Stewards, Inc. Announces Block 40 Refinancing and $5M Convertible Note Financing

What Happened

• Stewards, Inc. announced on July 24, 2026 that its subsidiaries closed a $69.0 million senior secured loan and a simultaneous up-to-$10.0 million mezzanine loan to refinance its multifamily property known as Block 40 / 1818 Park (1818 Hollywood Blvd., Hollywood, FL). The senior loan was made to Block 40 Property, LLC by VMC CRE Master Lending Upper REIT LLC; the mezzanine loan was made to Block 40 Holdco LLC by 1818 Mezz Lender LLC.
• On or about July 27, 2026, Stewards also closed a private $5.0 million secured convertible note financing (three accredited investors) and issued accompanying common stock purchase warrants, and funded an initial $5.0 million tranche of a separate convertible promissory note issued by HOPCo Intermediate Holdings II, Inc. in an available amount up to $25.0 million.

Key Details

• Senior loan: $69,000,000 principal; interest = Term SOFR + 350 bps (3.50%) with a planned reduction to 300 bps (3.00%) after the Margin Change Date; original maturity August 7, 2028 with three successive one‑year extension options; 1.00% origination and exit fees; secured by mortgage and related security documents. This note renews and restates prior indebtedness with no new obligors or additional principal.
• Mezzanine loan: up to $10,000,000; interest = Term SOFR + 12.00% (floor 14.50%) until Margin Change Date, then Term SOFR + 10.50% (floor 14.00%); same base maturity and extension mechanics as senior loan; includes guaranties and a limited payment guaranty capped at $19,750,000.
• Convertible note financing: $5,000,000 aggregate principal; 15% annual interest; 180‑day maturity; automatic conversion at maturity (principal + accrued interest) into Common Stock at $3.00/share (conversion prior to maturity requires company consent); accompanied by warrants to buy shares equal to principal ÷ $3.00 (aggregate 1,666,665 shares) at $3.00 exercise price for five years; secured by a first‑priority security interest in substantially all of Stewards’ personal property; issued in a Rule 506 private placement to accredited investors.
• HOPCo note: HOPCo issued Stewards a convertible note with an available amount up to $25,000,000, initial funding of at least $5,000,000 (funded), interest 8% PIK (compounding), maturity July 27, 2031, and automatic conversion into HOPCo units if a qualifying equity closing does not occur by Oct 31, 2026.

Why It Matters

• The refinancing secures financing for Stewards’ Block 40 property and sets lender terms and maturities through at least August 2028 (with extension options), reducing near-term refinancing risk for that asset.
• The mezzanine debt is higher-cost and subordinated to the senior loan and comes with guaranties from the company and certain affiliates, which increases contingent obligations on the company and certain officers.
• The $5M secured convertible notes and warrants are a near-term financing source but create potential equity dilution (automatic conversion at $3.00/share; warrants for ~1.67M shares) and grant lenders a broad security interest in Stewards’ personal property. Proceeds are intended to support the HOPCo-related transaction and general corporate purposes.
• Investors should note the mix of secured senior debt, higher‑cost mezzanine financing, and convertible securities — each affects the company’s capital structure, collateral encumbrances, and potential future share count.