LOAN PAYABLE |
6 Months Ended | ||||||||||||||||||||||||||
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Jun. 30, 2026 | |||||||||||||||||||||||||||
| LOAN PAYABLE | |||||||||||||||||||||||||||
| LOAN PAYABLE |
On March 15, 2023, the Company entered into a credit agreement (the “Revolving Facility” or the “Sunflower Secured Credit Facility”) pursuant to which the Company may request advances on a revolving facility up to an initial aggregate principal of $35,000,000. The maturity date of the Revolving Facility is March 15, 2028. The Revolving Facility’s base rate loans shall bear interest at the lesser of (i) 1.75% plus the highest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 0.50% and (c) the Secured Overnight Financing Rate (“SOFR”) for a one-month term in effect on such date plus 0.25% (“Term SOFR”) and (ii) the “Maximum Rate” as defined in the agreement as the maximum interest rate allowed under New York Law. The Revolving Facility’s SOFR rate loans shall bear interest in the lesser of (i) 2.75% plus Term SOFR for the relevant Interest Period and (ii) the Maximum Rate. During the six months ended June 30, 2025, the Company drew down $5,505,795 to fund future development costs. Following the Tower Sale in December 2025, the Company repaid $16,500,000 of the outstanding loan balance. On March 15, 2026, in accordance with the Sunflower Secured Credit Facility agreement, the outstanding balance on the Sunflower Secured Credit Facility principal balance became fixed at the then outstanding amount of $18,340,795 with no remaining available borrowing capacity. On this same date, the outstanding balance also converted to an amortizing loan with principal and interest payments required to be paid monthly over an amortization period of 25 years with the remaining unamortized balance of principal and interest due and payable in full on March 15, 2028. The outstanding loan payable balance was $18,096,251 and 18,340,795 as of June 30, 2026 and December 31, 2025, respectively. The Revolving Facility requires the Company to maintain certain financial covenants such as (1) the weighted average remaining lease term of data center properties shall not be permitted to be less than 60 months; (2) the fixed charge coverage ratio (pre-distribution) shall not be permitted to be less than 1.25 to 1.00; (3) the fixed charge coverage ratio (post-distribution) shall not be permitted to be less than 1.10 to 1.00; and (4) the loan to value ratio shall not be permitted to be greater than 70%. The Company was in compliance with these financial covenants as of June 30, 2026 and December 31, 2025. As of June 30, 2026 and December 31, 2025, the carrying value of the Company’s loan payable approximates its fair value. The fair value of the Company’s indebtedness is estimated by modeling the cash flows required by the Revolving Facility and discounting them back to present value using the appropriate discount rate. Additionally, the Company considers current market rates and conditions by evaluating similar current borrowing agreements with comparable terms. The inputs used in estimating the fair value of the Company’s indebtedness are considered Level 3. See Note 1, “Organization and Business Operation — Fair Value Instruments,” for more information on the three-tier fair value hierarchy. Contractual Maturities The scheduled principal maturities of the Company’s loan payable as of June 30, 2026 are as follows:
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