Quarterly report pursuant to Section 13 or 15(d)

Convertible Debt and Convertible Debt, Related Party

v3.21.1
Convertible Debt and Convertible Debt, Related Party
3 Months Ended
Mar. 31, 2021
Convertible Debt And Convertible Debt Related Party [Abstract]  
Convertible Debt and Convertible Debt, Related Party

Note 6 – Convertible Debt and Convertible Debt, Related Party

 

 As of March 31, 2021 and December 31, 2020, the Company’s convertible debt consisted of the following:

 

    March 31, 2021     December 31, 2020  
    Gross
Principal
Amount
    Debt
Discount
    Convertible
Debt,
Net of
Debt Discount
    Gross
Principal
Amount
    Debt
Discount
    Convertible
Debt,
Net of
Debt Discount
 
Convertible debt   $ 1,000,000     $
             -
    $ 1,000,000     $ 1,000,000     $
        -
    $ 1,000,000  
Convertible debt, related party     1,000,000      
-
      1,000,000       1,000,000      
-
      1,000,000  
Senior secured convertible notes    
-
     
-
     
-
      581,818       (3,646 )     578,172  
Total     2,000,000      
-
      2,000,000       2,581,818       (3,646 )     2,578,172  
Less: current portion     (2,000,000 )    
-
      (2,000,000 )     (2,000,000 )    
-
      (2,000,000 )
Convertible debt, non-current   $
-
    $
-
    $
-
    $ 581,818     $ (3,646 )   $ 578,172  

 

Convertible Debt and Convertible Debt, Related Party

 

Convertible bridge notes (the “Convertible Bridge Notes”) are secured by the assets of WPT and mature on February 23, 2022 (the “Maturity Date”). Further, the minimum interest to be paid under each Convertible Bridge Note shall be the greater of (a) 18 months of accrued interest at 12% per annum; or (b) the sum of the actual interest accrued plus 6 months of additional interest at 12% per annum. In the event of default, the Convertible Bridge Notes shall become immediately due and payable upon the written notice of the holder. The Company intends to repay the Convertible Bridge Notes from the proceeds of the Sale Transaction.

 

The Convertible Bridge Notes are convertible into shares of AESE common stock at any time at a conversion price of $8.50 per share. If any holder elects to convert their Convertible Bridge Note into common stock, they would also be entitled to receive additional shares of common stock (“Contingent Consideration Shares”) equal to the product of (i) 3,846,153 shares, multiplied by (ii) that holder’s investment amount, divided by (iii) $100,000,000, if at any time within five years after the August 9, 2019 closing date, the last exchange-reported sale price of common stock trades at or above $13.00 for thirty (30) consecutive calendar days.

 

The Company recorded interest expense of $59,138 related to the Convertible Bridge Notes during the three months ended March 31, 2021 and recorded interest expense of $682,940 (including amortization of debt discount of $64,193) during the three months ended March 31, 2020. As of March 31, 2021, all debt discount on the Convertible Bridge Notes has been fully amortized.

 

Senior Secured Convertible Notes

 

During the three months ended March 31, 2021, the Company issued 529,383 shares of its common stock, as Monthly Redemption Payments in satisfaction of aggregate amount of $581,818 of principal and $93,091 of interest payable owed on the Senior Notes as well as $146,958 of non-cash interest accrued on the Senior Notes. Of the 529,383 shares issued, 132,346 shares were issued in connection with accelerated Monthly Redemption Payments in the aggregate amount of $168,727 (representing $145,454 and $23,273 of principal and interest, respectively). The Company recorded additional non-cash interest expense in the amount of $46,110 in connection with Monthly Redemption Payments during the three months ended March 31, 2021. As of March 31, 2021 all principal and interest owed in connection with the Senior Notes has been repaid in full.