,361)
Dividends declared on preferred shares	(7,500)				(7,500)
Net income	30,140,482				30,140,482
Ending balance at Sep. 30, 2023	338,772,431	1	$ 204,577	349,510,418	(10,942,565)
Ending balance (in shares) at Sep. 30, 2023			20,457,697
Beginning balance at Jun. 30, 2023	340,318,237	1	$ 204,577	349,216,404	(9,102,745)
Beginning balance (in shares) at Jun. 30, 2023			20,457,697
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	294,014			294,014
Dividends declared on common shares	(9,819,695)				(9,819,695)
Net income	7,979,875				7,979,875
Ending balance at Sep. 30, 2023	338,772,431	1	$ 204,577	349,510,418	(10,942,565)
Ending balance (in shares) at Sep. 30, 2023			20,457,697
Beginning balance at Dec. 31, 2023	$ 320,052,225	1	$ 204,577	349,805,890	(29,958,243)
Beginning balance (in shares) at Dec. 31, 2023	20,457,697		20,457,697
Ending balance at Jun. 30, 2024	$ 314,283,821	0	$ 206,671	350,591,362	(36,514,212)
Ending balance (in shares) at Jun. 30, 2024			20,667,094
Beginning balance at Dec. 31, 2023	$ 320,052,225	$ 1	$ 204,577	349,805,890	(29,958,243)
Beginning balance (in shares) at Dec. 31, 2023	20,457,697		20,457,697
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock, net of offering costs (in shares)	0		1,214,953
Issuance of common stock, net of offering costs	$ 12,161,367		$ 12,150	12,149,217
Stock-based compensation (in shares)			209,397
Stock-based compensation	1,131,208		$ 2,094	1,129,114
Dividends declared on common shares	(30,161,550)				(30,161,550)
Dividends declared on preferred shares	(7,500)				(7,500)
Redemption of preferred shares (in shares)		(1)
Redemption of preferred shares	(125,000)			(124,999)
Distributions in connection with the Spin-Off	(114,765,177)			(114,765,177)
Net income	17,775,739				17,775,739
Ending balance at Sep. 30, 2024	$ 206,061,312	$ 0	$ 218,821	248,194,045	(42,351,554)
Ending balance (in shares) at Sep. 30, 2024	21,882,047		21,882,047
Beginning balance at Jun. 30, 2024	$ 314,283,821	0	$ 206,671	350,591,362	(36,514,212)
Beginning balance (in shares) at Jun. 30, 2024			20,667,094
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock, net of offering costs (in shares)	0		1,214,953
Issuance of common stock, net of offering costs	$ 12,161,367		$ 12,150	12,149,217
Stock-based compensation	218,643			218,643
Dividends declared on common shares	(7,221,076)				(7,221,076)
Distributions in connection with the Spin-Off	(114,765,177)			(114,765,177)
Net income	1,383,734				1,383,734
Ending balance at Sep. 30, 2024	$ 206,061,312	$ 0	$ 218,821	$ 248,194,045	$ (42,351,554)
Ending balance (in shares) at Sep. 30, 2024	21,882,047		21,882,047

INCOME TAX

9 Months Ended

Sep. 30, 2024

Income Tax Disclosure [Abstract]

INCOME TAX

A TRS is an entity taxed as a corporation that has not elected to be taxed as a REIT, in which a REIT directly or indirectly holds equity, and that has made a joint election with such REIT to be treated as a TRS. A TRS generally may engage in any business, including investing in assets and engaging in activities that could not be held or conducted directly by the Company without jeopardizing its qualification as a REIT. A TRS is subject to applicable United States federal, state and local income tax on its taxable income. In addition, as a REIT, the Company also may be subject to a 100% excise tax on certain transactions between it and its TRS that are not conducted on an arm’s-length basis. The income tax provision is included in the line item income tax expense, including excise tax.

The income tax provision for the Company was approximately $0.4 million and $0.8 million for the three and nine months ended September 30, 2024, respectively. The income tax provision for the Company was approximately $0.7 million and $1.0 million for the three and nine months ended September 30, 2023, respectively. The income tax expense for the three and nine months ended September 30, 2024 and 2023 primarily related to activities of the Company’s taxable REIT subsidiary.

The income tax provision for the Company and TRS1 consisted of the following for the three and nine months ended September 30, 2024 and 2023:


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Current(1)	$	394,210	$	663,220	$	838,545	$	1,005,689
Deferred	—		—		—		—
Excise tax	(7,954)		—		(7,954)		270
Total income tax expense, including excise tax	$	386,256	$	663,220	$	830,591	$	1,005,959

(1)During the three and nine months ended September 30, 2024, the Company incurred federal taxes of approximately $0.3 million and $0.6 million and state and local taxes of approximately $0.1 million and $0.2 million, respectively. During the three and nine months ended September 30, 2023, the Company incurred federal taxes of approximately $0.5 million and $0.7 million and state and local taxes of approximately $0.2 million and $0.3 million, respectively.

For the three and nine months ended September 30, 2024, the Company incurred a benefit of approximately $(8.0) thousand and $(8.0) thousand, respectively, for United States federal excise tax. For the three and nine months ended September 30, 2023, the Company incurred no expense for United States federal excise tax. Excise tax represents a 4% tax on the sum of a portion of the Company’s ordinary income and net capital gains not distributed during the period. If it is determined that an excise tax liability exists for the current period, the Company will accrue excise tax on estimated excess taxable income as such taxable income is earned. The expense is calculated in accordance with applicable tax regulations.

The Company does not have any unrecognized tax benefits and the Company does not expect that to change in the next 12 months.

- Definition

The entire disclosure for income tax.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
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+ Details

CURRENT EXPECTED CREDIT LOSSES - Schedule of Financing Receivable, Allowance for Credit Loss (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance			$ 26,309,450
Increase (decrease) in provision for current expected credit losses	$ 181,370	$ 1,053,398	(1,149,050)	$ 149,637
Ending balance	25,111,209		25,111,209
CECL Reserve
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	25,094,503		26,424,923
Increase (decrease) in provision for current expected credit losses	181,370		(1,149,050)
Write-offs	0		0
Recoveries	0		0
Ending balance	25,275,873		25,275,873
Outstanding \| CECL Reserve
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	24,971,603		26,309,450
Increase (decrease) in provision for current expected credit losses	139,606		(1,198,241)
Write-offs	0		0
Recoveries	0		0
Ending balance	25,111,209		25,111,209
Unfunded \| CECL Reserve
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	122,900		115,473
Increase (decrease) in provision for current expected credit losses	41,764		49,191
Write-offs	0		0
Recoveries	0		0
Ending balance	$ 164,664		$ 164,664

- Definition

Amount of allowance for credit loss on financing receivable. Excludes allowance for financing receivable covered under loss sharing agreement.

+ References + Details

DEBT (Tables)

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Schedule of Principal Payments

Scheduled principal payments on the 2027 Senior Notes as of September 30, 2024 are as follows:


	2027 Senior Notes
Year
2024 (remaining)	$	—
2025	—
2026	—
2027	90,000,000
2028	—
Thereafter	—
Total principal	90,000,000
Deferred financing costs included in senior notes	(1,538,064)
Total due senior notes, net	$	88,461,936

Summary of Interest Expense

The following tables reflect a summary of interest expense incurred during the three and nine months ended September 30, 2024 and 2023:


	Three months ended September 30, 2024
	2027 Senior Notes		Revolving Credit Facility		Total Borrowings

Interest expense	$	1,293,750	$	21,667	$	1,315,417

Amortization of deferred financing costs	158,964		98,324		257,288
Total interest expense	$	1,452,714	$	119,991	$	1,572,705


	Three months ended September 30, 2023
	2027 Senior Notes		Revolving Credit Facility		Total Borrowings

Interest expense	$	1,293,750	$	10,500	$	1,304,250
Unused fee expense	—		(26,667)		(26,667)
Amortization of deferred financing costs	158,964		96,381		255,345
Total interest expense	$	1,452,714	$	80,214	$	1,532,928


	Nine months ended September 30, 2024
	2027 Senior Notes		Revolving Credit Facility		Total Borrowings

Interest expense	$	3,881,250	$	104,054	$	3,985,304

Amortization of deferred financing costs	473,628		290,211		763,839
Total interest expense	$	4,354,878	$	394,265	$	4,749,143


	Nine months ended September 30, 2023
	2027 Senior Notes		Revolving Credit Facility		Total Borrowings

Interest expense	$	3,996,250	$	37,167	$	4,033,417
Unused fee expense	—		47,915		47,915
Amortization of deferred financing costs	482,698		212,833		695,531
Total interest expense	$	4,478,948	$	297,915	$	4,776,863

SHAREHOLDERS' EQUITY - Schedule of Share-based Payment Arrangement, Option, Activity (Details) - shares	Sep. 30, 2024	Dec. 31, 2023
Equity [Abstract]
Non-vested (in shares)	156,367	206,304
Vested (in shares)	2,218,265	2,168,328
Exercised (in shares)	(5,511)	(5,511)
Forfeited (in shares)	(200,169)	(200,169)
Balance (in shares)	2,168,952	2,168,952

COMMITMENTS AND CONTINGENCIES - Narrative (Details)		9 Months Ended
COMMITMENTS AND CONTINGENCIES - Narrative (Details)	Mar. 17, 2023 tranche	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Termination, period to receive base salary	12 months
Termination, percentage of COBRA premiums paid	100.00%
Termination, period of COBRA premiums paid	12 months
Termination, accelerated vesting of equity awards, number of tranches \| tranche	1
Termination, extension of exercise period for outstanding options	1 year
Termination benefits \| $		$ 0	$ 700,000

COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

As of September 30, 2024 and December 31, 2023, the Company had the following commitments to fund various investments:



	As of September 30, 2024		As of December 31, 2023

Total original loan commitments	$	349,532,028	$	431,239,913
Less: drawn commitments	(329,390,255)		(421,239,913)
Total undrawn commitments	$	20,141,773	$	10,000,000

The Company from time to time may be a party to litigation in the normal course of business. As of September 30, 2024, the Company is not aware of any legal claims that could materially impact its business, financial condition or results of operations.

On March 17, 2023, the Company appointed Brandon Hetzel to serve as its Chief Financial Officer and Treasurer in place of Brett Kaufman, effective as of such date, with Mr. Kaufman’s employment with AFC Management, LLC, the Company’s external manager (the “Manager”), terminated, effective as of April 17, 2023 (the “Separation Date”). In connection with his termination, Mr. Kaufman received (i) twelve (12) months’ worth of his current base salary, (ii) his annual target bonus, (iii) continued payment by our Manager of 100% of the COBRA premiums for him and his dependents for a period of twelve (12) months following his Separation Date, (iv) accelerated vesting of one (1) additional tranche of each of Mr. Kaufman’s outstanding equity awards, and (v) extension of the exercise period for Mr. Kaufman’s outstanding options until one (1) year following the Separation Date, contingent on Mr. Kaufman executing and not revoking a release of claims in favor of the Company. During the nine months ended September 30, 2024 and 2023, the Company recorded zero and approximately $0.7 million in severance expense within general and administrative expenses within the unaudited interim consolidated statements of operations, respectively.

The Company provides loans to companies operating in the cannabis industry which involves significant risks, including the risk of strict enforcement against the Company’s borrowers on 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 its business with respect to the loans it makes to companies operating in the cannabis industry 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.

DIVIDENDS AND DISTRIBUTIONS (Tables)

9 Months Ended

Sep. 30, 2024

DIVIDENDS AND DISTRIBUTIONS [Abstract]

Schedule of Dividends Payable

The following table summarizes the Company’s dividends declared during the nine months ended September 30, 2024 and 2023:


	Declaration Date	Record Date	Payment Date	Per Common Share Distribution Amount		Total Distribution Amount

Regular cash dividend	3/2/2023	3/31/2023	4/14/2023	$	0.56	$	11,473,971
Regular cash dividend	6/15/2023	6/30/2023	7/14/2023	0.48		9,819,695
Regular cash dividend	9/15/2023	9/30/2023	10/13/2023	0.48		9,819,695
2023 Period Subtotal				$	1.52	$	31,113,361
Regular cash dividend	3/4/2024	3/31/2024	4/15/2024	$	0.48	$	9,920,205
Regular cash dividend	6/13/2024	6/24/2024	7/15/2024	0.48		9,920,205
Special cash dividend	6/27/2024	7/8/2024	7/15/2024	0.15		3,100,064
Regular cash dividend	9/13/2024	9/30/2024	10/15/2024	0.33		7,221,076
2024 Period Subtotal				$	1.44	$	30,161,550

SHAREHOLDERS' EQUITY - Narrative (Details)		1 Months Ended			3 Months Ended		6 Months Ended	9 Months Ended		12 Months Ended
SHAREHOLDERS' EQUITY - Narrative (Details)	Apr. 05, 2022 USD ($)	Jun. 30, 2024 $ / shares shares	Jan. 31, 2024 shares	Jan. 31, 2023 shares	Sep. 30, 2024 USD ($) $ / shares shares	Sep. 30, 2023 USD ($) $ / shares shares	Jun. 30, 2024 USD ($) $ / shares shares	Sep. 30, 2024 USD ($) $ / shares shares	Sep. 30, 2023 USD ($) $ / shares shares	Dec. 31, 2023 $ / shares shares
Class of Stock [Line Items]
Preferred stock, authorized (in shares)					10,000			10,000		10,000
Preferred stock, par value (in dollars per share) \| $ / shares					$ 0.01			$ 0.01		$ 0.01
Preferred stock, outstanding (in shares)					0			0		125
Preferred stock, issued (in shares)					0			0		125
Issuance of common stock, net of offering costs (in shares)					0			0
Balance (in shares)					2,168,952			2,168,952		2,168,952
Granted (in shares)								0	0
Exercised (in shares)								0	0
Unrecognized share-based compensation cost, stock options \| $					$ 22,200			$ 22,200
Cost not yet recognized \| $					$ 1,600,000			$ 1,600,000
2020 Plan
Class of Stock [Line Items]
Shares of common stock outstanding (in shares)					2,536,289			2,536,289
Balance (in shares)					2,169,852			2,169,852
Share limit (in shares)		121,495			3,323,937		121,495	3,323,937
Stock Options
Class of Stock [Line Items]
Cost not yet recognized, period for recognition (in years)								1 year 1 month 20 days
Restricted Stock
Class of Stock [Line Items]
Restricted stock, granted (in shares)					0	0		209,397	126,393
Percentage of remaining unrecognized compensation cost of unvested restricted stock awards					0.67			0.67
Cost not yet recognized, period for recognition (in years)								1 year 10 months 28 days
Fair value of shares vested \| $					$ 25,000.0	$ 244,800		$ 763,600	$ 489,600
Vested (in shares)						18,470		64,752	38,028
Vested (in dollars per share) \| $ / shares						$ 16.24		$ 14.50	$ 17.97
Granted (in dollars per share) \| $ / shares								$ 11.70	$ 15.55
Restricted Stock \| Sunrise Realty Trust, Inc. (“SUNS”)
Class of Stock [Line Items]
Percentage of remaining unrecognized compensation cost of unvested restricted stock awards					0.33			0.33
Restricted Stock \| 2020 Plan
Class of Stock [Line Items]
Restricted stock, granted (in shares)			209,397	125,234
Vesting period (in years)			3 years	3 years
Non-vested (in shares)					366,437			366,437
Restricted Stock \| 2020 Plan \| James C. Fagan
Class of Stock [Line Items]
Restricted stock, granted (in shares)		1,159
Vesting period (in years)		1 year
Restricted Stock \| 2020 Plan \| Tranche one
Class of Stock [Line Items]
Vesting percentage			33.00%	33.00%
Restricted Stock \| 2020 Plan \| Tranche three
Class of Stock [Line Items]
Vesting percentage			33.00%	33.00%
Restricted Stock \| 2020 Plan \| Tranche two
Class of Stock [Line Items]
Vesting percentage			33.00%	33.00%
Shelf Registration
Class of Stock [Line Items]
Aggregate offering price \| $	$ 1,000,000,000.0
Open Market Sale
Class of Stock [Line Items]
Aggregate offering price \| $	$ 75,000,000.0
Commission percentage	3.00%
Shares sold in offering (in shares)					1,214,953			1,214,953
Offering price per share (in dollars per share) \| $ / shares					$ 10.39			$ 10.39
Proceeds from stock offering \| $					$ 12,200,000			$ 12,200,000
Remaining authorized, amount \| $					$ 51,000,000.0			$ 51,000,000.0
Series A Preferred Stock
Class of Stock [Line Items]
Preferred stock, authorized (in shares)					10,000			10,000		10,000
Preferred stock, dividend rate (in percent)								12.00%		12.00%
Preferred stock, outstanding (in shares)					0			0		125
Preferred stock, issued (in shares)					0			0		125
Preferred stock, liquidation preference (in dollars per share) \| $ / shares					$ 1,000			$ 1,000		$ 1,000
Preferred stock, redemption price (in dollars per share) \| $ / shares		$ 1,000			$ 1,000		$ 1,000	$ 1,000		$ 1,000
Redemption of preferred shares (in shares)							125
Accrued and unpaid dividend \| $							$ 0

CURRENT EXPECTED CREDIT LOSSES

9 Months Ended

Sep. 30, 2024

Credit Loss [Abstract]

CURRENT EXPECTED CREDIT LOSSES

The Company estimates its current expected credit losses 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 the “CECL Reserve” using a model that considers multiple datapoints and methodologies that may include 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 may include the fixed charge coverage ratio, loan-to-value ratio, property type and geographic location. Estimating the CECL Reserve also requires significant judgment with respect to various factors, including but not limited to, the expected timing of loan repayments and 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.

As of September 30, 2024 and December 31, 2023, the Company’s CECL Reserve for its loans held at carrying value and loan receivable held at carrying value is approximately $25.3 million and $26.4 million, respectively, or 10.70% and 8.71%, respectively, of the Company’s total loans held at carrying value and loan receivable held at carrying value of approximately $236.3 million and $303.3 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 loan receivable held at carrying value of approximately $25.1 million and $26.3 million, respectively, and a liability for unfunded commitments of approximately $0.2 million and $0.1 million, respectively. The liability was based on the unfunded portion of the loan commitment over the full contractual period over which the Company is exposed to credit risk through a current obligation to extend credit. Management considered the likelihood that funding will occur and, if funded, the expected credit loss on the funded portion.

