Quarterly report pursuant to Section 13 or 15(d)

Note 15 - Notes Payable

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Note 15 - Notes Payable
6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Debt Disclosure [Text Block]

Note 15. Notes Payable

 

Notes payable consisted of the following (in thousands):

 

   

June 30, 2024

   

December 31, 2023

 
    (Unaudited)     (Audited)  

A. Mortgage note payable - commercial bank - collateralized

  $ 1,096     $ 1,140  

B. Note payable - uncollateralized

    25       25  

C. Notes payable - collateralized

    204       255  

Insurance premiums financing

          103  

Subtotal

    1,325       1,523  

Less: current portion of notes payable

    (205 )     (312 )

Long-term portion of notes payable

  $ 1,120     $ 1,211  

 

(A) Mortgage Note Payable – collateralized

 

In 2018, Progressive Care closed on the purchase of land and building located at 400 Ansin Boulevard, Hallandale Beach, Florida. The purchase price was financed in part through a mortgage note and security agreement entered into with a commercial lender in the amount of $1,530,000. The promissory note is collateralized by the land and building, bears interest at a fixed rate of 4.75% per annum, matures on December 14, 2028 and is subject to a prepayment penalty. Principal and interest will be repaid through 119 regular payments of $11,901 that began in January 2019, with the final payment of all principal and accrued interest not yet paid on December 14, 2028. Note repayment is guaranteed by Progressive Care Inc.

 

(B) Note Payable – Uncollateralized

 

As of June 30, 2024 the uncollateralized note payable represents a non-interest-bearing loan that is due on demand from an investor.

 

(C) Notes Payable – Collateralized

 

On July 16, 2020 (the “Issue Date”), GTC, entered into a Coronavirus Interruption Loan Agreement (“Debenture”) by and among the Company and HSBC UK Bank PLC (the “Lender”) for an amount of £250,000, or USD $338,343 at an exchange rate of GBP: USD of 1.3533720. The Debenture bears interest beginning July 16, 2021, at a rate of 4.0% per annum over the Bank of England Base Rate (0.1% as of July 16, 2020), payable monthly on the outstanding principal amount of the Debenture. The Debenture has a term of 6 years from the date of drawdown, July 15, 2026, the “Maturity Date”. The first repayment of £4,166.67 (exclusive of interest) was made 13 month(s) after July 16, 2020. Voluntary prepayments are allowed with 5 business days’ written notice and the amount of the prepayment is equal to 10% or more of the limit or, if less, the balance of the debenture. The Debenture is secured by all GTC’s assets as well as a guarantee by the UK government. The proceeds from the Debenture were used for general corporate and working capital purposes. The Debenture includes customary events of default, including, among others: (i) non-payment of amounts due thereunder, (ii) non-compliance with covenants thereunder, (iii) bankruptcy or insolvency (each, an “Event of Default”). Upon the occurrence of an Event of Default, the Debenture becomes payable upon demand.

 

In April 2021, Progressive Care entered into a note obligation with a commercial lender, the proceeds from which were used to purchase pharmacy equipment in the amount of approximately $30,000. During September 2021, pharmacy equipment was returned since the installation was cancelled and the note was amended. The amended promissory note payable requires 46 monthly payments of $331, including interest at 6.9%. The balance outstanding as of  June 30, 2024 and  December 31, 2023 on the note payable was approximately $4,000 and $6,500, respectively.

 

In July 2022, Progressive Care entered into a note obligation with a commercial lender, the proceeds from which were used to purchase pharmacy equipment in the amount of approximately $90,000. The terms of the promissory note payable require 60 monthly payments of $1,859, including interest at 8.78% starting January 2023. The balance outstanding on the note payable was approximately $65,000 and $71,000 as of  June 30, 2024 and December 31, 2023, respectively.

 

In September 2022, Progressive Care entered into a note obligation with a commercial lender, the proceeds from which were used to purchase a vehicle in the amount of approximately $25,000. The terms of the promissory note payable require 24 monthly payments of $1,143, including interest at 8.29% starting October 2022. The balance outstanding on the note payable was approximately $3,000 and $10,000 as of  June 30, 2024 and December 31, 2023, respectively.

 

Principal outstanding as of  June 30, 2024, is expected to be repayable as follows (in thousands):

 

Year

 

Amount

 

2024 (remaining six months)

  $ 115  

2025

    214  

2026

    119  

2027

    124  

2028

    753  

Thereafter

    -  

Total

  $ 1,325