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OTHER NOTES PAYABLE
 6 Months Ended
Dec. 31, 2025
Other Notes Payable  
OTHER NOTES PAYABLE

NOTE 11 – OTHER NOTES PAYABLE

 

The following summarizes the balances of other notes payable as of December 31, 2025 and June 30, 2025, respectively:

 

As of  December 31, 2025   June 30, 2025 
Note payable - Hilton  $1,425,000   $1,583,000 
Note payable - Aimbridge   271,000    396,000 
Total related party and other notes payable  $1,696,000   $1,979,000 

 

 

Hilton Development Incentive

 

The note payable to Hilton (the franchisor) represents a self-exhausting, interest-free development incentive that is reduced by approximately $317,000 annually through January 2030, provided the Hotel continues to operate as a Hilton franchise.

 

Hotel Management Key Money

 

On February 1, 2017, Justice Operating Company, LLC (“Operating”) entered into a Hotel Management Agreement (the “HMA”) with Aimbridge Hospitality (“Aimbridge”) to manage the Hotel, with an effective takeover date of February 3, 2017. The term of the HMA is for an initial period of 10 years and automatically renews for up to five additional years in aggregate, subject to certain conditions. The HMA also provides for Aimbridge to advance a “key money” incentive payment to the Hotel for capital improvements in the amount of $2,000,000 pursuant to a separate key money agreement. The key money contribution is amortized in equal monthly amounts over an eight (8) year period commencing on the second anniversary of the takeover date. The unamortized portion of the key money was $271,000 and $396,000 at December 31, 2025, and June 30, 2025, respectively, and is included in other notes payable in the condensed consolidated balance sheets.

 

Future expected reductions of the carrying amounts of other notes payable (including amortization of the Aimbridge key money and the scheduled reductions of the Hilton development incentive) are as follows:

 

For the year ending June 30,  Amount 
     
2026 (6 months)  $283,000 
2027   463,000 
2028   317,000 
2029   317,000 
2030   316,000 
Thereafter   - 
Long term debt  $1,696,000