Activity related to the CECL Reserve for outstanding balances and unfunded commitments on the Company’s loans held at carrying value and loan receivable held at carrying value as of and for the three and nine months ended September 30, 2024 was as follows:


	Outstanding (1)		Unfunded (2)		Total
Balance at June 30, 2024	$	24,971,603	$	122,900	$	25,094,503
Increase (decrease) in provision for current expected credit losses	139,606		41,764		181,370
Write-offs	—		—		—
Recoveries	—		—		—
Balance at September 30, 2024	$	25,111,209	$	164,664	$	25,275,873


	Outstanding (1)		Unfunded (2)		Total
Balance at December 31, 2023	$	26,309,450	$	115,473	$	26,424,923
(Decrease) increase in provision for current expected credit losses	(1,198,241)		49,191		(1,149,050)
Write-offs	—		—		—
Recoveries	—		—		—
Balance at September 30, 2024	$	25,111,209	$	164,664	$	25,275,873

(1)As of September 30, 2024 and December 31, 2023, the CECL Reserve related to outstanding balances on loans held at carrying value and loan receivable held at carrying value is recorded within current expected credit loss reserve in the Company’s consolidated balance sheets.

(2)As of September 30, 2024 and December 31, 2023, the CECL Reserve related to unfunded commitments on loans held at carrying value is recorded within current expected credit loss reserve as a liability in the Company’s consolidated 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 by the Company. Based on a 5-point scale, the Company’s loans are rated “1” through “5,” from less risk to greater risk, which ratings are defined as follows:


Rating			Definition
1			Very Low Risk — Materially exceeds performance metrics included in original or current credit underwriting and business plan
2			Low Risk — Collateral and business performance exceeds substantially all performance metrics included in original or current credit underwriting and business plan
3			Medium Risk — Collateral and business performance meets, or is on track to meet underwriting expectations; business plan is met or can reasonably be achieved
4			High Risk/ Potential for Loss — Collateral performance falls short of underwriting, material differences from business plans, defaults may exist, or may soon exist absent material improvement. Risk of recovery of interest exists
5			Impaired/ Loss Likely — Performance is significantly worse than underwriting with major variances from business plan observed. Loan covenants or financial milestones have been breached; exit from loan or refinancing is uncertain. Full recovery of principal is unlikely

The risk ratings are primarily based on historical data as well as taking into account future economic conditions.

As of September 30, 2024, the carrying value, excluding the CECL Reserve, of the Company’s loans held at carrying value and loan receivable held at carrying value within each risk rating by year of origination is as follows:


Risk Rating:	2024		2023		2022		2021		2020		Total
1	$	—	$	—	$	—	$	—	$	—	$	—
2	—		—		—		—		—		—
3	56,832,385		27,573,208		37,488,876		23,078,389		—		144,972,858
4	—		—		—		—		—		—
5	—		—		11,513,143		77,771,041		2,040,058		91,324,242
Total	$	56,832,385	$	27,573,208	$	49,002,019	$	100,849,430	$	2,040,058	$	236,297,100

- Definition

The entire disclosure for credit loss on financial instrument measured at amortized cost basis, net investment in lease, off-balance sheet credit exposure, and available-for-sale debt security.

+ References

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+ Details

LOAN RECEIVABLE HELD AT CARRYING VALUE - Schedule of Changes in Loans Receivable (Details) - USD ($)	9 Months Ended
	Sep. 30, 2024	Dec. 31, 2023
Principal
Total loans receivable at carrying value, principal, beginning balance	$ 2,041,744	$ 2,041,744
Loan repayments	0
Total loans receivable at carrying value, principal, ending balance	2,041,744	$ 2,041,744
Original Issue Discount
Total loans receivable at carrying value, original issue discount, beginning balance	(1,686)
Total loans receivable at carrying value, original issue discount, ending balance	(1,686)
Carrying Value
Total loans receivable at carrying value, carrying value, beginning balance	2,040,058
Loan repayments	0
Total loans receivable at carrying value, carrying value, ending balance	$ 2,040,058

- Definition

Amortized cost, before allowance for credit loss, of financing receivable. Excludes financing receivable covered under loss sharing agreement and net investment in lease.

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Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

LOAN RECEIVABLE HELD AT CARRYING VALUE (Tables)

9 Months Ended

Sep. 30, 2024

Receivables [Abstract]

Schedule of Changes in Loans Receivable

The following table presents changes in loans receivable as of and for the nine months ended September 30, 2024:


	Principal		Original Issue Discount		Carrying Value

Total loan receivable held at carrying value at December 31, 2023	$	2,041,744	$	(1,686)	$	2,040,058
Loan repayments	—		—		—
Total loan receivable held at carrying value at September 30, 2024	$	2,041,744	$	(1,686)	$	2,040,058

SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
SIGNIFICANT ACCOUNTING POLICIES (Policies)	Sep. 30, 2024
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited interim consolidated financial statements and related notes have been prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and in conformity with the rules and regulations of the SEC applicable to interim financial information and include the accounts of the Company, and its wholly-owned subsidiary. The unaudited interim consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary for the fair presentation of the Company’s results of operations and financial condition as of and for the periods presented. All intercompany balances and transactions have been eliminated in consolidation. The current period’s results of operations will not necessarily be indicative of results that ultimately may be realized for the year ending December 31, 2024.
Discontinued Operations	Discontinued Operations A discontinued operation may include a component or a group of components of the Company’s operations. A disposal of a component or a group of components is reported in discontinued operations if the disposal represents a strategic shift that has or will have a major effect on the Company’s operations and financial results when the following occurs: (1) a component (or group of components) meets the criteria to be classified as held for sale; (2) the component or group of components is disposed of by sale; or (3) the component or group of components is disposed of other than by sale (for example, by abandonment or in a distribution to owners in a spin-off). For any component classified as held for sale or disposed of by sale or other than by sale, qualifying for presentation as a discontinued operation, the Company reports the results of operations of the discontinued operations (including any gain or loss recognized on the disposal or loss recognized on classification as held for sale of a discontinued operation), less applicable income taxes (benefit), as a separate component in the consolidated statements of operations for current and all prior periods presented. The Company also reports assets and liabilities associated with discontinued operations as separate line items on the consolidated balance sheets for prior periods. The Company determined that the Spin-Off of SUNS in July 2024 met the criteria for classification as a discontinued operation in accordance with ASC Subtopic 205-20, Discontinued Operations (“ASC 205-20”). See Note 17 for further details.
Use of Estimates in the Preparation of Financial Statements	Use of Estimates in the Preparation of Financial Statements The preparation of consolidated 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”).
Recent Accounting Pronouncements	Recent Accounting Pronouncements The Company is an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (“JOBS Act”). Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company has elected to take advantage of this extended transition period. As a result, the Company will not be subject to the same implementation timing for new or revised accounting standards as other public companies that are not emerging growth companies, which may make comparison of the Company’s financials to those of other public companies more difficult. In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. The Company is currently evaluating the impact of the update on the Company’s future consolidated financial statements. In December 2023, the FASB issued ASU 2023-09—Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 improves the transparency of income tax disclosures related to rate reconciliation and income taxes. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. For entities other than public business entities, the amendments are effective for annual periods beginning after December 15, 2025. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments should be applied prospectively, however retrospective application is permitted. The Company is currently evaluating the impact of the update on the Company’s future consolidated financial statements.
Current Expected Credit Losses	The Company estimates its current expected credit losses 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 the “CECL Reserve” using a model that considers multiple datapoints and methodologies that may include 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 may include the fixed charge coverage ratio, loan-to-value ratio, property type and geographic location. Estimating the CECL Reserve also requires significant judgment with respect to various factors, including but not limited to, the expected timing of loan repayments and 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.

- Definition

Disclosure of accounting policy for credit loss on financial instrument measured at amortized cost basis, net investment in lease, off-balance sheet credit exposure, and available-for-sale debt security. Includes, but is not limited to, methodology used to estimate allowance for credit loss, how writeoff of uncollectible amount is recognized, and determination of past due status and nonaccrual status.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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-SubTopic 20
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-Section S99
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+ Details

ORGANIZATION	9 Months Ended
ORGANIZATION	Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
ORGANIZATION	ORGANIZATION Advanced Flower Capital Inc. (formerly known as AFC Gamma, Inc.) (the “Company” or “AFC”) is an institutional lender that was founded in July 2020 by a veteran team of investment professionals. The Company primarily originates, structures, underwrites, invests in and manages senior secured mortgage loans and other types of loans and debt securities, with a specialization in loans to 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, a Delaware limited liability company (the Company’s “Manager”), pursuant to the terms of the Amended and Restated Management Agreement, dated January 14, 2021, between the parties (as amended from time to time, the “Management Agreement”). The Company’s wholly-owned subsidiary, AFCG TRS1, LLC, a Delaware limited liability company (“TRS1”), operates as a taxable real estate investment trust subsidiary (a “TRS”). TRS1 began operating in July 2021, and the financial statements of TRS1 are consolidated within the Company’s consolidated financial statements. On July 9, 2024, the Company completed the spin-off (the “Spin-Off”) of the Company’s wholly-owned subsidiary, Sunrise Realty Trust, Inc. (“SUNS”), which held the Company’s commercial real estate (“CRE”) loan portfolio, into an independent, publicly traded REIT, SUNS. In connection with the Spin-Off, the operating results of the SUNS business through the date of the Spin-Off are reported in net income from discontinued operations, net of tax in the consolidated statements of operations for all periods presented. The related assets and liabilities are reported as assets and liabilities of discontinued operations on the consolidated balance sheets. Cash flows from the Company’s discontinued operations are presented as such in the consolidated statements of cash flows for all periods presented. Unless otherwise noted, all amounts and disclosures included in the notes to consolidated financial statements reflect only the Company’s continuing operations. For additional information, see Note 17, “Discontinued Operations.” The Company operates in one operating segment. The Company is solely focused on senior secured 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 typically secured, directly or indirectly, by real estate, equipment, cash flows and the value associated with licenses (where applicable) 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”). 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.

RELATED PARTY TRANSACTIONS - Schedule of Related Party Transactions (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Related Party Transaction [Line Items]
General and administrative expenses reimbursable to Manager	$ 857,304	$ 986,772	$ 2,941,942	$ 4,068,780
Total	1,584,711	4,392,852	10,564,764	13,393,793
Related Party
Related Party Transaction [Line Items]
Management fees	909,229	1,347,378	3,599,338	4,046,179
Less: outside fees earned	(180,552)	(405,276)	(769,545)	(1,311,501)
Base management fees	728,677	942,102	2,829,793	2,734,678
Incentive fees earned	253,108	2,632,765	5,599,782	7,857,901
General and administrative expenses reimbursable to Manager	$ 602,926	$ 817,985	$ 2,135,189	$ 2,801,214

LOANS HELD FOR INVESTMENT AT FAIR VALUE - Narrative (Details)	9 Months Ended	12 Months Ended
	Sep. 30, 2024 USD ($) loan	Dec. 31, 2023 USD ($) loan
Loans and Leases Receivable Disclosure [Line Items]
Number of loans held for investment \| loan	1	2
Loans held at fair value, aggregate commitments	$ 85,300,000	$ 94,200,000
Outstanding principle	53,818,300	$ 71,883,402
Loans held at fair value, funded of outstanding principal	4,600,000
Loan repayments	4,509,069
Sale of loans	19,284,846
Non Accrual Status
Loans and Leases Receivable Disclosure [Line Items]
Outstanding principle	$ 53,800,000
Number of loans held at fair value \| loan	1
Accumulated unrealized loss	$ (19,600,000)

DEBT - Schedule of Principal Payments (Details) - 2027 Senior Notes	Sep. 30, 2024 USD ($)
Line of Credit Facility [Line Items]
2024 (remaining)	$ 0
2025	0
2026	0
2027	90,000,000
2028	0
Thereafter	0
Total principal	90,000,000
Deferred financing costs included in senior notes	(1,538,064)
Total due senior notes, net	$ 88,461,936

COMMITMENTS AND CONTINGENCIES (Tables)

9 Months Ended

Sep. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

Schedule of Commitments to Fund Various Investments

As of September 30, 2024 and December 31, 2023, the Company had the following commitments to fund various investments:



	As of September 30, 2024		As of December 31, 2023

Total original loan commitments	$	349,532,028	$	431,239,913
Less: drawn commitments	(329,390,255)		(421,239,913)
Total undrawn commitments	$	20,141,773	$	10,000,000

DISCONTINUED OPERATIONS (Tables)

9 Months Ended

Sep. 30, 2024

Discontinued Operations and Disposal Groups [Abstract]

Schedule of Discontinued Operations

The following table summarizes the financial statement lines included in net income from discontinued operations, net of tax for the three and nine months ended September 30, 2024 and 2023:


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023

Interest income	$	150,453	$	7,767	$	4,156,335	$	7,767
Expenses
General and administrative expenses	(83)		—		(21,651)		—
Professional fees	15,574		—		(1,140,762)		—
(Increase) decrease in provision for current expected credit losses	—		—		(71,854)		—
Net income from discontinued operations, net of tax	$	165,944	$	7,767	$	2,922,068	$	7,767

The following table summarizes the financial statement lines of assets and liabilities classified as discontinued operations as of December 31, 2023:


	As of
	December 31, 2023

Cash and cash equivalents	$	31,244,622
Total assets of discontinued operations	$	31,244,622

Accounts payable and other liabilities	$	10,000
Total liabilities of discontinued operations	$	10,000

- Definition

Tabular disclosure of information related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.

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+ Details

LOANS HELD FOR INVESTMENT AT FAIR VALUE (Tables)

9 Months Ended

Sep. 30, 2024

LOANS HELD FOR INVESTMENT AT FAIR VALUE [Abstract]

Schedule of Loans Held at Fair Value

The following tables summarize the Company’s loans held at fair value as of September 30, 2024 and December 31, 2023:


	As of September 30, 2024
	Fair Value(1)		Carrying Value(2)		Outstanding Principal(2)		Weighted Average Remaining Life (Years)(3)

Senior term loan	$	31,372,174	$	50,950,868	$	53,818,300	0.0
Total loan held at fair value	$	31,372,174	$	50,950,868	$	53,818,300	0.0


	As of December 31, 2023
	Fair Value(1)		Carrying Value(2)		Outstanding Principal(2)		Weighted Average Remaining Life (Years)(4)

Senior term loans	$	61,720,705	$	71,644,003	$	71,883,402	0.4
Total loans held at fair value	$	61,720,705	$	71,644,003	$	71,883,402	0.4

(1)Refer to Note 14.

(2)The difference between the Carrying Value and the Outstanding Principal amount of the loans consists of unaccreted original issue discount (“OID”) and loan origination costs.

(3)As of September 30, 2024, the maturity date passed on the credit facility with Private Company A without repayment.

(4)Weighted average remaining life is calculated based on the fair value of the loans as of December 31, 2023. As of December 31, 2023, the weighted average remaining life only reflects the remaining life of the Private Company A Credit Facility.

Schedule of Changes in Loans Held at Fair Value

The following table presents changes in loans held at fair value as of and for the nine months ended September 30, 2024:


	Principal		Original Issue Discount		Unrealized Gains (Losses)		Fair Value

Total loans held at fair value at December 31, 2023	$	71,883,402	$	(239,399)	$	(9,923,298)	$	61,720,705

Change in unrealized gains (losses) on loans at fair value, net	—		—		(9,655,396)		(9,655,396)
New fundings	4,594,027		(2,756,417)		—		1,837,610
Accretion of original issue discount	—		128,384		—		128,384
Loan repayments	(4,509,069)		—		—		(4,509,069)
Sale of loans	(19,284,846)		—		—		(19,284,846)
PIK interest	1,134,786		—		—		1,134,786
Total loans held at fair value at September 30, 2024	$	53,818,300	$	(2,867,432)	$	(19,578,694)	$	31,372,174

Schedule of Loans Held at Fair Value Portfolio

A more detailed listing of the Company’s loan held at fair value portfolio based on information available as of September 30, 2024 is as follows:


	Collateral Location	Collateral Type (1)	Fair Value (2)		Carrying Value (3)		Outstanding Principal (3)		Interest Rate			Maturity Date (4)	Payment Terms (5)

Private Co. A	AZ, GA, MA, NM	C, D	$	31,372,174	$	50,950,868	$	53,818,300	15.5	%	(6)	5/8/2024	I/O


Total loan held at fair value			$	31,372,174	$	50,950,868	$	53,818,300

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

(2)Refer to Note 14.

(3)The difference between the Carrying Value and the Outstanding Principal amount of the loans consists of OID and loan origination costs.

(4)Certain loans are subject to contractual extension options and may be subject to performance based or other conditions as stipulated in the loan agreement. Actual maturities may differ from contractual maturities stated herein as certain borrowers may have the right to prepay with or without paying a prepayment penalty. The Company may also extend contractual maturities and amend other terms of the loans in connection with loan modifications.

(5)I/O = interest-only, P/I = principal and interest. P/I loans may include interest-only periods for a portion of the loan term.

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

LOANS HELD FOR INVESTMENT AT CARRYING VALUE

9 Months Ended

Sep. 30, 2024

LOANS HELD FOR INVESTMENT AT CARRYING VALUE [Abstract]

LOANS HELD FOR INVESTMENT AT CARRYING VALUE

As of September 30, 2024 and December 31, 2023, the Company’s portfolio included eleven and nine loans held at carrying value, respectively. As of September 30, 2024 and December 31, 2023, the aggregate originated commitment under these loans was approximately $260.2 million and $333.1 million, respectively, and outstanding principal was approximately $242.8 million and $314.4 million, respectively. During the nine months ended September 30, 2024, the Company funded approximately $65.5 million of new loans and additional principal, had approximately $48.8 million of principal repayments of loans held at carrying value and sold $90.0 million in the aggregate of the Company’s investments in Subsidiary of Public Company H and Subsidiary of Public Company M. As of September 30, 2024 and December 31, 2023, approximately 47% and 84%, respectively, of the Company’s loans held at carrying value had floating interest rates. As of September 30, 2024, these floating benchmark rates included one-month Secured Overnight Financing Rate (“SOFR”) subject to a weighted average floor of 3.6% and quoted at 4.8%.

