PATRIOT NATIONAL BANCORP INC
For the period ended Jun 30, 2025. Filed Aug 14, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 14, 2025
PNBK$0.84+2.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-14.
0001628280-25-025485
Item 2. : Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-14.
0001628280-25-040370
Item 2. : Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 165 previous paragraphs and 189 current paragraphs.
77 unchanged; 81 reworded; 29 added; 7 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 13 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (29)
Current report
(1)We are operating under a formal agreement with the OCC requiring our Board of Directors to implement enhancements in strategic planning, capital planning, BSA/AML compliance, payment activities oversight, credit administration, and concentration risk management. The agreement reflects the OCC’s supervisory view that our controls in these areas must be strengthened. Failure to meet the agreement’s requirements on a timely basis could result in additional regulatory actions or restrictions, which could adversely affect our operations and financial condition.
Current report
(2)Our Digital Payments Division relies on third-party program managers and processors to operate programs under our BINs. Because certain transactions occur through their systems, our visibility and direct control over all activities may be limited. This structure increases our exposure to fraud, compliance failures, and operational issues by third parties, which could result in financial losses, regulatory action, network penalties, and reputational harm.
Current report
For the six months ended June 30, 2025, the net loss was $7.8 million, or $0.17 basic and diluted loss per share, compared to a net loss of $3.4 million, ($0.85 basic and diluted loss per share) for the six months ended June 30, 2024. This represents a year-over-year increase in net loss of $4.4 million.
Current report
Private Placement
Current report
Amendment to Notes
Current report
Note Conversions
Current report
On May 13, 2025, two holders of the Senior Notes, converted a total of $1,896,957 of the aggregate principal and accrued unpaid interest due on the Senior Notes into 2,529,275 shares of Common Stock.
Current report
On July 25, 2025, Unity Bancorp Inc. (“Unity”) notified the Company of its desire to convert the entire outstanding principal balance and accrued unpaid interest of the Senior Notes, totaling $2,005,027, into 2,673,369 shares of Common Stock at a conversion price of $0.75 per share. Similarly, on July 26, 2025, American Bank Incorporated (“AmBank”) provided notice to convert its outstanding principal balance and accrued unpaid interest of its Senior Note, amounting to $803,443, into 1,071,258 shares of Common Stock at the same conversion price of $0.75 per share.
Current report
Registered Direct Offering
Current report
On July 5, 2025, the Company completed its registered direct offering of 8,524,160 shares of its common stock at a purchase price of $1.25 per share, raising gross proceeds of $10,655,200.
Current report
Commercial Real Estate Loans ("CRE")
Current report
In accordance with OCC Bulletin 2006-46, "Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices: Interagency Guidance on CRE Concentration Risk Management", and the Joint Interagency Guidance (71 FR 74580), the Bank monitors its CRE lending relative to total capital. As of June 30, 2025, the Bank’s CRE concentration was 301% of total Tier 1 capital plus allowance for credit loss, below the Bank’s concentration policy limit of 350%. This concentration level is slightly above the 300% supervisory monitoring threshold outlined in the guidance. Exceeding this threshold does not, by itself, indicate unsafe or unsound banking practices; however, it subjects the Bank to heightened supervisory expectations for portfolio management, risk assessment, and capital planning. Management maintains portfolio management procedures, underwriting standards, and stress testing practices consistent with these regulatory expectations. For purposes of calculating the Bank’s CRE concentration in accordance with this regulatory guidance, owner-occupied CRE loans are excluded from the CRE total and classified as commercial and industrial (“C&I”) loans; however, the CRE portfolio tables above include owner-occupied CRE for presentation purposes.
Current report
Pursuant to guidance provided in OCC Bulletin 2020-49 and Interagency Policy Statement on Allowances for Credit Losses (May 8, 2020), the Bank refined the use of qualitative factors (“Q-Factors”) in its ACL methodology and calculations in the second quarter of 2025.
Current report
The application of the chosen Q-Factors added a net 12 bps to the overall reserves for Q2. The model-only ACL yielded 1.21% of total reserves – and the addition of 12 bps of Q-Factors increased the final ACL to 1.33% of total loans. The Q-Factors make up 9% of the total ACL calculation in Q2, a reasonable addition for the introduction.
