XML 16 R8.htm IDEA: XBRL DOCUMENT

NOTES PAYABLE

9 Months Ended

Dec. 31, 2011

3. NOTES PAYABLE

	December 31, 2011		March 31, 2011
Blackwood Ventures LLC	$	33,246	$	31,320
Litigation settlement with Joseph “Chip” Langston		30,000		120,000
Litigation settlement with Porter LeVay & Rose		79,323		-
Litigation settlement with Robert Denman		35,000		-
PE Consulting		-		13,250
Lothian Put Option holders		2,569,684		2,663,649
		2,747,253		2,828,219

Less current portion		2,747,253		144,570
Notes payable, less current portion	$	-	$	2,683,649

Blackwood Ventures LLC

Through March 31, 2010, Blackwood Ventures LLC made advances to the Company totaling $426,000, which were assessed interest at an annual rate of 8%. Accrued interest is payable quarterly. Of the amount advanced, $250,000 and related accrued interest were subject to a Convertible Debenture Agreement. Pursuant to the terms of the Debenture, in lieu of receiving cash, Blackwood had the right to receive shares of the Company’s common stock as payment for accrued interest at a conversion price of 5% over the bid price on the date of payment. The advances are convertible into common stock of the Company at price per share of $0.19. The debenture matured on December 31, 2010.

For the year ended March 31, 2010, the Company issued 2,600,410 shares of its common stock to Blackwood in exchange for the cancellation of $489,078 of loans, advances, accrued compensation, and accrued interest.

As of December 31, 2011 principal and accrued interest is $33,246. Interest charged to operations on the debenture for the three and nine months ended December 31, 2011 and 2010 amounted to $657 and $607 and $1,926 and $1,779, respectively.

Litigation Settlement with Joseph “Chip” Langston

On August 2, 2011 a litigation settlement was reached with Joseph “Chip” Langston, the Company’s former Chief Financial Officer. The settlement covered the Langston Family Partnership and Buccaneer Energy Corporation v. Glen Rose Petroleum Corporation and the Glen Rose Petroleum Corporation v. Joseph Langston matters.

In the settlement agreement, Mr. Langston agreed to discontinue and withdraw all legal claims with prejudice in exchange for receiving $80,000 in a lump sum payment and $3,333 each month for twelve (12) months thereafter and returning all shares of the Company’s common stock in which he or anyone related to him had beneficial control or ownership. The initial payment of $80,000 was made when the settlement was signed on August 2, 2011. The monthly payments commenced on October 1, 2011. As of December 31, 2011, the total monthly payments of $30,000 were recorded within current notes payables.

Litigation Settlement with Porter, LeVay & Rose, Inc.

On January 3, 2012 a litigation settlement was reached with Porter, LeVay & Rose, Inc. The settlement covered the Porter, LeVay & Rose, Inc. v. Glen Rose Petroleum Corporation matter. The settlement amount of $79,323, due by Glen Rose to Porter LeVay & Rose, Inc., was recorded within current notes payable as of December 31, 2011. The full settlement amount was paid in full on January 23, 2012.

Litigation Settlement with Robert Denman

On December 22, 2011 a general release was reached with Robert Denman, a former employee of UHC Petroleum. In accordance with the agreement, UHC Petroleum must pay Mr. Denman a total of $50,000. A payment of $15,000 was made on December 27, 2011, leaving a December 31, 2011 balance of $35,000 which is due by April 1, 2012.

Lothian Oil Note Payable

In February 2006, certain option agreements with shareholders of Lothian Oil, Inc. were modified and granted the shareholders a put option to require the Company to purchase said options for a price of $4.00 per share less the purchase price of $1.50 per share by making demand between April 1, 2008 and April 10, 2008 (“Put Option”). The Put Holders exercised their rights in the required period, but the Company had insufficient funds to meet the demand and these obligations totaling $2,147,770 were recognized as a liability by the Company.

In February 2010, the Company entered into novation agreements with the option holders to convert the put option liabilities into unsecured notes payable totaling $2,489,780. These notes are assessed interest at an annual rate of 4% and mature on December 31, 2011, when the principal balances and accrued interest thereon are due; however, the Company has the right to extend the maturity dates to December 31, 2012 with an increase in the interest rate charged on the notes to 6% per annum. The Company recognized a loss of $342,010 on the conversion, which was charged to operations in March 2010. As of December 31, 2011, the principal balance of the note was reduced by $186,508, and accrued interest of $13,024 was written off, due to the litigation settlement with Thomas Pernice. The lump sum payment agreed upon in the settlement was paid in full on July 27, 2011.

Interest accrued on these notes and charged to operations for the three and nine months ended December 31, 2011 and 2010 amounted to $35,317 and $38,177, and $105,567 and $114,115, respectively. The balance of this obligation, including accrued interest, was $2,569,684 on December 31, 2011. On September 15, 2011 the Company exercised its right to extend the maturity of its Lothian Oil Notes Payable (Put Option) obligation, including accrued interest, till December 31, 2012.