The following tables summarize the Company’s loans held at carrying value as of September 30, 2024 and December 31, 2023:


	As of September 30, 2024
	Outstanding Principal(1)		Original Issue Discount		Carrying Value(1)		Weighted Average Remaining Life (Years)(2)

Senior term loans	$	242,802,878	$	(8,545,836)	$	234,257,042	2.0
Total loans held at carrying value	$	242,802,878	$	(8,545,836)	$	234,257,042	2.0


	As of December 31, 2023
	Outstanding Principal(1)		Original Issue Discount		Carrying Value(1)		Weighted Average Remaining Life (Years)(2)

Senior term loans	$	314,376,929	$	(13,111,531)	$	301,265,398	2.2
Total loans held at carrying value	$	314,376,929	$	(13,111,531)	$	301,265,398	2.2

(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 September 30, 2024 and December 31, 2023.

The following table presents changes in loans held at carrying value as of and for the nine months ended September 30, 2024:


	Principal		Original Issue Discount		Carrying Value

Total loans held at carrying value at December 31, 2023	$	314,376,929	$	(13,111,531)	$	301,265,398
New fundings	65,512,166		(2,654,893)		62,857,273
Accretion of original issue discount	—		6,968,926		6,968,926
Loan repayments	(45,237,624)		—		(45,237,624)
Sale of loans	(90,000,000)		251,662		(89,748,338)
PIK interest	1,664,028		—		1,664,028
Loan amortization payments	(3,512,621)		—		(3,512,621)
Total loans held at carrying value at September 30, 2024	$	242,802,878	$	(8,545,836)	$	234,257,042

As of September 30, 2024, the Company had two loans held at carrying value on nonaccrual status.

The Company placed Subsidiary of Private Company G on nonaccrual status effective December 1, 2023, with an outstanding principal amount of approximately $79.2 million and an amortized cost of approximately $77.8 million. Subsidiary of Private Company G was previously placed on nonaccrual status during various periods in 2023. The Company will recognize income related to loan activity only upon receipt of cash. During the nine months ended September 30, 2024, the Company recognized interest income of approximately $5.2 million related to this loan, which was received in cash.

The Company placed Private Company K on nonaccrual status effective December 1, 2023, with an outstanding principal amount of approximately $12.2 million and an amortized cost of approximately $11.5 million. The Company will recognize income related to loan activity only upon receipt of cash. During the nine months ended September 30, 2024, the Company received a $1.3 million payment applied to the outstanding principal balance and recognized interest income of approximately $0.5 million related to this loan received in cash.

A more detailed listing of the Company’s loans held at carrying value portfolio based on information available as of September 30, 2024 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)


Sub. of Private Co. G	NJ, PA	C, D	$	79,215,888	$	(1,444,847)	$	77,771,041	12.5	%	(5)	5/1/2026	I/O
Private Co. K	MA	C, D	12,195,762		(682,619)		11,513,143		18.8	%	(6)	5/3/2027	P/I
Private Co. J	MO	C, D	23,258,785		(180,396)		23,078,389		18.8	%	(7)	9/1/2025	P/I

Private Co. L	OH	C, D	35,597,486		(716,302)		34,881,184		13.4	%	(8)	5/1/2026	P/I
Sub. of Public Co. M	IL, MA, MD, MI, NJ, OH, PA	C, D	2,797,527		(189,835)		2,607,692		9.5	%	(9)	8/27/2025	I/O
Private Co. M	AZ	D	30,499,498		(2,926,290)		27,573,208		9.0	%	(10)	7/31/2026	P/I
Private Co. N - Real Estate	FL	C, D	18,717,068		(682,818)		18,034,250		12.8	%	(11)	4/1/2028	P/I
Private Co. N - Non-Real Estate	FL	C, D	17,200,000		(602,000)		16,598,000		12.8	%	(12)	4/1/2028	P/I
Private Co. O	AZ, MD, MO, NJ, NV, NY, OH, OR, Canada	C	2,728,647		(275,000)		2,453,647		13.5	%	(13)	6/1/2028	P/I
Private Co. P	MI	C, D	15,383,749		(414,896)		14,968,853		13.0	%	(14)	7/1/2027	P/I
Private Co. Q	GA	C, D	5,208,468		(430,833)		4,777,635		13.8	%	(15)	9/1/2028	P/I

Total loans held at carrying value			$	242,802,878	$	(8,545,836)	$	234,257,042

(1)For cannabis operators, 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 12.5%. Effective March 2024, pursuant to the forbearance agreement with Subsidiary of Private Company G, Subsidiary of Private Company G transitioned from a floating interest rate tied to U.S. prime rate to a fixed interest rate. Effective December 1, 2023, the Company placed the borrower on nonaccrual status.

(6)Base interest rate of 12.0% plus SOFR (SOFR floor of 1.0%) and PIK interest rate of 2.0%. As amended by the forbearance agreement entered into in March 2024, between 20.0% and 80.0% of the monthly cash interest is paid in kind from December 1, 2023 to June 1, 2024. Effective December 1, 2023, the Company placed the borrower on nonaccrual status.

(7)Base interest rate of 12.0% plus SOFR (SOFR floor of 1.0%) and PIK interest rate of 2.0%.

(8)Base interest rate of 8.4% plus SOFR (SOFR floor of 5.0%).

(9)Base interest rate of 9.5%.

(10)Base interest rate of 9.0%. Quarterly cash interest is paid in kind from closing to February 1, 2024 and then payable in cash thereafter.

(11)Base interest rate of 8.0% plus SOFR (SOFR floor of 4.5%).

(12)Base interest rate of 8.0% plus SOFR (SOFR floor of 4.5%).

(13)Base interest rate of 8.5% plus SOFR (SOFR floor of 5.0%).

(14)Base interest rate of 13.0%. Pursuant to the first amendment to the credit agreement entered into in August 2024, interest was paid in kind from July 1, 2024 to August 31, 2024 and then payable in cash thereafter.

(15)Base interest rate of 8.75% plus SOFR (SOFR floor of 5.0%).

CURRENT EXPECTED CREDIT LOSSES (Tables)

9 Months Ended

Sep. 30, 2024

Credit Loss [Abstract]

Schedule of Financing Receivable, Allowance for Credit Loss


	Outstanding (1)		Unfunded (2)		Total
Balance at June 30, 2024	$	24,971,603	$	122,900	$	25,094,503
Increase (decrease) in provision for current expected credit losses	139,606		41,764		181,370
Write-offs	—		—		—
Recoveries	—		—		—
Balance at September 30, 2024	$	25,111,209	$	164,664	$	25,275,873


	Outstanding (1)		Unfunded (2)		Total
Balance at December 31, 2023	$	26,309,450	$	115,473	$	26,424,923
(Decrease) increase in provision for current expected credit losses	(1,198,241)		49,191		(1,149,050)
Write-offs	—		—		—
Recoveries	—		—		—
Balance at September 30, 2024	$	25,111,209	$	164,664	$	25,275,873

Schedule of Financing Receivable Credit Quality Indicators

Based on a 5-point scale, the Company’s loans are rated “1” through “5,” from less risk to greater risk, which ratings are defined as follows:


Rating			Definition
1			Very Low Risk — Materially exceeds performance metrics included in original or current credit underwriting and business plan
2			Low Risk — Collateral and business performance exceeds substantially all performance metrics included in original or current credit underwriting and business plan
3			Medium Risk — Collateral and business performance meets, or is on track to meet underwriting expectations; business plan is met or can reasonably be achieved
4			High Risk/ Potential for Loss — Collateral performance falls short of underwriting, material differences from business plans, defaults may exist, or may soon exist absent material improvement. Risk of recovery of interest exists
5			Impaired/ Loss Likely — Performance is significantly worse than underwriting with major variances from business plan observed. Loan covenants or financial milestones have been breached; exit from loan or refinancing is uncertain. Full recovery of principal is unlikely


Risk Rating:	2024		2023		2022		2021		2020		Total
1	$	—	$	—	$	—	$	—	$	—	$	—
2	—		—		—		—		—		—
3	56,832,385		27,573,208		37,488,876		23,078,389		—		144,972,858
4	—		—		—		—		—		—
5	—		—		11,513,143		77,771,041		2,040,058		91,324,242
Total	$	56,832,385	$	27,573,208	$	49,002,019	$	100,849,430	$	2,040,058	$	236,297,100

LOANS HELD FOR INVESTMENT AT CARRYING VALUE - Narrative (Details)	9 Months Ended	12 Months Ended
	Sep. 30, 2024 USD ($) loan	Dec. 31, 2023 USD ($) loan	Dec. 01, 2023 USD ($)
Loans and Leases Receivable Disclosure [Line Items]
Number of loans held for investments in portfolio (in loans) \| loan	11	9
Loans held for investments aggregate commitments	$ 260,200,000	$ 333,100,000
Loans held at carrying value, outstanding principal	242,802,878	$ 314,376,929
Loans held at carrying value, outstanding principal fundings	65,500,000
Loan repayments, carrying value	48,800,000
Sale of loans	$ 90,000,000
Percentage of loans held at carrying value with floating interest rates	47.00%	84.00%
Interest rate floor (in percent)	3.60%
Quoted interest rate (in percent)	0.048
Loan receivable held at carrying value, net	$ 2,040,058	$ 2,040,058
Sub. of Private Co. G
Loans and Leases Receivable Disclosure [Line Items]
Loans held at carrying value, outstanding principal			$ 79,200,000
Loan receivable held at carrying value, net			77,800,000
Nonaccrual, interest income	5,200,000
Private Co. K
Loans and Leases Receivable Disclosure [Line Items]
Loans held at carrying value, outstanding principal			12,200,000
Loan receivable held at carrying value, net			$ 11,500,000
Nonaccrual, interest income	500,000
Outstanding principal	$ 1,300,000
Non-Accrual
Loans and Leases Receivable Disclosure [Line Items]
Number of loans on non accrual status, carrying value \| loan	2

INTEREST RESERVE - Schedule of Changes in Interest Reserve (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Interest Reserve [Roll Forward]
Beginning reserves	$ 0	$ 1,130,541	$ 0	$ 3,200,944
New reserves	0	0	0	1,526,065
Reserves disbursed	0	(579,591)	0	(4,176,059)
Ending reserves	$ 0	$ 550,950	$ 0	$ 550,950

FAIR VALUE

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

FAIR VALUE

Loans Held for Investment

The Company’s loans are typically valued using a yield analysis, which is typically performed for non-credit impaired loans to borrowers where the Company does not own a controlling equity position. Alternative valuation methodologies may be used as appropriate, and can include a market analysis, income analysis, or recovery analysis. To determine fair value using a yield analysis, a current price is imputed for the loan based upon an assessment of the expected market yield for a similarly structured loan with a similar level of risk. In the yield analysis, the Company considers the current contractual interest rate, the maturity and other terms of the loan relative to risk of the company and the specific loan. A key determinant of risk, among other things, is the leverage through the loan relative to the enterprise value of the borrower. As loans held by the Company are substantially illiquid with no active loan market, the Company depends on primary market data, including newly funded loans, as well as secondary market data with respect to high-yield debt instruments and syndicated loans, as inputs in determining the appropriate market yield, as applicable.

The following tables present fair value measurements of loans held at fair value as of September 30, 2024 and December 31, 2023:


	Fair Value Measurement as of September 30, 2024
	Total		Level 1		Level 2		Level 3
Loans held at fair value	$	31,372,174	$	—	$	—	$	31,372,174
Total	$	31,372,174	$	—	$	—	$	31,372,174


	Fair Value Measurement as of December 31, 2023
	Total		Level 1		Level 2		Level 3
Loans held at fair value	$	61,720,705	$	—	$	—	$	61,720,705
Total	$	61,720,705	$	—	$	—	$	61,720,705

The following table presents changes in loans that use Level 3 inputs as of and for the nine months ended September 30, 2024:


	Nine months ended September 30, 2024
Total loans using Level 3 inputs at December 31, 2023	$	61,720,705

Change in unrealized gains (losses) on loans at fair value, net	(9,655,396)
Additional fundings	4,594,027
Original issue discount and other discounts, net of costs	(2,756,417)
Loan repayments	(4,509,069)
Sale of loans	(19,284,846)
Accretion of original issue discount	128,384
PIK interest	1,134,786
Total loans using Level 3 inputs at September 30, 2024	$	31,372,174

The change in unrealized losses included in the unaudited interim consolidated statements of operations attributable to loans held at fair value, categorized as Level 3, held as of September 30, 2024 is $(14,081,406).

The following tables summarize the significant unobservable inputs the Company used to value the loans categorized within Level 3 as of September 30, 2024 and December 31, 2023. The tables are not intended to be all-inclusive, but instead capture the significant unobservable inputs relevant to the Company’s determination of fair values.

As of September 30, 2024

Unobservable Input

Fair Value

Primary Valuation Techniques

Input

Estimated Range

Weighted Average

Senior term loan

31,372,174

Recovery analysis

Recovery rate

57.60% - 62.40%

60.00%

Total investment

31,372,174

As of December 31, 2023

Unobservable Input

Fair Value

Primary Valuation Techniques

Input

Estimated Range

Weighted Average

Senior term loans

47,627,845

Recovery analysis

Recovery rate

86.10% - 92.40%

89.25%

Senior term loans

14,092,860

Market approach

Revenue multiple

0.50x - 0.70x

0.60x

Total investments

61,720,705

Changes in market yields, revenue multiples, and recovery rates may change the fair value of certain of the Company’s loans. Generally, an increase in market yields may result in a decrease in the fair value of certain of the Company’s loans, while a decrease in revenue multiples and recovery rates may result in a decrease in the fair value of certain of the Company’s loans.

Due to the inherent uncertainty of determining the fair value of loans that do not have a readily available market value, the fair value of the Company’s loans may fluctuate from period to period. Additionally, the fair value of the Company’s loans may differ significantly from the values that would have been used had a ready market existed for such loans and may differ materially from the values that the Company may ultimately realize. Further, such loans are generally subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities. If the Company was required to liquidate a loan in a forced or liquidation sale, it could realize significantly less than the value at which the Company has recorded it.

In addition, changes in the market environment and other events that may occur over the life of the loans may cause the gains or losses ultimately realized on these loans to be different than the unrealized gains or losses reflected in the valuations currently assigned.

Fair Value of Financial Instruments

GAAP requires disclosure of fair value information about financial instruments, whether or not recognized at fair value in the balance sheets, for which it is practicable to estimate that value.

The following table details the book value and fair value of the Company’s financial instruments not recognized at fair value in the unaudited interim consolidated balance sheets as of September 30, 2024:


	As of September 30, 2024
	Carrying Value		Fair Value
Financial assets:
Cash and cash equivalents	$	122,163,732	$	122,163,732
Loans held for investment at carrying value	$	234,257,042	$	211,040,795
Loan receivable held at carrying value	$	2,040,058	$	510,436
Financial liabilities:
Senior notes payable, net	$	88,461,936	$	83,700,000

Estimates of fair value for cash and cash equivalents are measured using observable, quoted market prices, or Level 1 inputs. The Company’s loans held for investment are measured using unobservable inputs, or Level 3 inputs. The fair value of the Company’s 2027 Senior Notes is estimated using observable inputs based on the last available bid price in the market at the end of the period, or Level 2 inputs.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 107
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482078/820-10-55-107

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 100
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482078/820-10-55-100

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(3)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2E
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 940
-SubTopic 820
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478119/940-820-50-1

+ Details

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Assets
Loans held for investment at cost	$ 50,950,868	$ 71,644,003
Shareholders’ equity
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, authorized (in shares)	10,000	10,000
Preferred stock, issued (in shares)	0	125
Preferred stock, outstanding (in shares)	0	125
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	50,000,000	50,000,000
Common stock, issued (in shares)	21,882,047	20,457,697
Common stock, outstanding (in shares)	21,882,047	20,457,697

