As of December 31, 2021, and December 31, 2020, the current portion of long-term debt within the Company’s audited financial statements for our core MCA and Corporate facilities is $7,169,994 and $1,623,375 respectively. As of December 31, 2021 and 2020 the long term debt less the current portion of the company debt is $5,572,427 and $4,810,673, respectively. As of December 31, 2021, and December 31, 2020, the debt associated with our current portion of long-term debt within the Company’s audited consolidated financial statements for our assets held for sale as is $1,000,000 and $5,539,003, respectively. This debt is expected to be repaid primarily with the proceeds from the sales of these assets. See Note 2 – Summary of Significant Accounting Policies for more information about the Company’s assets held for sale.

The Company has recorded interest expense in the accompanying audited consolidated financial statements of $1,071,756 and $372,954 for the year ended December 31, 2021, and 2020, respectively, and $309,914 and $796,431 for discontinued operations for the same periods.

The change in the interest expense reflects primarily the impact of the repayment of debt since the beginning of the prior year period and during this period, offset in part by incurrence of indebtedness at the latter part of this period at higher and lower interest rates.

The following table summarizes the maturity of the Company’s long-term debt and notes payable as of December 31, 2021:

	Maturity Date	Interest Rate			December 31, 2021		December 31, 2020
Memory Care (Core) Facilities:
Naples Mortgage			3.99	%	$	-	$	2,731,100
Naples Equity Loan	May 2023		9.95	%		4,550,000		-
Libertas Financing Agreement	May 2022		33.00	%		283,685		-
New Braunfels Samson Funding 1	April 2022		25.00	%		80,467		-
New Braunfels Samson Group 2	April 2022		39.00	%		80,467		-
Naples Operating Samson Funding	April 2022		31.00	%		92,519		-
Naples LLC CFG Merchant Solutions	September 2022		15.00	%		134,239		-
MCA Invesque Loan⁽¹⁾	January 2022		8.50	%		57,452		1,610,577
New Braunfels Business Loan	March 2022		6.25	%		64,072		185,359
Gearhart Loan⁽²⁾	December 2022		7.00	%		213,578		238,578

Five C’s Loan	June 2022		9.85	%		325,000		325,000
Equity Secure Funds 1, LLC	June 2022		11.5	%		1,000,000
Buda 2k Loan Hospitality	October 2022		15.0	%		100,000
SBA PPP Loans	February 2022		1.00	%		2,510,998		1,364,962
Notional amount of debt						9,492,477		6,455,576
Less: current maturities						4,910,863		1,623,375
Unamortized Discount						-		21,528
					$	4,581,614	$	4,810,673
Non-core businesses classified as liabilities held for sale:
Hotels:
Seaworld Hotel Note ⁽³⁾	January 2021		Variable		$	-	$	3,395,000
Buda Hotel Note ⁽⁴⁾	November 2036		Variable			-		4,046,771
PPP Loan								255,300
Buda Tax Loans ⁽⁵⁾	May 2031		8.99	%		-		271,365
Notional amount of debt						-		7,968,436
Less: current maturities						-		3,395,000
					$	-	$	4,573,436

Real Estate:
Artesia Note ⁽⁶⁾	June 2033		Variable		$	225,436	$	238,168
Tamir Note	March 2022		12.00	%		300,000		300,000
Leander Note	March 2022		12.75	%		700,000		700,000
Notional amount of debt						1,225,436		1,238,168
Less: current maturities						1,000,000		712,599
					$	225,436	$	525,569

As of December 31, 2021, the current portion of long-term debt on the accompanying audited consolidated balance sheet for core business operations includes $189,809 of unamortized debt discounts. As of December 31, 2020, the long-term debt on the accompanying audited consolidated balance sheet for non-core business operations includes $21,528 of unamortized debt discount.

Notes:


(1)	Note is issued by MCA and is secured by all of MCA’s assets which consist primarily of its ownership of its residential facilities.

(2)	Note is issued by MCA and is secured by a senior subordinated lien on all of MCA’s assets which consist primarily of its ownership of its residential facilities. This stated maturity of this note has been extended to December 31, 2022.

(3)	Obligations have been compromised under the terms of a settlement agreement as of March 10, 2021 to approximately $318,500, as described above.

(4)	This note is a senior secured with an interest rate equal to greater of 10.5% or 30-day LIBOR plus 8.175%. This note was repaid in full in connection with sale of the mortgaged property as described in Note 15 - Subsequent Events.

(5)	Interest rate is 8.99%, per annum and is secured by the Buda Hotel property. This note was repaid in full in connection with sale of the mortgaged property as described in Note 15 - Subsequent Events.

