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Notes Payable | 3 Months Ended
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Mar. 31, 2024
Debt Disclosure [Abstract] |
Notes Payable | Notes Payable Notes Payable of the Company Notes payable consisted of the following as of March 31, 2024 and December 31, 2023 (in thousands):
Notes Payable |  | March 31, 2024 |  | December 31, 2023 |  | Weighted Average Interest Rate (1) |  | Maturity Date (1)
Corporate notes |  | $ | 35,392 |  |  | $ | 36,442 |  |  | 11.40 | % |  | January 2024 - March 2025
Convertible corporate notes |  | 1,324 |  |  | 1,324 |  |  | 8.25 | % |  | April 2024
Real estate and other loans |  | 16,454 |  |  | 16,252 |  |  | 5.61 | % |  | August 2024 - November 2029
Total notes payable |  | 53,170 |  |  | 54,018 |  |  |  |  |
Deferred financing costs, net |  | (218) |  |  | (219) |  |  |  |  |
Total notes payable, net |  | $ | 52,952 |  |  | $ | 53,799 |  |  |  |  |
__________________________________ (1) As of March 31, 2024. Real Estate Loans The terms of the loan agreements described below include, among other things, certain financial covenants, as defined in the respective loan agreements, including key financial ratios and liquidity requirements. Gateway II HoldCo, LLC On January 31, 2023, Caliber assumed a loan which is secured by the Company’s headquarters office building (see Note 4 – Real Estate Investments). The terms of the note require monthly principal and interest payments, with a balloon payment due at maturity. The loan has a fixed interest rate of 4.30% in effect through the maturity date in November 2029. The terms of the loan do not allow the prepayment of the outstanding balance in part or in whole at any time prior to the maturity date. The terms of the loan agreement include covenant clauses, which require certain key financial ratios and liquidity be met. As of March 31, 2024 and December 31, 2023, the outstanding principal balance of the loan was $16.1 million and $16.2 million, respectively. As of March 31, 2024, the debt service coverage ratio required by the loan agreement was not satisfied, which per the terms of the agreement required the Company to transfer funds to a cash management account. Corporate Notes and Convertible Corporate Notes The Company has entered into multiple general corporate financing arrangements with third parties. The arrangements are generally evidenced in the form of a promissory note and require monthly or quarterly interest-only payments until maturity. Certain corporate notes are secured by the otherwise unencumbered assets of the Company. The loans generally have a 12-month term and may be extended upon the mutual agreement of the lender and the borrower. Management believes it can come to a mutual agreement with each lender to extend the maturities of the notes for an additional 12-month term. As of March 31, 2024, there were 220 individual corporate notes outstanding, with an average outstanding principal balance of $0.2 million, interest rates ranging from 8.25% to 12.00%, with weighted average interest rate of 11.40%, and maturity dates ranging from January 2024 to March 2025. During the three months ended March 31, 2024, there were no conversions of debt into common stock. In April 2024, the Company entered into a loan extension agreement with certain corporate note holders to extend the respective maturity dates of multiple individual corporate notes, aggregating $12.3 million, for an additional 13 months, resulting in maturity dates of these corporate notes ranging from May 2025 to April 2026. As of May 9, 2024, an aggregate of $36.4 million of corporate and convertible notes mature within the 12-month period subsequent to when these financial statements were issued. As of December 31, 2023, there were 222 individual corporate notes outstanding, with an average outstanding principal balance of $0.2 million, interest rates ranging from 8.25% to 12.00%, with a weighted average interest rate of 11.42%, and maturity dates ranging from January 2024 to March 2025. The Company has issued corporate notes with a conversion feature. The conversion price is $7.57 per share of common stock. The holders of the convertible corporate notes can elect to convert all or any portion of the balance at any time. As of March 31, 2024 and December 31, 2023, the value of the conversion feature was zero. Future Minimum Payments The following table summarizes the scheduled principal repayments of our indebtedness as of March 31, 2024 (in thousands):
Year |  | Amount
April 1, 2024 - December 31, 2024 |  | $ | 23,106 |
2025 |  | 14,421 |
2026 |  | 304 |
2027 |  | 317 |
2028 |  | 330 |
Thereafter |  | 14,692 |
Total |  | $ | 53,170 |
