v3.25.2
Convertible Promissory Notes and Notes Payable
 12 Months Ended
Jun. 30, 2024
Convertible Promissory Notes and Notes Payable  
Convertible Promissory Notes and Notes Payable

Note 10. Convertible Promissory Notes and Notes Payable

 

Convertible promissory notes and notes payable outstanding as of June 30, 2024 and 2023 are summarized below:

 

 

 

Maturity

 

June 30,

 

 

June 30,

 

 

 

Date

 

2024

 

 

2023

 

Convertible Notes:

 

 

 

 

 

 

 

 

Promissory Note, 21- month term, as amended, 18.11% interest payable with common stock and subordinate to the Convertible Notes. This note was amended as of November 15, 2023, extending the note to June 1, 2026 and adjusted the interest rate to 12%, paid in cash monthly. 

 

June 1, 2026

 

$1,550,000

 

 

$2,150,000

 

Less current portion of notes payable

 

 

 

 

-

 

 

 

1,254,167

 

Notes payable, net of current portion

 

 

 

$1,550,000

 

 

$895,833

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition Notes:

 

 

 

 

 

 

 

 

 

 

Convertible Notes, 36-month term notes, 0% cash interest, collateralized with all the assets of the Company

 

October 31, 2025

 

 

-

 

 

 

3,500,000

 

Subordinated Promissory Notes, 24-month term notes, 4% cash interest, collateralized with all the assets of the Company

 

October 31, 2024

 

 

-

 

 

 

5,750,000

 

Subordinated Promissory Notes, 12-month term notes, 4% cash interest, collateralized with all the assets of the Company

 

October 31, 2024

 

 

-

 

 

 

5,750,000

 

Total

 

 

 

$-

 

 

$15,000,000

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition notes payable 

 

 

 

 

-

 

 

 

5,750,000

 

Discount on acquisition notes payable, current

 

 

 

 

-

 

 

 

(93,380 )

Acquisition notes payable, current

 

 

 

 

-

 

 

 

5,656,620

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

 

 

9,250,000

 

Discount on acquisition notes payable, long-term

 

 

 

 

-

 

 

 

(1,644,915 )

Acquisition notes payable, net of current and discount

 

 

 

$-

 

 

$7,605,085

 

 

 

 

 

 

 

 

 

 

 

 

Notes payable, Cygnet subsidiary:

 

 

 

 

 

 

 

 

 

 

SBA note payable, 30-year term note, 6% interest rate and collateralized with all assets of the Company

 

October 6, 2021

 

 

3,761,376

 

 

 

3,910,767

 

Inventory consignment note, 60 monthly payments, with first payment due June 30, 2022, 3.5% interest rate and no security interest in the assets of the business

 

June 30, 2027

 

 

1,002,221

 

 

 

1,099,592

 

GF Note, 6 annual payments, with first payment due December 31, 2022, 3.5% interest rate and no security interest in the assets of the business

 

November 7, 2026

 

 

683,968

 

 

 

683,968

 

Total

 

 

 

$5,447,565

 

 

$5,694,327

 

 

 

 

 

 

 

 

 

 

 

 

Notes payable, Cygnet subsidiary, current

 

 

 

 

5,447,565

 

 

 

795,778

 

 

 

 

 

 

 

 

 

 

 

 

Notes payable, Cygnet subsidiary, net of current

 

 

 

$-

 

 

$4,898,549

 

 

 

 

 

 

 

 

 

 

 

 

Notes Payable on Building for sale:

 

 

 

 

 

 

 

 

 

 

Mortgage Loan, 10-year term note, 4.8% interest, collateralized by land and warehouse building

 

September 26, 2032

 

$2,634,538

 

 

$2,841,566

 

 

 

 

 

 

 

 

 

 

 

 

Note Payable:

 

 

 

 

 

 

 

 

 

 

Promissory Note, 21-month term note, 10% cash interest and subordinate to the Convertible Notes.  This note was amended as of November 15, 2023, extending the note to June 1, 2026 and adjusted the interest rate to 12%, paid in cash monthly. 

 

June 1, 2026

 

 

560,000

 

 

 

560,000

 

 

 

 

 

 

 

 

 

 

 

 

Notes payable, current

 

 

 

 

-

 

 

 

362,667

 

Discount on notes payable, current

 

 

 

 

-

 

 

 

(24,193 )

Notes payable, current net of discount

 

 

 

$2,634,538

 

 

$338,474

 

 

 

 

 

 

 

 

 

 

 

 

Notes payable, long-term 

 

 

 

 

560,000

 

 

 

197,333

 

Discount on notes payable, long-term

 

 

 

 

(2,571 )

 

 

(23,521 )

Notes payable, long-term, net

 

 

 

$557,429

 

 

$173,812

 

 

 

 

 

 

 

 

 

 

 

 

Related Notes Payable:

 

 

 

 

 

 

 

 

 

 

Marshall Loan, 2-year term note, 12% cash interest, 3.5% PIK interest and subordinate to the Convertible Notes. November of 2023 extended to June 1, 2026 and interest was adjusted to 12% cash interest, paid monthly

 

June 1, 2026

 

$500,000

 

 

$1,500,000

 

 

 

 

 

 

 

 

 

 

 

 

Discount on related party note payable, current

 

 

 

 

-

 

 

 

(70,644 )

Notes payable, current, net of discount

 

 

 

$-

 

 

$1,429,356

 

 

 

 

 

 

 

 

 

 

 

 

Discount on related party note payable, long term

 

 

 

 

-

 

 

 

-

 