LOANS HELD FOR INVESTMENT AT CARRYING VALUE - Schedule of Loans Held at Carrying Value Portfolio (Details) - USD ($)	9 Months Ended
	Sep. 30, 2024	Dec. 31, 2023	Dec. 01, 2023
Loans held at investment, Carrying Amount [Abstract]
Outstanding Principal	$ 242,802,878	$ 314,376,929
Original Issue Discount	(8,545,836)	(13,111,531)
Carrying Value	$ 234,257,042	$ 301,265,398
Sub. of Private Co. G
Loans held at investment, Carrying Amount [Abstract]
Outstanding Principal			$ 79,200,000
Sub. of Private Co. G \| Base Rate
Loans held at investment, Carrying Amount [Abstract]
Interest Rate	12.50%
Private Co. K
Loans held at investment, Carrying Amount [Abstract]
Outstanding Principal			$ 12,200,000
Private Co. K \| Base Rate
Loans held at investment, Carrying Amount [Abstract]
Interest Rate	12.00%
Private Co. K \| Secured Overnight Financing Rate (SOFR)
Loans held at investment, Carrying Amount [Abstract]
Interest Rate	1.00%
Private Co. K \| PIK Interest Rate
Loans held at investment, Carrying Amount [Abstract]
Interest Rate	2.00%
Private Co. K \| Monthly Cash Interest \| Minimum
Loans held at investment, Carrying Amount [Abstract]
Interest Rate	20.00%
Private Co. K \| Monthly Cash Interest \| Maximum
Loans held at investment, Carrying Amount [Abstract]
Interest Rate	80.00%
Private Co. J \| Base Rate
Loans held at investment, Carrying Amount [Abstract]
Interest Rate	12.00%
Private Co. J \| Secured Overnight Financing Rate (SOFR)
Loans held at investment, Carrying Amount [Abstract]
Interest Rate	1.00%
Private Co. J \| PIK Interest Rate
Loans held at investment, Carrying Amount [Abstract]
Interest Rate	2.00%
Private Co. L \| Base Rate
Loans held at investment, Carrying Amount [Abstract]
Interest Rate	8.40%
Private Co. L \| Secured Overnight Financing Rate (SOFR)
Loans held at investment, Carrying Amount [Abstract]
Interest Rate	5.00%
Sub. of Public Co. M \| Base Rate
Loans held at investment, Carrying Amount [Abstract]
Interest Rate	9.50%
Private Co. M \| Base Rate
Loans held at investment, Carrying Amount [Abstract]
Interest Rate	9.00%
Private Co. N - Real Estate \| Base Rate
Loans held at investment, Carrying Amount [Abstract]
Interest Rate	8.00%
Private Co. N - Real Estate \| Secured Overnight Financing Rate (SOFR)
Loans held at investment, Carrying Amount [Abstract]
Interest Rate	4.50%
Private Co. N - Non-Real Estate \| Base Rate
Loans held at investment, Carrying Amount [Abstract]
Interest Rate	8.00%
Private Co. N - Non-Real Estate \| Secured Overnight Financing Rate (SOFR)
Loans held at investment, Carrying Amount [Abstract]
Interest Rate	4.50%
Private Co. O \| Base Rate
Loans held at investment, Carrying Amount [Abstract]
Interest Rate	8.50%
Private Co. O \| Secured Overnight Financing Rate (SOFR)
Loans held at investment, Carrying Amount [Abstract]
Interest Rate	5.00%
Private Co. P \| Base Rate
Loans held at investment, Carrying Amount [Abstract]
Interest Rate	13.00%
Private Co. Q \| Base Rate
Loans held at investment, Carrying Amount [Abstract]
Interest Rate	8.75%
Private Co. Q \| Secured Overnight Financing Rate (SOFR)
Loans held at investment, Carrying Amount [Abstract]
Interest Rate	5.00%
C, D \| AZ, GA, MA, NM \| Sub. of Private Co. G
Loans held at investment, Carrying Amount [Abstract]
Outstanding Principal	$ 79,215,888
Original Issue Discount	(1,444,847)
Carrying Value	$ 77,771,041
Interest Rate	12.50%
C, D \| AZ, GA, MA, NM \| Sub. of Public Co. M
Loans held at investment, Carrying Amount [Abstract]
Outstanding Principal	$ 2,797,527
Original Issue Discount	(189,835)
Carrying Value	$ 2,607,692
Interest Rate	9.50%
C, D \| MA \| Private Co. K
Loans held at investment, Carrying Amount [Abstract]
Outstanding Principal	$ 12,195,762
Original Issue Discount	(682,619)
Carrying Value	$ 11,513,143
Interest Rate	18.80%
C, D \| MO \| Private Co. J
Loans held at investment, Carrying Amount [Abstract]
Outstanding Principal	$ 23,258,785
Original Issue Discount	(180,396)
Carrying Value	$ 23,078,389
Interest Rate	18.80%
C, D \| OH \| Private Co. L
Loans held at investment, Carrying Amount [Abstract]
Outstanding Principal	$ 35,597,486
Original Issue Discount	(716,302)
Carrying Value	$ 34,881,184
Interest Rate	13.40%
C, D \| FL \| Private Co. N - Real Estate
Loans held at investment, Carrying Amount [Abstract]
Outstanding Principal	$ 18,717,068
Original Issue Discount	(682,818)
Carrying Value	$ 18,034,250
Interest Rate	12.80%
C, D \| FL \| Private Co. N - Non-Real Estate
Loans held at investment, Carrying Amount [Abstract]
Outstanding Principal	$ 17,200,000
Original Issue Discount	(602,000)
Carrying Value	$ 16,598,000
Interest Rate	12.80%
C, D \| MI \| Private Co. P
Loans held at investment, Carrying Amount [Abstract]
Outstanding Principal	$ 15,383,749
Original Issue Discount	(414,896)
Carrying Value	$ 14,968,853
Interest Rate	13.00%
D \| AZ \| Private Co. M
Loans held at investment, Carrying Amount [Abstract]
Outstanding Principal	$ 30,499,498
Original Issue Discount	(2,926,290)
Carrying Value	$ 27,573,208
Interest Rate	9.00%
C \| AZ, GA, MA, NM \| Private Co. O
Loans held at investment, Carrying Amount [Abstract]
Outstanding Principal	$ 2,728,647
Original Issue Discount	(275,000)
Carrying Value	$ 2,453,647
Interest Rate	13.50%
C, D \| AZ, MD, MO, NJ, NV, NY, OH, OR, Canada \| Private Co. Q
Loans held at investment, Carrying Amount [Abstract]
Outstanding Principal	$ 5,208,468
Original Issue Discount	(430,833)
Carrying Value	$ 4,777,635
Interest Rate	13.80%

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Revenue
Interest income	$ 10,455,021	$ 16,798,426	$ 42,767,720	$ 52,974,100
Interest expense	(1,572,705)	(1,532,928)	(4,749,143)	(4,776,863)
Net interest income	8,882,316	15,265,498	38,018,577	48,197,237
Expenses
Management and incentive fees, net (less rebate of $180,552, $405,276, 769,545 and 1,311,501, respectively)	981,785	3,574,867	8,429,575	10,592,579
General and administrative expenses	857,304	986,772	2,941,942	4,068,780
Stock-based compensation	218,643	294,014	1,131,208	705,361
Professional fees	417,466	295,502	1,231,906	1,135,977
Total expenses	2,475,198	5,151,155	13,734,631	16,502,697
(Increase) decrease in provision for current expected credit losses	(181,370)	(1,053,398)	1,149,050	(149,637)
Realized gains (losses) on investments, net	0	(1,213,416)	(93,338)	(1,239,800)
Gain (loss) on extinguishment of debt	0	0	0	1,986,381
Change in unrealized gains (losses) on loans at fair value, net	(4,621,702)	787,799	(9,655,396)	(1,152,810)
Net income from continuing operations before income taxes	1,604,046	8,635,328	15,684,262	31,138,674
Income tax expense	386,256	663,220	830,591	1,005,959
Net income from continuing operations	1,217,790	7,972,108	14,853,671	30,132,715
Net income from discontinued operations, net of tax	165,944	7,767	2,922,068	7,767
Net income	$ 1,383,734	$ 7,979,875	$ 17,775,739	$ 30,140,482
Basic earnings per common share:
Continuing operations (in dollars per share)	$ 0.05	$ 0.39	$ 0.71	$ 1.47
Discontinued operations (in dollars per share)	0.01	0.00	0.14	0.00
Total basic earnings per common share (in dollars per share)	0.06	0.39	0.85	1.47
Diluted earnings per common share:
Continuing operations (in dollars per share)	0.05	0.39	0.71	1.47
Discontinued operations (in dollars per share)	0.01	0.00	0.14	0.00
Total diluted earnings per common share (in dollars per share)	$ 0.06	$ 0.39	$ 0.85	$ 1.47
Weighted average number of common shares outstanding:
Basic weighted average shares of common stock outstanding (in shares)	20,684,149	20,324,125	20,493,375	20,315,162
Diluted weighted average shares of common stock outstanding (in shares)	20,785,848	20,342,880	20,543,644	20,390,385

LOANS HELD FOR INVESTMENT AT FAIR VALUE - Schedule of Loans Held at Fair Value Portfolio (Details) - USD ($)	1 Months Ended	9 Months Ended
	Oct. 31, 2023	Sep. 30, 2024	Dec. 31, 2023
Loans and Leases Receivable Disclosure [Line Items]
Fair Value		$ 31,372,174	$ 61,720,705
Carrying Value		50,950,868	71,644,003
Outstanding Principal		$ 53,818,300	$ 71,883,402
Private Co. A \| AZ, GA, MA, NM
Loans and Leases Receivable Disclosure [Line Items]
Base interest rate (in percent)		13.00%
PIK interest rate (in percent)		2.50%
Additional PIK interest rate (in percent)	5.00%
Private Co. A \| AZ, GA, MA, NM \| C, D
Loans and Leases Receivable Disclosure [Line Items]
Fair Value		$ 31,372,174
Carrying Value		50,950,868
Outstanding Principal		$ 53,818,300
Interest Rate		15.50%

INTEREST RECEIVABLE (Tables)

9 Months Ended

Sep. 30, 2024

Interest Receivable and Other Assets [Abstract]

Schedule of Interest Receivable

The following table summarizes the interest receivable by the Company as of September 30, 2024 and December 31, 2023:



	As of September 30, 2024		As of December 31, 2023

Interest receivable	$	1,397,114	$	2,680,188
PIK receivable	38,764		1,009,974
Unused fees receivable	37,766		25,833
Total interest receivable	$	1,473,644	$	3,715,995

COMMITMENTS AND CONTINGENCIES - Schedule of Commitments to Fund Various Investments (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
Total original loan commitments	$ 349,532,028	$ 431,239,913
Less: drawn commitments	(329,390,255)	(421,239,913)
Total undrawn commitments	$ 20,141,773	$ 10,000,000

EARNINGS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2024

Earnings Per Share [Abstract]

Schedule of Earnings (Loss) Per Share, Basic and Diluted

The following information sets forth the computations of basic and diluted weighted average earnings per common share for the three and nine months ended September 30, 2024 and 2023:


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Net income from continuing operations	$	1,217,790	$	7,972,108	$	14,853,671	$	30,132,715
Dividends paid on preferred stock	—		—		(7,500)		(7,500)
Dividends paid on unvested restricted stock	(167,625)		(65,991)		(353,021)		(205,268)
Net income from continuing operations attributable to common shareholders	1,050,165		7,906,117		14,493,150		29,919,947
Net income from discontinued operations	165,944		7,767		2,922,068		7,767
Net income attributable to common shareholders	1,216,109		7,913,884		17,415,218		29,927,714
Divided by:
Basic weighted average shares of common stock outstanding	20,684,149		20,324,125		20,493,375		20,315,162
Weighted average unvested restricted stock and dilutive stock options	101,699		18,755		50,269		75,223
Diluted weighted average shares of common stock outstanding	20,785,848		20,342,880		20,543,644		20,390,385

Basic earnings per share
Continuing operations	$	0.05	$	0.39	$	0.71	$	1.47
Discontinued operations	$	0.01	$	0.00	$	0.14	$	0.00
Total basic weighted average earnings per common share	$	0.06	$	0.39	$	0.85	$	1.47

Diluted earnings per share
Continuing operations	$	0.05	$	0.39	$	0.71	$	1.47
Discontinued operations	$	0.01	$	0.00	$	0.14	$	0.00
Total diluted weighted average earnings per common share	$	0.06	$	0.39	$	0.85	$	1.47

SHAREHOLDERS' EQUITY - Schedule of Nonvested Share Activity (Details) - Restricted Stock - shares	Sep. 30, 2024	Dec. 31, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	400,371	190,974
Vested (in shares)	(102,780)	(38,028)
Forfeited (in shares)	(33,934)	(33,934)
Balance (in shares)	263,657	119,012

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
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-Name Accounting Standards Codification
-Section 35
-Paragraph 1D
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

INCOME TAXES - Schedule of Income Tax Provision (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Income Tax Disclosure [Abstract]
Current	$ 394,210	$ 663,220	$ 838,545	$ 1,005,689
Deferred	0	0	0	0
Excise tax	(7,954)	0	(7,954)	270
Total income tax expense, including excise tax	386,256	663,220	830,591	1,005,959
Current federal tax expense	300,000	500,000	600,000	700,000
Current state and local tax expense	$ 100,000	$ 200,000	$ 200,000	$ 300,000

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

LOANS HELD FOR INVESTMENT AT CARRYING VALUE - Schedule of Changes in Loans Held at Carrying Value (Details)	9 Months Ended
	Sep. 30, 2024 USD ($)
Principal
Total loans held at carrying value, principal, beginning balance	$ 314,376,929
New fundings	65,512,166
Loan repayments	(45,237,624)
Sale of loans	(90,000,000)
PIK interest	1,664,028
Loan amortization payments	(3,512,621)
Total loans held at carrying value, principal, ending balance	242,802,878
Original Issue Discount
Total loans held at carrying value, original issue discount, beginning balance	(13,111,531)
New fundings	(2,654,893)
Accretion of original issue discount	6,968,926
Sale of loans	251,662
Total loans held at carrying value, original issue discount, ending balance	(8,545,836)
Carrying Value
Total loans held at carrying value, carrying value, beginning balance	301,265,398
New fundings	62,857,273
Accretion of original issue discount	6,968,926
Loan repayments	(45,237,624)
Sale of loans	(89,748,338)
PIK interest	1,664,028
Loan amortization payments	(3,512,621)
Total loans held at carrying value, carrying value, ending balance	$ 234,257,042

Cover Page - shares	9 Months Ended
Cover Page - shares	Sep. 30, 2024	Nov. 13, 2024
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2024
Document Transition Report	false
Entity File Number	001-39995
Entity Registrant Name	ADVANCED FLOWER CAPITAL INC.
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	85-1807125
Entity Address, Address Line One	477 S. Rosemary Ave.
Entity Address, Address Line Two	Suite 301
Entity Address, City or Town	West Palm Beach
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33401
City Area Code	561
Local Phone Number	510-2390
Title of 12(b) Security	Common Stock, $0.01 par value per share
Trading Symbol	AFCG
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		21,952,677
Entity Central Index Key	0001822523
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q3
Amendment Flag	false
Former Address
Document Information [Line Items]
Entity Registrant Name	AFC GAMMA, INC
Entity Address, Address Line One	525 Okeechobee Blvd
Entity Address, Address Line Two	Suite 1650
Entity Address, City or Town	West Palm Beach
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33401

EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2024

Earnings Per Share [Abstract]

EARNINGS PER SHARE

The following information sets forth the computations of basic and diluted weighted average earnings per common share for the three and nine months ended September 30, 2024 and 2023:


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Net income from continuing operations	$	1,217,790	$	7,972,108	$	14,853,671	$	30,132,715
Dividends paid on preferred stock	—		—		(7,500)		(7,500)
Dividends paid on unvested restricted stock	(167,625)		(65,991)		(353,021)		(205,268)
Net income from continuing operations attributable to common shareholders	1,050,165		7,906,117		14,493,150		29,919,947
Net income from discontinued operations	165,944		7,767		2,922,068		7,767
Net income attributable to common shareholders	1,216,109		7,913,884		17,415,218		29,927,714
Divided by:
Basic weighted average shares of common stock outstanding	20,684,149		20,324,125		20,493,375		20,315,162
Weighted average unvested restricted stock and dilutive stock options	101,699		18,755		50,269		75,223
Diluted weighted average shares of common stock outstanding	20,785,848		20,342,880		20,543,644		20,390,385

Basic earnings per share
Continuing operations	$	0.05	$	0.39	$	0.71	$	1.47
Discontinued operations	$	0.01	$	0.00	$	0.14	$	0.00
Total basic weighted average earnings per common share	$	0.06	$	0.39	$	0.85	$	1.47

Diluted earnings per share
Continuing operations	$	0.05	$	0.39	$	0.71	$	1.47
Discontinued operations	$	0.01	$	0.00	$	0.14	$	0.00
Total diluted weighted average earnings per common share	$	0.06	$	0.39	$	0.85	$	1.47

Diluted earnings per share was computed using the treasury stock method for stock options and restricted stock. Diluted weighted average earnings per common share excluded 1,499,235 and 1,499,235 weighted average unvested restricted stock and stock options due to anti-dilutive effect for the three and nine months ended September 30, 2024, respectively, and 2,288,419 and 2,247,328 for the three and nine months ended September 30, 2023, respectively.

SHAREHOLDERS' EQUITY - Schedule of Restricted Stock Awards Activity (Details) - Restricted Stock - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Number of shares of restricted stock
Beginning balance (in shares)			119,012
Granted (in shares)	0	0	209,397	126,393
Vested (in shares)		(18,470)	(64,752)	(38,028)
Forfeited (in shares)			0
Ending balance (in shares)	263,657		263,657
Weighted-average grant date fair value
Beginning balance (in dollars per share)			$ 16.06
Granted (in dollars per share)			11.70	$ 15.55
Vested (in dollars per share)		$ 16.24	14.50	$ 17.97
Forfeited (in dollars per share)			0
Ending balance (in dollars per share)	$ 8.61		$ 8.61

INTEREST RESERVE

9 Months Ended

Sep. 30, 2024

INTEREST RESERVE [Abstract]

INTEREST RESERVE

At September 30, 2024 and December 31, 2023, the Company had no loans that included a loan-funded interest reserve. For the three and nine months ended September 30, 2024, zero of aggregate interest income was earned and disbursed from the interest reserves. For the three and nine months ended September 30, 2023, approximately $0.6 million and $4.2 million, respectively, of aggregate interest income was earned and disbursed from the interest reserves.

The following table presents changes in interest reserve as of and for the three and nine months ended September 30, 2024 and 2023:


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Beginning reserves	$	—	$	1,130,541	$	—	$	3,200,944
New reserves	—		—		—		1,526,065
Reserves disbursed	—		(579,591)		—		(4,176,059)
Ending reserves	$	—	$	550,950	$	—	$	550,950

RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2024

RELATED PARTY TRANSACTIONS

Management Agreement

Pursuant to the Management Agreement, the Manager manages the loans and day-to-day operations of the Company, subject at all times to the further terms and conditions set forth in the Management Agreement and such further limitations or parameters as may be imposed from time to time by the Company’s Board.

The Manager receives base management fees (the “Base Management Fee”) that are calculated and payable quarterly in arrears, in an amount equal to 0.375% of the Company’s Equity (as defined in the Management Agreement), subject to certain adjustments, less 50% of the aggregate amount of any other fees (“Outside Fees”), including any agency fees relating to our loans, but excluding the Incentive Compensation (as defined below) and any diligence fees paid to and earned by the Manager and paid by third parties in connection with the Manager’s due diligence of potential loans.

In addition to the Base Management Fee, the Manager is entitled to receive incentive compensation (the “Incentive Compensation” or “Incentive Fees”) under the Management Agreement. Under the Management Agreement, the Company pays Incentive Fees to the Manager based upon the Company’s achievement of targeted levels of Core Earnings. “Core Earnings” is defined in the Management Agreement as, for a given period, the net income (loss) for such period, computed in accordance with GAAP, excluding (i) non-cash equity compensation expense, (ii) the Incentive Compensation, (iii) depreciation and amortization, (iv) any unrealized gains or losses or other non-cash items that are included in net income for the applicable reporting period, regardless of whether such items are included in other comprehensive income or loss, or in net income and (v) one-time events pursuant to changes in GAAP and certain non-cash charges, in each case after discussions between the Manager and the Company’s independent directors and approved by a majority of the independent directors.

