XML 37 R26.htm IDEA: XBRL DOCUMENT
v3.24.2.u1

SUBSEQUENT EVENTS | 6 Months Ended
--- | ---
Jun. 30, 2024
Subsequent Events [Abstract] |
SUBSEQUENT EVENTS | NOTE 20. SUBSEQUENT EVENTS Letter Agreement As previously disclosed, on March 1, 2024, the Company entered into a Note Purchase Agreement (the “Agreement”), by and between the Company, Kustom Entertainment (together with the Company, the “Borrowers”), and Mosh Man, LLC, a New Jersey limited liability company (the “Purchaser”), pursuant to which the Borrowers issued to the Purchaser a Senior Secured Promissory Note (the “Note”) with a principal amount of $1,425,000. On July 13, 2024, the Company entered into a Letter Agreement (the “Letter Agreement”), by and between the Company, Kustom Entertainment and the Purchaser, increasing automatically the principal amount of the Note from $1,425,000 to $1,725,000; provided, however, that if the Borrowers repay the Note in full on or before August 15, 2024, then the principal amount of the Note shall be reduced automatically by $100,000. Pursuant to the Letter Agreement, the Borrowers’ failure to adhere to Sections 3.2(d)(iii) (the “Section 3.2(d)(iii) Failure”) and Section 3.3(a) (the “Section 3.3(a) Failure”) of the Purchase Agreement shall not constitute Events of Default, as defined in the Purchase Agreement; provided, however, that if the Borrowers shall be in breach or default under the Letter Agreement or otherwise fail to satisfy their obligations thereunder, the Section 3.2(d)(iii) Failure and Section 3.3(a) Failure shall each automatically constitute an Event of Default under the Purchase Agreement. Pursuant to the Letter Agreement, the Company agreed to make a cash payment to the Purchaser in the amount of $150,000 on or before July 26, 2024. The Company also agreed to sell or enter into a firm commitment to sell the office building owned by the Company and located at 14001 Marshall Drive, Lenexa, Kansas 66215 (the “Company Office Building”) and pay to the Purchaser: (i) $325,000, if the Company sells or enters into a firm commitment to sell the Company Office Building on or before August 7, 2024; or (ii) $400,000, if the Company sells or enters into a firm commitment to sell the Company Office Building after August 7, 2024. Pursuant to the Letter Agreement, the Company’s failure to sell or enter into a firm commitment to sell the Company Office Building prior to September 1, 2024 shall constitute an Event of Default, as defined in the Purchase Agreement, under the Purchase Agreement. The Company shall pay to the Purchaser $100,000 per month until the Note is repaid in full, with the first such payment occurring on August 12, 2024, and each subsequent payment occurring on the 12th calendar day of each month thereafter. Pursuant to the Letter Agreement, the Purchaser shall be a party to any and every flow of funds when there is an extraordinary receipt of capital by the Company. The Company shall pay to the Purchaser a penalty payment of $200,000 within five Business Days, as defined in the Purchase Agreement, if the Company fails to make the Purchaser a party to any flow of funds in respect of an extraordinary receipt of capital by the Company. Except as stated above, the Letter Agreement does not result in any other substantive changes to the Agreement. Purchase and Sale Agreement On August 2, 2024, the Company entered into a purchase and sale agreement (the “Purchase Agreement”) with Serenity Now, LLC, a Kansas limited liability company (the “Buyer”) to sell a commercial office building and associated property located at 14001 Marshall Drive, Lenexa, KS (the “Office Building”). The Buyer has no prior material relationship with the Company beyond the Agreement. Pursuant to the Agreement, the Buyer has agreed to acquire the Property (as defined in the Agreement) for five million nine hundred thousand and 00/100 dollars ($5,900,000), exclusive of closing costs. The Purchase Agreement includes customary representations and warranties, covenants and closing conditions, including, without limitation, assignment and assumption of existing leases and performance of all the covenants. Pursuant to the terms of the Agreement, during the Inspection Period (as defined in the Purchase Agreement), the Buyer is entitled to conduct inspections and review title and survey matters. The Company will lease its premises in the Office Building from the Buyer for six months after the closing of the Agreement for $240,000. On August 12, 2024, pursuant to the Agreement, the Company and the Buyer completed the sale of the Property. The Buyer has no prior material relationship with the Company beyond the Agreement. Common Stock Issuance The Company issued 353,123 shares of common stock subsequent to June 30, 2024. Effectiveness of Registration Statement Clover Leaf Capital Corp.’s (“Clover Leaf”) registration statement on Form S-4 was declared effective by the U.S. Securities and Exchange Commission (the “SEC”) as of Tuesday, July 30, 2024, relating to the previously announced proposed business combination by and among Clover Leaf, Kustom Entertainment, Inc. and CL Merger Sub, Inc. On August 1, the board of directors of the Company (the “Board”) set the record date for the dividend distribution to August 12, 2024 for determining stockholders entitled to receive the dividend distribution (the “Record Date”).

X
- References No definition available. + Details
Name: | us-gaap_SubsequentEventsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 855 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/855/tableOfContent Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 855 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147483399/855-10-50-2 + Details
Name: | us-gaap_SubsequentEventsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration