Debt | Note 14 — Debt As of December 31, 2021 and 2020, debt consisted of the following: Schedule of Long-term Debt December 31, December 31, 2021 2020 Line of credit: Lines of credit $ - $ 1,133,652 Receivable financing - 367,301 Total lines of credit - 1,500,953 Senior convertible notes payable: Notes payable 27,644 1,932,088 Senior convertible notes payable– related parties 122,272 1,428,161 Senior convertible notes payable 113,000,000 591,104 Senior convertible notes payable of Lomotif Private Limited 150,000 - Senior convertible notes payable of Lomotif Private Limited – related parties 2,500,000 - Senior convertible notes payable 2,500,000 - Debt issuance costs (68,925,172 ) (280,511 ) Total senior convertible notes payable 46,847,100 1,738,754 Less: current portion of convertible notes payable (44,238,177 ) (577,260 ) Convertible notes payable – related parties, net of current portion 2,608,923 1,161,494 Notes payable: Notes payable 27,644 1,932,088 Debt issuance costs - (34,997 ) Total notes payable 27,644 1,897,091 Less: current portion of notes payable (15,530 ) (1,301,212 ) Notes payable, net of current portion 12,114 595,879 Notes payable – related parties: Notes payable 112,835 2,827,512 Debt issuance costs - (33,833 ) Total notes payable – related parties: 112,835 2,793,679 Less: current portion of notes payable – related parties (112,835 ) (1,389,922 ) Notes payable – related parties, net of current portion $ - $ 1,403,757 Convertible Notes Payable – Related Parties Zash – February 2021 On February 23, 2021, Lomotif Private Limited entered into a loan agreement with Zash Global Media and Entertainment for $ 1,500,000 with a maturity date on February 22, 2028 and an annual interest rate of 2% . Under the terms of the agreement, the note is convertible at a 20% discount to a $150 million valuation of Lomotif Private Limited. Zash – March 2021 On March 30, 2021, Lomotif Private Limited entered into a loan agreement with Zash Global Media and Entertainment for $ 1,000,000 March 28, 2028 2% Under the terms of the agreement, the note is convertible at a 20% discount to a $150 million valuation of Lomotif Private Limited Convertible Notes Payable Tarun Katial – February 2021 On February 10, 2021, Lomotif Private Limited entered into a loan agreement with Tarun Katial for $ 100,000 February 9, 2023 3% Under the terms of the agreement, the Company had the option to automatically convert the note into common stock of Lomotif Private Limited based on the valuation at the time of a qualified financing round with accrued interest being forgone or receive a payment equal to the sum of one and a half times (1.5x) the purchase amount which would increase the principal to $150,000 Hudson Bay Financing – July 2021 On July 22, 2021 Vinco Ventures, Inc. consummated the closing of a private placement offering (the “July 2021 Offering”) whereby pursuant to the Securities Purchase Agreement (the “July 2021 Purchase Agreement”) entered into by the Company on July 22, 2021 with Hudson Bay Master Fund Ltd as investor the Company issued a Senior Secured Convertible Note in the amount of $ 120,000,000 for the purchase price of $ 100,000,000 (the “July 2021 Note”) and five ( 5 ) year warrants (the “July 2021 Warrant”) to purchase shares of the common stock. The Company placed $ 100,000,000 of cash into a restricted bank account under a deposit account control agreement as collateral against for the Senior Secured Convertible Note. 120,000,000 20,000,000 9,300,000 90,700,000 The July 2021 Note shall carry no interest unless and until an event of default shall occur and the July 2021 Note matures on July 22, 2022 . The July 2021 Note contains a voluntary conversion mechanism whereby the Noteholder may convert at any time after the Initial Convertibility Date (as defined therein), in whole or in part, the outstanding principal and interest under the July 2021 Note into shares of the Common Stock at a conversion price of $ 2.655 per share. The July 2021 Note is guaranteed by the Company’s subsidiaries and certain other guarantors and is a senior secured obligation of the Company and its subsidiaries. The July 2021 Note contains customary events of default. If an event of default occurs, interest under the July 2021 Note will accrue at a rate of eighteen percent ( 18 %) per annum and the outstanding principal amount of the July 2021 Note, plus