Current report
The Q-Factors are applied to specific loan pools and are quantified using management’s best estimates. As noted below, a total of 15 bps of Q-Factors was applied, but because the application is on a pool-by-pool basis, the net effect is only 12 bps across total loans.
Current report
For the six months ended June 30, 2025, net charge-offs declined $2.9 million to $1.9 million, with a net charge-offs to average loans ratio of 0.55% , down from $4.7 million and 1.15% for the six months ended June 30, 2024.
Current report
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We are currently assessing its impact on our Consolidated Financial Statements.
Current report
Interest expense incurred for the three and six months ended June 30, 2025 were $1,000 and $3,000, respectively. Interest expense incurred for the three and six months ended June 30, 2024 were $362,000 and $721,000, respectively.
Current report
On May 13, 2025, two noteholders of the Senior Notes converted a total of $1.90 million of the aggregate principal and accrued unpaid interest due on the Senior Notes into 2,529,275 shares of Common Stock.
Current report
For the three and six months ended June 30, 2025, the Company recognized interest expense of $183,000 and $505,000, respectively. Interest expense incurred for the three and six months ended June 30, 2024 was $289,000 and $579,000, respectively.
Current report
For the three and six months ended June 30, 2025, the Company recognized interest expense of $164,000 and $377,000, respectively. Interest expense incurred for the three and six months ended June 30, 2024 was $224,000 and $451,000, respectively.
Current report
For the three and six months ended June 30, 2025, the Company recognized interest expense of $163,000 and $325,000, respectively. Interest expense incurred for the three and six months ended June 30, 2024 was $180,000 and $359,000, respectively.
Current report
For the three and six months ended June 30, 2025, the Company recognized interest expense of nil and $1,000, respectively. Interest expense incurred for the three and six months ended June 30, 2024 was $2,000 and $3,000, respectively.
Current report
For the six months ended June 30, 2025, interest income and dividend income was $24.0 million, which decreased $3.2 million as compared to $27.2 million for the six months ended June 30, 2024. Total interest expense was $15.9 million, which decreased $891,000 as compared to $16.8 million for the six months ended June 30, 2024. Net interest income was $8.1 million for the six months ended June 30, 2025, which decreased $2.3 million from $10.4 million for the six months ended June 30, 2024.
Current report
The decline for both three and six months ended June 30, 2025 reflects a lower loan balance and narrower net interest margin due to higher deposit costs.
Current report
For the three months ended June 30, 2025, the provision for credit losses was $1.5 million, consisting of a $1.6 million loan provision and a $78,000 credit for off-balance-sheet exposure reserves. In comparison, for the three months ended June 30, 2024, the provision for credit losses was $3.1 million, including a $3.1 million loan provision and a $41,000 credit for off-balance-sheet exposure reserves.
Current report
For the six months ended June 30, 2025, the PCL was $2.3 million, which included a $2.4 million loan provision and a $101,000 credit for off-balance-sheet exposure reserves. For the six months ended June 30, 2024, the provision was $3.8 million, consisting of a $3.8 million provision and a $36,000 credit for off-balance-sheet exposure reserves.
Current report
One key driver in both the level of outstanding loans and reserves is the pool of purchased unsecured consumer loans, which decreased from $32.3 million as of June 30, 2024 to $12.4 million as of June 30, 2025. Correspondingly, the reserves for this pool also fell, declining from $4.6 million as of June 30, 2024 to $2.7 million as of June 30, 2025.
Current report
Non-interest expense for the three months ended June 30, 2025 increased to $9.7 million, up from $8.0 million for the three months ended June 30, 2024. For the six months ended June 30, 2025, non-interest expense totaled $18.5 million, compared to $15.2 million for the six months ended June 30, 2024. The increase in 2025 is primarily attributed to the higher salaries and benefits, along with other operating expense.
Removed paragraphs (7)
Previous report
Interest expense incurred for the three months ended March 31, 2025 and March 31, 2024 were $2,000 and $359,000, respectively.
Previous report
For the three months ended March 31, 2025 and 2024, the Company recognized interest expense of $322,000 and $290,000, respectively.
