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NOTES PAYABLE
 9 Months Ended
Sep. 30, 2025
Debt Disclosure [Abstract]  
NOTES PAYABLE

14. NOTES PAYABLE

 

Notes payable at September 30, 2025 and December 31, 2024, were comprised of the following:

 

                          
   Collateral  Guarantors   Interest
rate		  Effective
rate(1)		  Due date  September 30,
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 $26.2 million   -   8%  8%  December 16, 2025   7,201,000    13,126,000 
Circle 8 equipment financing notes  Circle 8 equipment with a book value of $3.4 million   -   6%  6%  October 17, 2025 through July 20, 2029   2,562,000    2,826,000 
15% term notes, in default  -   Milton C. Ault, III    15%  -  October 31, 2024   -    3,777,000 
ROI promissory note, in default  -  -   18%  35%  May 15, 2025   -    2,367,000 
Other ($1.2 million in default)  -  -   12%  -  Various   1,526,000    5,826,000 
Total notes payable                  $80,039,000   $96,672,000 
Less:                          
Unamortized debt discounts                   -    - 
Total notes payable, net                  $80,039,000   $96,672,000 
Less: current portion                   (78,359,000)   (95,768,000)
Notes payable – long-term portion                  $1,680,000   $904,000 

 

(1)Includes forbearance and extension fees and original issue discount (“OID”) costs that are amortized to interest expense over the life of the notes.

 

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.

 

Gain on Extinguishment of ROI Note Payable

 

During the three months ended September 30, 2025, the Company recognized a gain on extinguishment of debt of $1.1 million related to the pay-off of an ROI note payable.

 

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 September 30, 2025 were:

 

      
Year     
2025 (remainder)   $78,359,000 
2026    759,000 
2027    325,000 
2028    325,000 
2029    271,000 
    $80,039,000 

 

Interest Expense

 

Schedule of interest expense                    
   For the Three Months Ended   For the Nine Months Ended 
   September 30,   September 30, 
   2025   2024   2025   2024 
Contractual interest expense  $2,838,000   $5,350,000   $10,013,000   $10,725,000 
Forbearance fees   59,000    1,050,000    436,000    3,300,000 
Amortization of debt discount   166,000    1,366,000    4,117,000    4,800,000 
Total interest expense  $3,063,000   $7,766,000   $14,566,000   $18,825,000