8-K: Loop Media Faces Multiple Loan Defaults, Receives Demand Notices Totaling Over $3 Million in Accelerated Debt

Loop Media, Inc. has disclosed multiple events of default on significant financial obligations, leading to demand notices and potential acceleration of over $3 million in debt from various lenders.

Summary

• Loop Media, Inc. has defaulted on its May 2023 Secured Line of Credit, with an outstanding principal balance of $889,000, including accrued interest, due on May 10, 2025.
• On June 10, 2025, a lender under the May 2023 Secured Line of Credit, owed $300,000, issued a demand notice for full payment within 10 days, with the interest rate increasing by 500 basis points (to 17%) retroactively upon default.
• The company defaulted on its $2,000,000 Bellino Trust Convertible Note, which accrues interest at 30% per annum and is personally guaranteed by Bruce A. Cassidy, the Executive Chairman.
• On June 16, 2025, the Bellino Trust issued a notice of default and stated it would accelerate repayment of all principal and interest due to the company's failure to make a payment on June 1, 2025.
• Loop Media also defaulted on multiple promissory and bridge notes with 1800 Diagonal Lending, LLC, failing to make payments totaling $79,260 due on June 16, 2025.
• On June 20, 2025, 1800 Diagonal Lending issued a default notice demanding immediate payment of 150% of the remaining outstanding principal balance, totaling $286,326, plus accrued interest and default interest at 22%.
• 1800 Diagonal Lending converted $15,000 and $20,000 of the $138,000 Promissory Note into 1,152,073 shares and 1,498,127 shares of Common Stock on June 20, 2024, and June 24, 2025, respectively, leaving $36,310.00 due on that specific note.

Sentiment

Score: 1

Explanation: The document details multiple, severe financial defaults and demand notices from lenders, indicating significant financial distress and potential insolvency. This is highly negative news for the company and its shareholders.

Negatives

• The company failed to pay the $889,000 principal balance, including accrued interest, on its May 2023 Secured Line of Credit by the May 10, 2025, maturity date.
• A demand notice was received from a lender for $300,000 of the May 2023 Secured Line of Credit, requiring payment within 10 days and triggering a 500 basis point increase in the interest rate (to 17%) retroactively.
• The company failed to make a payment on the $2,000,000 Bellino Trust Convertible Note on June 1, 2025, leading to a default notice and acceleration of the entire principal and accrued interest.
• The company failed to make aggregate payments of $79,260 due on June 16, 2025, to 1800 Diagonal Lending, LLC, on multiple promissory and bridge notes.
• 1800 Diagonal Lending, LLC, issued a default notice demanding immediate payment of 150% of the remaining outstanding principal balance, totaling $286,326, plus accrued and default interest at 22%.
• The company faces potential enforcement actions from multiple lenders, including the exercise of security interests over all present and future assets and properties.

Risks

• Lenders under the May 2023 Secured Line of Credit may seek to enforce their rights, potentially seizing the company's assets given the granted security interest in all present and future assets and properties.
• The Bellino Trust may seek to enforce its rights under the $2,000,000 Convertible Note, including accelerating repayment of all principal and interest, which is personally guaranteed by the Executive Chairman.
• 1800 Diagonal Lending, LLC, may enforce its rights under the various notes, including converting additional amounts into shares of Common Stock, which could lead to significant shareholder dilution.
• The sale of converted shares by 1800 Diagonal Lending in the public market could exert downward pressure on the company's stock price.
• The company faces significant financial distress due to multiple simultaneous defaults and accelerated debt obligations, threatening its operational continuity and solvency.

Future Outlook

The company faces significant uncertainty regarding its ability to comply with the demands from its lenders. There is no assurance that lenders will not seek to enforce their rights, which could include exercising security interests over company assets or converting additional debt into common stock, potentially leading to further dilution for shareholders.

Management Comments

• The report was signed by Justis Kao, Interim Chief Executive Officer, on July 1, 2025.

Industry Context

This announcement primarily details company-specific financial distress and does not provide broader industry trends or context. The defaults indicate severe liquidity challenges for Loop Media, which could be an isolated incident or reflect broader pressures if the company's business model is not generating sufficient cash flow.

Legal Proceedings

• The demand notices from Lender No. 1, the Bellino Trust, and 1800 Diagonal Lending, LLC, indicate potential future legal proceedings if the company fails to comply with the demands for accelerated repayment.

Related Party Transactions

• The Bellino Trust $2M Convertible Note is personally guaranteed by Bruce A. Cassidy, the company's Executive Chairman of its Board of Directors and a significant stockholder.

Stakeholder Impact

• Shareholders face significant risk of value erosion due to potential asset seizures by secured lenders, further equity dilution from debt conversions (e.g., by 1800 Diagonal Lending), and the overall financial instability of the company.
• Creditors (lenders) are actively seeking repayment and may initiate enforcement actions, potentially impacting their recovery depending on the company's asset value and other claims.
• Employees may face uncertainty regarding job security and the company's long-term viability given the severe financial challenges.
• Suppliers and customers may experience disruptions or reduced confidence in the company's ability to fulfill obligations.

Next Steps

• The company must respond to the demand notices from Lender No. 1 (May 2023 Secured Line of Credit) within 10 days of June 10, 2025.
• The company must address the accelerated repayment demands from the Bellino Trust.
• The company must address the accelerated repayment demands from 1800 Diagonal Lending, LLC, including the demand for 150% of the outstanding principal plus default interest.
• The company may need to negotiate with lenders to avoid enforcement of rights, including asset seizures or further equity dilution.

Key Dates

Recommendation

Keywords

Loan default, Secured line of credit, Convertible note, Promissory note, Bridge note, Debt acceleration, Demand notice, Financial obligation, Event of default, Corporate finance, SEC filing, 8-K, Loop Media