Notes Receivable, Net

9 Months Ended

Sep. 30, 2025

Note 4 – Notes Receivable, net

The Company’s notes receivable, net consists of investments in loans to buyers of charged-off and nonperforming receivable portfolios through HGC and financing of laboratory equipment sales through ALT.

As of September 30, 2025 and December 31, 2024, the Company’s outstanding notes receivable balance related to loans to buyers of charged-off and nonperforming receivable portfolios, net of unamortized deferred fees and costs on originated loans, and adjusted for the allowance for credit losses was $8.9 million and $9.6 million, respectively. The activity during the nine months ended September 30, 2025 includes the additional investment in notes receivable of approximately $4.0 million, which was offset by principal payments made by borrowers of approximately $4.7 million.

As of both September 30, 2025 and December 31, 2024, the Company’s outstanding notes receivable balance related to financing of laboratory equipment sales, net of unamortized deferred fees and costs on originated loans and adjusted for the reserve for credit losses was $0.4 million. The activity during the nine months ended September 30, 2025 includes the investment in notes receivable of approximately $0.4 million, which was offset by principal payments made by purchasers of $0.4 million and an immaterial amount of deferred financing fees, and allowance for credit losses.

The table below shows the Company’s lending activity for the nine months ended September 30, 2025 (in thousands):



Notes receivable, net, December 31, 2024	$	10,409
Investment in notes receivable		4,433
Principal repayments		(5,132	)
Notes receivable, as of September 30, 2025		9,710
Deferred financing fees and costs, net		(44	)
Allowance for credit losses		(346	)
Notes receivable, net, September 30, 2025	$	9,320

In accordance with ASC 326, the Company performs a review of notes receivable on a quarterly basis. During the nine months ended September 30, 2025, the Company made no material changes to the provision for credit losses in selling, general and administrative expense on the consolidated statement of income. As of September 30, 2025 and December 31, 2024, the amortized cost basis of notes receivable in nonaccrual status was $4.8 million and $5.3 million, respectively.