Quarterly report pursuant to Section 13 or 15(d)

Convertible Debt and Convertible Debt, Related Party

v3.20.1
Convertible Debt and Convertible Debt, Related Party
3 Months Ended
Mar. 31, 2020
Debt Disclosure [Abstract]  
Convertible Debt and Convertible Debt, Related Party

Note 7 – Convertible Debt and Convertible Debt, Related Party

 

As of March 31, 2020 and December 31, 2019, the Company's convertible debt consisted of the following:

 

    March 31, 2020   December 31, 2019
    Gross
Principal
Amount
  Debt
Discount
  Convertible
Debt, Net of
Debt Discount
  Gross
Principal
Amount
  Debt
Discount
  Convertible
Debt, Net of
Debt Discount
Convertible debt   $ 13,000,000     $ (94,893 )   $ 12,905,107     $ 13,000,000     $ (154,499 )   $ 12,845,501  
Convertible debt, related party     1,000,000       (7,299 )     992,701       1,000,000       (11,885 )     988,115  
Total     14,000,000       (102,192 )     13,897,808       14,000,000       (166,384 )     13,833,616  
Less: non-current portion     2,000,000       (14,599 )     1,985,401                    
Total convertible debt, current portion   $ 12,000,000     $ (87,592 )   $ 11,912,407     $ 14,000,000     $ (166,384 )   $ 13,833,616  

 

 

Pursuant to an Amendment and Acknowledgement Agreement dated August 5, 2019, the convertible notes (the "Notes") are secured by the assets of the Company and mature on August 23, 2020 (the "Maturity Date"). The Notes are convertible into shares of AESE common stock at any time at a conversion price of $8.50 per share. Further, the minimum interest to be paid under each 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 Notes shall become immediately due and payable upon the written notice of the holder.

  

If any holder elects to convert their Note into common stock, they would 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 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 $682,940 (including amortization of debt discount of $64,192) and $0 related to the Notes during the three months ended March 31, 2020 and 2019, respectively. As of March 31, 2020, there was $102,192 of unamortized debt discount.