The Company’s commitments and contingencies consist primarily of unused commitments to extend credit in the form of loans or equipment financings to the Company’s portfolio companies. A portion of these unfunded contractual commitments as of December 31, 2024 and December 31, 2023 are generally dependent upon the portfolio company reaching certain milestones before the debt commitment becomes available. Furthermore, the Company’s credit agreements contain customary lending provisions that allow the Company relief from funding obligations for previously made commitments in instances where the underlying portfolio company experiences materially adverse events that affect the financial condition or business outlook for the Company. Since a portion of these commitments may expire without being drawn, unfunded contractual commitments do not necessarily represent future cash requirements. As such, the Company’s disclosure of unfunded contractual commitments as of December 31, 2024 and December 31, 2023 includes only those commitments that are available at the request of the portfolio company and are unencumbered by milestones or additional lending provisions.

As of December 31, 2024, the Company had aggregate unfunded commitments of $31.2 million to two portfolio companies, as well as unfunded commitments of $3.0 million and $0.8 million for the JV and EPT 16, respectively, which represented the Company's uncalled capital commitments. As of December 31, 2023, the Company had unfunded commitments of $10.4 million for the JV.

The Company did not have any other off-balance sheet financings or liabilities as of December 31, 2024 and December 31, 2023. The Company will fund its unfunded commitments, if any, from the same sources it uses to fund its investment commitments that are funded at the time they are made (which are typically through existing cash and cash equivalents and borrowings under its KeyBank Credit Facility) and maintains adequate liquidity to fund its unfunded commitments through these sources.

In the normal course of business, the Company enters into contracts that provide a variety of representations and warranties, and general indemnifications. Such contracts include those with certain service providers, brokers and trading counterparties. Any exposure to the Company under these arrangements is unknown as it would involve future claims that may be made against the Company; however, based on the Company’s experience, the risk of loss is remote and no such claims are expected to occur. As such, the Company has not accrued any liability in connection with such indemnifications.

ASU No. 2016‑02, Leases (Topic 842) (“ASU 2016‑02”) requires that a lessee evaluate its leases to determine whether they should be classified as operating or finance leases. The Company identified significant operating leases for its headquarters in Phoenix, AZ and office spaces in San Diego, CA. The lease for the Company's Phoenix headquarters commenced on July 10, 2021, and was most recently amended on September 17, 2024. Amendments since commencement include (i) additional office space and (ii) an extension to the term of the lease through May 31, 2031. The lease for Suite 200 in the Company's San Diego office commenced on March 10, 2023, and expires on January 31, 2026. The Company entered into a second lease in San Diego for Suite 203, which commenced on June 1, 2024, and expires on November 14, 2025. As of December 31, 2024, the weighted-average remaining lease term for the operating leases was 6.1 years.

The total lease expense incurred for the years ended December 31, 2024, 2023 and 2022 was approximately $1.3 million, $0.6 million and $0.5 million, respectively. As of December 2024 and December 31, 2023, the right-of-use assets related to the office operating leases were $5.4 million and $5.3 million, respectively, and the lease liabilities were $5.7 million and $5.4 million, respectively. As of December 31, 2024 and December 31, 2023, the weighted-average discount rate determined for the operating lease liabilities was 8.53% and 8.66%, respectively.

The following table shows future minimum payments under the Company’s operating leases as of December 31, 2024 (in thousands):


For the Years Ended December 31,	Total
2025	$	1,314
2026		1,008
2027		1,021
2028		1,051
2029		1,080
Thereafter		1,565
Total	$	7,039

The Company may, from time to time, be involved in litigation arising out of its operations in the normal course of business or otherwise. Furthermore, third parties may try to seek to impose liability on the Company in connection with the activities of its portfolio companies. As of December 2024, there were no material legal matters or material litigation pending of which the Company is aware.