Deferred Financing Costs Amortization of deferred financing costs for the Company was an immaterial amount and there were no deferred financing cost write-offs during each of the three months ended March 31, 2024 and 2023. Notes Payable of the Consolidated Funds Notes payable of the consolidated funds consisted of the following as of March 31, 2024 and December 31, 2023, respectively (in thousands):
Notes Payable |  | March 31, 2024 |  | December 31, 2023 |  | Interest Rate (1) |  | Maturity date (1) |
Real Estate Loans |  |  |  |  |  |  |  |  |
Hampton Inn & Suites Hotel |  | $ | — |  | (3) | $ | 5,939 |  |  | N/A |  | N/A |
Four Points by Sheraton Hotel (2) |  | 10,700 |  |  | 11,000 |  |  | 18.00% |  | September 2023 |
Holiday Inn Ocotillo Hotel |  | — |  | (3) | 9,250 |  |  | N/A |  | N/A |
Airport Hotel Portfolio |  | — |  | (3) | 55,631 |  |  | N/A |  | N/A |
DoubleTree by Hilton Tucson Convention Center |  | 18,306 |  |  | 18,418 |  |  | 4.22% |  | August 2027 |
Hilton Tucson East |  | — |  | (3) | 11,901 |  |  | N/A |  | N/A |
DT Mesa Holdco II, LLC |  | 3,000 |  |  | 3,000 |  |  | 7.28% |  | May 2024 |
Southpointe Fundco, LLC |  | 1,050 |  |  | 1,050 |  |  | 11.99% |  | September 2024 |
West Frontier Holdco, LLC |  | 4,636 |  |  | 4,636 |  |  | 6.35% |  | February 2038 |
Total Real Estate Loans |  | 37,692 |  |  | 120,825 |  |  |  |  |  |
Revolving line of credit |  | 4,500 |  |  | 4,500 |  |  | 8.75% |  | October 2024 |
Member notes |  | 5,600 |  |  | 5,600 |  |  | 10.00% |  | June 2025 |
Economic injury disaster and other loans |  | 150 |  |  | 475 |  |  | 3.75% |  | June 2050 |
Total notes payable |  | 47,942 |  |  | 131,400 |  |  |  |  |  |
Deferred financing costs, net |  | (288) |  |  | (1,716) |  |  |  |  |  |
Total notes payable, net |  | $ | 47,654 |  |  | $ | 129,684 |  |  |  |  |  |
__________________________________ (1) As of March 31, 2024. (2) During the year ended December 31, 2023, the hotel ceased operations as the consolidated fund is converting the property into a multi-family residential asset. (3) During the three months ended March 31, 2024, the Company deconsolidated Caliber Hospitality, LP and the Caliber Hospitality Trust, which included activity from six hospitality funds. Real Estate Loans The terms of the loan agreements described below include, among other things, certain financial covenants, as defined in the respective loan agreements, including key financial ratios and liquidity requirements. Unless otherwise noted below, the consolidated funds were in compliance with the required financial covenants as of March 31, 2024. Hampton Inn & Suites Hotel In July 2015, the previously consolidated fund entered into a loan agreement which is secured by a deed of trust and assignment of leases and rents of a hotel property in Scottsdale, Arizona. The terms of the note require monthly principal and interest payments, with a balloon payment due at maturity. The loan has a fixed interest rate of 6.12% in effect through the maturity date in July 2025. The loan is guaranteed by an individual who is an affiliate of the Company. During the three months ended March 31, 2024, the Company deconsolidated Hampton Inn & Suites Hotel (as discussed in Note 3 – VIEs). Four Points by Sheraton Hotel In June 2018, the consolidated fund entered into a loan agreement which is secured by a deed of trust and assignment of leases and rents of a hotel property in Phoenix, Arizona. The loan requires monthly interest-only payments until maturity. The loan is guaranteed by the Company and matured in September 2023. Per the terms of this agreement, the interest rate on the loan is equal to US Prime Rate plus 2.25%, with a floor rate of 9.65%, until August 31, 2023, at which time, the interest rate increased to 18% until the loan is paid in full or replaced with construction financing from the lender. In April 2024, the consolidated fund paid the loan amount outstanding in full. In April 2024, the consolidated fund entered into a $19.1 million construction loan agreement, which is secured by a deed of trust of the Four Points by Sheraton Hotel. Per the terms of the agreement, the loan has interest at a variable rate equal to SOFR plus 6.140%, with a floor rate of 12.65% until maturity in October 2025. The loan requires monthly interest-only payments until maturity and the loan may be prepaid in whole or in part without premium or penalty. The loan is guaranteed by an individual who is an affiliate of the Company. Holiday Inn Ocotillo Hotel In July 2018, the previously consolidated fund entered into a loan agreement which is secured by a deed of trust and assignment of leases and rents of a hotel property in Chandler, Arizona. The loan requires monthly interest-only payments. The interest rate on the loan is equal to 1-month LIBOR plus 6.00%, with a floor rate of 11.00% until maturity in May 2023. In May 2023, the loan agreement was amended and restated with the lender, extending the maturity date to