accrued but unpaid interest, liquidated damages and other amounts owing with respect to the July 2021 Note will become, at the July 2021 Noteholder’s election, immediately due and payable in cash. Upon completion of a Change of Control (as defined in the July 2021 Note), the July 2021 Note holder may require the Company to purchase any outstanding portion of the July 2021 Note in cash at a price in accordance with the terms of the July 2021 Note. Pursuant to the July 2021 Purchase Agreement, the investor received a July 2021 Warrant. The July 2021 Warrant contains an exercise price of $ 2.655 per share, subject to adjustments as provided under the terms of the July 2021 Warrant. In connection with the closing of the July 2021 Offering, the July 2021 Warrant was issued for an aggregate of 32,697,548 shares of Common Stock. The Company also entered into a Registration Rights Agreement with the investor. The Registration Rights Agreement provides that the Company shall (i) file with the Securities and Exchange Commission (the “Commission”) a registration statement by 30 days following the closing date of the July 2021 Purchase Agreement to register the conversion Shares and warrant Shares; and (ii) use all commercially reasonable efforts to have the registration statement declared effective by the Commission within 60 days following the Closing Date or at the earliest possible date, or 75 days following the Closing Date if the registration statement receives comments from the Commission. The Company filed the Registration Statement which has been declared effective. Palladium Capital Group, LLC. acted as placement agent for the July 2021 Offering. The placement agent received $9,000,000 of which $ 1,000,000 was cash compensation and $8,000,000 was deferred cash compensation (8% of the gross proceeds to the Company plus an additional 1% of the gross proceeds to the Company for non-accountable expenses). The Company has paid $4,000,000 of the remaining $8,000,000 as of December 31, 2021. The conversion feature on the July 2021 Note and the July 2021 Warrants were approved by shareholders on October 14, 2021. On November 9, 2021 the investor converted $ 7,000,000 of principal under the notes payable in exchange for 1,750,000 shares of common stock. Hudson Bay Financing- February 2021 On February 23, 2021, the Company consummated the closing of a private placement offering (the “Offering”) whereby pursuant to the Securities Purchase Agreement (the “February 2021 Purchase Agreement”) entered into by the Company on February 18, 2021 with one accredited investor, the Company issued a Senior Convertible Note for the purchase price of $ 10,000,000 (the “February 2021 Note”) and five ( 5 ) year warrants (the “February 2021 Warrants”) to purchase shares of the Company’s common stock. The Company issued the February 2021 Warrants to the investor representing the right to acquire an aggregate of 18,568,188 shares of Common Stock. The February 2021 Warrants contain an exercise price of $ 3.722 per share. 10,000,000 1,050,000 8,950,000 The February 2021 Note carries an interest rate of 6 % per annum compounding monthly and matures on February 23, 2022 . The February 2021 Note contains a voluntary conversion mechanism whereby the noteholder may convert at any time after the issuance date, in whole or in part, the outstanding principal and interest under the February 2021 Note into shares of the Common Stock at a conversion price of $ 4.847 per share. The February 2021 Note shall be a senior unsecured obligation of the Company and its subsidiaries. The February 2021 Note contains customary events of default. If an event of default occurs, interest under the February 2021 Note will accrue at a rate of twelve percent ( 12 %) per annum and the outstanding principal amount of the February 2021 Note, plus accrued but unpaid interest, liquidated damages and other amounts owing with respect to the February 2021 Note will become, at the February 2021 noteholder’s election, immediately due and payable in cash. Upon completion of a Change of Control (as defined in the Note), the February 2021 Noteholder may require the Company to purchase any outstanding portion of the February 2021 Note in cash at a price in accordance with the terms of the February 2021 Note. The investor fully converted $ 10,000,000 of principal into 2,063,132 of the Company’s