NOTES PAYABLE

12 Months Ended

Dec. 31, 2023

Notes Payable

NOTES PAYABLE

21. NOTES PAYABLE

Notes payable at December 31, 2023 and 2022, were comprised of the following:

	Collateral		Guarantors		Interest rate		Due date		December 31, 2023			December 31, 2022
Circle 8 revolving credit facility		Circle 8 cranes with a book value of $31.7 million		-		8.4%		December 16, 2025	$	15,907,000		$	14,724,000
8.5% secured promissory notes		-		-		8.5%		May 7, 2024		-			17,389,000
16% promissory note (in default at December 31, 2023)		-		Ault & Company and Milton C. Ault, III		16.0%		December 16, 2023		2,572,000			17,456,000
Circle 8 equipment financing notes		Circle 8 equipment with a book value of $3.9 million		-		0.0%		March 15, 2024 through November 15, 2026		5,629,000			10,677,000
3% secured promissory notes		-		-		3.0%				-			5,672,000
8% demand loans		-		-		8.0%		Upon demand		950,000			-
Short-term bank credit facilities		-		-		5.9%		Renews monthly		1,464,000			1,702,000
XBTO note payable (in default at December 31, 2023 and repaid in March 2024)		2,482 Antminers with a book value of $3.4 million		-		12.5%		December 30, 2023		1,067,000			2,749,000
10% secured promissory notes		-		-		10.0%				-			8,789,000
Other ($0.9 million in default at December 31, 2023)		-		-						3,518,000			2,619,000
Total notes payable		-		-					$	31,107,000		$	81,777,000
Less:		-		-
Unamortized debt discounts		-		-						(83,000	)		(12,325,000	)
Total notes payable, net		-		-					$	31,024,000		$	69,452,000
Less: current portion		-		-						(12,866,000	)		(39,621,000	)
Notes payable – long-term portion		-		-					$	18,158,000		$	29,831,000

During the year ended December 31, 2023, the holders of $8.4 million 10% secured promissory notes exchanged their notes and accrued interest for Series E, Series F and Series G preferred stock liabilities. The Company recorded a loss on extinguishment of debt of $0.1 million related to the transaction. When the Series E, Series F and Series G preferred stock liabilities converted to Series A Common stock, the Company recorded a loss on extinguishment of $1.5 million.

During the year ended December 31, 2023, the holders of $10.5 million 10% demand promissory notes and $1.1 million 12% demand promissory notes exchanged their notes for notes from Ault & Company (see Note 22), resulting in a loss on extinguishment of debt of $0.4 million.

In connection with the December 2023 Series C Preferred Stock offering (see Note 26), the Company paid $20.4 million to pay the $20.2 million outstanding balance of the 8% senior secured promissory notes, plus $0.2 million accrued interest payable. The 8% senior secured promissory notes had an unamortized debt discount of $3.2 million outstanding, which was recorded as a loss on extinguishment of debt.

The Company recorded a $2.0 million loss on extinguishment of debt related to the April 2023 restructuring related to one of the 16% promissory notes payable.

Notes Payable Maturities

The contractual 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, 2023 were:

Year
2024	$	12,866,000
2025		17,721,000
2026		418,000
2027		51,000
2028		51,000
	$	31,107,000

Interest Expense

	For the Year Ended
	December 31,
	2023		2022
Contractual interest expense	$	9,619,000	$	6,780,000
Forbearance fees		5,469,000		1,453,000
Amortization of debt discount		21,507,000		29,109,000
Total interest expense	$	36,595,000	$	37,342,000