PART I — FINANCIAL INFORMATION

Item 1Financial Statements.

LOOP MEDIA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS


	June 30,		September 30,
	2022		2021
ASSETS	(UNAUDITED)
Current assets
Cash	$	709,725	$	4,162,548
Accounts receivable, net		11,601,025		1,571,226
Inventory		12,554		223,048
Prepaid expenses and other current assets		1,136,401		1,645,037
Prepaid income tax		19,648		17,806
License content assets - current		420,789		850,263
Deferred offering costs		540,108		—
Total current assets		14,440,250		8,469,928
Non-current assets
Deposits		63,879		34,289
License content assets - non current		36,797		365,360
Property and equipment, net		884,492		38,936
Operating lease right-of-use assets		118,375		237,094
Intangible assets, net		618,444		702,778
Goodwill		1,970,321		1,970,321
Total non-current assets		3,692,308		3,348,778
Total assets	$	18,132,558	$	11,818,706
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	3,739,527	$	1,147,585
Accrued liabilities		5,707,627		434,858
Accrued royalties		3,316,708		633,463
Payable on acquisition		250,125		250,125
License content liabilities - current		50,250		985,000
Note payable - current		—		25,714
Deferred Income		144,079		191,331
Convertible debt related party - current, net		2,075,692		530,226
Convertible debt – current, net		602,581		—
Lease liability - current		119,178		167,101
Total current liabilities		16,005,767		4,365,403
Non-current liabilities
Convertible debt – related party, less current portion, net		—		2,458,194
Convertible debt, less current portion, net		142,714		404,319
Note payable – non-current		—		460,924
Derivative liability		893,925		1,058,633
Non-revolving line of credit, related party		2,203,064		—
Non-revolving line of credit		1,316,246		—
Lease liability		—		75,530
Total non-current liabilities		4,555,949		4,457,600
Total liabilities		20,561,716		8,823,003

Stockholders’ equity (deficit)
Series B Convertible Preferred stock, $0.0001 par value, 3,333,334 shares authorized, 0 and 200,000 shares issued and outstanding as of June 30, 2022 and September 30, 2021, respectively. Liquidation preference of $1.50 per share before any payment to Series A Preferred or Common stock		—		20
Common Stock, $0.0001 par value, 316,666,667 shares authorized,153,539,596 and 127,316,716 shares issued and outstanding as of June 30, 2022 and September 30, 2021, respectively		15,352		13,345
Additional paid in capital		79,319,016		69,824,754
Accumulated deficit		(81,763,526)		(66,842,416)
Total stockholders' equity (deficit)		(2,429,158)		2,995,703
Total liabilities and stockholders' equity (deficit)	$	18,132,558	$	11,818,706

See the accompanying notes to the consolidated financial statements

Table of Contents

LOOP MEDIA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)


	Three months ended June 30,				Nine months ended June 30,
	2022		2021		2022		2021

Revenue	$	10,804,083	$	1,160,793	$	18,679,956	$	2,660,004
Cost of revenue		7,018,283		763,359		11,978,477		1,949,979
Gross profit		3,785,800		397,434		6,701,479		710,025

Operating expenses
Selling, general and administrative		7,553,431		4,269,169		19,354,942		15,211,751
Impairment of goodwill and intangibles		—		—		—		2,390,799
Total operating expenses		7,553,431		4,269,169		19,354,942		17,602,550

Loss from operations		(3,767,631)		(3,871,735)		(12,653,463)		(16,892,525)

Other income (expense)
Interest income		—		—		200		8,653
Interest expense		(978,435)		(632,094)		(1,976,941)		(1,443,917)
Income from equity investment		—		—		—		1,551
Loss on extinguishment of debt		(944,614)		—		(944,614)		(15,000)
Gain on extinguishment of debt, net		—		579,486		490,051		593,386
Change in fair value of derivatives		18,395		—		164,708		—
Total other income (expense)		(1,904,654)		(52,608)		(2,266,596)		(855,327)
Loss before income taxes		(5,672,285)		(3,924,343)		(14,920,059)		(17,747,852)
Income tax (expense)/benefit		—		—		(1,051)		(99,830)
Net loss	$	(5,672,285)	$	(3,924,343)	$	(14,921,110)	$	(17,847,682)

Basic and diluted net loss per common share	$	(0.04)	$	(0.03)	$	(0.11)	$	(0.15)

Weighted average number of basic and diluted common shares outstanding		153,517,932		124,965,541		141,183,276		120,474,850

See the accompanying notes to the consolidated financial statements

Table of Contents

LOOP MEDIA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE NINE MONTHS ENDED JUNE 30, 2022, and 2021

(UNAUDITED)