Previous report
For the three months ended March 31, 2025 and 2024, the Company recognized interest expense of $213,000 and $227,000, respectively.
Previous report
For the three months ended March 31, 2025 and 2024, the Company recognized interest expense of $162,000 and $179,000, respectively.
Previous report
For the three months ended March 31, 2025 and 2024, the Company recognized interest expense of $1,000 and $1,000, respectively.
Previous report
Provision for credit losses for the three months ended March 31, 2025, amounted to $733,000. This encompassed a $756,000 PCL on loans and a $23,000 of reserve for credit losses on unfunded commitments. For the three months ended March 31, 2024, the PCL was $658,000, consisting of $653,000 PCL on loans and a $5,000 PCL on unfunded commitments.
Previous report
Non-interest expense for the three months ended March 31, 2025 increased by $1.5 million to $8.7 million, compared to $7.2 million for the three months ended March 31, 2024. The primary drivers of this increase were higher salaries and benefit expenses of $355,000, professional and other outside services of $240,000, regulatory assessments of $236,000, and an OREO expense of $253,000 which is included in other operating expense in the first quarter of 2025.
Reworded paragraphs (81)
Previous wording
(1)changes in prevailing interest rates which would affect the interest earned on the Company’s interest earning assets and the interest paid on its interest bearing liabilities;
Current wording
(3)changes in prevailing interest rates which would affect the interest earned on the Company’s interest earning assets and the interest paid on its interest bearing liabilities;
Previous wording
(2)the timing of re-pricing of the Company’s interest earning assets and interest bearing liabilities;
Current wording
(4)the timing of re-pricing of the Company’s interest earning assets and interest bearing liabilities;
Previous wording
(3)the effect of changes in governmental monetary policy;
Current wording
(5)the effect of changes in governmental monetary policy;
Previous wording
(4)the effect of changes in regulations applicable to the Company and the Bank and the conduct of its business;
Current wording
(6)the effect of changes in regulations applicable to the Company and the Bank and the conduct of its business;
Previous wording
(5)changes in competition among financial service companies, including possible further encroachment of non-banks on services traditionally provided by banks;
Current wording
(7)changes in competition among financial service companies, including possible further encroachment of non-banks on services traditionally provided by banks;
Previous wording
(6)the ability of competitors that are larger than the Company to provide products and services which it is impracticable for the Company to provide;
Current wording
(8)the ability of competitors that are larger than the Company to provide products and services which it is impracticable for the Company to provide;
Previous wording
(7)the state of the economy and real estate values in the Company’s market areas, and the consequent effect on the quality of the Company’s loans;
Current wording
(9)the state of the economy and real estate values in the Company’s market areas, and the consequent effect on the quality of the Company’s loans;
Previous wording
(8)demand for loans and deposits in our market area;
Current wording
(10)demand for loans and deposits in our market area;
Previous wording
(9)recent governmental initiatives that are expected to have a profound effect on the financial services industry and could dramatically change the competitive environment of the Company;
Current wording
(11)recent governmental initiatives that are expected to have a profound effect on the financial services industry and could dramatically change the competitive environment of the Company;
Previous wording
(10)other legislative or regulatory changes, including those related to residential mortgages, changes in accounting standards, and Federal Deposit Insurance Corporation (“FDIC”) premiums that may adversely affect the Company;
Current wording
(12)other legislative or regulatory changes, including those related to residential mortgages, changes in accounting standards, and Federal Deposit Insurance Corporation (“FDIC”) premiums that may adversely affect the Company;
Previous wording
(11)the application of generally accepted accounting principles in the United States of America (“U.S. GAAP”), consistently applied;
Current wording
(13)the application of generally accepted accounting principles in the United States of America (“U.S. GAAP”), consistently applied;
Previous wording
(12)the fact that one period of reported results may not be indicative of future periods;
Current wording
(14)the fact that one period of reported results may not be indicative of future periods;
Previous wording
(13)the state of the economy in the greater New York metropolitan area and its particular effect on the Company's customers, vendors and communities and other such factors, including risk factors, as may be described in the Company’s other filings with the Securities and Exchange Commission (the “SEC”);
