8. OTHER DEBT INSTRUMENTS

Asset Backed Preferred Instruments

On March 5, 2021, Origination executed an Origination Member Units buy-back structure, in which a member exchanged 100% of their holdings (3,992,629 Origination Member Units representing approximately 23.4% of the outstanding Origination Member Units at the time) along with a $1,000,000 promissory note for 23,500,000 mandatorily redeemable units in a newly created limited partnership controlled by Origination (the "LP Units"). The redemption terms of these LP Units required:

6,670,000 of the LP Units were required to be redeemed at the following prices per unit, depending on when the redemption was made: before May 1, 2021 at $0.71 per LP Unit, or thereafter but before June 1, 2021 at $0.8809 per LP Unit, or thereafter but before September 1, 2021 at $1.00 per LP Unit. If not paid by September 1, 2021, the LP Units would be considered in default.

The remaining 16,830,000 LP Units were required to be redeemed at $1.00 per LP Unit by March 5, 2024. If not redeemed by that date, the redemption price would increase to $1.35 per LP Unit and the Company would be considered to be in default.

While outstanding, all LP Units earned a fixed rate of return of 12% per annum, which increased to 17% in any event of default.

The LP Units were determined to be mandatorily redeemable instruments, classified as a liability, initially measured at fair value and subsequently at amortized cost.

As a result of the buy-back, the Company recorded a reduction to Origination Member Units of $8,680,786 (weighted average issue price of $21.7/unit) a reduction in promissory note liability of $1,000,000, a liability for the LP Units at an initial fair value of $21,565,702 and a reduction to accumulated deficit of $11,884,916. The fair value of the LP Units was determined by discounting the expected cash flows related to the instrument at the market-based rate of 12% per annum at that time.

In the second quarter of 2021, the Company redeemed 6,670,000 LP Units at $0.71 per LP Unit for a total amount of $4,735,700. In 2022, the Company redeemed the remaining LP Units for $16,830,000, plus accrued interest of $2,515,398, using the proceeds from the ABS Facility (Note 7).

For the year ended December 31, 2022, the Company recorded finance expense related to the outstanding LP Units in the amount $658,047 (December 31, 2021 - $1,857,351).

Promissory and Convertible Promissory Notes

The Company did not have promissory and convertible promissory notes outstanding during the year ended December 31, 2022.

	2022		2021
Balance as at January 1	-	$	5,425,000
Issued for cash	-		3,375,000
Converted to Origination Member Units	-		(3,475,000	)
Converted to LP Units	-		(1,000,000	)
Repayment of notes	-		(2,025,000	)
Converted to Origination Member Units	-		(2,300,000	)
Balance as at December 31	-		-

During the year ended December 31, 2021, Origination issued $3,375,000 in promissory and convertible promissory notes for cash, some of which were held by officers of the Company.

The outstanding promissory notes were settled as follows in the year ended December 31, 2021:

$3,475,000 in promissory notes were settled via the issuance of 353,870 Origination Member Units, and $1,000,000 in promissory notes was exchanged and settled as part of the receipt of LP Units, in connection with the Asset Backed Preferred Instrument.
$1,755,000 in promissory notes was paid in cash, and $270,000 in promissory notes was offset with agreed upon overhead expenses paid by the Company on behalf of the note holders, which was shown as a reduction of general and administrative expenses.
$2,300,000 of the convertible promissory notes were converted into 234,216 Origination Member Units.

For the year ended December 31, 2022, the Company recorded finance expense related to the promissory and convertible promissory notes in the amount of $nil (December 31, 2021 - $300,685).