This Management's Discussion and Analysis of Financial Condition and Results of Operations is intended to provide a reader of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity, and certain other factors that may affect our future results. The following discussion and analysis should be read in conjunction with our audited consolidated financial statements and the accompanying notes thereto included in "Item 8. Financial Statements and Supplementary Data." In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. See "Forward-Looking Statements." Our results and the timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors.
Results of Operations General
We have recognized income from related parties of approximately
The following table provides selected consolidated balance sheet data as ofSeptember 30, 2020 . Balance Sheet Data:9/30/2020 Cash 47,056
Loan receivable and accrued interest receivable, net of discounts 1,456,952 Total assets
1,504,359 Accounts payable and accrued liabilities 339.872 Total liabilities 360,672 Temporary equity 380.800 Shareholders' equity 762,887 Three Months Ended Nine Months Ended 2020 2019 2020 2019 Interest Income$ 11,393 $ 13,112 $ 33,612 $ 78,112
Accretion of Loan Origination Fees 23,919 23,919 71,758 103,187 Amortization of Loan Issuance Costs (25,785 ) (25,785 ) (77,356 ) (103,141 ) Net Investment Income
$ 9,527 $ 11,246 $ 28,015 $ 78,158
Three Months Ended
For the three months ended
Nine Months Ended
For the nine months ended
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Liquidity and Capital Resources
During the nine months ended
Critical Accounting Policies Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in
Loans Receivable, net and Allowance for Losses
The Company records its investments in loans receivable at cost less unamortized costs of issuance and deferred origination fees. Origination fees collected at the time of investment are recorded against the loans receivable and amortized into net interest income over the lives of the related loans. Issuance costs incurred are capitalized along with the initial investment and amortized against net interest income over the lives of the related loans.
When a loan receivable is placed on non-accrual status, the related interest receivable is reversed against interest income of the current period. If a non-accrual loan is returned to accrual status, the accrued interest existing at the date the residential loan is placed on non-accrual status and interest during the non-accrual period are recorded as interest income as of the date the loan no longer meets the non-accrual criteria.
The Company maintains an allowance for loan losses on its investments in real estate loans receivable for estimated credit impairment. Management's estimate of losses is based on a number of factors including the types and dollar amounts of loans in the portfolio, adverse situations that may affect the borrower's ability to repay, prevailing economic conditions and the underlying collateral securing the loan. Additions to the allowance are provided through a charge to earnings and are based on an assessment of certain factors, which may indicate estimated losses on the loans. Actual losses on loans are recorded first as a reduction to the allowance for loan losses. Generally, subsequent recoveries of amounts previously charged off are recognized as income.
Estimating allowances for loan losses requires significant judgment about the underlying collateral, including liquidation value, condition of the collateral, competency and cooperation of the related borrower and specific legal issues that affect loan collections or taking possession of the property on an individual loan receivable basis.
Off-Balance Sheet Arrangements
There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
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