Tue, Apr 1, 5:52 PM (19 days ago)
### Summary of Korth Direct Mortgage Inc. (KDM) Annual Report **Company Overview:** - **Ticker:** KDM - **Headquarters:** 135 San Lorenzo Avenue, Suite 600, Coral Gables, FL 33146 - **Business:** KDM originates and funds loans secured by commercial real estate, primarily focusing on multi-family value-add bridge loans and loans secured by mortgages on commercial tenanted properties. **Financial Performance (Year Ended December 31, 2024):** - **Revenue:** $12,067,657 (23% increase from 2023) - **Net Income:** Net loss of $3,618,907 (improvement from $6,200,165 loss in 2023) - **Operating Expenses:** $9,533,115 (23% increase from 2023) - **Earnings per Share:** Not explicitly stated, but the company reported a net loss attributable to common stockholders. **Strategic Overview:** - **Market Position:** KDM positions itself as a "Middle-Money" lender, filling the gap between traditional lenders and hard money lenders. - **Loan Origination:** Utilizes a network of brokers and digital marketing campaigns to source new deals. - **Risk Management:** Employs a proprietary ratings system to assess loan quality and risk. **Future Outlook:** - **Growth Plans:** KDM is actively raising capital for a new debt fund, KDM Capital Partners, LP, and may access capital markets or private credit markets as needed. - **Market Conditions:** The company acknowledges challenging conditions in the commercial real estate market but remains optimistic about future prospects. **Risk Factors:** - **Market Volatility:** Economic conditions, interest rates, and geopolitical tensions pose risks. - **Credit Risk:** Defaults on CM Loans and foreclosure processes can impact financial performance. - **Operational Risks:** Dependence on information technology and potential cybersecurity threats. **Financial Condition:** - **Assets:** Total assets declined by 5% to $521,851,544 due to loan payoffs and disposals. - **Liabilities:** Total liabilities increased due to mortgage-secured notes payable and other liabilities. **Market Position Changes:** - **Loan Portfolio:** KDM had 4 loans in default and 5 properties in its REO portfolio as of December 31, 2024. - **Customer Base:** The company had 40 customers as of December 31, 2024. **Management and Governance:** - **Executive Team:** Key executives include James W. Korth (Chairman), Holly MacDonald-Korth (CEO), and Daniel Llorente (Chief Lending Officer). - **Board of Directors:** The company does not have formal board committees but plans to establish them as the business grows. **Dividends and Shareholder Matters:** - **Dividends:** The company has not paid dividends on its common stock and has no plans to do so. - **Shareholder Equity:** The company has 5,000,000 shares of common stock outstanding. **Auditor Fees:** - **Auditor:** Berkowitz Pollack and Brant - **Fees:** $205,261 for audit services in 2024. **Conclusion:** KDM faces challenges in the commercial real estate market but is strategically positioning itself for growth through diversification and risk management. The company's financial performance shows improvement, but it continues to navigate a competitive and volatile market environment.