Notes Receivable

6 Months Ended

Jun. 30, 2024

8.	Notes Receivable

On January 21, 2020, pursuant to that certain Loan Agreement and Promissory Note, dated October 3, 2019 (the “CPF GP Loan Agreement”), as amended on October 15, 2019 and November 7, 2019, by and between CPF GP 2019-1 LLC (“CPF GP”) and the Company, CPF GP issued to the Company a promissory note in the principal amount of $400,000 (the “Company Note”) and issued to Paul Galvin, the Company’s Chairman and CEO, a promissory note in the principal amount of $100,000 (the “Galvin Note”). The Company Note and Galvin Note bear interest at five percent (5%) per annum, payable, together with the unpaid principal amount of the promissory notes, on the earlier of the July 31, 2023 maturity date or upon the liquidation, redemption sale or issuance of a dividend upon CPF GP’s limited liability company interests in CPF MF 2019-1 LLC, a Texas limited liability company of which CPF GP is the general partner (“CPF MF”); provided, that the terms of the Galvin Note provide that all interest payments due to Mr. Galvin under the Galvin Note shall be paid directly to, and for the benefit of, the Company.During the year ended December 31, 2022, the Galvin Note was assigned to the Company and the principal amount of $100,000 was paid to Mr. Galvin.

On April 15, 2020, pursuant to the CPF GP Loan Agreement, CPF GP issued to the Company a promissory note in the principal amount of $250,000 (the “Company Note 2”). The Company Note 2 bears interest at five percent (5%) per annum, payable, together with the unpaid principal amount of the promissory notes, on the earlier of the July 31, 2023 maturity date or upon the liquidation, redemption sale or issuance of a dividend upon CPF GP’s limited liability company interests in CPF MF.

During the year ended December 31, 2023, the Company determined that the Company Note, the Galvin Note and the Company Note 2 were not collectible and recorded bad debts for the outstanding amounts, which resulted in a write off of principal of $750,000 and accrued interest of $129,418 during 2023.