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v3.25.2

Debt | 6 Months Ended
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Jun. 30, 2025
Debt Disclosure [Abstract] |
Debt | Debt Senior Unsecured Notes On February 10, 2021, Terra BDC issued $34.8 million in aggregate principal amount of 7.00% Senior Notes Due 2026, and on February 26, 2021, the underwriters exercised the option to purchase an additional $3.6 million of the 7.00% Senior Notes Due 2026. The 7.00% Senior Notes Due 2026 may be redeemed in whole or in part at any time or from time to time at Terra LLC’s option on or after February 10, 2023, at a redemption price equal to 100% of the outstanding principal amount thereof, plus accrued and unpaid interest. In connection with the Merger, Terra LLC assumed all of Terra BDC’s rights and obligations under the indenture governing the 7.00% Senior Notes Due 2026. The Company's 7.00% Senior Notes Due 2026 contain certain financial covenants. As of June 30, 2025, the Company was in compliance with such covenants. The following table is a summary of the Company’s unsecured notes payable outstanding as of:
|  | Coupon Rate |  | Effective Rate (1) |  | Maturity Date |  | June 30, 2025 |  | December 31, 2024
7.00% Senior Notes Due 2026 (2) |  | 7.00 | % |  | 11.16 | % |  | 3/31/2026 |  | 38,375,000 |  |  | 38,375,000 |
Unamortized purchase discount (2) |  |  |  |  |  |  |  | (1,142,708) |  |  | (1,853,316) |
Unsecured notes payable, net |  |  |  |  |  |  |  | $ | 37,232,292 |  |  | $ | 36,521,684 |
_______________ (1)Includes purchase discount that is amortized to interest expense over the remaining life of the notes. (2)In connection with the Merger, Terra LLC assumed all the obligations under the 7.00% Senior Notes Due 2026 and recorded a purchase discount of $4.6 million, representing the difference between the carrying value and the fair value of the notes on the date of the merger. Notes Maturity The Company’s $38.4 million in aggregate principal amount of 7.00% Senior Notes Due 2026 mature on March 31, 2026. The Company intends to repay the 7.00% Senior Notes Due 2026 through ordinary course loan repayments, including collecting on the outstanding balance of the promissory note receivable, asset sales and distributions, and may also use debt or equity capital sources or facilities. Term Loan In April 2021, Terra BDC entered into a credit agreement (the “Credit Agreement”) with a lender to provide for a delayed draw term loan of $25.0 million (the “Term Loan”). On September 27, 2022, the Credit Agreement was amended to, among other things, remove the make whole premium on voluntary prepayment of the loans as well as to provide consent to the consummation of the Merger and the assumption by Terra LLC of all of the rights and obligations of Terra BDC under the Credit Agreement. On June 30, 2023, Terra LLC amended the Credit Agreement to, among other things, (i) decrease the principal amount to $15.0 million, (ii) extend the scheduled maturity date to March 31, 2024, and (iii) increase the rate on which the loans thereunder bear interest from a fixed rate of 5.625% per annum to a floating rate based on SOFR plus 7.375% with a SOFR floor of 5.0%, and repaid $10.0 million of the principal amount of the Term Loan. The Credit Agreement was secured by a lien on substantially all of Terra BDC's, and, following the Merger, Terra LLC’s owned and thereafter acquired property. In March 2024, the Term Loan was repaid in full. Scheduled Debt Principal Payments Scheduled debt principal payments for each of the five calendar years following June 30, 2025 are as follows:
Years Ending December 31, |  | Total
2025 (July 1, 2025- December 31, 2025) |  | $ | — |
2026 |  | 38,375,000 |
2027 |  | — |
2028 |  | — |
2029 |  | — |
Thereafter |  | — |
|  | 38,375,000 |
Unamortized purchase discount |  | (1,142,708) |
Total |  | $ | 37,232,292 |
Obligation Under Participation Agreement As discussed in Note 6, the Company follows the guidance in ASC 860 when accounting for loan participation. Such guidance requires the transferred interests meet certain criteria in order for the transaction to be recorded as a sale. Loan participation from the Company which does not qualify for sale treatment remains on the Company’s consolidated balance sheets and the proceeds are recorded as obligation under participation agreement. As of June 30, 2025 and December 31, 2024, obligation under participation agreement had a carrying value of $19.8 million and $18.2 million, respectively, and the carrying value of the loan that is associated with this obligation under participation agreement was $20.4 million and $18.6 million, respectively (see “Participation Agreements” in Note 6). The interest rate on the obligation under participation agreement was 19.3% and 19.5%, respectively.

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- 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 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 8A -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-8A Reference 2: http://www.xbrl.org/2003/role/disclosureRef 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