	Maturity Date	Interest Rate			December 31, 2021		December 31, 2020
Core Businesses (Continuing Operations) Notes Payable
Cibolo Creek Partners promissory note	December 2025		0.09	%	$	66,208	$	-
EIDL SBA Treas 310	December 2051		3.75	%		494,900
AGP Contract	October 2022		2.00	%		2,522,922
Round Rock Development Partners Note	December 2025		0.09	%		500,000		500,000
Notional amount of debt						3,584,030		500,000
less current maturities						2,522,922
						1,061,108
Other Current Liabilities
Related Party Payable - Guarantee Fees						283,023		139,883
					$	283,023	$	139,883

Non-Core Businesses (Discontinued Continuing Operations) Notes Payable
Cibolo Creek Partners promissory note	December 2025		0.09	%	$	421,470	$	641,804
Notional amount of debt						421,470		641,804

Other Current Liabilities
Related Party Payable - Guarantee Fees						-		143,141
					$	421,470	$	784,945

In addition, the Company has an obligation for the payment of the acquisition of the Primrose adult daycare center of $110,000 getting due for payment on May 31, 2022.

On April 29, 2021, the Company executed a secured promissory note with Benworth Capital Partners, LLC in the amount of $4,550,000. The original Naples mortgage was paid off in the amount of $2,739,195 and there were closing costs of $354,357 which netted the Company proceeds in the amount of $1,456,448. This secured promissory note is a one-year loan with interest only payments at a fixed interest rate of 9.95%. This loan is guaranteed by certain officers of the Company and is secured by the Memory Care facility located at 2626 Goodlette-Frank Road, Naples, Florida 34105.

On May 25, 2021, the Company executed a merchant cash advance loan with Libertas Funding LLC in the amount of $737,000 with a purchase price consideration of $550,000 less $11,000 in origination fees for net proceeds of $539,000. The debt discount on the loan is $187,000 and will be amortized over the life of the loan. The weekly payment amount under the agreement is $14,623 and interest rate associated with this agreement is 1.28% per week. Additionally, the Company can terminate the transaction at any time by repurchasing future receipts sold to purchaser but not delivered. This agreement has no stated maturity date. However, based on historical revenue, management has estimated that repayment will 12 months. The obligations under this agreement are guaranteed by James Walesa, the Chairman and CEO of the Company.

The Company entered into a Futures Receipts Sale and Purchase Agreement dated as of September 28, 2021 (“Factoring Agreement 1”), with Cloudfund LLC d/b/a Samson Group (“NB Financier 1”). Under Factoring Agreement 1, a specified percentage of its future receipts (as defined by Factoring Agreement 1, which include the future resident revenues in the New Braunfels residential care facility owned by MCA) were sold to NB Financier 1, which were equal to $142,000 for a purchase price of $100,000, less origination and other fees of $5,075. The obligations under Factoring Agreement 1 are repaid in 10 equal weekly installments. Factoring Agreement 1 expressly provides that the sale of the future receipts shall be construed and treated for all purposes as a true and complete sale and includes customary provisions granting a security interest under the Uniform Commercial Code in accounts and the proceeds. The obligations under Factoring Agreement 1 are guaranteed by James Walesa, the Company’s Chairman and Chief Executive Officer.

The Company entered into a Revenue Purchase Agreement and Security Agreement and Guaranty of Performance dated as of September 28, 2021 (“Factoring Agreement 2”) Samson MCA LLC (“NB Financier 2”). Under Factoring Agreement 2, a specified percentage of its future receipts (as defined by Factoring Agreement 2, which include the payments to MCA as a result of its sale of goods and/or services such as its future resident revenues in the New Braunfels residential care facility owned by MCA), which were equal to $142,000 for a purchase price of $100,000, less origination and other fees of $5,075. Factoring Agreement 2 expressly provides that the sale of the future receipts shall be construed and treated for all purposes as a true and complete sale and includes customary provisions granting a security interest under the Uniform Commercial Code in accounts and the proceeds. The obligations under Factoring Agreement 2 are guaranteed by James Walesa, the Company’s Chairman and Chief Executive Officer.

In May 2020, the Company was granted four separate loans under the Paycheck Protection Program (the “PPP Loans”) administered by the United States Small Business Administration (“SBA”) established under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, which has enabled the Company to retain the Company’s employees during the period of disruption created by the Coronavirus pandemic. The PPP Loans, which are evidenced by Notes issued by the Company (the “Note”), mature in May 2022 and bear interest at a fixed rate of 1.0% per annum, accruing from May 2020 (“Loan Date”) and payable monthly. The Note is unsecured and guaranteed by the SBA. The Note may be prepaid by the Company at any time prior to maturity with no prepayment penalties. The Note provides for customary defaults, including failure to make payment when due or to fulfill the Company’s obligations under the notes or related documents, reorganizations, mergers, Consolidations or other changes to the Company’s business structure, and certain defaults on other indebtedness, bankruptcy events, adverse changes in financial condition or civil or criminal actions. The PPP Loans may be accelerated upon the occurrence of a default. During the year, the Company has received an additional $2,042,958 in PPP loans. Superconductor Technologies also received a PPP Loan in the amount of $468,000 that was still outstanding at the time of acquisition.

