13. CREDIT FACILITIES

Notes payable consisted of the following:


	June 30, 2015		December 31, 2014
Construction revolvers	$	7,503	$	6,505
Development and acquisition notes		14,658		13,748
Mezzanine notes		4,960		5,770
Line of credit		2,177		2,356

Total secured notes		29,298		28,379
Unsecured note		1,806		2,064
Notes payable, unsecured, net of $2.2 million and $1.4 million discount, respectively		17,938		15,488

Total notes payable	$	49,042	$	45,931

As of June 30, 2015, maturities and/or curtailment obligations of all borrowings are as follows:


2015	$	23,255
2016		9,619
2017		13,198
2018		2,970

Total	$	49,042

As of June 30, 2015, $23.3 million of our credit facilities and project related loans are scheduled to mature during 2015. Subsequent to quarter end, the Company secured extensions on $8.1 million of the $23.3 million, which was scheduled to mature in the third quarter of 2015. The extensions provide for new maturity dates of January 2016. Additionally, the Company secured an extension on the $2.0 million mezzanine financing that had a maturity date of August 2015. The extension provides for a new maturity date of December 2015. Although we extended certain of our credit facilities subsequent to the quarter end, we are in active discussions with our lenders with respect to the remaining 2015 maturities and are seeking long term extensions and modifications to the loans as necessary. No assurances can be made that we will be successful in these efforts.

Construction, development and mezzanine debt – secured

The Company enters into secured acquisition and development loan agreements to purchase and develop land parcels. In addition, the Company enters into secured construction loan agreements for the construction of its real estate inventories. The loans are repaid with proceeds from home closings based upon a specific release price, as defined in each respective loan agreement.

As of June 30, 2015 and December 31, 2014, the Company had secured construction revolving credit facilities with a maximum loan commitment of $39.7 million and $33.4 million, respectively. The Company may borrow under these facilities to fund its home building activities. The amount the Company may borrow is subject to applicable borrowing base provisions and the number of units under construction, which may also limit the amount available or outstanding under the facilities. The facilities are secured by deeds of trust on the real property and improvements thereon, and the borrowings are repaid with the net proceeds from the closings of homes sold, subject to a minimum release price. As of June 30, 2015 and December 31, 2014, the Company had approximately $32.2 million and $26.9 million, respectively, of unused loan commitments. Interest rates charged under these facilities include the London Interbank Offered Rate (“LIBOR”) and prime rate pricing options, subject to minimum interest rate floors. At June 30, 2015 and December 31, 2014, the weighted average interest rate on the Company’s outstanding construction revolving facility was 4.7% and 5.1% per annum, respectively. The Company had $7.5 million and $6.5 million of outstanding construction borrowings as of June 30, 2015 and December 31, 2014, respectively. The construction credit facilities have maturity dates ranging from August 2015 to March 2018, including extensions subject to certain conditions.

As of June 30, 2015 and December 31, 2014, the Company had approximately $37.8 million and $28.0 million, respectively, of aggregate acquisition and development maximum loan commitments of which $14.7 million and $13.7 million, respectively, was outstanding. These loans have maturity dates ranging from August 2015 to March 2018, including extensions subject to certain conditions, and bear interest at a rate based on LIBOR and Prime Rate pricing options, with interest rate floors ranging from 4.25% to 5.75% per annum. As of June 30, 2015 and December 31, 2014, the weighted average interest rates were 5.0% and 4.8% per annum, respectively.

On August 7, 2015, $8.1 million of the outstanding construction, acquisition and development revolving credit facilities due in August and September of 2015, related to the Townes at Maxwell Square, the Townes at Shady Grove Metro, and New Hampshire Avenue projects were extended to provide a new maturity date of January 31, 2016.

As of June 30, 2015 and December 31, 2014, the Company had three secured mezzanine loans. The first mezzanine loan had a maximum loan commitment and outstanding balance of $3.0 million at June 30, 2015 and December 31, 2014. This mezzanine financing was utilized to acquire land for the development of the City Homes at the Hampshires and the Townes at the Hampshires projects and is secured by the second deed of trust. This first mezzanine loan bears a fixed interest rate of 13.5% per annum paid on a monthly basis, with the full principal balance due at maturity, September 22, 2015.

The second and third mezzanine loans are being used to finance the development of the Townes at Shady Grove Metro and Momentum | Shady Grove projects. The maximum principal commitment amount of these loans was $3.2 million at June 30, 2015 and December 31, 2014, respectively, of which $2.0 million and $2.8 million of principal and accrued interest was outstanding as of June 30, 2015 and December 31, 2014, respectively. These financings carry an annual interest rate of 12% of which 6% is paid on a monthly basis with the remaining 6% being accrued and paid at maturity. These financings had a maturity date of August 22, 2015. On August 5, 2015, the maturity date of these financings was extended to December 31, 2015. These financings are guaranteed by the Company and our Chief Executive Officer.