common shares and made a cash payment for the remaining accrued interest. The principal and interest is fully paid as of December 31, 2021. Pursuant to the February 2021 Purchase Agreement, the investor received a Warrant in an amount equal to 900 % of the shares of Common Stock initially issuable to the Investor pursuant to the conversion terms of the investor’s February 2021 Note. The Warrant contains an exercise price of $ 3.722 per share, subject to adjustments as provided under the terms of the Warrant. In connection with the closing of the Offering, the Warrant was exercisable for an aggregate of 18,568,188 13,968,188 The Company also entered into a Registration Rights Agreement with the investor (the “Registration Rights Agreement”). The Registration Rights Agreement provides that the Company shall (i) file with the Securities and Exchange Commission a registration statement by 30 days following the Closing Date of the February 2021 Purchase Agreement to register the conversion shares and warrant shares; and (ii) use all commercially reasonable efforts to have the registration statement declared effective by the Commission within 60 days following the Closing Date or at the earliest possible date, or 75 days following the Closing Date if the registration statement receives comments from the Commission. The Company filed the registration statement which has been declared effective. Palladium Capital Group, LLC. acted as placement agent for the Offering. The placement agent received cash compensation of $ 900,000 (8% of the gross proceeds to the Company plus an additional 1% of the gross proceeds to the Company for non-accountable expenses). The placement agent also received a Warrant granting the Holder the right to purchase 1,650,346 shares of the Company’s common stock at an exercise price of $ 3.722 with an expiration date of February 23, 2026. On June 4, 2021, the Company entered into a warrant exercise agreement (the “June 2021 Warrant Agreement”) with the investor whereby the Company agreed to issue additional warrants, to purchase shares of Common Stock at a per-share exercise price equal to $ 3.30 (the “Incentive Warrants”, all pursuant to the terms and conditions set forth in the June 2021 Warrant Agreement. At the Closing (as defined in Section 2 of the June 2021 Agreement), the parties shall execute and deliver a registration rights agreement, (the “Registration Rights Agreement”), pursuant to which the Company will agree to register the shares of Common Stock underlying the Incentive Warrants. Subject to the terms of June 2021 Warrant Agreement, the Company shall issue and deliver Incentive Warrants to the investor to initially purchase zero shares of Common Stock, which number of shares shall be subject to adjustment, including the provision of Incentive Warrants on a 1.75-for-one basis for the additional exercise of each Existing Warrant on or prior to July 7, 2021. During the year ended December 31, 2021, the investor exercised 15,898,188 warrants and received 27,821,829 incentive warrants. The June 2021 Warrant Agreement includes customary representations, warranties and covenants, and customary conditions to closing, expense and reimbursement obligations and termination provisions. Hudson Bay Financing- January 2021 On January 25, 2021, the Company consummated the closing of a private placement offering (the “January 2021 Offering”) whereby pursuant to the Securities Purchase Agreement (the “January 2021 Purchase Agreement”) entered into by the Company on January 21, 2021 with investor, the Company issued a Senior Convertible Note for the purchase price of $ 12,000,000 (the “January 2021 Note”) and a five ( 5 ) year warrant (the “January 2021 Warrant”) to purchase shares of the Company’s common stock. The Company issued the January 2021 Warrants to the investor representing the right to acquire an aggregate of 15,000,000 shares of the Company’s common stock. The January 2021 Warrants contain an exercise price of $ 2.00 per share. The Company recorded a deferred discount of $ 12,000,000 1,230,000 10,770,000 The January 2021 Note carries an interest rate of 6 % per annum and matures on the 12-month anniversary of the issuance date (as defined in the January 2021 Note). The January 2021 Note contains a voluntary conversion mechanism whereby the January 2021 noteholder may convert at any time after