Current wording
(15)the state of the economy in the greater New York metropolitan area and its particular effect on the Company's customers, vendors and communities and other such factors, including risk factors, as may be described in the Company’s other filings with the Securities and Exchange Commission (the “SEC”);
Previous wording
(14)political, social, legal and economic instability, civil unrest, war, catastrophic events, acts of terrorism;
Current wording
(16)political, social, legal and economic instability, civil unrest, war, catastrophic events, acts of terrorism;
Previous wording
(15)possible future outbreaks of infectious diseases, including the ongoing novel coronavirus (COVID-19) outbreak;
Current wording
(17)possible future outbreaks of infectious diseases, including the ongoing novel coronavirus (COVID-19) outbreak;
Previous wording
(16)changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for c losses;
Current wording
(18)changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for c losses;
Previous wording
(17)our ability to access cost-effective funding;
Current wording
(19)our ability to access cost-effective funding;
Previous wording
(18)our ability to implement and change our business strategies;
Current wording
(20)our ability to implement and change our business strategies;
Previous wording
(19)changes in the quality or composition of our loan or investment portfolios;
Current wording
(21)changes in the quality or composition of our loan or investment portfolios;
Previous wording
(20)technological changes that may be more difficult or expensive than expected;
Current wording
(22)technological changes that may be more difficult or expensive than expected;
Previous wording
(21)our ability to manage market risk, credit risk and operational risk in the current economic environment;
Current wording
(23)our ability to manage market risk, credit risk and operational risk in the current economic environment;
Previous wording
(22)our ability to enter new markets successfully and capitalize on growth opportunities;
Current wording
(24)our ability to enter new markets successfully and capitalize on growth opportunities;
Previous wording
(23)changes in consumer spending, borrowing and savings habits;
Current wording
(25)changes in consumer spending, borrowing and savings habits;
Previous wording
(24)our ability to retain key employees;
Current wording
(26)our ability to retain key employees;
Previous wording
(25)our compensation expense associated with equity allocated or awarded to our employees;
Current wording
(27)our compensation expense associated with equity allocated or awarded to our employees;
Previous wording
(26)the premiums paid for the guaranteed portion of SBA loans by third party investors;
Current wording
(28)the premiums paid for the guaranteed portion of SBA loans by third party investors;
Previous wording
(27)our ability to meet regulatory capital requirements; and
Current wording
(29)our ability to meet regulatory capital requirements; and
Previous wording
(28)the imposition of new or increased tariffs on imported or exported goods, which could negatively impact economic activity in the Company’s markets, affect the creditworthiness of borrowers, and reduce demand for the Company’s products and services.
Current wording
(30)the imposition of new or increased tariffs on imported or exported goods, which could negatively impact economic activity in the Company’s markets, affect the creditworthiness of borrowers, and reduce demand for the Company’s products and services.
Previous wording
The Company reported net loss of $2.8 million ($0.21 basic and diluted loss per share) for the quarter ended March 31, 2025, compared to a net loss of $299,000 ($0.08 basic and diluted loss per share) for the quarter ended March 31, 2024.
Current wording
The Company reported net loss of $5.0 million ($0.06 basic and diluted loss per share) for the quarter ended June 30, 2025, compared to a net loss of $3.1 million ($0.77 basic and diluted loss per share) for the quarter ended June 30, 2024.
Previous wording
During the first quarter of 2025, net interest income declined $1.5 million, compared to the first quarter of 2024 due to an intentional decline in loan balances. The Company reported a decrease in gross loans of $33.3 million in the first quarter of 2025, from $707.5 million at December 31, 2024 to $674.2 million at March 31, 2025. The Company has continued the trend of restricting loan growth and allowing loans to pay down as the balance sheet is reduced in order to strengthen capital ratios.
Current wording
For the three and six months ended June 30, 2025, net interest income declined $835,000 and $2.3 million, compared to the three and six months ended June 30, 2024, respectively, due to an intentional decline in loan balances. The Company reported a decrease in gross loans of $119.9 million in 2025, from $707.5 million at December 31, 2024 to $587.5 million at June 30, 2025. The Company has continued the trend of restricting loan growth and allowing loans to pay down as the balance sheet is reduced in order to strengthen capital ratios.
