ABUNDIA GLOBAL IMPACT GROUP, INC. Debt Disclosure

NOTE 6 – NOTES PAYABLE

 

Bridge Loan Financing

 

In September 2019, the Company issued promissory notes (the “Bridge Loan Notes”) with a total principal amount of $621,052, an original issue discount of 5%, warrants (the “Bridge Loan Warrants”) to purchase 1,180,000 shares of common stock, and a term of 120 days to the Company’s Chief Executive Officer and significant shareholder. Net proceeds received for the Bridge Loan Notes and Warrants totaled $590,000.

 

The Bridge Loan Notes were unsecured obligations bearing interest at 12.0% per annum and payable interest only on the last day of each calendar month with any unpaid principal and accrued interest being payable in full on January 16, 2020.

 

The Bridge Loan Notes were subject to mandatory prepayment from and to the extent of (i) 100% of net proceeds the Company receive from any sales, for cash, of equity or debt securities (other than Bridge Loan Notes), (ii) 100% of net proceeds the Company receive from the sale of assets (other than sales in the ordinary course of business); and (iii) 75% of net proceeds the Company receive from the sale of oil and gas produced from our Hockley County, Texas properties. Additionally, the Company had the option to prepay the Bridge Loan Notes, at its sole election, without penalty. The holders of the Bridge Loan Notes waived mandatory prepayment at the end of each month during 2019.

 

The Bridge Loan Notes were recorded net of debt discount that consists of (i) $31,052 of original issue discount on the Bridge Loan Notes and (ii) the relative fair value of the Bridge Loan Warrants of $144,948. The debt discount is amortized over the life of the Bridge Loan Notes as additional interest expense.

During 2019, interest expense paid in cash totaled $21,439, and interest expense attributable to amortization of debt discount totaled $152,533.

 

During 2020, interest expense paid in cash totaled $3,350, and interest expense attributable to amortization of debt discount totaled $23,467. The Bridge Loan Notes were repaid in full in January 2020.

 

The holders of the Bridge Loan Notes were the CEO and a 10% shareholder of the Company.

 

OID Promissory Note

 

In October 2019, the Company issued a promissory note (the “OID Note”) with a principal amount of $100,000 and an original issue discount of 10% to a significant shareholder of the Company. Net proceeds received for the OID Note totaled $90,000.

 

The debt discount was amortized over the life of the OID Note as additional interest expense. During 2019, the Company recognized additional interest expense of $10,000 related to the amortization of the OID Note debt discount.

 

The OID Note was an unsecured obligation bearing interest at 0% per annum and payable from any and all of the Company’s cash receipts, with any unpaid principal and accrued interest being payable in full on October 31, 2019. The OID Note was repaid in full as of October 31, 2019.

 

The holder of the OID Note was a 10% shareholder of the Company.