November 2023 and amending the interest rate to SOFR plus 600 basis points, with a floor rate of 11.00%. In November 2023, the loan agreement was amended with the lender, extending the maturity date to February 2024. In February 2024, the loan agreement was amended with the lender, extending the maturity date to May 2024. The loan is guaranteed by the Company. During the three months ended March 31, 2024, the Company deconsolidated Holiday Inn Ocotillo Hotel (as discussed in Note 3 – VIEs). Airport Hotel Portfolio In September 2018, the previously consolidated fund entered into a portfolio loan agreement which was secured by a deed of trust and assignment of leases and rents of the Airport Hotel Portfolio. The loan had a variable interest rate equal to one-month LIBOR plus 3.75% and the loan required interest-only payments until maturity. The loan was guaranteed by the Company and individuals who are affiliates of the Company. In January 2023, the consolidated fund paid the loan amount outstanding in full. In January 2023, the previously consolidated fund entered into a loan agreement which is secured by a deed of trust and assignment of leases and rents of the Airport Hotel Portfolio. Per the terms of the loan agreement, the loan has a variable interest rate equal to SOFR plus 8.75% and matures in January 2025. In connection with the loan, the consolidated fund entered into an interest rate cap agreement, which sets the maximum SOFR rate for the loan at 5.00% through January 2024. The loan requires interest-only payments until maturity. The terms of the loan do not allow the prepayment of the outstanding balance in part prior to the maturity date but can be prepaid in whole subject to certain conditions, terms and fees outlined in the loan agreement. The terms of the loan agreement require an exit fee equal to 1.25% of the original principal amount of the loan and a minimum return equal to 30.0% of the original principal amount of the loan less any interest payments made at the time the loan is repaid in full. The exit fee was accrued upon entering into the loan and recorded as a deferred financing cost to be amortized over the life of the loan. The loan is guaranteed by the Company and individuals who are affiliates of the Company. During the three months ended March 31, 2024, the Company deconsolidated the Airport Hotel Portfolio (as discussed in Note 3 – VIEs). DoubleTree by Hilton Tucson Convention Center In August 2019, the consolidated fund entered into a loan agreement which is secured by a deed of trust and assignment of rents of the DoubleTree by Hilton Tucson Convention Center located in Tucson, Arizona. The loan has a variable interest rate per annum equal to LIBOR plus 2.50%. In connection with the loan, the consolidated fund entered into an interest rate swap agreement, which sets the interest at a fixed rate of 4.22% from September 2022 through August 2027. The loan required interest-only payments until September 2022 and principal and interest payments thereafter until maturity. The terms of the loan allow for the prepayment of the outstanding balance in whole or in part at any time prior to the maturity date. The loan matures in August 2027 and is guaranteed by the Company. In May 2024, the consolidated fund terminated the interest rate swap agreement and received $1.6 million. Hilton Tucson East In November 2021, the previously consolidated fund entered into a loan agreement which is secured by the deed of trust and assignment of rents of the Hilton Tucson East hotel located in Tucson, AZ. The loan has a fixed interest rate of 6.25% and matures in November 2025. The loan required interest-only payments until June 1, 2023 and principal and interest payments thereafter until maturity. The loan amount may be prepaid prior to maturity subject to certain conditions and terms and a prepayment fee as outlined in the agreement. During the three months ended March 31, 2024, the Company deconsolidated the Hilton Tucson East (as discussed in Note 3 – VIEs). DT Mesa Holdco II, LLC In November 2019, the consolidated fund entered into a loan agreement which is secured by the deed of trust of a commercial building in Mesa, Arizona. The loan requires interest-only payments until maturity and the terms of the loan allow the prepayment of the outstanding balance in part or in whole at any time prior to the maturity date with no prepayment penalty. In December 2022, the terms of the loan agreement were renegotiated, extending the maturity date of the loan to November 2023 and amending the interest rate to the greater of (i) the federal home loan bank rate plus 2.75%% or (ii) 6.50%. In November 2023, the loan agreement was amended with the lender, extending the maturity date to February 2024. In February 2024, the loan agreement was amended with the lender, extending the maturity