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Senior Secured Promissory Note, Related Party
12 Months Ended
Dec. 31, 2018
Notes to Financial Statements  
SENIOR SECURED PROMISSORY NOTE, RELATED PARTY

NOTE 5 – Senior Secured Promissory Note, related party

 

On October 10, 2013, a Senior Secured Convertible Promissory Note for up to $2,500,000 was issued to Pure Path Capital Management Company, LLC ("Pure Path") pursuant to a Settlement and Release Agreement. The note had an original principal balance of $1,933,345, with a maturity date of April 10, 2015, and bears interest at 8% per annum. The settlement agreement included the issuance to Pure Path of 27,000,000 of the Company's common shares, resulting in Pure Path becoming a related party. Upon an event of default additional interest will accrue at the rate equal to the lesser of (i) 15% per annum in addition to the Interest Rate or (ii) the highest rate permitted by applicable law, per annum (the "Default Rate"). The Company has obtained a waiver on the default rate interest, allowing the 8% interest rate to remain in effect during the default on the note. The Note is securitized by any and all of Borrower's tangible or intangible assets, already acquired or hereinafter acquired, including but not limited to: machinery, inventory, accounts receivable, cash, computers, hardware, mineral rights, etc.

 

The outstanding principal balance on the note was $2,229,187 as of both December 31, 2018 and 2017, with related accrued interest of $955,701 and $768,982, respectively. In March 2019, Pure Path's interest was acquired by Granite Peak Resources, LLC. This Note is in default. See Note 11– Subsequent Events.