The Incentive Compensation for the three and nine months ended September 30, 2024 was approximately $0.3 million and $5.6 million, respectively. The Incentive Compensation for the three and nine months ended September 30, 2023 was approximately $2.6 million and $7.9 million, respectively.

The Company is required to pay all of its costs and expenses and reimburse the Manager or its affiliates for expenses of the Manager and its affiliates paid or incurred on behalf of the Company, excepting only those expenses that are specifically the responsibility of the Manager pursuant to the Management Agreement. With respect to certain office expenses incurred by the Manager on behalf of the Company and other funds managed by the Manager or its affiliates, such as rent, the Manager determines each fund’s pro rata portion of such expenses in an amount equal to the proportional amount of time employees of the Manager spent providing services to the Company, as reasonably stipulated by time sheets.

The following table summarizes the related party costs incurred by the Company for the three and nine months ended September 30, 2024 and 2023:


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Affiliate Costs
Management fees	$	909,229	$	1,347,378	$	3,599,338	$	4,046,179
Less: outside fees earned	(180,552)		(405,276)		(769,545)		(1,311,501)
Base management fees	728,677		942,102		2,829,793		2,734,678
Incentive fees earned	253,108		2,632,765		5,599,782		7,857,901
General and administrative expenses reimbursable to Manager	602,926		817,985		2,135,189		2,801,214
Total	$	1,584,711	$	4,392,852	$	10,564,764	$	13,393,793

Amounts payable to the Company’s Manager as of September 30, 2024 and December 31, 2023 were approximately $1.9 million and $5.0 million, respectively.

The Manager is a wholly-owned subsidiary of Castleground Holdings LLC (f/k/a Advanced Flower Capital Management, LLC) (the “Parent Manager”). Certain officers have ownership in the outstanding equity of the Parent Manager, including Leonard Tannenbaum, Chairman of the Board, Robyn Tannenbaum, President and Chief Investment Officer, Bernard Berman, a member of the Company’s Investment Committee, and Daniel Neville, Chief Executive Officer.

Due to Affiliate

Amounts due to an affiliate of the Company as of September 30, 2024 and December 31, 2023 were approximately $20.6 thousand and $16.4 thousand, respectively.

Investments in Loans

From time to time, the Company may co-invest with other investment vehicles managed by the Manager or its affiliates, including the Manager, and their portfolio companies, including by means of splitting loans, participating in loans or other means of syndicating loans. The Company is not obligated to provide, nor has it provided, any financial support to the other managed investment vehicles. As such, the Company’s risk is limited to the carrying value of its investment in any such loan. Additionally, the Company’s Manager or its affiliates, including AFC Agent LLC (“AFC Agent”), may from time to time serve as administrative and collateral agent to the lenders under the Company’s loans. As of September 30, 2024, there were two co-invested loans held by the Company and affiliates of the Company.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480990/946-20-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480990/946-20-50-5

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480990/946-20-50-6

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477968/946-235-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477968/946-235-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483326/850-10-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(g)(3))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479134/946-220-S99-1

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(c))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479134/946-220-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(e))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479134/946-220-S99-1

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org/850/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483326/850-10-50-6

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483326/850-10-50-1

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483326/850-10-50-1

+ Details

FAIR VALUE - Schedule of Fair Value measurement Inputs and Valuation Techniques (Details) - Level 3	Sep. 30, 2024 USD ($)	Dec. 31, 2023 USD ($)
Fair Value [Abstract]
Loans held for investment, fair value	$ 31,372,174	$ 61,720,705
Recovery analysis
Fair Value [Abstract]
Loans held for investment, fair value	$ 31,372,174	$ 47,627,845
Estimated Range and Weighted Average [Abstract]
Investment, type [extensible enumeration]	Senior term loan	Senior term loan
Recovery analysis \| Market Yield \| Minimum
Estimated Range and Weighted Average [Abstract]
Unobservable Input	0.5760	0.8610
Recovery analysis \| Market Yield \| Maximum
Estimated Range and Weighted Average [Abstract]
Unobservable Input	0.6240	0.9240
Recovery analysis \| Market Yield \| Weighted Average
Estimated Range and Weighted Average [Abstract]
Unobservable Input	0.6000	0.8925
Market approach
Fair Value [Abstract]
Loans held for investment, fair value		$ 14,092,860
Estimated Range and Weighted Average [Abstract]
Investment, type [extensible enumeration]		Senior term loan
Market approach \| Minimum
Estimated Range and Weighted Average [Abstract]
Unobservable Input		0.5
Market approach \| Maximum
Estimated Range and Weighted Average [Abstract]
Unobservable Input		0.7
Market approach \| Weighted Average
Estimated Range and Weighted Average [Abstract]
Unobservable Input		0.6

CURRENT EXPECTED CREDIT LOSSES - Schedule of Financing Receivable Credit Quality Indicators (Details)	Sep. 30, 2024 USD ($)
Financing Receivable, Credit Quality Indicator [Line Items]
2024	$ 56,832,385
2023	27,573,208
2022	49,002,019
2021	100,849,430
2020	2,040,058
Total	236,297,100
1
Financing Receivable, Credit Quality Indicator [Line Items]
2024	0
2023	0
2022	0
2021	0
2020	0
Total	0
2
Financing Receivable, Credit Quality Indicator [Line Items]
2024	0
2023	0
2022	0
2021	0
2020	0
Total	0
3
Financing Receivable, Credit Quality Indicator [Line Items]
2024	56,832,385
2023	27,573,208
2022	37,488,876
2021	23,078,389
2020	0
Total	144,972,858
4
Financing Receivable, Credit Quality Indicator [Line Items]
2024	0
2023	0
2022	0
2021	0
2020	0
Total	0
5
Financing Receivable, Credit Quality Indicator [Line Items]
2024	0
2023	0
2022	11,513,143
2021	77,771,041
2020	2,040,058
Total	$ 91,324,242

SHAREHOLDERS' EQUITY - Assumption Used in The Option Pricing Model of Options Granted (Details) - Stock Options		9 Months Ended
	Jul. 09, 2024	Sep. 30, 2024
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility, minimum	31.24%
Expected volatility, maximum	32.41%
Expected dividend yield	15.65%
Risk-free interest rate, minimum	4.16%
Risk-free interest rate, maximum	4.25%
Expected forfeiture rate	0.00%
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term		3 years 1 month 6 days
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term		4 years 6 months
2020 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term		7 years
Expected volatility, minimum		40.00%
Expected volatility, maximum		50.00%
Expected dividend yield, minimum		0.10
Expected dividend yield, maximum		0.20
Risk-free interest rate, minimum		0.50%
Risk-free interest rate, maximum		2.00%
Expected forfeiture rate		0.00%

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (unaudited) (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Statement of Stockholders' Equity [Abstract]
Dividends declared on common shares (in dollars per share)	$ 0.33	$ 0.48	$ 1.44	$ 1.52
Dividends declared on preferred shares (in dollars per share)			$ 60	$ 60

FAIR VALUE - Schedule of Fair Value Measurements of Changes in Loans using Level 3 inputs (Details)	9 Months Ended
	Sep. 30, 2024 USD ($)
Changes in Loans Using Level 3 Inputs [Roll Forward]
Total loans using Level 3 inputs, beginning balance	$ 61,720,705
Change in unrealized gains (losses) on loans at fair value, net	(9,655,396)
Additional fundings	4,594,027
Original issue discount and other discounts, net of costs	(2,756,417)
Accretion of original issue discount	128,384
PIK interest	1,134,786
Total loans using Level 3 inputs, ending balance	31,372,174
Level 3
Changes in Loans Using Level 3 Inputs [Roll Forward]
Total loans using Level 3 inputs, beginning balance	61,720,705
Change in unrealized gains (losses) on loans at fair value, net	(9,655,396)
Additional fundings	4,594,027
Original issue discount and other discounts, net of costs	(2,756,417)
Loan repayments	(4,509,069)
Sale of loans	(19,284,846)
Accretion of original issue discount	128,384
PIK interest	1,134,786
Total loans using Level 3 inputs, ending balance	$ 31,372,174

LOANS HELD FOR INVESTMENT AT CARRYING VALUE - Schedule of Loans Held at Carrying Value (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2024	Dec. 31, 2023
Loans and Leases Receivable Disclosure [Line Items]
Outstanding Principal	$ 242,802,878	$ 314,376,929
Original Issue Discount	(8,545,836)	(13,111,531)
Carrying Value	$ 234,257,042	$ 301,265,398
Weighted Average Remaining Life (Years)	2 years	2 years 2 months 12 days
Senior term loan
Loans and Leases Receivable Disclosure [Line Items]
Outstanding Principal	$ 242,802,878	$ 314,376,929
Original Issue Discount	(8,545,836)	(13,111,531)
Carrying Value	$ 234,257,042	$ 301,265,398
Weighted Average Remaining Life (Years)	2 years	2 years 2 months 12 days

INTEREST RECEIVABLE (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Interest Receivable and Other Assets [Abstract]
Interest receivable	$ 1,397,114	$ 2,680,188
PIK receivable	38,764	1,009,974
Unused fees receivable	37,766	25,833
Total interest receivable	$ 1,473,644	$ 3,715,995

LOANS HELD FOR INVESTMENT AT FAIR VALUE - Schedule of Loans Held at Fair Value (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2024	Dec. 31, 2023
Loans and Leases Receivable Disclosure [Line Items]
Fair Value	$ 31,372,174	$ 61,720,705
Carrying Value	50,950,868	71,644,003
Outstanding Principal	$ 53,818,300	$ 71,883,402
Weighted Average Remaining Life (Years)	0 years	4 months 24 days
Senior term loan
Loans and Leases Receivable Disclosure [Line Items]
Fair Value	$ 31,372,174	$ 61,720,705
Carrying Value	50,950,868	71,644,003
Outstanding Principal	$ 53,818,300	$ 71,883,402
Weighted Average Remaining Life (Years)	0 years	4 months 24 days

SHAREHOLDERS' EQUITY (Tables)

9 Months Ended

Sep. 30, 2024

Equity [Abstract]

Schedule of Valuation Assumption

The following table presents the assumptions used in the Black-Scholes pricing model of options granted under the 2020 Plan during the three and nine months ended September 30, 2024 and 2023:


Assumptions:			Range
Expected term			7.0 years
Expected volatility			40% - 50%
Expected dividend yield			10% - 20%
Risk-free interest rate			0.5% - 2.0%
Expected forfeiture rate			0%

The modification date fair value of the stock options was determined using the Binomial-Lattice Model with the following assumptions on July 9, 2024:


Assumptions:			Range
Expected term			3.1 - 4.5 years
Expected volatility			31.24% - 32.41%
Expected dividend yield			15.65%
Risk-free interest rate			4.16% - 4.25%
Expected forfeiture rate			0%

Schedule of Stock-Based Compensation Expense

The following table summarizes the stock-based compensation expense incurred by the Company for the three and nine months ended September 30, 2024 and 2023:


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023

Stock-based compensation	$	218,643	$	294,014	$	1,131,208	$	705,361

Schedule of Share-based Payment Arrangement, Option, Activity

The following table summarizes the (i) non-vested options granted, (ii) vested options granted, (iii) exercised and (iv) forfeited options granted for the Company’s directors and officers and employees of the Manager as of September 30, 2024 and December 31, 2023:



	As of September 30, 2024	As of December 31, 2023
Non-vested	156,367	206,304
Vested	2,218,265	2,168,328
Exercised	(5,511)	(5,511)
Forfeited	(200,169)	(200,169)
Balance	2,168,952	2,168,952

Schedule of Stock Option Activity

The following tables summarize stock option activity as of and during the nine months ended September 30, 2024:


	Number of options	Weighted-average exercise price		Weighted-average remaining contractual term	Aggregate intrinsic value
Outstanding as of December 31, 2023	2,168,952	$	11.46
Granted	—	—
Exercised	—	—
Forfeited	—	—
Outstanding as of September 30, 2024	2,168,952	$	11.46	3.52 years	$	529,236
Exercisable as of September 30, 2024	2,129,108	$	11.44	3.51 years	$	526,559

Schedule of Nonvested Share Activity

The following table summarizes restricted stock (i) granted, (ii) vested and (iii) forfeited for the Company’s directors and officers and employees of the Manager as of September 30, 2024 and December 31, 2023:



	As of September 30, 2024	As of December 31, 2023
Granted	400,371	190,974
Vested	(102,780)	(38,028)
Forfeited	(33,934)	(33,934)
Balance	263,657	119,012

Schedule of Restricted Stock Awards Activity

The following tables summarize the restricted stock activity as of and during the nine months ended September 30, 2024:


	Number of shares of restricted stock	Weighted-average grant date fair value(1)
Balance as of December 31, 2023	119,012	$	16.06
Granted	209,397	11.70
Vested	(64,752)	14.50
Forfeited	—	—
Balance as of September 30, 2024	263,657	$	8.61

(1)The fair value of the Company’s restricted stock awards is based on the Company’s stock price on the date of grant. The weighted-average grant date fair value of the remaining unvested restricted stock awards as of September 30, 2024 has been adjusted to give effect to the Spin-Off transaction, which was completed July 9, 2024.

INTEREST RESERVE (Tables)

9 Months Ended

Sep. 30, 2024

INTEREST RESERVE [Abstract]

Schedule of Changes in Interest Reserve

The following table presents changes in interest reserve as of and for the three and nine months ended September 30, 2024 and 2023:


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Beginning reserves	$	—	$	1,130,541	$	—	$	3,200,944
New reserves	—		—		—		1,526,065
Reserves disbursed	—		(579,591)		—		(4,176,059)
Ending reserves	$	—	$	550,950	$	—	$	550,950

CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Assets
Loans held for investment at fair value (cost of $50,950,868 and $71,644,003 at September 30, 2024 and December 31, 2023, respectively, net)	$ 31,372,174	$ 61,720,705
Loans held for investment at carrying value, net	234,257,042	301,265,398
Loan receivable held at carrying value, net	2,040,058	2,040,058
Current expected credit loss reserve	(25,111,209)	(26,309,450)
Loans held for investment at carrying value and loan receivable held at carrying value, net of current expected credit loss reserve	211,185,891	276,996,006
Cash and cash equivalents	122,163,732	90,381,831
Accounts receivable	0	1,837,450
Interest receivable	1,473,644	3,715,995
Prepaid expenses and other assets	422,967	688,446
Assets of discontinued operations	0	31,244,622
Total assets	366,618,408	466,585,055
Liabilities
Accrued interest	2,170,417	894,000
Due to affiliate	20,587	16,437
Dividends Payable	7,221,076	9,819,695
Current expected credit loss reserve	164,664	115,473
Accrued management and incentive fees	981,785	3,471,726
Accrued direct administrative expenses	878,407	1,486,256
Accounts payable and other liabilities	658,224	704,685
Senior notes payable, net	88,461,936	88,014,558
Line of credit payable, net	60,000,000	42,000,000
Liabilities of discontinued operations	0	10,000
Total liabilities	160,557,096	146,532,830
Commitments and contingencies (Note 10)
Shareholders’ equity
Preferred stock, par value $0.01 per share, 10,000 shares authorized at September 30, 2024 and December 31, 2023 and 0 and 125 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively	0	1
Common stock, par value $0.01 per share, 50,000,000 shares authorized at September 30, 2024 and December 31, 2023 and 21,882,047 and 20,457,697 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively	218,821	204,577
Additional paid-in capital	248,194,045	349,805,890
Accumulated (deficit) earnings	(42,351,554)	(29,958,243)
Total shareholders’ equity	206,061,312	320,052,225
Total liabilities and shareholders’ equity	$ 366,618,408	$ 466,585,055

ORGANIZATION (Details)	9 Months Ended
ORGANIZATION (Details)	Sep. 30, 2024 segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of operating segments	1

INCOME TAX (Tables)

9 Months Ended

Sep. 30, 2024

Income Tax Disclosure [Abstract]

Schedule of Income Tax Provision

The income tax provision for the Company and TRS1 consisted of the following for the three and nine months ended September 30, 2024 and 2023:


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Current(1)	$	394,210	$	663,220	$	838,545	$	1,005,689
Deferred	—		—		—		—
Excise tax	(7,954)		—		(7,954)		270
Total income tax expense, including excise tax	$	386,256	$	663,220	$	830,591	$	1,005,959

RELATED PARTY TRANSACTIONS - Narrative (Details)	3 Months Ended		9 Months Ended
RELATED PARTY TRANSACTIONS - Narrative (Details)	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($) loan	Sep. 30, 2023 USD ($)	Dec. 31, 2023 USD ($)
Related Party Transaction [Line Items]
Incentive fees earned	$ 300,000	$ 2,600,000	$ 5,600,000	$ 7,900,000
Related Party
Related Party Transaction [Line Items]
Percentage of base management fees	0.375%		0.375%
Percentage of aggregate amount of any outside fees	50.00%		50.00%
Amounts payable	$ 1,900,000		$ 1,900,000		$ 5,000,000.0
Affiliated Entity
Related Party Transaction [Line Items]
Due to affiliate	$ 20,600		$ 20,600		$ 16,400
Number of co-invested loans held \| loan			2

SHAREHOLDERS' EQUITY - Schedule of Stock-Based Compensation Expense (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Equity [Abstract]
Stock-based compensation	$ 218,643	$ 294,014	$ 1,131,208	$ 705,361

LOANS HELD FOR INVESTMENT AT FAIR VALUE - Schedule of Changes in Loans Held at Fair Value (Details)	9 Months Ended
	Sep. 30, 2024 USD ($)
Principal
Total loans held at fair value, principal, beginning balance	$ 71,883,402
New fundings	4,594,027
Loan repayments	(4,509,069)
Sale of loans	(19,284,846)
PIK interest	1,134,786
Total loans held at fair value, principal, ending balance	53,818,300
Original Issue Discount
Total loans held at fair value, original issue discount, beginning balance	(239,399)
New fundings	(2,756,417)
Accretion of original issue discount	128,384
Total loans held at fair value, original issue discount, ending balance	(2,867,432)
Unrealized Gains (Losses)
Total loans held at fair value, unrealized gains (losses), beginning balance	(9,923,298)
Change in unrealized gains (losses) on loans at fair value, net	(9,655,396)
Total loans held at fair value, unrealized gains (losses), ending balance	(19,578,694)
Fair Value
Total loans using Level 3 inputs, beginning balance	61,720,705
Change in unrealized gains (losses) on loans at fair value, net	(9,655,396)
New fundings	1,837,610
Accretion of original issue discount	128,384
Loan repayments	(4,509,069)
Sale of loans	(19,284,846)
PIK interest	1,134,786
Total loans using Level 3 inputs, ending balance	$ 31,372,174

LOAN RECEIVABLE HELD AT CARRYING VALUE

9 Months Ended

Sep. 30, 2024

Receivables [Abstract]

LOAN RECEIVABLE HELD AT CARRYING VALUE

As of September 30, 2024 and December 31, 2023, the Company’s portfolio included one loan receivable held at carrying value. The originated commitment under this loan was $4.0 million and outstanding principal was approximately $2.0 million as of September 30, 2024 and December 31, 2023, respectively.

