DEBT AND DEBT - RELATED PARTIES

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

DEBT AND DEBT - RELATED PARTIES

5. DEBT AND DEBT - RELATED PARTIES

	March 31, 2022			December 31, 2021
Senior Secured Promissory Notes	$	1,305,000		$	1,305,000
Senior Secured Promissory Notes - Related Parties		750,000			750,000
Fixed-Rate Mortgage Loans		31,395,111			31,407,503
Variable-Rate Mortgage Loans		5,015,982			5,063,841
Other Debt, Subordinated Secured		741,000			741,000
Other Debt, Subordinated Secured - Related Parties		150,000			150,000
Other Debt, Subordinated Secured - Seller Financing		85,738			93,251
		39,442,831			39,510,595
Unamortized Discount and Debt Issuance Costs		(1,243,071	)		(1,243,071	)
	$	38,199,760		$	38,267,524
As presented in the Consolidated Balance Sheets:
Current Maturities of Long Term Debt, Net	$	3,438,860		$	6,312,562
Short term debt – Related Parties, Net		150,000			150,000
Debt, Net		33,860,900			31,054,962
Debt - Related Parties, Net		750,000			750,000

The weighted average interest rate and term of our fixed rate debt are 3.55% and 15.17 years, respectively, as of March 31, 2022. The weighted average interest rate and term of our variable rate debt are 5.90% and 16.12 years, respectively, as of March 31, 2022.

During the three months ended March 31, 2022, the Company did not issue any non-related party debt. The Company has made payments of $353,811 on non-related party debt. Additionally, the Company financed $581,393 of insurance premiums.

Corporate Senior and Senior Secured Promissory Notes

As of March 31, 2022, and December 31, 2021, the senior secured notes are subject to annual interest ranging from 10% to 11% and an original maturity date of October 31, 2021. These notes were extended to June 30, 2023 and as consideration the Company modified the outstanding warrants to extend the life and additional 1.67 years. As a result of the warrant modification, the Company recorded the incremental increase in fair value of $844,425 as a debt discount which will be amortized over the new life of the loans.

Mortgage Loans and Lines of Credit Secured by Real Estate

Mortgage loans and other debts such as line of credit here are collateralized by all assets of each nursing home property and an assignment of its rents. Collateral for certain mortgage loans includes the personal guarantee of Christopher Brogdon, formerly but no longer a related party, or corporate guarantees. Mortgage loans for the periods presented consisted of the following:

					Total Principal Outstanding as of
State	Number of Properties		Total Face Amount		March 31, 2022		December 31, 2021
Arkansas(1)		1	$	5,000,000	$	4,017,993	$	4,058,338
Georgia		5	$	17,765,992	$	16,519,160	$	16,581,283
Ohio		1	$	3,000,000	$	2,728,599	$	2,728,599
Oklahoma(3)		6	$	12,129,769	$	11,520,588	$	11,823,385
		13	$	37,895,761	$	34,786,340	$	35,191,605

(1)	The mortgage loan collateralized by this property is 80% guaranteed by the USDA and requires an annual renewal fee payable in the amount of 0.25% of the USDA guaranteed portion of the outstanding principal balance as of December 31 of each year. Guarantors under the mortgage loan include Christopher Brogdon. Mr. Brogdon has assumed operations of the facility and is making payments of principal and interest on the loan on our behalf in lieu of paying rent on the facility to us. During the three months ended March 31, 2022, the Company recognized other income of $40,346 for repayments on the loan.
(2)	The Company has refinanced two of its mortgages that would have matured in June and October of 2021 amounting to $2,961,167 and $3,289,595, to extend their maturity dates to May 2024 for both.
(3)	The Company refinanced all three mortgages in July 2021, that would have matured in June and July of 2021 amounting to $2,065,969 and $750,000, $500,000, to extend their maturity dates to June, 2027 for all three. Additionally, the Company has refinanced the primary mortgage at the Southern Hills Campus, for 35 years at 2.38%.

Subordinated, Corporate and Other Debt

Other debt outstanding as of March 31, 2022 and December 31, 2021 includes unsecured notes payable issued to entities controlled by the Company used to facilitate the acquisition of the nursing home properties.

				Principal Outstanding at
Property		Face Amount		March 31, 2022		December 31, 2021	Stated Interest Rate	Maturity Date
Goodwill Nursing Home	$	2,030,000	$	741,000	$	741,000	13% Fixed	31-Dec-19
Goodwill Nursing Home – Related Party	$	150,000		150,000		150,000	13% Fixed	31-Dec-19
Higher Call Nursing Center	$	150,000		82,265		93,251	8% Fixed	1-Apr-24
			$	973,265	$	984,251

Our corporate debt outstanding as of March 31, 2022, and December 31, 2021 includes unsecured notes and notes secured by all assets of the Company not serving as collateral for other notes.

			Principal Outstanding at
Series	Face Amount		March 31, 2022		December 31, 2021		Stated Interest Rate	Maturity Date
10% Senior Secured Promissory Notes		1,670,000		1,230,000		1,230,000	10.0% Fixed	30-Jun-23
10% Senior Secured Promissory Notes – Related Party		975,000		750,000		750,000	10.0% Fixed	30-Jun-23
			$	1,980,000	$	1,980,000

During the three months ended March 31, 2022, $255,000 of debt was converted to 2,560 of shares.