20. RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2024

Notes

20. RELATED PARTY TRANSACTIONS

20.RELATED PARTY TRANSACTIONS  

Related party transactions in these consolidated financial statements are as follows: 

On September 16, 2020, the Company issued a promissory note to JPM, in the amount of $450,000. Portions of the note were converted from time to time into Shares until paid in full. JPM is a related party as a significant shareholder holding directly and indirectly, as of December 31, 2024, 2,249,882 common shares (12.89%), 25,000 common share purchase warrants, and 1 preferred share of the Company.

On June 21, 2021, stockholders of the Company unanimously consented to terminate a Stockholders Agreement entered into by all of the stockholders and the Company on September 24, 2020, and approved a governance agreement between the Company and JPM, which grants to JPM the following rights:

·a consent right with respect to certain business transaction matters, including: (a) material changes to the nature of the Company’s business, (b) a grant of certain stock options or restricted stock, (c) the Company’s entry into certain employment or compensation agreements, (d) the incurrence by the Company of more than $500,000 of debt, (e) the Company’s entry into a related party agreement, (f) a sale transaction, (g) a loan by the Company in excess of $500,000, (h) settlement of a lawsuit or other dispute in excess of $500,000 or (i) any investment by the Company in excess of $500,000; 

·Board of Director observation rights; 

·the right to receive certain quarterly and annual financial statements of the Company; and 

·certain inspection rights so long as JPM owns at least 10% of the Company’s outstanding shares of common stock. 

For the year ended December 31, 2024, the Company paid sitting and committee fees of $157,750 to members of the board of directors.