The following table presents changes in loans receivable as of and for the nine months ended September 30, 2024:


	Principal		Original Issue Discount		Carrying Value

Total loan receivable held at carrying value at December 31, 2023	$	2,041,744	$	(1,686)	$	2,040,058
Loan repayments	—		—		—
Total loan receivable held at carrying value at September 30, 2024	$	2,041,744	$	(1,686)	$	2,040,058

As of September 30, 2024, the Company had one loan receivable held at carrying value on nonaccrual status with an outstanding principal amount of approximately $2.0 million and amortized cost of approximately $2.0 million.

DISCONTINUED OPERATIONS - Schedule of Net Income from Discontinued Operations, net of Tax (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net income from discontinued operations, net of tax	$ 165,944	$ 7,767	$ 2,922,068	$ 7,767
Discontinued Operations, Disposed of by Means Other than Sale, Spinoff \| Sunrise Realty Trust, Inc. (“SUNS”)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Interest income	150,453	7,767	4,156,335	7,767
General and administrative expenses	(83)	0	(21,651)	0
Professional fees	15,574	0	(1,140,762)	0
(Increase) decrease in provision for current expected credit losses	0	0	(71,854)	0
Net income from discontinued operations, net of tax	$ 165,944	$ 7,767	$ 2,922,068	$ 7,767

- Definition

Amount after tax of income (loss) from a discontinued operation including the portion attributable to the noncontrolling interest. Includes, but is not limited to, the income (loss) from operations during the phase-out period, gain (loss) on disposal, gain (loss) for reversal of write-down (write-down) to fair value, less cost to sell, and adjustments to a prior period gain (loss) on disposal.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(12))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477250/944-220-S99-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 270
-Name Accounting Standards Codification
-Section 45
-Paragraph 3
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477349/740-270-45-3

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 205
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 7
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483499/205-20-50-7

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 205
-SubTopic 20
-Name Accounting Standards Codification
-Section 45
-Paragraph 3A
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483475/205-20-45-3A

Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 205
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 5C
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483499/205-20-50-5C

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 205
-SubTopic 20
-Name Accounting Standards Codification
-Section 45
-Paragraph 3B
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483475/205-20-45-3B

Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 205
-SubTopic 20
-Name Accounting Standards Codification
-Section 45
-Paragraph 4
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483475/205-20-45-4

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 205
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483499/205-20-50-1

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 205
-SubTopic 20
-Name Accounting Standards Codification
-Section 45
-Paragraph 3
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483475/205-20-45-3

+ Details

DISCONTINUED OPERATIONS - Narrative (Details) - USD ($)	3 Months Ended	9 Months Ended
DISCONTINUED OPERATIONS - Narrative (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2024	Jul. 09, 2024	Jul. 08, 2024
Discontinued Operations, Disposed of by Means Other than Sale, Spinoff \| Sunrise Realty Trust, Inc. (“SUNS”)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Assets contributed			$ 114,800,000
Spin-off costs	$ (15,600)	$ 1,100,000
Sunrise Realty Trust, Inc. (“SUNS”)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Ownership percent			0.00%
Common Stock \| Sunrise Realty Trust, Inc. (“SUNS”)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Exchange ratio				0.333

LOAN RECEIVABLE HELD AT CARRYING VALUE - Narrative (Details)	Sep. 30, 2024 USD ($) loan	Dec. 31, 2023 USD ($) loan
Financing Receivable, Allowance for Credit Loss [Line Items]
Number of portfolio loans \| loan	1	1
Loans receivable at carrying value aggregate commitments	$ 4,000,000.0	$ 4,000,000.0
Loans receivable at principal	2,041,744	2,041,744
Loan receivable held at carrying value, net	2,040,058	$ 2,040,058
Non Accrual Status
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans receivable at principal	$ 2,000,000.0
Number of loans \| loan	1
Loan receivable held at carrying value, net	$ 2,000,000.0

- Definition

Amortized cost, before allowance for credit loss, of financing receivable. Excludes financing receivable covered under loss sharing agreement and net investment in lease.

+ References

+ Details

INTEREST RESERVE - Narrative (Details)	3 Months Ended		9 Months Ended		12 Months Ended
INTEREST RESERVE - Narrative (Details)	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($) loan	Sep. 30, 2023 USD ($)	Dec. 31, 2023 loan
INTEREST RESERVE [Abstract]
Number of loans included in loan funded interest reserve (in loans) \| loan			0		0
Interest reserve disbursed \| $	$ 0	$ 579,591	$ 0	$ 4,176,059

SUBSEQUENT EVENTS	9 Months Ended
SUBSEQUENT EVENTS	Sep. 30, 2024
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	SUBSEQUENT EVENTS The Company has evaluated subsequent events through the date the consolidated financial statements were available to be issued. There were no material subsequent events, other than those described below, that required disclosure in these unaudited interim consolidated financial statements. In October 2024, the Company entered into a $41.0 million senior secured credit facility with Private Company R, which was fully funded at closing. The loan was originated at a discount of 2.0% and matures November 1, 2027. The loan bears interest at SOFR plus a 7.5% spread, subject to a SOFR floor of 4.5%. The loan is secured by substantially all assets of the borrowers, including a first-lien mortgage on the owned real property and a senior lien against the borrower’s assets, operations and the value of its cannabis licenses. The loan is also guaranteed by certain direct or indirect shareholders of the borrowers. The proceeds of the loan will be used to, among other things, refinance existing debt and provide working capital. In October 2024, the Company received a prepayment of approximately $0.9 million from Private Company L’s sale of certain collateral assets and a $17.8 thousand prepayment premium. In November 2024, the Company entered into an agreement to purchase $10.0 million in outstanding principal amount of a senior secured term loan to Subsidiary of Public Company S, a publicly traded operator, at par from a third party lender and the Company expects to settle the transaction in the near future. The third party lender assigned all of its rights and obligations under such loan to the Company. The term loan under the Subsidiary of Public Company S Credit Facility accrues interest at a fixed rate per annum of 9.5% and matures in August 2026. In November 2024, in connection with its credit facility with Private Company P, the Company entered into a limited waiver and amendment to such facility to waive certain failures by Private Company P to pay monthly cash interest payments when due. In connection with the waiver and amendment, Private Company P will make a cash payment constituting the majority of such missed interest payments of approximately $0.3 million, with the remaining amount due capitalized into the loan balance. Cash interest payments on the facility will restart January 1, 2025.

FAIR VALUE (Tables)

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

Schedule of Fair Value Measurements of Loans Held at Fair Value

The following tables present fair value measurements of loans held at fair value as of September 30, 2024 and December 31, 2023:


	Fair Value Measurement as of September 30, 2024
	Total		Level 1		Level 2		Level 3
Loans held at fair value	$	31,372,174	$	—	$	—	$	31,372,174
Total	$	31,372,174	$	—	$	—	$	31,372,174


	Fair Value Measurement as of December 31, 2023
	Total		Level 1		Level 2		Level 3
Loans held at fair value	$	61,720,705	$	—	$	—	$	61,720,705
Total	$	61,720,705	$	—	$	—	$	61,720,705

Schedule of Fair Value Measurements of Changes in Loans using Level 3 inputs

The following table presents changes in loans that use Level 3 inputs as of and for the nine months ended September 30, 2024:


	Nine months ended September 30, 2024
Total loans using Level 3 inputs at December 31, 2023	$	61,720,705

Change in unrealized gains (losses) on loans at fair value, net	(9,655,396)
Additional fundings	4,594,027
Original issue discount and other discounts, net of costs	(2,756,417)
Loan repayments	(4,509,069)
Sale of loans	(19,284,846)
Accretion of original issue discount	128,384
PIK interest	1,134,786
Total loans using Level 3 inputs at September 30, 2024	$	31,372,174

Schedule of Fair Value Measurement Inputs and Valuation Techniques

As of September 30, 2024

Unobservable Input

Fair Value

Primary Valuation Techniques

Input

Estimated Range

Weighted Average

Senior term loan

31,372,174

Recovery analysis

Recovery rate

57.60% - 62.40%

60.00%

Total investment

31,372,174

As of December 31, 2023

Unobservable Input

Fair Value

Primary Valuation Techniques

Input

Estimated Range

Weighted Average

Senior term loans

47,627,845

Recovery analysis

Recovery rate

86.10% - 92.40%

89.25%

Senior term loans

14,092,860

Market approach

Revenue multiple

0.50x - 0.70x

0.60x

Total investments

61,720,705

Schedule of Book Value and Fair Value of the Financial Instruments


	As of September 30, 2024
	Carrying Value		Fair Value
Financial assets:
Cash and cash equivalents	$	122,163,732	$	122,163,732
Loans held for investment at carrying value	$	234,257,042	$	211,040,795
Loan receivable held at carrying value	$	2,040,058	$	510,436
Financial liabilities:
Senior notes payable, net	$	88,461,936	$	83,700,000

RELATED PARTY TRANSACTIONS (Tables)

9 Months Ended

Sep. 30, 2024

Schedule of Related Party Transactions

The following table summarizes the related party costs incurred by the Company for the three and nine months ended September 30, 2024 and 2023:


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Affiliate Costs
Management fees	$	909,229	$	1,347,378	$	3,599,338	$	4,046,179
Less: outside fees earned	(180,552)		(405,276)		(769,545)		(1,311,501)
Base management fees	728,677		942,102		2,829,793		2,734,678
Incentive fees earned	253,108		2,632,765		5,599,782		7,857,901
General and administrative expenses reimbursable to Manager	602,926		817,985		2,135,189		2,801,214
Total	$	1,584,711	$	4,392,852	$	10,564,764	$	13,393,793

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Operating activities:
Net income	$ 17,775,739	$ 30,140,482
Net income from discontinued operations, net of tax	(2,922,068)	(7,767)
Net income from continuing operations	14,853,671	30,132,715
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Increase (decrease) in provision for current expected credit losses	(1,149,050)	149,637
Realized (gains) losses on investments, net	93,338	1,239,800
(Gain) loss on extinguishment of debt	0	(1,986,381)
Change in unrealized (gains) losses on loans at fair value, net	9,655,396	1,152,810
Accretion of deferred loan original issue discount and other discounts	(7,097,310)	(4,435,186)
Amortization of deferred financing and offering costs	763,839	695,531
Stock-based compensation	1,131,208	693,441
Payment-in-kind interest	(2,798,814)	(9,404,473)
Changes in operating assets and liabilities:
Interest receivable	2,242,351	673,473
Prepaid expenses and other assets	233,257	(79,474)
Interest reserve	0	(4,149,994)
Accrued interest	1,276,417	1,130,083
Accrued management and incentive fees, net	(2,489,941)	(316,867)
Accrued direct administrative expenses	(607,849)	(499,024)
Accounts payable and other liabilities	(42,311)	(13,504)
Net cash provided by (used in) operating activities of continuing operations	16,064,202	14,982,587
Net cash provided by (used in) operating activities of discontinued operations	3,271,445	7,767
Net cash provided by (used in) operating activities	19,335,647	14,990,354
Cash flows from investing activities:
Issuance of and fundings on loans	(50,022,243)	(51,757,225)
Proceeds from sales of loans	96,061,029	21,312,827
Due from affiliate	0	(1,000,000)
Principal repayment of loans	53,259,314	49,953,251
Net cash provided by (used in) investing activities of continuing operations	99,298,100	18,508,853
Net cash (used in) provided by investing activities of discontinued operations	(47,211,339)	0
Net cash provided by (used in) investing activities	52,086,761	18,508,853
Cash flows from financing activities:
Proceeds from sale of common stock	12,335,674	0
Payment of offering costs - equity offering	(174,307)	0
Payment of financing costs	(240,612)	(225,000)
Redemption of preferred shares	(125,000)	0
Cash distribution in connection with the Spin-Off of SUNS	(67,913,215)	0
Borrowings on revolving credit facility	185,000,000	21,000,000
Repayment of revolving credit facility	(167,000,000)	(81,000,000)
Dividends paid to common and preferred shareholders	(32,767,669)	(32,705,006)
Repayment of senior notes	0	(7,737,500)
Net cash (used in) provided by financing activities of continuing operations	(70,885,129)	(100,667,506)
Net cash provided by (used in) financing activities of discontinued operations	0	0
Net cash provided by (used in) financing activities	(70,885,129)	(100,667,506)
Net increase (decrease) in cash and cash equivalents	537,279	(67,168,299)
Cash and cash equivalents, beginning of period	121,626,453	140,372,841
Cash and cash equivalents, end of period	122,163,732	73,204,542
Supplemental disclosure of non-cash activity:
Interest reserve withheld from funding of loans	0	1,500,000
OID withheld from funding of loans	5,411,310	7,398,475
Dividends declared and not yet paid	7,221,076	9,819,695
Non-cash funding of new loan	14,672,640	0
Non-cash net assets distribution in connection with the spin-off of SUNS	46,851,962	0
Supplemental information:
Interest paid during the period	2,708,888	2,951,250
Income taxes paid during the period	939,046	1,078,959
Amortization of deferred financing costs - revolving credit facility
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Amortization of deferred financing and offering costs	290,211	212,833
Amortization of deferred financing costs - senior notes
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Amortization of deferred financing and offering costs	$ 473,628	$ 482,698

EARNINGS PER SHARE (Details) - USD ($)	3 Months Ended		9 Months Ended
EARNINGS PER SHARE (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Earnings Per Share Reconciliation [Abstract]
Net income from continuing operations	$ 1,217,790	$ 7,972,108	$ 14,853,671	$ 30,132,715
Dividends paid on preferred shares	0	0	(7,500)	(7,500)
Dividends paid on unvested restricted stock	(167,625)	(65,991)	(353,021)	(205,268)
Net income from continuing operations attributable to common shareholders, diluted	1,050,165	7,906,117	14,493,150	29,919,947
Net income from continuing operations attributable to common shareholders, basic	1,050,165	7,906,117	14,493,150	29,919,947
Net income from discontinued operations, basic	165,944	7,767	2,922,068	7,767
Net income from discontinued operations, diluted	165,944	7,767	2,922,068	7,767
Net income attributable to common shareholders, basic	1,216,109	7,913,884	17,415,218	29,927,714
Net income attributable to common shareholders, diluted	$ 1,216,109	$ 7,913,884	$ 17,415,218	$ 29,927,714
Divided by:
Basic weighted average shares of common stock outstanding (in shares)	20,684,149	20,324,125	20,493,375	20,315,162
Weighted average unvested restricted stock and dilutive stock options (in shares)	101,699	18,755	50,269	75,223
Diluted weighted average shares of common stock outstanding (in shares)	20,785,848	20,342,880	20,543,644	20,390,385
Basic earnings per share
Continuing operations (in dollars per share)	$ 0.05	$ 0.39	$ 0.71	$ 1.47
Discontinued operations (in dollars per share)	0.01	0.00	0.14	0.00
Total basic earnings per common share (in dollars per share)	0.06	0.39	0.85	1.47
Diluted earnings per share
Continuing operations (in dollars per share)	0.05	0.39	0.71	1.47
Discontinued operations (in dollars per share)	0.01	0.00	0.14	0.00
Total diluted earnings per common share (in dollars per share)	$ 0.06	$ 0.39	$ 0.85	$ 1.47
Antidilutive stock options (in shares)	1,499,235	2,288,419	1,499,235	2,247,328

DEBT - Schedule of Interest Expense (Details) - USD ($)	3 Months Ended		9 Months Ended
DEBT - Schedule of Interest Expense (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Line of Credit Facility [Line Items]
Interest expense	$ 1,315,417	$ 1,304,250	$ 3,985,304	$ 4,033,417
Unused fee expense		(26,667)
Unused fee expense				47,915
Amortization of deferred financing costs	257,288	255,345	763,839	695,531
Total interest expense	1,572,705	1,532,928	4,749,143	4,776,863
Revolving Credit Facility
Line of Credit Facility [Line Items]
Interest expense	21,667	10,500	104,054	37,167
Unused fee expense		(26,667)
Unused fee expense				47,915
Amortization of deferred financing costs	98,324	96,381	290,211	212,833
Total interest expense	119,991	80,214	394,265	297,915
2027 Senior Notes
Line of Credit Facility [Line Items]
Interest expense	1,293,750	1,293,750	3,881,250	3,996,250
Unused fee expense		0
Unused fee expense				0
Amortization of deferred financing costs	158,964	158,964	473,628	482,698
Total interest expense	$ 1,452,714	$ 1,452,714	$ 4,354,878	$ 4,478,948

- Definition

Amount of interest expense classified as operating and nonoperating. Includes, but is not limited to, cost of borrowing accounted for as interest expense.

