The events (9 total) that cause a default are listed on page 2-3. Being late with the SEC filing (#viii) is only one cause, which has already been triggered (delinquent with SEC filings after January 30, 2016). But, if REDG were to stop filing all together that would probably delist the company from the OTCQB or pink, causing another event of default to occur (event #v).
The late SEC filings also affect any other notes that are left with the same clause in them.
Since Benny will probably use stock to satisfy the notes and penalties, it doesn't really create a financial burden for the company. It does create a burden for all shareholders through the dilution it creates.
Edit As the penalties pile up, the company also has to reserve more shares to cover the note. REDG is required to reserve five times the number of shares necessary to satisfy the note. Using $0.0001 as the share price, REDG would need to reserve 5 billion shares per $100,000 owed. Half that amount using $0.0002.
If they can get GSL and powfolio up and running, i imagine there will be opportunities to consolidate a lot of the debt on more favorable terms...i hope