AmBase Corporation Enters Into Senior Promissory Note with Chairman and CEO

AmBase Corporation (OTCMKTS: ABCP) recently disclosed in an 8-K filing submitted to the Securities and Exchange Commission that the company has entered into a significant financial agreement with its Chairman, President, and Chief Executive Officer, Mr. Richard A. Bianco. This agreement, signed in December 2024, involves a Senior Promissory Note that includes a loan provision to AmBase Corporation for $500,000, bearing an interest rate of 6.5% per annum. The purpose of this loan is to support the company’s working capital requirements.

The terms of the Promissory Note stipulate that the loan is due either on the date when the Company receives adequate funds from any source to settle the amounts owed, inclusive of interest, particularly from a potential settlement related to the 111 West 57th legal proceedings, or by December 31, 2027. Additionally, the agreement allows Mr. Richard A. Bianco the option to convert the amounts due under the Promissory Note, along with interest, into a litigation funding agreement parallel to any such agreements entered into by the Company with litigation funding entities.

AmBase Corporation has been upfront about its financial challenges, as previously highlighted in its filings under the Securities Exchange Act of 1934, including concerns about its viability as a going concern. In light of this, the company has been actively exploring various funding and financing options to maintain its operations and support the ongoing litigation associated with the 111 West 57th Property. Potential funding sources could include third parties, existing shareholders, or management, through mechanisms such as litigation funding agreements, equity or debt securities, loans, or a combination of these.

As part of its strategy moving forward, AmBase Corporation is considering engaging in additional litigation funding agreements with external funders to secure up to $5 million for litigation costs. These agreements typically involve the funder receiving their initial funding along with additional returns on investment, including fees, expenses, and interest, based on the outcome of the litigation. However, there is no guarantee that favorable funding terms can be secured.

The company also continues to evaluate options regarding its disputes and legal matters concerning the 111 West 57th Property. This includes exploring potential asset value recovery strategies, legal avenues to uphold its rights, and potentially divesting its interest in the property. However, uncertainties remain regarding the company’s success in these endeavors.

AmBase Corporation encourages stakeholders to refer to its Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and other periodic filings for a comprehensive overview of its legal proceedings. It emphasizes the importance of considering this 8-K disclosure in conjunction with prior periodic reports to gain a holistic view of the company’s financial health and operational results.

The terms and conditions of the recent funding and financing agreements are still subject to negotiation, and there is no definite assurance of successful completion. AmBase Corporation remains committed to pursuing viable financial solutions to maintain its operations and resolve its outstanding legal matters effectively.

This article is based on the information provided in the 8-K filing by AmBase Corporation and does not reflect any external commentary or analysis on the matter.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read AmBase’s 8K filing here.

About AmBase

AmBase Corporation does not have significant operations. Previously, it invested in a real estate development property. The company was incorporated in 1975 and is headquartered in Coral Springs, Florida.