+ References + Details

FAIR VALUE - Schedule of Fair Value Measurements of Loans Held at Fair Value (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loans held at fair value	$ 31,372,174	$ 61,720,705
Total	31,372,174	61,720,705
Level 1
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loans held at fair value	0	0
Total	0	0
Level 2
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loans held at fair value	0	0
Total	0	0
Level 3
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loans held at fair value	31,372,174	61,720,705
Total	$ 31,372,174	$ 61,720,705

SHAREHOLDERS' EQUITY - Schedule of Stock Option Activity (Details) - USD ($)	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Number of options
Outstanding, beginning balance (in shares)	2,168,952
Granted (in shares)	0	0
Vested (in shares)	0	0
Forfeited (in shares)	0
Outstanding, ending balance (in shares)	2,168,952
Exercisable, Number of options (in shares)	2,129,108
Weighted-average exercise price
Outstanding, beginning balance (in dollars per share)	$ 11.46
Granted (in dollars per share)	0
Exercised (in dollars per share)	0
Forfeited (in dollars per share)	0
Outstanding, ending balance (in dollars per share)	11.46
Exercisable, Weighted average exercise price (in dollars per share)	$ 11.44
Options, Additional Disclosures [Abstract]
Outstanding, Weighted average remaining contractual term	3 years 6 months 7 days
Exercisable, Weighted average remaining contractual term	3 years 6 months 3 days
Outstanding, Aggregate intrinsic value	$ 529,236
Exercisable, Aggregate intrinsic value	$ 526,559

DISCONTINUED OPERATIONS - Assets and Liabilities Classified as Discontinued Operations (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Total assets of discontinued operations	$ 0	$ 31,244,622
Total liabilities of discontinued operations	$ 0	10,000
Discontinued Operations, Disposed of by Means Other than Sale, Spinoff \| Sunrise Realty Trust, Inc. (“SUNS”)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cash and cash equivalents		31,244,622
Total assets of discontinued operations		31,244,622
Accounts payable and other liabilities		10,000
Total liabilities of discontinued operations		$ 10,000

DIVIDENDS AND DISTRIBUTIONS (Details) - USD ($)	3 Months Ended						9 Months Ended
DIVIDENDS AND DISTRIBUTIONS (Details) - USD ($)	Sep. 30, 2024	Jun. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2024	Sep. 30, 2023
Dividends Payable [Line Items]
Common Share Distribution Amount (in dollars per share)							$ 1.44	$ 1.52
Total Distribution Amount	$ 7,221,076			$ 9,819,695			$ 30,161,550	$ 31,113,361
O 2023 Q1 Dividends
Dividends Payable [Line Items]
Common Share Distribution Amount (in dollars per share)						$ 0.56
Total Distribution Amount						$ 11,473,971
O 2023 Q2 Dividends
Dividends Payable [Line Items]
Common Share Distribution Amount (in dollars per share)					$ 0.48
Total Distribution Amount					$ 9,819,695
O 2023 Q3 Dividends
Dividends Payable [Line Items]
Common Share Distribution Amount (in dollars per share)				$ 0.48
Total Distribution Amount				$ 9,819,695
O 2024 Q1 Dividends
Dividends Payable [Line Items]
Common Share Distribution Amount (in dollars per share)			$ 0.48
Total Distribution Amount			$ 9,920,205
O 2024 Q2 Dividends
Dividends Payable [Line Items]
Common Share Distribution Amount (in dollars per share)		$ 0.48
Total Distribution Amount		$ 9,920,205
S 2024 Q3 Dividends
Dividends Payable [Line Items]
Common Share Distribution Amount (in dollars per share)	$ 0.15
Total Distribution Amount	$ 3,100,064
O 2024 Q3 Dividends
Dividends Payable [Line Items]
Common Share Distribution Amount (in dollars per share)	$ 0.33
Total Distribution Amount	$ 7,221,076

DISCONTINUED OPERATIONS

9 Months Ended

Sep. 30, 2024

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

On July 9, 2024, the Company announced the completion of the previously announced separation and Spin-Off of the Company’s CRE portfolio into an independent, publicly-traded REIT, SUNS. The Spin-Off was effected by the distribution of all of the outstanding shares of SUNS common stock to the Company’s shareholders of record as of the close of business on July 8, 2024 (the “Record Date”). The Company’s shareholders of record as of the Record Date received one share of SUNS common stock for every three shares of the Company’s common stock held as of the Record Date. The Spin-Off was completed July 9, 2024 (the “Distribution Date”). On the Distribution Date, SUNS became an independent, publicly-traded company, trading on the Nasdaq Capital Market under the symbol “SUNS”. The Company retained no ownership interest in SUNS following the Spin-Off.

On the Distribution Date, the Company recognized a reduction to additional paid-in capital of approximately $114.8 million in connection with the Spin-Off related to the transfer of certain assets and liabilities associated with its CRE business to SUNS. In connection with the Spin-Off, the Company entered into several agreements with SUNS that govern the relationship between the Company and SUNS following the spin-off, including the Separation and Distribution Agreement and the Tax Matters Agreement. These agreements provide for the allocation between the Company and SUNS of the assets, liabilities and obligations (including, among others, investments, property and tax-related assets and liabilities) of the Company and its subsidiaries attributable to periods prior to, at and after the Spin-Off.

The operating results of the SUNS business through the date of the Spin-Off are reported in net income from discontinued operations, net of tax in the consolidated statements of operations for all periods presented. The related assets and liabilities are reported as assets and liabilities of discontinued operations on the consolidated balance sheets. Cash flows from the Company’s discontinued operations are presented as such in the consolidated statements of cash flows for all periods presented.

The following table summarizes the financial statement lines included in net income from discontinued operations, net of tax for the three and nine months ended September 30, 2024 and 2023:


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023

Interest income	$	150,453	$	7,767	$	4,156,335	$	7,767
Expenses
General and administrative expenses	(83)		—		(21,651)		—
Professional fees	15,574		—		(1,140,762)		—
(Increase) decrease in provision for current expected credit losses	—		—		(71,854)		—
Net income from discontinued operations, net of tax	$	165,944	$	7,767	$	2,922,068	$	7,767

During the three and nine months ended September 30, 2024, Spin-Off costs incurred were approximately $(15.6) thousand and $1.1 million, respectively. During the three months ended September 30, 2024, previous estimates for Spin-Off work performed were less than actuals, resulting in a credit to expense. Prior to the third quarter of 2024, Spin-Off costs were historically presented within professional fees in the consolidated statements of operations and are now included in the measurement and presentation of discontinued operations for all periods presented.

There were no assets or liabilities classified as discontinued operations as of September 30, 2024. The following table summarizes the financial statement lines of assets and liabilities classified as discontinued operations as of December 31, 2023:


	As of
	December 31, 2023

Cash and cash equivalents	$	31,244,622
Total assets of discontinued operations	$	31,244,622

Accounts payable and other liabilities	$	10,000
Total liabilities of discontinued operations	$	10,000

INCOME TAX - Narrative (Details) - USD ($)	3 Months Ended		9 Months Ended
INCOME TAX - Narrative (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Effective Income Tax Rate Reconciliation, Amount [Abstract]
Income tax expense	$ 386,256	$ 663,220	$ 830,591	$ 1,005,959
Tax expense for US federal tax	(8,000.0)	$ 0	$ (8,000.0)	$ 0
Exercise tax as a percentage of undistributed ordinary income and net capital gains			4.00%
Unrecognized tax benefits	$ 0		$ 0

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References

+ Details

FAIR VALUE - Narrative (Details)	9 Months Ended
FAIR VALUE - Narrative (Details)	Sep. 30, 2024 USD ($)
Level 3
Defined Benefit Plan Disclosure [Line Items]
Change in unrealized losses on loans at fair value	$ (14,081,406)

SHAREHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2024

Equity [Abstract]

SHAREHOLDERS' EQUITY

SHAREHOLDERS’ EQUITY

Series A Preferred Stock

As of September 30, 2024 and December 31, 2023, the Company has authorized 10,000 preferred shares designated as 12.0% Series A Cumulative Non-Voting Preferred Stock, par value $0.01 per share (the “Series A Preferred Stock”). As of September 30, 2024 and December 31, 2023, there were zero and 125 shares of Series A Preferred Stock issued and outstanding, respectively.

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, plus all accrued and unpaid dividends thereon up to and including the date fixed for redemption. Shares of the Series A Preferred Stock that are redeemed shall no longer be deemed outstanding shares of the Company and all rights of the holders of such shares will terminate.

On June 30, 2024, the Company redeemed all 125 outstanding shares of its Series A Preferred Stock. The Series A Preferred Stock was redeemed at a price of $1,000 per share, plus all accrued and unpaid dividends thereon to and including the date fixed for redemption. As the shares were redeemed on June 30, 2024, there were no accrued and unpaid dividends.

Common Stock

During the three and nine months ended September 30, 2024 and year ended December 31, 2023, the Company did not issue any shares of its common stock, other than shares of common stock sold under the ATM Program (hereinafter defined) and restricted stock awards granted under the Stock Incentive Plan.

Shelf Registration Statement

On April 5, 2022, the Company filed a shelf registration statement on Form S-3 (File No. 333-264144) (the “Shelf Registration Statement”), which was declared effective on April 18, 2022. Under the Shelf Registration Statement, the Company may, from time to time, issue and sell up to $1.0 billion of the Company’s common stock, preferred stock, debt securities, warrants and rights (including as part of a unit) to purchase shares of the Company’s common stock or preferred stock.

At-the-Market Offering Program (“ATM Program”)

On April 5, 2022, the Company entered into an Open Market Sales Agreement (the “Sales Agreement”) with Jefferies LLC and Citizens JMP Securities LLC, as Sales Agents, under which the Company may, from time to time, offer and sell shares of common stock, having an aggregate offering price of up to $75.0 million. Under the terms of the Sales Agreement, the Company has agreed to pay the Sales Agents a commission of up to 3.0% of the gross proceeds from each sale of common stock sold through the Sales Agents. Sales of common stock, if any, may be made in transactions that are deemed to be “at-the-market” offerings, as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended (the “Securities Act”). During the three and nine months ended September 30, 2024, the Company sold an aggregate of 1,214,953 shares of the Company’s common stock under the Sales Agreement at a weighted average price of $10.39 per share, generating net proceeds of approximately $12.2 million. As of September 30, 2024, the Company’s remaining authorization under the Sales Agreement was approximately $51.0 million.

As of September 30, 2024, the shares of common stock sold under the ATM Program are the only offerings that have been initiated under the Shelf Registration Statement.

Stock Incentive Plan

The Company has established a stock incentive compensation plan (the “2020 Plan”). The 2020 Plan authorizes stock options, stock appreciation rights, restricted stock, stock bonuses, stock units and other forms of awards granted or denominated in the Company’s common stock or units of common stock. The 2020 Plan retains flexibility to offer competitive incentives and to tailor benefits to specific needs and circumstances. Any award may be structured to be paid or settled in cash. The Company has granted, and currently intends to continue to continue to grant, stock options and restricted stock awards 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, consultants and other service providers to the Company or any of its subsidiaries.

In January 2024, the Company’s Board of Directors approved grants of restricted stock to the Company’s directors and certain officers, as well as certain employees of the Manager, with an aggregate of 209,397 shares of restricted stock granted to such eligible persons. The restricted stock granted in January 2024 under the 2020 Plan contain vesting periods that vary from immediately vested to vesting over a three-year period, with approximately 33% vesting on each of the first, second and third anniversaries of the vesting commencement date. As of September 30, 2024, there were 2,536,289 shares of common stock granted under the 2020 Plan, underlying 2,169,852 options and 366,437 shares of restricted stock.

In January 2023, the Company’s Board of Directors approved grants of restricted stock to the Company’s directors and certain officers, as well as certain employees of the Manager, with an aggregate of 125,234 shares of restricted stock granted to such eligible persons. The restricted stock granted in January 2023 under the 2020 Plan contain vesting periods that vary from immediately vested to vesting over a three-year period, with approximately 33% vesting on each of the first, second and third anniversaries of the vesting commencement date. In June 2023, the Company granted 1,159 shares of restricted stock to James C. Fagan in connection with his appointment to the Company’s Board of Directors, which vested upon the one-year anniversary of the grant date.

As of September 30, 2024, the maximum number of shares of the Company’s common stock that may be delivered pursuant to awards under the 2020 Plan (the “Share Limit”) equals 3,323,937 shares, which is an increase of 121,495 shares compared to June 30, 2024. The Share Limit increased during the third quarter of 2024 under the evergreen provision in the 2020 Plan in connection with the shares issued under the ATM Program during such time. Shares that are subject to or underlie awards that expire or, for any reason, are cancelled, terminated, forfeited, fail to vest or 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.

Modification of Stock Options and Restricted Stock Outstanding at Spin-Off

Stock Options

On July 9, 2024, the Company completed the separation of its CRE portfolio through the Spin-Off of SUNS. As a result, the strike price for the outstanding stock options of the Company were adjusted to give effect to the Spin-Off. All adjustments were made with the intent to preserve the intrinsic value of each award immediately before and after the Spin-Off. The Company accounted for the modification as Type I modification (probable to probable). The number of awards remained constant, while the strike prices were modified to preserve the intrinsic value of each award. The modified stock option awards otherwise retained substantially the same terms and conditions, including term and vesting provisions. The fair value of such unvested stock option awards remained constant pre- and post-Spin-Off, resulting in no incremental compensation cost. The Company will recognize the remaining unrecognized compensation cost of the original stock option awards over the remaining vesting period.

The Company used the Black-Scholes option pricing model to value stock options in determining the stock-based compensation expense. The Company has elected to recognize forfeitures as they occur. Previously recognized compensation expense related to forfeitures are reversed in the period the nonvested awards are forfeited. 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 the 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 expected term for each award is based on the contractual term for all awards granted thus far under the 2020 Plan. Restricted stock grant expense is based on the Company’s stock price at the time of the grant and amortized over the vesting period.

The weighted-average exercise price of stock options have been retroactively adjusted to give effect to the Spin-Off for all periods presented.

The following table presents the assumptions used in the Black-Scholes pricing model of options granted under the 2020 Plan during the three and nine months ended September 30, 2024 and 2023:


Assumptions:			Range
Expected term			7.0 years
Expected volatility			40% - 50%
Expected dividend yield			10% - 20%
Risk-free interest rate			0.5% - 2.0%
Expected forfeiture rate			0%

The modification date fair value of the stock options was determined using the Binomial-Lattice Model with the following assumptions on July 9, 2024:


Assumptions:			Range
Expected term			3.1 - 4.5 years
Expected volatility			31.24% - 32.41%
Expected dividend yield			15.65%
Risk-free interest rate			4.16% - 4.25%
Expected forfeiture rate			0%

As additional Company history and information is available, the Company determined the use of the Binomial-Lattice Model to be appropriate compared to the closed-form Black-Scholes model. The risk-free interest rate is based on the continuously compounded rates from the U.S. Treasury yield curve in effect at the date of Spin-Off. The expected term is based on the remaining contractual term of each option’s life as of the date of Spin-Off. The expected dividend yield was based on the Company’s most recent quarterly dividend divided by the three-month average stock price as of the Spin-Off date, annualized. Expected volatility is based on the remaining contractual term-matched historical volatility. In cases where the look back period exceeds the trading history of the Company’s Common Stock, the Company’s entire trading history was used.

Restricted Stock

Restricted stock awards originally granted under the 2020 Plan include awards granted to employees of the Company’s manager that perform shared functions pre- and post-Spin-Off. In connection with the Spin-Off transaction and as a result of the related modification, approximately 33% of the remaining unrecognized compensation cost of unvested restricted stock awards will be recognized over the remaining vesting period of the Company’s former wholly-owned subsidiary, SUNS. The Company will recognize the remaining 67% of unrecognized compensation cost of unvested restricted stock awards over the remaining vesting period.

The following table summarizes the stock-based compensation expense incurred by the Company for the three and nine months ended September 30, 2024 and 2023:


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023

Stock-based compensation	$	218,643	$	294,014	$	1,131,208	$	705,361



	As of September 30, 2024	As of December 31, 2023
Non-vested	156,367	206,304
Vested	2,218,265	2,168,328
Exercised	(5,511)	(5,511)
Forfeited	(200,169)	(200,169)
Balance	2,168,952	2,168,952

The following tables summarize stock option activity as of and during the nine months ended September 30, 2024:


	Number of options	Weighted-average exercise price		Weighted-average remaining contractual term	Aggregate intrinsic value
Outstanding as of December 31, 2023	2,168,952	$	11.46
Granted	—	—
Exercised	—	—
Forfeited	—	—
Outstanding as of September 30, 2024	2,168,952	$	11.46	3.52 years	$	529,236
Exercisable as of September 30, 2024	2,129,108	$	11.44	3.51 years	$	526,559

The Company did not grant any options during the nine months ended September 30, 2024 and 2023. No options were exercised during the nine months ended September 30, 2024 and 2023.

As of September 30, 2024, there was approximately $22.2 thousand of total unrecognized compensation cost related to stock options, which is expected to be recognized over a weighted-average period of 1.14 years.



	As of September 30, 2024	As of December 31, 2023
Granted	400,371	190,974
Vested	(102,780)	(38,028)
Forfeited	(33,934)	(33,934)
Balance	263,657	119,012

The following tables summarize the restricted stock activity as of and during the nine months ended September 30, 2024:


	Number of shares of restricted stock	Weighted-average grant date fair value(1)
Balance as of December 31, 2023	119,012	$	16.06
Granted	209,397	11.70
Vested	(64,752)	14.50
Forfeited	—	—
Balance as of September 30, 2024	263,657	$	8.61

The total fair value of shares vested during the three months ended September 30, 2024 was approximately $25.0 thousand. There were no shares of restricted stock granted during the three months ended September 30, 2024 and 2023. During the three months ended September 30, 2023, 18,470 shares of restricted stock vested with a weighted-average grant date fair value of $16.24. The total fair value of shares vested during the three months ended September 30, 2023 was approximately $244.8 thousand.

The total fair value of shares vested during the nine months ended September 30, 2024 was approximately $763.6 thousand. During the nine months ended September 30, 2023, 126,393 shares of restricted stock were granted with a weighted-average grant date fair value of $15.55. During the nine months ended September 30, 2023, 38,028 shares of restricted stock vested with a weighted-average grant date fair value of $17.97. The total fair value of shares vested during the nine months ended September 30, 2023 was approximately $489.6 thousand.

As of September 30, 2024, there was approximately $1.6 million of total unrecognized compensation cost related to non-vested restricted stock. That cost is expected to be recognized over a weighted-average period of 1.91 years.