	Preferred Stock Series B			Common Stock			Additional Paid		Accumulated
	Shares	Amount		Shares	Amount		in Capital		Deficit		Total
Balances, September 30, 2021	200,000	$	20	133,470,018	$	13,345	$	69,824,754	$	(66,842,416)	$	2,995,703
Stock-based compensation	—		—	—		—		1,549,406		—		1,549,406
Net loss	—		—	—		—		—		(4,273,995)		(4,273,995)
Balances, December 31, 2021	200,000	$	20	133,470,018	$	13,345	$	71,374,160	$	(71,116,411)	$	271,114

Stock-based compensation	—		—	—		—		1,116,318		—		1,116,318
Warrants issued to consultants	—		—	—		—		56,788		—		56,788
Payment in kind interest stock issuance	—		—	37,136		4		88,496		—		88,500
Conversion of series B convertible stock to common stock	(200,000)		(20)	20,000,000		2,000		(1,980)		—		—
Net loss	—		—	—		—		—		(4,974,830)		(4,974,830)
Balances, March 31, 2022	—	$	—	153,507,154	$	15,349	$	72,633,782	$	(76,091,241)	$	(3,442,110)

Stock-based compensation	—		—	—		—		1,282,548		—		1,282,548
Warrants issued in conjunction with debt	—		—	—		—		3,036,970		—		3,036,970
Beneficial conversion feature of convertible debenture	—		—	—		—		2,079,993		—		2,079,993
Warrants issued to consultants	—		—	—		—		197,226		—		197,226
Payment in kind interest stock issuance	—		—	32,319		3		88,497		—		88,500
Net loss	—		—	—		—		—		(5,672,285)		(5,672,285)
Balances, June 30, 2022	—	$	—	153,539,473	$	15,352	$	79,319,016	$	(81,763,526)	$	(2,429,158)


		Preferred Stock B			Preferred Stock A			Common Stock			Common stock		Additional Paid		Accumulated
		Shares	Amount		Shares	Amount		Shares	Amount		subscriptions		in Capital		Deficit		Total
Balances, September 30, 2020		200,000	$	20	30,667	$	3	114,320,911	$	11,432	$	135,144	$	36,669,899	$	(35,867,920)	$	948,578
Shares issued for cash		—		—	—		—	757,333		75		—		899,925		—		900,000
Cash received for common stock subscribed		—		—	—		—	—		—		330,000		—		—		330,000
Issuance of common stock subscribed		—		—	—		—	(53,333)		(5)		20,000		(19,995)		—		—
Shares issued in connection with reverse merger		—		—	—		—	—		—		—		(1)		—		(1)
Shares issued for asset purchase		—		—	—		—	1,369,863		137		—		2,671,096		—		2,671,233
Beneficial conversion feature of convertible debt		—		—	—		—	—		—		—		750,000		—		750,000
Stock-based compensation		—		—	—		—	—		—		—		134,253		—		134,253
Warrants issued to consultant		—		—	—		—	—		—		—		492,000		—		492,000
Shares issued for debt settlement		—		—	—		—	97,891		10		—		194,793		—		194,803
Shares issued for license content assets		—		—	—		—	1,180,880		118		—		2,065,878		—		2,065,996
Shares issued for investment in unconsolidated entity		—		—	—		—	454,463		46		—		863,434		—		863,480
Net loss		—		—	—		—	—		—		—		—		(5,676,224)		(5,676,224)
Balances, December 31, 2020	$	200,000	$	20	30,667	$	3	118,128,008	$	11,813	$	485,144	$	44,721,282	$	(41,544,144)	$	3,674,118

Issuance of common stock subscribed		—		—	—		—	497,429		49		(485,144)		485,095		—		—
Conversion of convertible debenture		—		—	—		—	1,003,618		100		—		376,256		—		376,356
Shares issued for cash		—		—	—		—	1,564,000		156		—		1,954,844		—		1,955,000
Stock-based compensation		—		—	—		—	—		—		—		5,419,800		—		5,419,800
Warrants issued in conjunction with debenture		—		—	—		—	—		—		—		43,654		—		43,654
Beneficial conversion feature of convertible debt		—		—	—		—	—		—		—		306,346		—		306,346
Net loss		—		—	—		—	—		—		—		—		(8,247,115)		(8,247,115)

Table of Contents

BALANCES, March 31, 2021	$	200,000	$	20	30,667	$	3	121,193,055	$	12,118	$	$	—	$	53,307,277	$	(49,791,259)	$	3,528,159

