XML 21 R13.htm IDEA: XBRL DOCUMENT v3.23.1
Debt
 3 Months Ended
Mar. 31, 2023
Debt Disclosure [Abstract]  
Debt

Note 7 – Debt

 

The following represents a summary of the Company’s convertible notes payable, convertible note payable – related party, accounts receivable credit facility, and loans payable – related parties, key terms, and outstanding balances at March 31, 2023 and December 31, 2022, respectively:

 

Convertible Notes Payable

 

The Company executed several convertible notes with various lenders as follows:

 

   GS Capital   PowerUp Lending   Sixth Street Lending 
             
Issuance Dates of Convertible Notes   

June 2021 - April 2022

    September 2021    October 2021 - January 2022 
Maturity Dates of Convertible Notes   

June 2022 - April 2023

    September 2022    October 2022 - January 2023 
Interest Rate   10%   12%   12%
Default Interest Rate   24%   22%   22%
Collateral   Unsecured    Unsecured    Unsecured 
Conversion Rate   $0.001 or 60% of the average of the two (2) lowest prices in the prior 20-day period    61% of the average of the two (2) lowest prices in the prior 20-day period    61% of the average of the two (2) lowest prices in the prior 20-day period 

 

 

FOMO WORLDWIDE, INC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2023

UNAUDITED

 

  

GS

Capital

  

PowerUp

Lending

  

Sixth Street

Lending

   Total 
                 
Balance - December 31, 2021  $380,000   $43,750   $78,750   $502,500 
Proceeds from issuance of notes   335,000    -    43,750    378,750 
Conversion of accrued interest to note   16,206              16,206 
Repayment of notes   -    -    (122,500)   (122,500)
Conversion of debt to common stock   (55,000)   (43,750)   -    (98,750)
Balance   676,206    -    -    676,206 
Less: unamortized debt discount   (31,200)   -    -    (31,200)
Balance - December 31, 2022  $645,006   $-   $-   $645,006 

 

  

GS

Capital

  

PowerUp

Lending

  

Sixth Street

Lending

   Total 
                 
Balance - December 31, 2022  $676,206   $-   $-   $676,206 
Proceeds from issuance of notes   -        -    -    - 
Conversion of accrued interest to note   -    -    -    - 
Repayment of notes   -    -    -    - 
Conversion of debt to common stock   -    -    -    - 
Balance   676,206                 -                   -    676,206 
Less: unamortized debt discount   -    -    -    - 
Balance - March 31, 2023  $676,206   $-   $-   $676,206 

 

During the three months ended March 31, 2022, third-party lenders converted $104,367 of principal and interest into 301,448,152 shares of common stock. This resulted in a loss on debt extinguishment of $205,691.

 

Convertible Note Payable – Related Party

 

In March 2022, the Chief Executive Officer of SST advanced funds to the Company as follows:

 

   Convertible Debt 
   Related Party 
     
Issuance Date of Convertible Note   March 31, 2022  
Maturity Date of Convertible Note   September 30, 2022  
Interest Rate   11.50%
Default Interest Rate   0.00%
Collateral   1 
Conversion Rate   2 
      
Balance - December 31, 2021   $- 
Proceeds from issuance of note    195,000 
Repayments    (195,000)
Balance – December 31, 2022   $- 

 

1 200,000 shares of Series B, Preferred Stock
2 Converts into Series B, preferred stock at $1/share ($0.001/share in common stock – 1:1,000 ratio)

 

 

FOMO WORLDWIDE, INC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2023

UNAUDITED

 

During the year ended December 31, 2022, $50,000 of this loan was repaid. On December 19, 2022, the remaining $145,000 was exchanged as part of the SST Founder Employment Status and Compensation Change Agreement.

 

Loans Payable – Related Parties

 

In 2022, the Company, in connection with the acquisition of SST, assumed a loan due to SST’s Chief Executive Officer for $321,705.

 

In 2021 and prior, the Company’s current Chief Executive Officer and former Chief Executive Officer made advances for business operating expenses.

 

Loans payable - related parties is as follows:

 

    1    2    3      
    Loan Payable     Loan Payable     Loan Payable       
    Related Party     Related Party     Related Party     Total  
                     
Issuance Date of Loan   Various     Various     Various       
Maturity Date of Convertible Note   Due on Demand     Due on Demand     Due on Demand       
Interest Rate   0.00%   0.00%   0.00%     
Default Interest Rate   0.00%   0.00%   0.00%     
Collateral   Unsecured     Unsecured     Unsecured       
Conversion Rate   None     None     None       
                     
Balance - December 31, 2021   -    5,168    17,546    22,714 
                     
Debt acquired in SST acquisition   321,705    -    -    321,705 
Advances   326,911    -    14,741    341,652 
Repayments   (364,136)   -    (12,407)   (376,543)
Balance - December 31, 2022  $284,480   $5,168   $19,880   $309,528 
                     
Advances   -    -    3,090    3,090 
Repayments   -    -    (3,900)   (3,900)
Balance - March 31, 2023  $284,480   $5,168   $19,070   $308,718 
Short Term Portion of Balance  $    $5,168  $19,070   $24,238 
Long Term Portion of Balance  $284,480   $-   $-   $284,480 

 

1 - reflects activity related to the Company’s current Chief Executive Officer of SST.
2 - reflects activity related to the Company’s former Chief Executive Officer of FOMO.
3 - reflects activity related to the Company’s current Chief Executive Officer of FOMO.

 

 

FOMO WORLDWIDE, INC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2023

UNAUDITED

 

Loan Payable – Other

 

In 2022, the Company executed two loans with a third-party lender for $443,060, including interest of $138,050, resulting in net proceeds of $305,010. The Company is required to pay $5,116 over a period of 52 weeks to repay the loan.

 

   Loan Payable - Other 
     
Issuance Date of Loan   April 1, 2022 
Maturity Date of Loan   April 1, 2023 
Interest Rate   16.00%
Default Interest Rate   0.00%
Collateral   Unsecured 
Conversion Rate   None 
      
Balance - December 31, 2021  $- 
Proceeds   443,060 
Repayments   (199,368)
Balance – December 31, 2022  $243,692 
Proceeds   - 
Repayments   (66,001)
Balance – March 31, 2023  $177,691 

 

In 2023, the Company executed two loans with a third-party lender for $368,800, including interest of $121,800, resulting in net proceeds of $247,000. The Company is required to pay $8,902 over a period of 52 weeks to repay the loan.

 

   Loan Payable - Other 
     
Issuance Date of Loan   January 17, 2023 and March 27, 2023 
Maturity Date of Loan   January 17, 2024 and March 27, 2024 
Interest Rate   18.00 – 33.00%
Default Interest Rate   0.00%
Collateral   Unsecured 
Conversion Rate   None 
      
Balance – December 31, 2022  $- 
Proceeds   368,800 
Repayments   (40,720)
Balance – March 31, 2023  $328,080 

 

 

FOMO WORLDWIDE, INC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2023

UNAUDITED

 

Accounts Receivable Credit Facility

 

The Company, in connection with the acquisition of SST, entered into an accounts receivable credit facility.

 

On February 28, 2022, SST entered into a revolving accounts receivable and term loan financing and security agreement in the aggregate amount of $1,000,000 (subject to adjustment by the lender). The financing provides for advances up to $1,000,000, based upon 85% of eligible accounts receivable (as defined in the agreement) and subject to adjustment at the discretion of the lender. The amount was increased on June 21, 2022 to a total availability of $1,500,000.

 

The Facility is paid from collections of accounts receivable and is secured by all assets of SST. The AR Facility has an interest rate of the lesser of (a) maximum rate allowed by law and (b) prime plus 5.25%. The minimum rate of interest is 11.50%.

 

The lender charges the following fees:

 

  1. 2% commitment fee for the establishment of the Facility (1% due at funding and 1% due on February 28, 2023); and
  2. Monitoring fee of 0.40% of the outstanding credit Facility at the end of each month

 

The Company is subject to financial covenants (unless waived by lender) as follows:

 

  1. Debt service coverage ratio of 1.25 to 1,
  2. Fixed charge coverage ratio of 1.25 to1; and
  3. Tangible net worth of $350,000

 

At March 31, 2022, the Company was in default on the financial covenants noted above, however, the lender has waived all defaults through May 31, 2023 while the Company and the lender negotiate additional financing for operations and acquisitions under purchase agreement or letters of intent. The Company and the lender continue to operate under the terms of the agreement without disruption.

 

The Company and its subsidiaries are guarantors of this Agreement.

 

   Accounts Receivable 
   Credit Facility 
     
Issuance Date of credit facility   February 28, 2022 
Maturity Date of credit facility   February 28, 2024 
Interest Rate   11.50%
Default Interest Rate   0.00%
Collateral   All assets  
Conversion Rate   None 
      
Balance - December 31, 2021  $- 
Proceed from drawdowns   7,269,906 
Repayments   (5,993,439)
Balance - December 31, 2022   1,267,467 
Proceed from drawdowns   1,112,819 
Repayments   (949,024)
Balance - March 31, 2023  $1,440,262 

 

 

FOMO WORLDWIDE, INC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2023

UNAUDITED