Previous wording
On March 20, 2025, the Company entered into (i) securities purchase agreements (the “Co-Lead Investors Agreements”) with its President and director, Steven Sugarman (the “Lead Party”), and three co-lead investors (the “Co-Lead Investors”), and (ii) securities purchase agreements (the “Purchasers Agreements”, and together with the Co-Lead Investors Agreements, the “Securities Purchase Agreements”) with other accredited investors (collectively, and together with the Co-Lead Investors and the Lead Party, the “Purchasers”).
Current wording
On March 20, 2025, the Company entered into (i) securities purchase agreements (the “Co-Lead Investors Agreements”) with its President and director, Steven Sugarman, and three co-lead investors, and (ii) securities purchase agreements with other accredited investors (collectively, and together with the Co-Lead Investors and the Lead Party, the “Purchasers”).
Previous wording
Total assets decreased $55.7 million to $956.6 million as of March 31, 2025, compared to $1.01 billion at December 31, 2024, primarily due to the decline in gross loans receivable of $33.3 million and a $26.4 million decline in cash, cash equivalents and restricted cash as of March 31, 2025.
Current wording
Total assets decreased $82.3 million to $930.0 million as of June 30, 2025, compared to $1.01 billion at December 31, 2024, primarily due to the decline in gross loans receivable of $119.9 million, partially offset by a $40.4 million increase in cash, cash equivalents and restricted cash as of June 30, 2025.
Previous wording
Cash, cash equivalents and restricted cash decreased from $162.6 million at December 31, 2024 to $136.2 million at March 31, 2025. The decrease in 2025 was primarily due to a $104.2 million reduction in deposits offset by cash received on loans held for investment and cash proceeds on issuance of common and preferred stock shares. After completion of the Private Placement, the Company reduced excess cash by lowering deposits. For further details, refer to the Consolidated Statements of Cash Flows.
Current wording
Cash, cash equivalents and restricted cash increased from $162.6 million at December 31, 2024 to $203.0 million at June 30, 2025. The increase in 2025 was primarily driven by loan repayments and sale of loan receivable, and cash proceeds from issuance of common and preferred stock shares, partially offset by a $135.7 million reduction in deposits. Following the completion of the Private Placement, the Company reduced excess cash by lowering deposits. For further details, refer to the Consolidated Statements of Cash Flows.
Previous wording
Total investments increased by $700,000, from $84.4 million at December 31, 2024 to $85.1 million at March 31, 2025. The increase in the three months ended March 31, 2025 was primarily attributable to a $1.4 million unrealized gain on securities, partially offset by the amortization of securities totaling $827,000. During the three months ended March 31, 2025, the Bank did not sell any available-for-sale securities.
Current wording
Total investments increased by $700,000, from $84.4 million at December 31, 2024 to $85.1 million at June 30, 2025. The increase in the six months ended June 30, 2025 was primarily attributable to a $2.2 million reduction in unrealized losses on securities, partially offset by the repayment of securities totaling $1.7 million. During the six months ended June 30, 2025, the Bank did not sell any available-for-sale securities.
Previous wording
The Company’s loan portfolio decreased $33.3 million, from $707.5 million at December 31, 2024 to $674.2 million at March 31, 2025. The Company has continued the trend of restricting loan growth and allowing loans to pay down as the balance sheet is reduced in order to strengthen capital ratios.
Current wording
The Company’s loan portfolio decreased $119.9 million, from $707.5 million at December 31, 2024 to $587.5 million at June 30, 2025. The Company has continued the trend of restricting loan growth and allowing loans to pay down as the balance sheet is reduced in order to strengthen capital ratios. For the three and six months ended June 30, 2025, the Company sold $15.9 million Home Equity Line of Credit loans and $28.9 million purchased residential restate loans, resulting a recognized net loss of $995,000 on the sale. No loans were sold during the three and six months ended June 30, 2024.
Previous wording
SBA loans held for investment were included in the commercial real estate loans and commercial and industrial loan classifications above. As of March 31, 2025 and December 31, 2024, SBA loans included in the commercial real estate loans were $17.0 million and $18.7 million, respectively. SBA loans included in the commercial and industrial loans were $10.6 million and $11.2 million, respectively.