the issuance date, in whole or in part, the outstanding balance of the January 2021 Note into shares of the Common Stock at a conversion price of $ 2.00 per share. The January 2021 Note shall be a senior obligation of the Company and its subsidiaries. The January 2021 Note contains customary events of default. If an event of default occurs, interest under the January 2021 Note will accrue at a rate of twelve percent ( 12 %) per annum and the outstanding principal amount of the January 2021 Note, plus accrued but unpaid interest, liquidated damages and other amounts owing with respect to the January 2021 Note will become, at the January 2021 noteholder’s election, immediately due and payable in cash. Upon completion of a Change of Control (as defined in the January 2021 Note), the January 2021 Noteholder may require the Company to purchase any outstanding portion of the January 2021 Note in cash at a price in accordance with the terms of the January 2021 Note. The investor fully converted $ 12,000,000 of principal and $ 41,690 of interest into 6,020,845 of the Company’s common shares. The principal and interest is fully paid as of December 31, 2021. Pursuant to the January 2021 Purchase Agreement, the investor received a Warrant in an amount equal to 250 % of the shares of Common Stock initially issuable to each investor pursuant to the investor’s January 2021 Note. The Warrant contains an exercise price of $ 2.00 per share. In connection with the closing of the Offering, the Warrant was issued to purchase an aggregate of 15,000,000 shares of Common Stock. As of December 31, 2021, the investor has exercised 15,000,000 warrants. The Company also entered into a Registration Rights Agreement with the investor (the “Registration Rights Agreement”). The Registration Rights Agreement provides that the Company shall (i) file with the Securities and Exchange Commission a registration statement by 30 days following the Closing Date to register the conversion shares and warrant shares; and (ii) use all commercially reasonable efforts to have the registration statement declared effective by the Commission within 60 days following the Closing Date or at the earliest possible date, or 75 days following the Closing Date if the registration statement receives comments from the Commission. The Company filed the registration statement which has been declared effective. Palladium Capital Group, LLC acted as placement agent for the Offering. The placement agent received cash compensation of $ 1,080,000 (8% of the gross proceeds to the Company plus an additional 1% of the gross proceeds to the Company for non-accountable expenses). The placement agent also received a Warrant dated January 25, 2021 granting the Holder the right to purchase 480,000 shares of the Company’s common stock at an exercise price of $ 2.00 with an expiration date of January 25, 2026. On May 24, 2021, the Company entered into a warrant exercise agreement (the “May 2021 Warrant Agreement”) with the investor who agreed to exercise 2,870,000 shares of Common Stock underlying the January Warrants and the Company agreed to issue additional warrants, to purchase shares of Common Stock at a per-share exercise price equal to $ 3.20 (the “Incentive Warrants”, all pursuant to the terms and conditions set forth in the May 2021 Warrant Agreement. At the Closing (as defined in Section 2(b) of the May 2021 Warrant Agreement), the parties shall execute and deliver a registration rights agreement, (the “Registration Rights Agreement”), pursuant to which the Company will agree to register the shares of Common Stock underlying the Incentive Warrants. During the year ended December 31, 2021, the investor exercised 13,070,000 warrants and received 13,070,000 incentive warrants. Subject to the terms of May 2021 Warrant Agreement, (i) the investor shall pay to the Company an amount equal to the exercise price of the January Warrants in effect as of the date of such exercise multiplied by 2,870,000 shares (as adjusted for any share split or similar transaction after the date hereof) and (ii) the Company shall issue and deliver Incentive Warrants to the investor to initially purchase an aggregate number of shares equal to the number of exercised warrant shares, which number of shares shall be subject to adjustment, including the provision of Incentive Warrants on a one-for-one basis for the