RELATED PARTY TRANSACTIONS

9 Months Ended

Jun. 30, 2023

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 10 – RELATED PARTY TRANSACTIONS

Related parties are natural persons or other entities that have the ability, directly or indirectly, to control another party or exercise significant influence over the party making financial and operating decisions. Related parties include other parties that are subject to common control or that are subject to common significant influences.

Revolving Loan Agreement

Effective as of July 29, 2022, we entered into the Revolving Loan Agreement. In connection with the loan under the Revolving Loan Agreement, the Subordinated Lenders delivered the Revolving Loan Subordination Agreements to the Senior Lender. In connection with the delivery of the Revolving Loan Subordination Agreements by the Subordinated Lenders, on July 29, 2022, we issued warrants to each Subordinated Lender on identical terms for an aggregate of up to 296,329 shares of our Common Stock. Each warrant has an exercise price of $5.25 per share, expires on July 29, 2025. One warrant for 191,570 warrant shares was issued to Eagle Investment Group, LLC, an entity managed by Bruce Cassidy, Chairman of our Board of Directors, as directed by its affiliate, Excel, one of the Subordinated Lenders.

Excel Non-Revolving Loan Agreement

On February 23, 2022, we entered into the Prior Excel Loan Agreement with Excel, an entity managed by Bruce Cassidy, Chairman of our Board of Directors, for the $2m Loan (aggregate principal amount of $1,500,000, which was amended on April 13, 2022, to increase the aggregate principal amount to $2,000,000. Effective as of April 25, 2022, we entered into the Excel Non-Revolving Loan Agreement for the Excel Non-Revolving Loan (aggregate principal amount of $4,022,986). The Excel Non-Revolving Loan matures eighteen (18) months from the date of the Excel Non-Revolving Loan Agreement and accrues interest, payable semi-annually in arrears, at a fixed rate of interest equal to twelve (12) percent per year. On April 25, 2022, we used $2,000,000 of the proceeds of the Excel Non-Revolving Loan to prepay all of the remaining outstanding principal and interest of the $2m Loan and the Prior Excel Loan Agreement was terminated in connection with such prepayment. Under the Excel Non-Revolving Loan Agreement, we granted to the lender a security interest in all of our present and future assets and properties, real or personal, tangible or intangible, wherever located, including products and proceeds thereof (which was subsequently subordinated in connection with the Revolving Loan Agreement). In connection with the Excel Non-Revolving Loan, on April 25, 2022, we issued a warrant for an aggregate of up to 383,141 shares of our Common Stock. The warrant has an exercise price of $5.25 per share, expires on April 25, 2025, and shall be exercisable at any time prior to the expiration date. Effective as of December 14, 2022, we entered into a Non-Revolving Line of Credit Agreement Amendment and a Non-Revolving line of Credit Promissory Note Amendment with Excel to extend the maturity date of the Excel Non-Revolving Loan from eighteen (18) months to twenty-four (24) months from the date of the Excel Non-Revolving Loan. Effective as of May 10, 2023, we entered into a Non-Revolving Line of Credit Agreement Amendment No. 2 and a Non-Revolving Line of Credit Promissory Note Amendment No. 2 with Excel to extend the maturity date of the Excel Non-Revolving Loan from twenty-four (24) months to twenty-five (25) months from the date of the Excel Non-Revolving Loan.

The Excel Non-Revolving Loan had a balance, including accrued interest, amounting to $4,352,871 and $4,226,181 as of June 30, 2023, and September 30, 2022, respectively. We incurred interest expense for the Excel Non-Revolving Loan in the amount of $325,226 and $331,548 for the three months ended June 30, 2023, and 2022, respectively, and $1,080,945 and $331,548 for the nine months ended June 30, 2023, and 2022, respectively.

2023 Secured Loan

Excel, an entity managed by Bruce Cassidy, Chairman of our Board of Directors, has committed to be a lender under the 2023 Secured Loan Agreement for an aggregate loan of $2.65 million. As of the date of this filing, Excel has not loaned any funds to us under the 2023 Secured Loan.  

Excel $2.2M Line of Credit

On May 31, 2023, we entered into the Excel Secured Line of Credit Agreement with Excel, an entity managed by Bruce Cassidy, Chairman of our Board of Directors for the Excel $2.2M Line of Credit, evidenced by a Non-Revolving Line of Credit Promissory Note. The Excel $2.2M Line of Credit matures ninety (90) days from the date of the Excel Secured Line of Credit Agreement and accrues interest, payable in arrears on the Excel $2.2M Line of Credit maturity date, at a fixed rate of interest equal to ten and one half (10.5) percent per year.

The Excel $2.2M Line of Credit had a balance, including accrued interest, amounting to $2,219,250 and $0 as of June 30, 2023, and September 30, 2022, respectively. We incurred interest expense for the Excel $2.2M Line of Credit in the amount of $19,250 and $0 for the three months ended June 30, 2023, and 2022, respectively, and $19,250 and $0 for the nine months ended June 30, 2023, and 2022, respectively.

500 Limited

For the nine months ended June 30, 2023, and 2022, we paid 500 Limited $307,000 and $310,269, respectively, for programming services provided to Loop Media. 500 Limited is an entity controlled by Liam McCallum, our Chief Product and Technology Officer.