Note 12 - Notes payable | December 31, 2016 $ December 31, 2015 $ Mortgages payable on February 20, 2034, bearing interest at a variable rate, collateralized by a deed of trust on the real estate properties purchased with the loan 194,984 203,343 Promissory note payable on November 1, 2019, bearing interest at 5.371% per annum, collateralized by the real estate properties titled to ARP Borrower, LLC and 100% equity ownership in ARP Borrower, LLC. The note is also secured by the Company 1,628,276 1,651,183 Promissory note payable on December 1, 2020, bearing interest at 5.88% per annum, collateralized by the real estate properties titled to ARP Borrower II, LLC and 100% equity ownership in ARP Borrower II, LLC 956,815 968,000 Promissory note payable on May 27, 2017, bearing interest at 16% per annum, collateralized by a deed of trust on the real estate property purchased with the loan 180,000 180,000 Promissory note payable on July 8, 2017, bearing interest at 18% per annum initially and at 12% per annum after four months, collateralized by a deed of trust on the real estate property purchased with the loan 80,000 80,000 Promissory note payable on April 1, 2017, bearing interest at 16% per annum, collateralized by a deed of trust on the real estate properties titled to ARP 122,298 – Promissory note payable on January 1, 2022, bearing interest at 10% per annum, collateralized by a deed of trust on the real estate properties purchased with the loan 350,000 – Mortgage payable on April 1, 2053, bearing interest at 2% per annum, collateralized by a deed of trust on the real estate properties purchased with the loan 244,767 – Promissory note payable on May 1, 2021, bearing interest at 6.07% per annum, collateralized by the real estate properties titled to AHIT Valfre, LLP and ARP Borrower, LLC 1,196,022 – Mortgage payable on April 1, 2028, bearing interest at 2.985% per annum, collateralized by the real estate property purchased with the loan 123,571 – Mortgage payable on April 1, 2018, bearing interest at 5% per annum, collateralized by a deed of trust on the real estate properties purchased with the loan – 18,861 Mortgage payable on July 1, 2029, bearing interest at 4.125% per annum, collateralized by a deed of trust on the real estate properties purchased with the loan – 91,943 Home Equity Line-of-credit, bearing interest at a variable interest rate, collateralized by a deed of trust on the real estate properties purchased with the loan – 46,108 Mortgage payable on October 1, 2035, bearing interest at a variable rate, collateralized by a deed of trust on the real estate properties purchased with the loan – 140,512 Mortgage payable on June 1, 2043, bearing interest at 4.125% per annum, collateralized by a deed of trust on the real estate properties purchased with the loan – 113,036 Mortgage payable on July 1, 2041, bearing interest at 5.25% per annum, collateralized by a deed of trust on the real estate properties purchased with the loan – 274,905 Home Equity Line-of-credit, bearing interest at 8.25% per annum, collateralized by a deed of trust on the real estate properties purchased with the loan – 34,484 Mortgage payable on June 1, 2043, bearing interest at 4.125% per annum, collateralized by a deed of trust on the real estate properties purchased with the loan – 132,362 Mortgage payable on December 1, 2034, bearing interest at a variable rate, collateralized by a deed of trust on the real estate properties purchased with the loan – 111,168 Mortgage payable on January 1, 2022, bearing interest at 4.375% per annum, collateralized by a deed of trust on the real estate properties purchased with the loan – 16,683 Mortgage payable on September 1, 2033, bearing interest at a variable rate, collateralized by a deed of trust on the real estate properties purchased with the loan – 76,336 Home Equity Line-of-credit payable on January 13, 2040, bearing interest at 2.76% per annum, collateralized by a deed of trust on the real estate properties purchased with the loan – 50,215 Mortgage payable on November 1, 2026, bearing interest at 4.5% per annum, collateralized by a deed of trust on the real estate properties purchased with the loan – 82,526 5,076,733 4,271,665 Note payable – relate party, payable on June 1, 2026, bearing interest at 4.5% per annum, collateralized by a deed of trust on the real estate properties purchased with the loan 74,307 – 5,151,040 4,271,665 On April 18, 2016, AHIT-Valfre closed financing with FirstKey Mortgage, LLC and entered into a balloon note for $1,203,000, bearing interest at 6.07% per annum and due on May 1,2021. The note is collateralized by the real estate properties titled to AHIT Valfre. The proceeds from the balloon note were used to pay off mortgages previously assumed by AHIT-Valfre on August 3, 2015. Effective July 8, 2016, the deed of trust and $80,000 promissory note owed by the Company was amended such that the maturity date was extended from July 8, 2016 to July 8, 2017. Commencing July 8, 2016, the promissory note will bear interest 18% per annum initially and then 12% per annum after four months. On November 8, 2016, the Company entered into a promissory note for $90,000, bearing interest at 12% per annum and due on November 8, 2017. The note is collateralized by a real estate property titled to ARP. On December 23, 2016, the Company sold the property and repaid principal amount of $90,000. Effective November 27, 2016, the $180,000 promissory note owed by the Company was amended such that the maturity date was extended from November 27, 2016 to May 27, 2017. On December 7, 2016, the Company amended a Promissory Note with original principal balance of $314,831 whereby the creditor provided additional funding of $11,435 to the Company. The accrued interest to December 7, 2016 ($21,689) and the interest from December 8, 2016 to December 31, 2016 ($2,045) were also added to the new principal. The principal amount of the new note is $350,000. The new note bears interest at 10% per annum and is due on January 1, 2022. The Company evaluated the application of ASC 470-50 and ASC 470-60 by Debtors and determined the original and new debt instruments are not substantially different and the revised terms constituted a debt modification rather than a debt extinguishment. The following table schedules the principal payments on the notes payable for the next five years and thereafter as of December 31, 2016: Year Amount 2017 $ 460,964 2018 82,604 2019 1,637,530 2020 966,215 2021 1,166,682 thereafter 837,045 Total $ 5,151,040 At December 31, 2016, the weighted-average interest rate on short-term borrowings outstanding was 15.43%. The average amount of short-term borrowings during the year ended December 31, 2016 was $186,667. The average interest on short-term borrowings during the year ended December 31, 2016 was $26,562. |