additional exercise of each January Warrant on or prior to June 1, 2021. The May 2021 Warrant Agreement includes customary representations, warranties and covenants, and customary conditions to closing, expense and reimbursement obligations and termination provisions. Jefferson Street Capital Financing On July 29, 2020, the Company entered into a Securities Purchase Agreement with Jefferson Street Capital, LLC, as investor, wherein the Company issued the investor a Convertible Promissory Note in the amount of $ 224,000 ($ 24,000 OID). The note had a term of six ( 6 ) months, was due on January 29, 2021 and has a one-time interest charge of 2 %. In addition, the Company issued the investor 14,266 shares of Common Stock as an origination fee. The transaction closed on July 29, 2020. On January 28, 2021, the Company paid all outstanding principal and interest in the amount of $ 260,233 . On April 7, 2020, the Company entered into a Securities Purchase Agreement with Jefferson Street Capital, LLC, as investor, wherein the Company issued the investor a Convertible Promissory Note in the amount of $ 168,000 ($ 18,000 OID). The note has a term of six ( 6 ) months, is due on October 7, 2020 and has a one-time interest charge of 2 %. In addition, the Company issued the investor 10,700 shares of Common Stock as an origination fee. The transaction closed on April 9, 2020. On October 7, 2020, the Company and investor entered into a Forbearance Agreement. Under the terms of the Forbearance Agreement, the Company requested and the investor agreed to temporarily forebear, until the earlier of (i) December 9, 2020 or (ii) at such time as a default shall occur under and pursuant to the Purchase Agreement, the note or the Securities Purchase Agreement, from exercising its right to convert amounts due under the Note into Common Stock of the Company, in exchange for a one-time cash payment forbearance fee equal to $ 12,500 paid upon execution of the Securities Purchase Agreement. On December 23, 2020, the investor submitted a Notice of Conversion for $ 45,000 in principal and $ 750 in fees. On December 29, 2020, the Company issued 41,730 shares to satisfy the conversion obligation. The investor converted $ 54,830 of principal into 54,830 of the Company’s common shares. The note was paid in full on February 1, 2021. BHP Capital Financing On April 7, 2020, the Company entered into a Securities Purchase Agreement with BHP Capital NY Inc. as investor wherein the Company issued the BHP Capital NY Inc. Convertible Promissory Note in the amount of $ 168,000 ($ 18,000 OID). The note has a term of six ( 6 ) months, is due on October 7, 2020 and has a one-time interest charge of 2 %. In addition, the Company issued BHP Capital NY Inc. 10,700 shares of Common Stock as an origination fee. The transaction closed on April 9, 2020. The note was paid in full on January 29, 2021. 32E Financing On December 4, 2019, the Company agreed to issue and sell to 32 Entertainment LLC (“32E”) a 10% Senior Secured Note (the “32E Note”), in the principal amount of $ 250,000 . The maturity date of the 32E Note is December 4, 2020 . In addition, the Company issued to 32E 10,000 shares of common stock as an inducement to 32E to purchase the 32E Note. The fees were recorded as a debt discount and amortized over the term of the note. The $ 250,000 of proceeds from the 32E Note was used for general working capital needs of the Company and the repayment of debt related to Horberg Enterprises. On May 19, 2020, the Company entered into an Amendment to the 32E Note. Under the terms of the amendment, the Company issued to 32E an Amended Subordinate Secured Note (the “Replacement Note”) in the principal amount of $ 200,000 that accrued interest at 16 % annually and matured on May 21, 2021. On May 28, 2020, the Company paid $ 50,000 toward the principal plus interest in the amount of $ 6,250 for a total of $ 56,250 . 