Notes payable, long term, net

 

 

 

$500,000

 

 

$-

 

 

 

 

 

 

 

 

 

 

 

 

Total convertible notes payable, acquisition notes payable, notes payable and related party note payable

 

 

 

$10,689,532

 

 

$25,889,239

 

Future payments on notes payable are as follows:

 

For the year ended June 30:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note Payable

 

 

Related Party Note Payable

 

 

Convertible Notes

 

 

Cygnet Subsidiary Notes Payable

 

 

Total

 

2025

 

$2,634,538

 

 

$-

 

 

$-

 

 

$5,447,565

 

 

$8,082,103

 

2026

 

 

560,000

 

 

 

500,000

 

 

 

1,550,000

 

 

 

-

 

 

 

2,610,000

 

 

 

 

3,194,538

 

 

 

500,000

 

 

 

1,550,000

 

 

 

5,447,565

 

 

 

10,692,103

 

Note original discount

 

 

(2,571 )

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(2,571 )

 

 

$3,191,967

 

 

$500,000

 

 

$1,550,000

 

 

$5,447,565

 

 

$10,689,532

 

 

On April 15, 2022, the Company entered into a non-negotiable convertible promissory note in the original principal amount of $1,050,000, as adjusted, (“Cygnet Note”) which can be converted into common stock of the Company at a price of $120.00 per share and is payable in full, to the extent not previously converted, on April 15, 2023.

 

In June 2022, the Company entered into a securities purchase agreement with two accredited investors pursuant to which the Company could receive up to $15,000,000 during the following twelve months of the agreement. The Company received $6,678,506 for Convertible Notes in the original principal amount of $7,500,000 (the “Convertible Notes”), representing the original purchase amount, less fees, costs, and a $500,000 holdback by the investors. In addition to the Convertible Notes, the investors received Common Stock Purchase Warrants (the “Warrants”) to acquire an aggregate of 2,813 shares of common stock. The Warrants are exercisable for five years at an exercise price of $88.80 per share, provide for customary anti-dilution protection, and an investor put right to require the Company to redeem the Warrants for a total of $250,000.  There was a loss of $3,540 for the change in the derivative liability for the period ended December 31, 2022.  On October 31, 2022, the Company entered into a letter agreement with the accredited investors in which all amounts owed were paid in full, and the related convertible notes and all security interests were canceled.   Additionally, the Company terminated the related Form S-3 registration statement.

 

In June 2022, the Company executed a promissory note with Allan Marshall, the Company’s Chief Executive Officer, in the original principal amount of $1,500,000 (“Marshall Loan”). The promissory note has a 2-year term and bears cash interest at the rate of 8.5% per annum with an additional PIK of 3.5% per annum. The promissory note provides for monthly payments of principal, on an even line 36-month basis, plus cash interest, with a balloon payment of all outstanding principal, cash interest, and PIK interest at maturity. The Company received and deposited the principal amount on July 31, 2022.  On November 15, 2023, the Company executed an amendment to the promissory note with Mr. Marshall, providing for the payment of interest only for 18 months at an interest rate of 12% per annum and thereafter the amortization of the note over a 12 month period, starting in June of 2025. The principal currently outstanding is $500,000.  In addition to this, the Company issued Mr. Marshall a warrant to purchase up to 18,750 shares of the Company’s common stock  for five years at a per share price of $22.00.  The note has been classified as long-term in the consolidated financial statements.  $1,000,000 of the promissory note was used by the investor in the purchase of VitaMedica.

On October 19, 2022, Upexi, Inc. (the “Company”) and its indirect wholly owned subsidiary, Upexi 17129 Florida, LLC entered into a loan agreement, promissory note and related agreements with Professional Bank, a Florida state-chartered bank, providing for a mortgage on the Company’s principal office in N. Clearwater, Florida. The Company received $3,000,000 in connection with the transaction. The principal is to be repaid to Professional Bank over a term of ten years. The proceeds of the loan were utilized by the Company to pay down its loan facility with Acorn Capital, LLC in the amount of $2,780,200.  As of March 31, 2023, the Company was not in compliance with the debt service ratio.  The Company received a forbearance agreement from the bank until June 30, 2024 to return to compliance of the debt service ratio of 1.25 to 1, until that time the Company will pay an interest rate of 10% instead of the contractual terms of 4.8% and has paid the original principal and adjusted interest through this report.  The building was sold for $4,300,000 on July 8, 2024. 

 

On February 22, 2023, the Company executed a promissory note with an investor, in the original principal amount of $560,000.  On November 15, 2023, the Company executed an amendment to the promissory note with the investor, providing for the payment of interest only for 18 months at 12% per annum and thereafter the amortization of the note over a 12-month period, starting in June of 2025.  The principal currently outstanding is $560,000. In addition to this, the Company issued the investor a warrant to purchase up to 6,250 shares of the Company’s common stock for five years at a per share price of $22.00. The note has been classified as long-term in the consolidated financial statements. 

 

On February 22, 2023, the Company executed a promissory note with an investor, in the original principal amount of $2,150,000.   In November of  2023, the Company executed an amendment to the promissory note with the investor, providing for the payment of interest only for 18 months at 12% per annum and thereafter the amortization of the note over a 12-month period, starting in June of 2025. The principal currently outstanding is $2,150,000.  In addition to this, the Company issued the investor a warrant to purchase up to 25,000 shares of the Company’s common stock at a per share price of $22.00.  In addition, $100,000 of the promissory note was used by the investor in the purchase of VitaMedica.  The note has been classified as long-term in the consolidated financial statements.