date to May 7, 2024 and waiving the minimum liquidity covenant default. The Company is within the 30-day grace period and expects to extend the maturity date of the loan by 90 days. Southpointe Fundco, LLC In June 2022, the consolidated fund entered into a loan agreement which is secured by a deed of trust and assignment of rents of a residential development property in Phoenix, Arizona. The loan has a fixed rate per annum equal to 9.99%. In May 2023, an extension agreement was executed with the lender, extending the maturity date to December 2023. In November 2023, an extension agreement was executed with the lender, extending the maturity date to March 2024 and amending the interest to a fixed rate of 11.99%. In February 2024, an extension agreement was executed with the lender, extending the maturity date to September 2024. The terms of the loan allow the prepayment of the outstanding balance in part or in whole at any time prior to the maturity date with no prepayment penalty. The loan is guaranteed by an individual who is an affiliate of the Company. West Frontier Holdco, LLC In March 2023, the consolidated fund entered into a construction loan agreement which is secured by a deed of trust and assignment of rents of a multi-family residential property in Payson, Arizona. Upon completion of the construction project, subject to conditions in the agreement, the loan converts to a term loan. The loan requires interest-only payments until March 2025 and principal and interest payments until March 2028, at a fixed interest rate of 6.35%. In April 2028, the loan requires principal and interest payments until maturity in February 2038, at a rate of the five year Treasury Constant Federal Reserve Index plus 2.50%. The terms of the loan allow the prepayment of the outstanding balance in part or in whole at any time prior to the maturity date with no prepayment penalty. The loan is guaranteed by individuals who are affiliates of the Company. Revolving Line of Credit In August 2019, a consolidated fund entered into a revolving line of credit (“LOC”) with a maximum borrowing amount of $4.5 million. The LOC is secured by the consolidated fund’s assets and is guaranteed by the Company. The LOC has a variable interest rate equal to the greater of (i) Wall Street Journal Prime Rate plus 0.25% per annum or (ii) 4.75%, resulting in a rate of 8.75% as of March 31, 2024. The Company is required to pay a fee of 0.20% of the unused revolving balance. In August 2023, the agreement was amended extending the maturity date of the LOC to October 2024 and removing certain restrictive covenants. The terms of the LOC include certain financial covenants and as of March 31, 2024, the consolidated fund was in compliance with all such covenants. Member Notes During 2022 and the year ended December 31, 2023, the consolidated fund, Southpointe Fundco, LLC, entered into 10.0% unsecured promissory notes with individual investors. The notes mature in June 2025 and may be extended up to two additional 12-month periods by the fund manager. The notes require quarterly interest-only payments. The terms of the notes allow the prepayment of the outstanding balance in part or in whole at any time prior to the maturity date with no prepayment penalty. Economic Injury Disaster Loans In June 2020, the consolidated funds were granted Economic Injury Disaster Loans, which are secured by the assets of the respective funds and have a fixed interest rate of 3.75 % and mature in June 2050. At March 31, 2024 and December 31, 2023, the outstanding principal balance was $0.2 million and $0.5 million, respectively. Fixed monthly installment payments began in December 2022 with payments applied first to accrued interest and then the balance, if any, will be applied to principal outstanding. The loans allow for prepayment of principal plus accrued interest prior to maturity. The loan agreements contain certain usual and customary restrictions and covenants relating to, among other things, insurance, and other indebtedness. In addition, the terms of the loans include a cross-default provision whereby the Small Business Administration may, in its discretion, without notice or demand require immediate payment of all amounts outstanding under the loans. Future Debt Maturities As of March 31, 2024, the future aggregate principal repayments due on the Company’s notes payable are as follows (in thousands):
Year |  | Amount
April 1, 2024 - December 31, 2024 |  | $ | 19,594 |
2025 |  | 6,119 |
2026 |  | 555 |
2027 |  | 17,046 |
2028 |  | 66 |
Thereafter |  | 4,562 |
Total |  | $ | 47,942 |
Deferred Financing Costs Amortization of deferred financing costs was $0.3 million and there were no deferred financing cost write-offs during each of the three months ended March 31, 2024 and 2023.

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