32E also received 40,000 restricted stock units and surrendered the warrant issued to it in the December 4, 2019 financing transaction. The note was paid in full on January 28, 2021. Promissory Notes On January 2, 2020, Ed Roses, LLC entered into a Loan Agreement with Sook Hyun Lee. Under the terms of the Loan Agreement, the Sook Hyun Lee agreed to lend $ 150,000 to Ed Roses, LLC for general working capital. The Loan is due on April 15, 2020 and accrues interest at 15 % per annum. The Loan Agreement shall automatically renew at the maturity date for successive 90-day periods unless written notice is remitted by either party. On April 15, 2020, Ed Roses, LLC shall pay the lender all unpaid principal and interest and a $ 30,000 commitment fee. The lender shall have a collateral interest in the accounts receivable of Ed Roses, LLC, including but not limited to 7 Eleven receivables. As collateral, the Company placed 75,000 shares of common stock in reserve. The note was paid in full on March 11, 2021. On January 10, 2020, the Company entered into a 5% Promissory Note Agreement with Equity Trust Company on behalf of Rawleigh Ralls (“Ralls”) for an aggregate principal amount of $ 267,000 250,000 17,000 125,000 86,725 On January 15, 2020, the Company entered into a 5% Promissory Note Agreement with Paul J. Solit & Julie B. Solit (“Solits”) for an aggregate principal amount of $ 107,000 100,000 7,000 50,000 31,755 On January 17, 2020, the Company entered into a 5% Promissory Note Agreement with Richard O’Leary (“O’Leary”) for an aggregate principal amount of $ 53,500 50,000 3,500 25,000 16,797 Paycheck Protection Program On April 15, 2020, the Company entered into a loan agreement (the “First Choice PPP Loan”) with First Choice Bank under the Paycheck Protection Program (the “PPP”), which was part of the Coronavirus Aid, Relief, and Economic Security Act administered by the United States Small Business Administration (the “SBA”). The Company received proceeds of $ 789,852 from the First Choice PPP Loan. On May 4, 2021, the First Choice PPP loan was forgiven and the carrying value of $ 789,852 was recorded as a gain on extinguishment as part of interest expense. In accordance with the requirements of the PPP, the Company used the proceeds from the First Choice PPP Loan primarily for payroll costs, subject to thresholds, rent and utilities. The First Choice PPP Loan had a 1.00 % interest rate per annum and a maturity date of April 15, 2022 and was subject to the terms and conditions applicable to loans administered by the SBA under the PPP. On May 4, 2020, TBD Safety, LLC, the Company’s wholly owned subsidiary, entered into a loan agreement (the “First Home PPP Loan”) with First Home Bank under the PPP. The Company received proceeds of $ 62,500 62,500 1.00 May 4, 2022 Receivables Financing On February 21, 2020, the Company entered into a receivables financing arrangement for certain receivables of the Company not to exceed $ 1,250,000 85 1 2 On November 12, 2019, the Company entered into a Receivables Purchase Agreement with a financial institution (the “Receivables Purchase Agreement”), whereby the Company agreed to the sale of $ 250,000 200,000 In April 2019, we entered into a receivables financing arrangement for certain receivables of the Company. The agreement allows for borrowings up to 80 1 2 Line of Credit On the effective date, the Company as guarantor entered into a Secured Line of Credit Agreement with Global and PPE. Under the terms of the Credit Agreement, PPE is to make available to Global a revolving credit loan in a principal aggregate amount at any one time not to exceed $ 2,500,000 . Upon each drawdown of funds against the credit line, Global shall issue a Promissory Note to PPE. The Note shall accrue interest at 3% per annum and have a maturity date of six (6) months. In the event of a default, any and all amounts due to PPE by Global, including principal and accrued but unpaid interest, shall increase by forty (40%) percent and the interest shall increase to five (5%) percent. The outstanding principal and interest was fully settled and paid as of December 31, 2021 for 575,000 shares of common stock. The scheduled maturities of the debt for the next five years as of December 31, 2021, are as follows: Schedule of Maturities of Long-term Debt For the Years Ended December 31, Amount 2022 113,278,365 2023 2,634,386 2024 - 2025 - 2026 - Long-term Debt, Gross 115,912,751 Less: debt discount (68,925,172 ) Long-term Debt $ 46,987,579 For the years ended December 31, 2021 and 2020, interest expense was $ 72,784,039 and $ 3,378,131 , respectively, of which $ 665,624 and $ 314,415 was related party interest expense. For the years ended December 31, 2021 and 2020, interest income of $ 649,077 and $ 0 was included in the interest expense, net on the consolidated statements of operations. |