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
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-Paragraph 1
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Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
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-URI https://asc.fasb.org/505/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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Reference 19: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

LOANS HELD FOR INVESTMENT AT CARRYING VALUE (Tables)

9 Months Ended

Sep. 30, 2024

LOANS HELD FOR INVESTMENT AT CARRYING VALUE [Abstract]

Schedule of Loans Held at Carrying Value

The following tables summarize the Company’s loans held at carrying value as of September 30, 2024 and December 31, 2023:


	As of September 30, 2024
	Outstanding Principal(1)		Original Issue Discount		Carrying Value(1)		Weighted Average Remaining Life (Years)(2)

Senior term loans	$	242,802,878	$	(8,545,836)	$	234,257,042	2.0
Total loans held at carrying value	$	242,802,878	$	(8,545,836)	$	234,257,042	2.0


	As of December 31, 2023
	Outstanding Principal(1)		Original Issue Discount		Carrying Value(1)		Weighted Average Remaining Life (Years)(2)

Senior term loans	$	314,376,929	$	(13,111,531)	$	301,265,398	2.2
Total loans held at carrying value	$	314,376,929	$	(13,111,531)	$	301,265,398	2.2

(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 September 30, 2024 and December 31, 2023.

Schedule of Changes in Loans Held at Carrying Value

The following table presents changes in loans held at carrying value as of and for the nine months ended September 30, 2024:


	Principal		Original Issue Discount		Carrying Value

Total loans held at carrying value at December 31, 2023	$	314,376,929	$	(13,111,531)	$	301,265,398
New fundings	65,512,166		(2,654,893)		62,857,273
Accretion of original issue discount	—		6,968,926		6,968,926
Loan repayments	(45,237,624)		—		(45,237,624)
Sale of loans	(90,000,000)		251,662		(89,748,338)
PIK interest	1,664,028		—		1,664,028
Loan amortization payments	(3,512,621)		—		(3,512,621)
Total loans held at carrying value at September 30, 2024	$	242,802,878	$	(8,545,836)	$	234,257,042

Schedule of Loans Held at Carrying Value Portfolio

A more detailed listing of the Company’s loans held at carrying value portfolio based on information available as of September 30, 2024 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)


Sub. of Private Co. G	NJ, PA	C, D	$	79,215,888	$	(1,444,847)	$	77,771,041	12.5	%	(5)	5/1/2026	I/O
Private Co. K	MA	C, D	12,195,762		(682,619)		11,513,143		18.8	%	(6)	5/3/2027	P/I
Private Co. J	MO	C, D	23,258,785		(180,396)		23,078,389		18.8	%	(7)	9/1/2025	P/I

Private Co. L	OH	C, D	35,597,486		(716,302)		34,881,184		13.4	%	(8)	5/1/2026	P/I
Sub. of Public Co. M	IL, MA, MD, MI, NJ, OH, PA	C, D	2,797,527		(189,835)		2,607,692		9.5	%	(9)	8/27/2025	I/O
Private Co. M	AZ	D	30,499,498		(2,926,290)		27,573,208		9.0	%	(10)	7/31/2026	P/I
Private Co. N - Real Estate	FL	C, D	18,717,068		(682,818)		18,034,250		12.8	%	(11)	4/1/2028	P/I
Private Co. N - Non-Real Estate	FL	C, D	17,200,000		(602,000)		16,598,000		12.8	%	(12)	4/1/2028	P/I
Private Co. O	AZ, MD, MO, NJ, NV, NY, OH, OR, Canada	C	2,728,647		(275,000)		2,453,647		13.5	%	(13)	6/1/2028	P/I
Private Co. P	MI	C, D	15,383,749		(414,896)		14,968,853		13.0	%	(14)	7/1/2027	P/I
Private Co. Q	GA	C, D	5,208,468		(430,833)		4,777,635		13.8	%	(15)	9/1/2028	P/I

Total loans held at carrying value			$	242,802,878	$	(8,545,836)	$	234,257,042

(1)For cannabis operators, 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.

(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.

(7)Base interest rate of 12.0% plus SOFR (SOFR floor of 1.0%) and PIK interest rate of 2.0%.

(8)Base interest rate of 8.4% plus SOFR (SOFR floor of 5.0%).

(9)Base interest rate of 9.5%.

(10)Base interest rate of 9.0%. Quarterly cash interest is paid in kind from closing to February 1, 2024 and then payable in cash thereafter.

(11)Base interest rate of 8.0% plus SOFR (SOFR floor of 4.5%).

(12)Base interest rate of 8.0% plus SOFR (SOFR floor of 4.5%).

(13)Base interest rate of 8.5% plus SOFR (SOFR floor of 5.0%).

(15)Base interest rate of 8.75% plus SOFR (SOFR floor of 5.0%).

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (Parenthetical) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Expenses
Management and incentive fees, rebate	$ 180,552	$ 405,276	$ 769,545	$ 1,311,501

SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
SIGNIFICANT ACCOUNTING POLICIES	Sep. 30, 2024
Accounting Policies [Abstract]
SIGNIFICANT ACCOUNTING POLICIES	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, 2023 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 accounting principles generally accepted in the United States of America (“GAAP”) and in conformity with the rules and regulations of the SEC applicable to interim financial information and include the accounts of the Company, and its wholly-owned subsidiary. The unaudited interim consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary for the fair presentation of the Company’s results of operations and financial condition as of and for the periods presented. All intercompany balances and transactions have been eliminated in consolidation. The current period’s results of operations will not necessarily be indicative of results that ultimately may be realized for the year ending December 31, 2024. Discontinued Operations A discontinued operation may include a component or a group of components of the Company’s operations. A disposal of a component or a group of components is reported in discontinued operations if the disposal represents a strategic shift that has or will have a major effect on the Company’s operations and financial results when the following occurs: (1) a component (or group of components) meets the criteria to be classified as held for sale; (2) the component or group of components is disposed of by sale; or (3) the component or group of components is disposed of other than by sale (for example, by abandonment or in a distribution to owners in a spin-off). For any component classified as held for sale or disposed of by sale or other than by sale, qualifying for presentation as a discontinued operation, the Company reports the results of operations of the discontinued operations (including any gain or loss recognized on the disposal or loss recognized on classification as held for sale of a discontinued operation), less applicable income taxes (benefit), as a separate component in the consolidated statements of operations for current and all prior periods presented. The Company also reports assets and liabilities associated with discontinued operations as separate line items on the consolidated balance sheets for prior periods. The Company determined that the Spin-Off of SUNS in July 2024 met the criteria for classification as a discontinued operation in accordance with ASC Subtopic 205-20, Discontinued Operations (“ASC 205-20”). See Note 17 for further details. Use of Estimates in the Preparation of Financial Statements The preparation of consolidated 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”). Recent Accounting Pronouncements The Company is an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (“JOBS Act”). Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company has elected to take advantage of this extended transition period. As a result, the Company will not be subject to the same implementation timing for new or revised accounting standards as other public companies that are not emerging growth companies, which may make comparison of the Company’s financials to those of other public companies more difficult. In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. The Company is currently evaluating the impact of the update on the Company’s future consolidated financial statements. In December 2023, the FASB issued ASU 2023-09—Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 improves the transparency of income tax disclosures related to rate reconciliation and income taxes. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. For entities other than public business entities, the amendments are effective for annual periods beginning after December 15, 2025. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments should be applied prospectively, however retrospective application is permitted. The Company is currently evaluating the impact of the update on the Company’s future consolidated financial statements.

DEBT

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

DEBT

Revolving Credit Facility

On April 29, 2022, the Company entered into the Loan and Security Agreement (the “Revolving Credit Agreement”) by and among the Company, the other loan parties from time to time party thereto, the lenders party thereto, and the lead arranger, bookrunner and administrative agent party thereto, pursuant to which, the Company obtained a $60.0 million senior secured revolving credit facility (as amended from time to time, the “Revolving Credit Facility”). The Revolving Credit Facility has a maturity date of April 29, 2025.

The Revolving Credit Facility contains aggregate commitments of $60.0 million from two FDIC-insured banking institutions (which may be increased to up to $100.0 million in aggregate, subject to available borrowing base and additional commitments) which may be borrowed, repaid and redrawn, subject to a borrowing base based on eligible loan obligations held by the Company and subject to the satisfaction of other conditions provided under the Revolving Credit Facility. Interest is payable on the Revolving Credit Facility at the greater of (1) the applicable base rate plus 0.50% and (2) 4.50%, as provided in the Revolving Credit Agreement, payable in cash in arrears. Upon entering into the Revolving Credit Agreement, the Company incurred a one-time commitment fee expense of approximately $0.5 million, which was included in prepaid expenses and other assets on the Company’s consolidated balance sheets and amortized over the life of the facility. Commencing on the six-month anniversary of the closing date, the Revolving Credit Facility has an unused line fee of 0.25% per annum, payable semi-annually in arrears, which is included within interest expense in the Company’s unaudited interim consolidated statements of operations. Based on the terms of the Revolving Credit Agreement, the Company’s estimated average cash balance will exceed the minimum balance required to waive the unused line fee and as such, the Company did not incur an unused line fee for the three and nine months ended September 30, 2024. As of September 30, 2024 and December 31, 2023, outstanding borrowings under the Revolving Credit Facility were $60.0 million and $42.0 million, respectively, and zero and $18.0 million was available for borrowing as of September 30, 2024 and December 31, 2023, respectively.

The obligations of the Company under the Revolving Credit Facility are secured by certain assets of the Company comprising of or relating to loan obligations designated for inclusion in the borrowing base. In addition, the Company is subject to various financial and other covenants, including: (1) liquidity of at least $5.0 million, (2) annual debt service coverage of at least 1.5 to 1.0 and (3) secured debt not to exceed 25% of total consolidated assets of the Company and its subsidiaries.

2027 Senior Notes

On November 3, 2021, the Company issued $100.0 million in aggregate principal amount of senior unsecured notes due in May 2027 (the “2027 Senior Notes”). The 2027 Senior Notes accrue interest at a rate of 5.75% per annum. Interest on the 2027 Senior Notes is due semi-annually on May 1 and November 1 of each year, which began on May 1, 2022. The net proceeds from the offering were approximately $97.0 million, after deducting the initial purchasers’ discounts and commissions and estimated offering fees and expenses payable by the Company. The Company used the proceeds from the issuance of the 2027 Senior Notes (i) to fund loans related to unfunded commitments to existing borrowers, (ii) to originate and participate in commercial loans to companies operating in the cannabis industry that are consistent with the Company’s investment strategy and (iii) for working capital and other general corporate purposes. The terms of the 2027 Senior Notes are governed by an indenture, dated November 3, 2021, among us, as issuer, and TMI Trust Company, as trustee (the “Indenture”).

Under the Indenture, the Company is required to cause all of its existing and future subsidiaries to guarantee the 2027 Senior Notes, other than certain immaterial subsidiaries as set forth in the Indenture. TRS1 is currently a subsidiary guarantor under the Indenture.

Prior to February 1, 2027, the Company may redeem the 2027 Senior Notes in whole or in part, at a price equal to the greater of 100% of the principal amount of the 2027 Senior Notes being redeemed or a make-whole premium set forth in the Indenture, plus accrued and unpaid interest thereon to, but excluding, the applicable redemption date. On or after February 1, 2027, we may redeem the 2027 Senior Notes in whole or in part at a price equal to 100% of the principal amount of the 2027 Senior Notes being redeemed, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date. The Indenture also requires us to offer to purchase all of the 2027 Senior Notes at a purchase price equal to 101% of the principal amount of the 2027 Senior Notes, plus accrued and unpaid interest if a “change of control triggering event” (as defined in the Indenture) occurs.

The Indenture contains customary terms and restrictions, subject to a number of exceptions and qualifications, including restrictions on the Company’s ability to (1) incur additional indebtedness unless the Annual Debt Service Charge (as defined in the Indenture) is no less than 1.5 to 1.0, (2) incur or maintain total debt in an aggregate principal amount greater than 60% of the Company’s consolidated Total Assets (as defined in the Indenture), (3) incur or maintain secured debt in an aggregate principal amount greater than 25% of the Company’s consolidated Total Assets (as defined in the Indenture), and (4) merge, consolidate or sell substantially all of the Company’s assets. In addition, the Indenture also provides for customary events of default. If any event of default occurs, any amount then outstanding under the Indenture may immediately become due and payable. These events of default are subject to a number of important exceptions and qualifications set forth in the Indenture.

During the nine months ended September 30, 2023, the Company repurchased $10.0 million in principal amount of the Company’s 2027 Senior Notes at 77.4% of par value, plus accrued interest. This resulted in a gain on extinguishment of debt of approximately $2.0 million, recorded within the unaudited interim consolidated statements of operations. No repurchases took place during the nine months ended September 30, 2024. As of September 30, 2024, the Company had $90.0 million in principal amount of the 2027 Senior Notes outstanding.

The 2027 Senior Notes are due on May 1, 2027. Scheduled principal payments on the 2027 Senior Notes as of September 30, 2024 are as follows:


	2027 Senior Notes
Year
2024 (remaining)	$	—
2025	—
2026	—
2027	90,000,000
2028	—
Thereafter	—
Total principal	90,000,000
Deferred financing costs included in senior notes	(1,538,064)
Total due senior notes, net	$	88,461,936

The following tables reflect a summary of interest expense incurred during the three and nine months ended September 30, 2024 and 2023:


	Three months ended September 30, 2024
	2027 Senior Notes		Revolving Credit Facility		Total Borrowings

Interest expense	$	1,293,750	$	21,667	$	1,315,417

Amortization of deferred financing costs	158,964		98,324		257,288
Total interest expense	$	1,452,714	$	119,991	$	1,572,705


	Three months ended September 30, 2023
	2027 Senior Notes		Revolving Credit Facility		Total Borrowings

Interest expense	$	1,293,750	$	10,500	$	1,304,250
Unused fee expense	—		(26,667)		(26,667)
Amortization of deferred financing costs	158,964		96,381		255,345
Total interest expense	$	1,452,714	$	80,214	$	1,532,928


	Nine months ended September 30, 2024
	2027 Senior Notes		Revolving Credit Facility		Total Borrowings

Interest expense	$	3,881,250	$	104,054	$	3,985,304

Amortization of deferred financing costs	473,628		290,211		763,839
Total interest expense	$	4,354,878	$	394,265	$	4,749,143


	Nine months ended September 30, 2023
	2027 Senior Notes		Revolving Credit Facility		Total Borrowings

Interest expense	$	3,996,250	$	37,167	$	4,033,417
Unused fee expense	—		47,915		47,915
Amortization of deferred financing costs	482,698		212,833		695,531
Total interest expense	$	4,478,948	$	297,915	$	4,776,863

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481544/470-10-50-6

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
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-Paragraph 1
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477092/405-40-50-1

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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-Subparagraph (SX 210.4-08(c))
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-URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
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-URI https://asc.fasb.org/470/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147482925/835-30-45-2

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 1B
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-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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Reference 15: http://www.xbrl.org/2003/role/disclosureRef
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Reference 19: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

LOANS HELD FOR INVESTMENT AT FAIR VALUE

9 Months Ended

Sep. 30, 2024

LOANS HELD FOR INVESTMENT AT FAIR VALUE [Abstract]

LOANS HELD FOR INVESTMENT AT FAIR VALUE

As of September 30, 2024 and December 31, 2023, the Company’s portfolio included one and two loans held at fair value, respectively. The aggregate originated commitment under these loans was approximately $85.3 million and $94.2 million, respectively, and outstanding principal was approximately $53.8 million and $71.9 million as of September 30, 2024 and December 31, 2023, respectively. For the nine months ended September 30, 2024, the Company funded approximately $4.6 million in new loans and additional principal and received approximately $4.5 million of principal repayments of loans held at fair value and sold $19.3 million of the Company’s investment in Private Company B. As of September 30, 2024 and December 31, 2023, none of the Company’s loans held at fair value had floating interest rates.

The following tables summarize the Company’s loans held at fair value as of September 30, 2024 and December 31, 2023:


	As of September 30, 2024
	Fair Value(1)		Carrying Value(2)		Outstanding Principal(2)		Weighted Average Remaining Life (Years)(3)

Senior term loan	$	31,372,174	$	50,950,868	$	53,818,300	0.0
Total loan held at fair value	$	31,372,174	$	50,950,868	$	53,818,300	0.0


	As of December 31, 2023
	Fair Value(1)		Carrying Value(2)		Outstanding Principal(2)		Weighted Average Remaining Life (Years)(4)

Senior term loans	$	61,720,705	$	71,644,003	$	71,883,402	0.4
Total loans held at fair value	$	61,720,705	$	71,644,003	$	71,883,402	0.4

(1)Refer to Note 14.

(2)The difference between the Carrying Value and the Outstanding Principal amount of the loans consists of unaccreted original issue discount (“OID”) and loan origination costs.

(3)As of September 30, 2024, the maturity date passed on the credit facility with Private Company A without repayment.

The following table presents changes in loans held at fair value as of and for the nine months ended September 30, 2024:


	Principal		Original Issue Discount		Unrealized Gains (Losses)		Fair Value

Total loans held at fair value at December 31, 2023	$	71,883,402	$	(239,399)	$	(9,923,298)	$	61,720,705

Change in unrealized gains (losses) on loans at fair value, net	—		—		(9,655,396)		(9,655,396)
New fundings	4,594,027		(2,756,417)		—		1,837,610
Accretion of original issue discount	—		128,384		—		128,384
Loan repayments	(4,509,069)		—		—		(4,509,069)
Sale of loans	(19,284,846)		—		—		(19,284,846)
PIK interest	1,134,786		—		—		1,134,786
Total loans held at fair value at September 30, 2024	$	53,818,300	$	(2,867,432)	$	(19,578,694)	$	31,372,174

As of September 30, 2024, the Company had one loan held at fair value on nonaccrual status. Effective March 1, 2024, the Company placed Private Company A on nonaccrual status with an outstanding principal amount of approximately $53.8 million and an unrealized loss of approximately $(19.6) million as of September 30, 2024.

A more detailed listing of the Company’s loan held at fair value portfolio based on information available as of September 30, 2024 is as follows:


	Collateral Location	Collateral Type (1)	Fair Value (2)		Carrying Value (3)		Outstanding Principal (3)		Interest Rate			Maturity Date (4)	Payment Terms (5)

Private Co. A	AZ, GA, MA, NM	C, D	$	31,372,174	$	50,950,868	$	53,818,300	15.5	%	(6)	5/8/2024	I/O


Total loan held at fair value			$	31,372,174	$	50,950,868	$	53,818,300

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

(2)Refer to Note 14.

(3)The difference between the Carrying Value and the Outstanding Principal amount of the loans consists of OID and loan origination costs.

(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.