Line of credit – secured

At June 30, 2015 and December 31, 2014, the Company had a secured revolving line of credit amounting to $4.0 million of which $2.2 million was outstanding. This line of credit is secured by the first priority security interest in the Company’s wholly owned subsidiaries’ in the Washington D.C., metropolitan area and is used to finance the predevelopment related expenses and deposits for current and future projects. This line of credit bears a variable interest rate tied to a one-month LIBOR plus 3.25% per annum, with an interest rate floor of 5.0% and matured on July 15, 2015. On August 11, 2015, the maturity date of this line of credit was extended to provide a new maturity date of January 31, 2016. This line of credit also calls for the Company to adhere to financial covenants, as defined in the loan agreement such as, minimum net worth and minimum liquidity, measured quarterly and minimum EBITDA measured on a twelve month basis. As of June 30, 2015, the Company was in compliance with all financial covenants dictated by the line of credit agreement. This line of credit is guaranteed by our Chief Executive Officer.

Unsecured note

As of June 30, 2015 and December 31, 2014, the Company had balances of $1.8 million and $2.1 million, respectively, outstanding to a bank under a 10-year unsecured note. Interest is charged on this financing on an annual basis at LIBOR plus 2.2%. As of June 30, 2015 and December 31, 2014, the interest rate was 2.4% per annum. The maturity date of this financing is December 28, 2018. The Company is required to make monthly principal and interest payments through maturity.

Notes payable to affiliate – unsecured

On March 14, 2013, the Company and Stonehenge entered into an agreement to extend the maturity date of the loan from July 20, 2013 to January 1, 2016. Under the terms of the Extension Agreement, the Company is required to pay $50 monthly to Stonehenge, to be allocated first to accrued and unpaid interest and then to outstanding principal. Interest is charged to the loan based on LIBOR plus 3% per annum. As of June 30, 2015 and December 31, 2014, the interest rate was 3.8% and 3.6% per annum, respectively. The Company had approximately $4.0 million and $4.2 million of outstanding borrowings as of June 30, 2015 and December 31, 2014, respectively.

On October 17, 2014, CGF entered into a subscription agreement with Comstock Development Services, LC (“CDS”), an entity wholly-owned by our Chief Executive Officer, pursuant to which CDS purchased membership interests in CGF for an aggregate principal amount of $10 million (the “CGF Private Placement”). Other purchasers who purchased interest in the CGF Private Placement include members of the Company’s management, board of directors and third party accredited investors for an aggregate principal amount of $6.2 million. Purchasers other than CDS who purchased a certain amount of interests received warrants that represent the right to purchase an aggregate amount of between 500,000 to 1,000,000 shares of the Company’s Class A common stock, depending upon the investment amount. As of June 30, 2015, we issued 534,000 warrants representing the right to purchase shares of the Company’s Class A common stock to CGF having an aggregate fair value of $433 that was treated as a debt discount. In calculating the fair value of the warrants, the Company used the Black-Scholes pricing model based upon the date the funds were contributed to CGF. The Company amortizes the debt discount over the three year term of the loan to interest expense.

Simultaneously, on October 17, 2014, the Company entered into an unsecured promissory note with CGF whereby CGF made a loan to the Company in the initial principal amount of $10 million and a maximum amount available for borrowing of up to $20 million. On December 18, 2014, the Company entered into an amended and restated Original Promissory Note pursuant to which the maximum amount for borrowing was increased from $20 million to $25 million. All of the other terms of the unsecured promissory note remained the same. During 2015, the Company borrowed an additional principal loan amount of $6.2 million under the Amended and Restated CGF promissory note. The CGF loan has a three year term carrying a floating interest rate of LIBOR plus 9.75% with a 10% floor. The loan requires an annual principal repayment in the amount of 10% of the average outstanding balance and a monthly interest payment that will be made in arrears. The loan will be used by the Company (i) to finance the Company’s current and future development pipeline, (ii) to repay all or a portion of the Company’s prior private placements, (iii) to repay all or a portion of the Company’s project mezzanine loans, and (iv) for general corporate purposes. The Company is the administrative manager of CGF but does not own any membership interests. The Company had approximately $13.9 million and $11.3 million of outstanding borrowings under the CGF loan, net of discounts, as of June 30, 2015 and December 31, 2014, respectively. For the three and six months ended June 30, 2015, the Company made interest payments under the CGF loan of $0.4 million and $0.8 million, respectively. As of June 30, 2015 and December 31, 2014, the interest rate of the CGF loan was 10.0% per annum.

On December 18, 2014, CGF entered into amended and restated subscription agreements with CDS, management, members of the Company’s board of directors and third party accredited investors who participated in the CGF Private Placement (the “Amended CGF Private Placement”). Under the Amended CGF Private Placement, in addition to the warrants described above, the Company entered into a commitment to grant 1,588,000 shares of the Company’s Class A common stock to purchasers of membership interests of CGF in the Amended CGF Private Placement. The Company determined the fair value of the stock based on the closing price of our stock on the dates the funds were received by CGF.

On May 12, 2015, the Company granted the aggregate amount of 1,588,000 un-registered shares of Class A common stock to the Purchasers in the Amended CGF Private Placement. Upon issuance of these shares, the derivative liability was satisfied, and was no longer an obligation, and therefore the value of the shares were recorded within ‘Stockholders’ equity’ as an increase to Class A common stock and ‘Additional paid-in capital’ within the consolidated balance sheets based on the fair value on the date of issuance. The resulting change in fair value was recorded as a gain on derivative and is included within ‘Other income’ on the consolidated statement of operations. The shares of Class A common stock were issued pursuant to exemptions from the registration requirements of the Securities Act provided by Section 4(a)(2) thereof and Rule 506 promulgated thereunder.