v3.26.1
NOTES PAYABLE
 12 Months Ended
Dec. 31, 2025
Debt Disclosure [Abstract]  
NOTES PAYABLE

19. NOTES PAYABLE

 

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

                          
    Collateral  Guarantors  Interest
rate		  Effective
rate(1)		  Due date  December 31,
2025		   December 31,
2024		 
AGREE secured construction loans, in default    AGREE hotels  -  9%  9%  January 1, 2026  $68,750,000   $68,750,000 
Circle 8 revolving credit facility    Circle 8 cranes with a book value of $25.6 million  -  9%  9%  June 16, 2026   7,205,000    13,126,000 
Circle 8 equipment financing notes    Circle 8 equipment with a book value of $3.2 million  -  6%  6%  Various dates through July 20, 2029   2,171,000    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%  36%  May 15, 2025   -    2,367,000 
Other ($0.9 million in default)    -  -  6%     Various   4,995,000    5,826,000 
Total notes payable                   $83,121,000   $96,672,000 
Less:                            
Unamortized debt discounts                    -    - 
Total notes payable, net                   $83,121,000   $96,672,000 
Less: current portion                    (82,055,000)   (95,768,000)
Notes payable – long-term portion                   $1,066,000   $904,000 

 

(1)Includes forbearance and extension fees and 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 year ended December 31, 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 December 31, 2025 were:

      
Year     
2026   $82,055,000 
2027    488,000 
2028    354,000 
2029    224,000 
    $83,121,000 

 

Interest Expense

 

Interest expense includes amounts incurred on notes payable, convertible notes payable, and notes payable to related parties. The components of interest expense for the years ended December 31, 2025 and 2024 were as follows:

          
   For the Year Ended 
   December 31, 
   2025   2024 
Contractual interest expense  $11,153,000   $11,925,000 
Forbearance fees   505,000    2,214,000 
Amortization of debt discount   4,462,000    5,532,000 
Total interest expense  $16,120,000   $19,671,000