The Company entered into an unsecured promissory note with A.G.P./Alliance Global Partners (“AGP”) which was the financial adviser to AIU in connection with the merger. The $2,630,000 principal amount of this note represents the unpaid fee amount then owed to AGP for its services. Interest under this note accrues at 2% per annum. The Company makes monthly payments of $30,000 and will pay 50% of net proceeds (which shall be deemed gross proceeds minus direct selling costs, expenses and commissions) received, directly or indirectly, by the Company and/or its subsidiaries from the issuance of any equity or equity-linked financing (including convertible debt), less any selling commissions. Accrued and unpaid obligations of this note are due on September 10, 2022.

Effective July 31, 2019, the Company signed an amended and restated promissory note with the landlord parties, as defined for the principal sum of $3.3 million (the “A&R MCA Note”), including the previously outstanding principal balance of $300,000. Proceeds from the loan were used to pay outstanding obligations to certain landlords of three leased memory care facilities related to a settlement agreement between the parties. See Note 7 – Commitments and Contingencies.

Beginning January 2020, the Company is required to make monthly principal and interest payments of $47,812. The loan has a fixed interest rate of 8.5%.The note is guaranteed by certain officers and directors of the Company and is collateralized by a pledge of proceeds from the sale of the Naples facility and another specified property interest (in Westover Town Center) that was sold in 2021.

In April 2021, there were three properties in which the Company had an interest and whose proceeds from any sale were pledged to the lender in collateral to the guarantees. One of those interests, Westover Town Center, was sold and the proceeds in the amount of $1,128,126 was used to pay down $1,000,000 against the Invesque loan balance in September 2021. The loan was paid off in February 2022.

On April 1, 2012, the Company executed a promissory note with Betty Gearhart for $200,000 (the “Gearhart Note”). Interest accrues at a fixed rate of 7.0% and is payable quarterly in January, April, July and October. In April 2015, the Company executed the First Amended and Restated Promissory Note in the principal amount of $218,578 which extended the maturity date until April 2017. The note is collateralized by the debtor granting a security interest to Betty Gearhart including all assets of MCA, LLC as well as any proceeds (including insurance proceeds) of any and all of the foregoing collateral. The maturity date of the loan was further extended in April 2017, April 2018 and April 2020. The Second Amendment to the Amended and Restated Promissory Note (the “Second Amendment”) was executed on March 5, 2020 in the principal amount of $218,578 and has a maturity date of April 1, 2021. The scheduled maturity date of this note has been further extended to December 15, 2021. Clearday is negotiating the terms of an additional extension or forbearance with this lender. However, there can be no assurance that any such agreement will be on terms that are acceptable to Clearday, or at all.

As of April 1, 2019, the Five C’s LLC entered into an agreement issuing capital stock that reduced obligations under an existing promissory note to $325,000. Under a February, 2021 extension agreement, the interest rate was set to 9.85% per annum and maturity date was extended. The maturity date is currently June 30, 2022. This maturity date will be extended by the parties for successive six-month periods unless the noteholder provides notice to the borrower that the term shall not be extended on or prior to the date that is 30 days prior than the then maturity date of the note.

On March 26, 2021, the Company executed a promissory note for $1,000,000 with Equity Secured Fund I, LLC. The loan matures on March 26, 2022 and was subject to one (1) twelve (12)-month extension option. The interest rate of the loan is 11.50% and is guaranteed by certain officers and is collateralized the building located at 8800 Village Drive in San Antonio, Texas. Total proceeds received by the Company was $803,063 after adjusting the interest for the period amounting to approximately $115,000, which is classified as prepaid interest in the audited consolidated balance sheet; $44,891 and $5,575 that was paid for prepaid property tax and prepaid insurance respectively (both of which) are included in “net deferred finance cost” and $31,511 in closing costs.

In December 2021, the company received an Economic Injury Disaster Loan (EIDL) in the amount of $494,900 from the US Treasury. The loan is due in 2051 and carries an interest rate of 3.75%. This loan is guaranteed by certain officers of the company

On July 12, 2019, the Company executed a loan agreement with Pender West Credit 1 REIT, LLC for a principal amount of $3,395,000 (“SeaWorld Hotel Note”) to refinance existing financing for the hotel. The note had an initial maturity date of August 1, 2020 and is collateralized by a security interest in the property and other assets within the property. The note required interest only monthly payments with the full principal balance becoming due upon the maturity date. The note has a variable interest rate equal to the greater of 10.5% or LIBOR plus 8.175%. The note has been paid off.

In November 2011, the Company executed a commercial loan agreement with Members Choice Credit Union totaling $4.8 million (“Buda Hotel Note”) to fund the construction of the Buda Hotel, purchase equipment, establish adequate working capital, and pay closing costs. The note matures on November 2036 and is collateralized by a security interest in the property and other assets within the property. The Company must pay principal and interest payments of $31,486 during the term of the note which are subject to change to amortize the principal payments of the note. The note has a variable interest rate of Prime plus 2.75% and is collateralized by a security interest in the property and other assets within the property. The note has been paid off.