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 September 30, 2023 and December 31, 2022, respectively: Convertible Notes Payable The Company executed several convertible notes with various lenders as follows: Schedule of Convertible Notes Payable 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 - December 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 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 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 ) 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 - - - - Repayment of notes - - - - Conversion of debt to preferred stock (335,000 ) - - (335,000 ) Conversion of debt to common stock (101,206 ) - - (101,206 ) 240,000 - - 240,000 Less: unamortized debt discount - - - - Balance – September 30, 2023 $ 240,000 $ - $ - $ 240,000 FOMO WORLDWIDE, INC AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2023 UNAUDITED On May 30, 2023, the Company exchanged two convertible notes held by third-party lender GS Capital Partners, LLC in the amounts of $220,000 dated January 14, 2022, with a current balance of $260,842 and a $115,000 dated April 5, 2022, with a current balance of $130,312, totaling $391,154 for 15,646,159 shares of Series A Preferred stock at a price per share equal to $0.025 per share. On an as converted basis, the Series A Preferred shares can convert into 782,307,950 common shares. As consideration for the exchange, we reduced the strike price on a total of 557,424,483 common stock purchase warrants held by the lender to $0.0005 and extended their expiration dates to May 26, 2026. This resulted in a gain on debt extinguishment of $156,462 During the nine months ended September 30, 2023, third-party lender GS Capital converted $ 436,206 891,605,499 409,805 During the nine months ended September 30, 2022, third-party lenders converted $ 104,367 301,448,152 205,691 On April 19, 2022, the Company modified the terms of a loan it had with GS Capital for $ 325,000 16,206 341,206 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: Schedule of Loans Payable - Related Parties 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 Balance - December 31, 2022 $ 284,480 $ 5,168 $ 19,880 $ 309,528 Advances 37,000 - 3,090 40,090 Repayments (117,462 ) - (12,900 ) (130,362 ) Conversion - - (10,000 ) (10,000 ) Balance – September 30, 2023 $ 204,018 $ 5,168 $ 70 $ 209,256 Short term Portion of Balance $ - $ 5,168 $ 70 $ 5,238 Long term Portion of Balance $ 204,018 $ - $ - $ 204,018 FOMO WORLDWIDE, INC AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2023 UNAUDITED 1 reflects activity related to the Company’s former Chief Executive Officer of SST. 2 reflects activity related to the Company’s former Chief Executive Officer of EIC. 3 reflects activity related to the Company’s current Chief Executive Officer of FOMO. Loan Payable – Other The Company has various merchant cash advances (“MCAs”). The following summarizes the borrowings: Schedule of Loan Payable Other Loan 1 Loan 2 Loan 3 Loan 4 Loan 5 Loan 6 Issuance Date April 1, 2022 January 17, 2023 March 22, 2023 May 23, 2023 May 5, 2023 August 1, 2023 Maturity Date April 1, 2023 January 1, 2024 March 22, 2024 May 23, 2024 May 5, 2024 May 5, 2024 Interest Rate 16 % 18 % 33 % 33 % 29 % 36 % Default Interest Rate 0 % 0 % 0 % 0 % 0 % 0 % Collateral Unsecured Unsecured Unsecured Assets of SST FOMO, Himalya and CEO Unsecured Conversion None None None None None None Balance, December 31, 2022 $ 243,692 $ - $ - $ - $ - $ - $ 243,692 Borrowings - 140,000 228,800 149,990 140,000 281,066 939,856 Repayments (121,788 ) (63,864 ) (54,480 ) (20,991 ) (29,333 ) (207,571 ) (498,027 ) Balance, September 30, 2023 $ 121,904 $ 76,136 $ 174,320 $ 128,999 $ 110,667 $ 73,495 $ 685,521 At September 30, 2023, the Company was in default on its debt arrangements with four providers of MCAs that funded against expected shipments from its primary vendor SMART Technologies, who subsequently reduced our credit line for equipment from $ 1,000,000 350,000 FOMO WORLDWIDE, INC AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 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 1,000,000 85 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 11.50 The lender charges the following fees: 1. 2 2. Monitoring fee of 0.40 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 3. Tangible net worth of $ 350,000 At December 31, 2022, the Company is in default on the financial covenants noted above, however, the lender has not exercised its rights of default. 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. Schedule of Accounts Receivable Credit Facility 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 1,276,467 Balance - December 31, 2022 1,276,467 Proceeds from drawdowns 1,976,026 Repayments (2,069,159 ) Balance – September 30, 2023 $ 1,183,334 FOMO WORLDWIDE, INC AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2023 UNAUDITED |