NOTES PAYABLE AND RELATED PARTY LOANS |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NOTES PAYABLE AND RELATED PARTY LOANS | NOTE 6 – NOTES PAYABLE AND RELATED PARTY LOANS
The Company enters into loan agreements with both related and non-related parties in order to fund their ongoing film production activities. To that extent, the Company had the following outstanding debt as of December 31, 2024 and June 30, 2024:
As of December 31, 2024, certain notes totaling $1,690,000, were in technical default as a result of non-payment. However, per the terms of the notes, the default interest rate of 25% cannot be triggered unless a default notice is received from the lender(s). Additionally, $250,000 of notes were in default as a result of provisions in the respective note agreements requiring payment upon sale of a film, which has yet to be fulfilled by the Company. As of the date of the filing, $340,000 were still in default and bore an interest rate of 20% to 25%.
During the six months ended December 31, 2024, the Company entered into certain note agreements totaling $0.9 million. These notes bear interest at rates of 15% to 20%, and mature dependent upon factors related to future film sales or the closing of a senior debt facility.
On October 16, 2024 the Company entered into a one-year credit facility with total availability of $3.5 million. The full amount of $3.5 million has been drawn as of the date of these condensed consolidated financial statements with an approximate interest rate of 6.5%.
During the six months ended December 31, 2024, the Company issued notes payable totaling $0.3 million bearing an interest rate of 20%, due upon the earlier of a sale of a film or closing of a senior debt facility.
During the six months ended December 31, 2024, the Company issued approximately $15.4 million of notes payable bearing an interest rate of 10%.
During the six months ended December 31, 2024, the Company entered into certain note agreements totaling $61,064. These notes bear interest at a rate of 10%, and mature at dates through March 28, 2025. During the six months ended December 31, 2024, the Company repaid $47,571 of these notes.
During the six months ended December 31, 2024, the Company paid notes payable of approximately $6.0 million.
In addition to the stated interest rates on the loans, certain loans include a net profit participation feature whereby the lender may receive an additional return based on the performance of the film underwritten by the loan. Certain of these loans are collateralized by interests in film rights the Company owns. Additionally, certain of these notes are guaranteed by an individual who is a related party. To that extent, none of the participation features were triggered as of December 31, 2024. In addition, certain tax credit assignment loans totaling $750,000 were entered into during fiscal year 2024 whereby the lenders agreed to be paid (on a dollar per dollar basis) from the proceeds of a refundable tax credit related to the production of the Nutcracker film. While the tax credit was not received as of December 31, 2024, the Company expects to receive the credit in the near future and has therefore classified the tax assignment loans as current. In order to receive this tax credit, the Company must have an audit performed on the required financial information, which is currently in-process.
The Company had approximately $7.9 million in related party debt to its former parent company as of June 30, 2024. However, in accordance with the merger agreement all of the debt was forgiven as of the merger consummation date. The debt forgiveness was recognized as an increase to additional paid in capital. Upon settlement of the transaction an additional $0.2 million of liabilities were forgiven, resulting in total liability forgiveness of $8.1 million.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||