Conversion of series A convertible stock to common stock		—		—	(30,667)		(3)	3,066,700		307			—		(304)		—		—
Payment in kind interest stock issuance		—		—	—		—	14,475		3			—		41,976		—		41,979
Shares issued for consulting fees		—		—	—		—	79,051		8			—		199,992		—		200,000
Shares issued for acquisition		—		—	—		—	2,003,435		200			—		5,689,555		—		5,689,755
Shares issued for cash		—		—	—		—	960,000		96			—		1,199,904		—		1,200,000
Stock-based compensation		—		—	—		—	—		—			—		1,482,746		—		1,482,746
Warrants issued in conjunction with debenture		—		—	—		—	—		—			—		144,291		—		144,291
Beneficial conversion feature of convertible debt		—		—	—		—	—		—			—		1,705,709		—		1,705,709
Warrants issued for severance		—		—	—		—	—		—			—		82,000		—		82,000
Net loss		—		—	—		—	—		—			—		—		(3,924,343)		(3,924,343)
BALANCES, June 30, 2021	$	200,000	$	20	—	$	—	127,316,716	$	12,732	$	$	—	$	63,853,146	$	(53,715,602)	$	10,150,296

See the accompanying notes to the consolidated financial statements

Table of Contents

LOOP MEDIA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	Nine months ended June 30,
	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(14,921,110)	$	(17,847,682)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of debt discount		1,532,792		954,080
Depreciation and amortization expense		195,666		1,452,799
Amortization of license content assets		933,036		402,676
Amortization of right-of-use assets		118,719		107,248
Bad debt expense		20,000		208,791
Gain on extinguishment of debt		(490,051)		(579,486)
Loss on early extinguishment of convertible debt		944,614		—
Change in fair value of derivative		(164,708)		—
Warrants issued for consulting services		254,014		—
Warrants issued for severance		—		82,000
Stock-based compensation		3,948,272		7,528,800
Payment in kind for interest stock issuance		177,000		—
Gain on settlement of obligations		—		(13,900)
Loss on settlement of obligations		—		15,000
Equity method investment income		—		(1,551)
Impairment of intangible assets		—		2,390,799
Change in operating assets and liabilities:
Accounts receivable		(10,049,799)		(131,732)
Prepaid income tax		(1,842)		99,905
Inventory		210,494		11,979
Prepaid expenses		(741,364)		(231,450)
Deposit		(29,590)		227,000
Accounts payable		2,558,353		(175,305)
Accrued expenses		5,269,758		—
Accrued royalties		2,683,245		—
License content liability		(1,109,750)		(1,451,000)
Operating lease liabilities		(123,453)		(107,558)
Deferred income		(47,252)		18,552
NET CASH USED IN OPERATING ACTIVITIES		(8,832,956)		(7,040,035)

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of fixed assets, net of cash acquired		—		(750,000)
Cash paid for acquisition of EON Media Group, net of cash acquired		—		(749,937)
Purchase of property and equipment		(956,889)		2,752
Collection of note receivable		—		1,477
NET CASH USED IN INVESTING ACTIVITIES		(956,889)		(1,495,708)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock from prior year		1,250,000		4,385,000
Proceeds from PPP loan		—		486,637
Proceeds from issuance of preferred stock		—		1,000,000
Proceeds from issuance of convertible debt		2,079,993		2,950,000
Proceeds from non-revolving line of credit		6,222,986		—
Repayment of convertible debt		(2,715,865)		(36,078)
Repayment of stockholder loans		—		(292,336)
Shares issued for cash		—		(1,000,000)
Share issuance costs		—		(80,134)
Reverse merger costs		—		80,134
Deferred offering costs		(500,092)		—
NET CASH PROVIDED BY FINANCING ACTIVITIES		6,337,022		7,493,223

Change in cash and cash equivalents		(3,452,823)		(1,042,520)
Cash, beginning of period		4,162,548		1,971,923
Cash, end of period	$	709,725	$	929,403

SUPPLEMENTAL DISCLOSURES OF CASH FLOW STATEMENTS
Cash paid for interest	$



Nevada		47-3975872
(State or other jurisdiction of incorporation)		(IRS Employer Identification Number)

700 N. Central Ave., Suite 430, Glendale, CA 91203
(Address of principal executive offices) (Zip Code)

(818) 823-4801
(Registrant’s telephone number, including area code)


Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
Emerging growth company ☐

PART I — FINANCIAL INFORMATION		2

Item 1.	Financial Statements.	2
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	32
Item 3.	Quantitative and Qualitative Disclosure About Market Risk.	44
Item 4.	Controls and Procedures.	44

PART II — OTHER INFORMATION		46

Item 1.	Legal Proceedings	46
Item 1A.	Risk Factors	46
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	49
Item 3.	Defaults Upon Senior Securities.	49
Item 4.	Mine Safety Disclosure.	49
Item 5.	Other Information.	49
Item 6.	Exhibits	49
Signatures		51