| NOTES PAYABLE |
15. NOTES PAYABLE
Notes payable at March 31,
2025 and December 31, 2024, were comprised of the following:
| Schedule of notes payable | |
| |
| |
| |
| |
| |
| | | |
| | |
| | |
Collateral | |
Guarantors | |
Interest
rate | |
Effective
rate | |
Due date | |
March 31,
2025 | | |
December 31,
2024 | |
| AGREE secured construction loans, in default | |
AGREE hotels | |
- | |
9% | |
11% | |
March 31, 2026 | |
$ | 68,750,000 | | |
$ | 68,750,000 | |
| Circle 8 revolving credit facility | |
Circle 8 cranes with a book
value of $29.3 million | |
- | |
8% | |
8% | |
December 16, 2025 | |
| 13,234,000 | | |
| 13,126,000 | |
| Circle 8 equipment financing notes | |
Circle 8 equipment with a
book value of $4.1 million | |
- | |
11% | |
11% | |
September 15, 2025
through June 15, 2027 | |
| 1,977,000 | | |
| 2,826,000 | |
| 15% term notes | |
- | |
Milton C. Ault, III | |
15% | |
- | |
October 31, 2024 | |
| - | | |
| 3,777,000 | |
| ROI promissory note, in default | |
- | |
- | |
18% | |
51% | |
May 15, 2025 | |
| 2,569,000 | | |
| 2,367,000 | |
| Other ($2.6 million in default) | |
- | |
- | |
- | |
- | |
- | |
| 6,264,000 | | |
| 5,826,000 | |
| Total notes payable | |
| |
| |
| |
| |
| |
$ | 92,794,000 | | |
$ | 96,672,000 | |
| Less: | |
| |
| |
| |
| |
| |
| | | |
| | |
| Unamortized debt discounts | |
| |
| |
| |
| |
| |
| (56,000 | ) | |
| - | |
| Total notes payable, net | |
| |
| |
| |
| |
| |
$ | 92,738,000 | | |
$ | 96,672,000 | |
| Less: current portion | |
| |
| |
| |
| |
| |
| (91,909,000 | ) | |
| (95,768,000 | ) |
| Notes payable – long-term portion | |
| |
| |
| |
| |
| |
$ | 829,000 | | |
$ | 904,000 | |
Amendment to AGREE Secured Construction
Loans
The AGREE secured construction
loans with an original due date of January 1, 2025, were amended on February 2, 2025, whereby AGREE agreed to pay monthly installments
of interest only based on an annualized interest rate of Term SOFR plus 4.75%. In addition, AGREE agreed to make principal payments of
$1.0 million in June 2025 and $2.0 million in September 2025 and December 2025 with the balance due March 1, 2026. AGREE has failed to
make timely interest payments per the amended payment terms.
Notes Payable Maturities
Principal maturities of the
Company’s notes payable, assuming the exercise of all extensions that are exercisable solely at the Company’s option, as of
March 31, 2025 were:
| Schedule of maturities | |
| | |
| Year | |
| |
| 2025 (remainder) | |
$ | 91,965,000 | |
| 2026 | |
| 719,000 | |
| 2027 | |
| 110,000 | |
| | |
$ | 92,794,000 | |
Interest Expense
| Schedule of interest expense | |
| | | |
| | |
| | |
For the Three Months Ended March 31, | |
| | |
2025 | | |
2024 | |
| Contractual interest expense | |
$ | 3,775,000 | | |
$ | 1,994,000 | |
| Forbearance fees | |
| 12,000 | | |
| 1,500,000 | |
| Amortization of debt discount | |
| 52,000 | | |
| 2,137,000 | |
| Total interest expense | |
$ | 3,839,000 | | |
$ | 5,631,000 | |
|