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NOTES PAYABLE | 6 Months Ended
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Jun. 30, 2024
Debt Disclosure [Abstract] |
NOTES PAYABLE | 19. NOTES PAYABLE Notes payable at June 30, 2024 and December 31, 2023, were comprised of the following:
Schedule of notes payable |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Collateral |  | Guarantors |  | Interest rate |  | Due date |  | June 30, 2024 |  |  | December 31, 2023 |
AGREE secured construction loans |  | AGREE hotels |  |  |  | 7.0% |  | January 1, 2025 |  | $ | 68,689,000 |  |  | $ | 67,632,000 |
Circle 8 revolving credit facility |  | Circle 8 cranes with a book value of $30.2 million |  | - |  | 8.4% |  | December 16, 2025 |  |  | 15,031,000 |  |  |  | 15,907,000 |
16% promissory note (in default) |  | - |  | Ault & Company and Milton C. Ault, III |  | 16.0% |  | July 15, 2024 |  |  | 4,822,000 |  |  |  | 2,572,000 |
Circle 8 equipment financing notes |  | Circle 8 equipment with a book value of $4.5 million |  | - |  | 10.5% |  | September 15, 2025 through June 15, 2027 |  |  | 4,638,000 |  |  |  | 5,629,000 |
15% term notes |  | - |  | Milton C. Ault, III |  | 15.0% |  | September 30, 2024 |  |  | 3,499,000 |  |  |  | - |
15% promissory notes |  | - |  | Milton C. Ault, III |  | 15.0% |  | December 4, 2024 |  |  | 2,400,000 |  |  |  | - |
8% demand loans |  | - |  | - |  | 8.0% |  | Upon demand |  |  | - |  |  |  | 950,000 |
Short-term bank credit facilities |  | - |  | - |  | 5.2% |  | Renews monthly |  |  | 2,718,000 |  |  |  | 1,464,000 |
Sentinum note payable |  | - |  | - |  | 12.5% |  | - |  |  | - |  |  |  | 1,067,000 |
ROI promissory note (in default) |  | - |  | - |  | 18.0% |  | April 30, 2024 |  |  | 2,094,000 |  |  |  | - |
Other ($0.9 million in default) |  | - |  | - |  | - |  | - |  |  | 2,948,000 |  |  |  | 3,518,000 |
Total notes payable |  |  |  |  |  |  |  |  |  | $ | 106,839,000 |  |  | $ | 98,739,000 |
Less: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Unamortized debt discounts |  |  |  |  |  |  |  |  |  |  | (748,000 | ) |  |  | (453,000 | )
Total notes payable, net |  |  |  |  |  |  |  |  |  | $ | 106,091,000 |  |  | $ | 98,286,000 |
Less: current portion |  |  |  |  |  |  |  |  |  |  | (89,643,000 | ) |  |  | (12,866,000 | )
Notes payable – long-term portion |  |  |  |  |  |  |  |  |  | $ | 16,448,000 |  |  | $ | 85,420,000 |
ROI 15% Term Note On February 9, 2024, ROI entered into a $1.77 million term note agreement with an institutional investor bearing interest of 15%. The term note was issued at a discount, with net proceeds to ROI of $1.75 million. The term note was scheduled to mature February 14, 2024. This note has been guaranteed by Ault & Company and Mr. Ault. The term note was subsequently amended to increase the principal amount due to $2.1 million, increase the interest rate to 18% and extend the maturity date to April 30, 2024. The term note is in default as of May 1, 2024. 15% Term Notes On April 29, 2024, the Company entered into note agreements totaling $3.5 million with an institutional investor bearing interest of 15%. The term notes were issued at a discount, with net proceeds to the Company of $3.1 million. The term notes were amended to extend the maturity dates to September 30, 2024. $20 Million Credit Agreement On June 4, 2024 the Company entered into a Loan Agreement (the “Credit Agreement”) with two institutional investors (collectively, the “Lender”). The Credit Agreement provides for an unsecured, non-revolving credit facility with an aggregate draw limit of $20.0 million. However, the Company is restricted to having no more than $2.0 million in principal amount of outstanding advances at any given time under the Credit Agreement. As of June 30, 2024, $2.0 million has been advanced, exclusive of $0.4 million original issue discount. All loans under the Credit Agreement will be evidenced by a promissory note. The Lender made an Advance to the Company of $1.5 million on the execution date. The advances are due December 4, 2024, provided, however, that if on such date, the Company has executed an equity line of credit agreement relating to the sale of shares of the Company’s 13.00% Series D Cumulative Redeemable Perpetual Preferred Stock, has an effective registration statement relating thereto and is not currently in default under such agreement, then the maturity date shall be automatically extended until June 4, 2025. The Lender is not obligated to make any further Advances under the Credit Agreement after the maturity date. Advances under the Credit Agreement will include the addition of an original issuance discount of 20% to the amount of each Advance and all Advances will bear interest at the rate of 15.0% per annum and may be repaid at any time without penalty or premium. The obligations of the Company under the Credit Agreement are secured by a guaranty provided by Milton C. Ault, the Executive Chairman of the Company. Notes Payable Maturities The contractual maturities of the Company’s notes payable, assuming the exercise of all extensions that are exercisable solely at the Company’s option, as of June 30, 2024 were:
Schedule of maturities |  |  |  |
Year |  |  |
2024 (remainder) |  | $ | 20,930,000 |
2025 |  |  | 85,497,000 |
2026 |  |  | 382,000 |
2027 |  |  | 15,000 |
2028 |  |  | 15,000 |
|  | $ | 106,839,000 |
Interest Expense
Schedule of interest expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | For the Three Months Ended |  |  | For the Six Months Ended |
|  | June 30, |  |  | June 30, |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Contractual interest expense |  | $ | 3,336,000 |  |  | $ | 2,547,000 |  |  | $ | 6,622,000 |  |  | $ | 5,942,000 |
Forbearance fees |  |  | 750,000 |  |  |  | 6,198,000 |  |  |  | 2,250,000 |  |  |  | 7,538,000 |
Amortization of debt discount |  |  | 1,297,000 |  |  |  | 7,182,000 |  |  |  | 3,434,000 |  |  |  | 16,177,000 |
Total interest expense |  | $ | 5,383,000 |  |  | $ | 15,927,000 |  |  | $ | 12,306,000 |  |  | $ | 29,657,000 |

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