Current wording
SBA loans held for investment were included in the commercial real estate loans and commercial and industrial loan classifications above. As of June 30, 2025 and December 31, 2024, SBA loans included in the commercial real estate loans were $10.5 million and $18.7 million, respectively. As of June 30, 2025 and December 31, 2024, SBA loans included in the commercial and industrial loans were $10.2 million and $11.2 million, respectively.
Previous wording
At March 31, 2025, the net loan to deposit ratio was 77.4% and the net loan to total assets ratio was 69.8%. At December 31, 2024, these ratios were 72.4% and 69.2%, respectively.
Current wording
At June 30, 2025, the net loan to deposit ratio was 69.8% and the net loan to total assets ratio was 62.3%. At December 31, 2024, these ratios were 72.4% and 69.2%, respectively.
Previous wording
The allowance for credit losses on loans was $6.7 million as of March 31, 2025, compared to $7.3 million as of December 31, 2024, a reduction of $576,000. The decrease in allowance was mainly due to reduction in loan balances and the recognition of charge-offs on the unsecured consumer loan portfolio. Based upon the overall assessment and evaluation of the loan portfolio at March 31, 2025, management believes $6.7 million in the allowance for credit losses, which represented 1.00% of gross loans outstanding, is adequate under prevailing economic conditions to absorb existing losses in the loan portfolio.
Current wording
The allowance for credit losses on loans was $7.8 million as of June 30, 2025, compared to $7.3 million as of December 31, 2024, an increase of $490,000. The increase in allowance was mainly attributed to qualitative factors incorporated into the ACL calculations, even though a reduction in loan balances and the recognition of charge-offs on the unsecured consumer loan portfolio would typically suggest a decrease. Based upon the overall assessment and evaluation of the loan portfolio as of June 30, 2025, management has determined that the $7.8 million allowance for credit loss, representing 1.33% of gross loans outstanding, is adequate to cover expected credit losses under current economic conditions. This assessment follows CECL guidance, which requires estimating expected losses over the life of the loans, considering historical data, current conditions, and future forecasts.
Previous wording
The following table provides detail of activity in the allowance for credit losses on loans for the three months ended March 31, 2025 and 2024:
Current wording
The following table provides detail of activity in the allowance for credit losses on loans for the three and six months ended June 30, 2025 and 2024:
Previous wording
For the three months ended March 31, 2025, net charge-offs decreased $1.5 million to $1.3 million, with a net charge-offs to average loans ratio of 0.19%, compared to $2.8 million and 0.33% for the three months ended March 31, 2024.
Current wording
For the three months ended June 30, 2025, net charge-offs decreased $1.4 million to $536,000, with a net charge-offs to average loans ratio of 0.08%, compared to $1.9 million and 0.24% for the three months ended June 30, 2024.
Showing the first 40 of 81 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
The amendment to the Subordinated Note provides that the interest on the Subordinated Note will be paid-in-kind (“PIK”) and the aggregate outstanding principal amount of the Subordinated Note will be automatically increased on each interest payment date by the amount of such PIK interest for all accrued and unpaid interest payments as of the closing date of the Private Placement and for future scheduled interest payments owed through and including the March 30, 2026 interest payment date. In addition, pursuant to such amendment, the noteholder agreed to convert $2.0 million of the outstanding principal amount of the Subordinated Note into shares of Common Stock effective on the closing date of the Private Placement. The amendment to the Senior Notes provides that (i) the maturity date of the Senior Notes will be extended to April 15, 2028, (ii) the interest rate will be increased to 10.0% effective as of January 1, 2026, and (iii) at any time prior to the maturity date, the Company may repay any amount of the outstanding principal amount of the Senior Notes, in whole or in part, without penalty. In addition, pursuant to such amendment, the noteholders agreed to convert into shares of Common Stock an amount of the outstanding Senior Notes, on a pro rata basis, equal to $5.0 million based on the terms of the amendment and the closing of the Private Placement, and all accrued and unpaid interest payments as of the closing date of the Private Placement and for future scheduled interest payments owed through the January 15, 2026 payment may be PIK.
Current report — wording carried from elsewhere
The following tables present daily average balance sheets, interest income, interest expense and the corresponding yields earned and rates paid for the six months ended June 30, 2025 and 2024: