Convertible Promissory Note(S) Payable, Related Party

6 Months Ended

Jun. 30, 2023

Convertible Promissory Note(S) Payable, Related Party [Abstract]

CONVERTIBLE PROMISSORY NOTE(S) PAYABLE, RELATED PARTY

NOTE 4 – CONVERTIBLE PROMISSORY NOTE(S) PAYABLE, RELATED PARTY

On March 16, 2020 the Company executed a Line of Credit (“LOC”) with Granite Peak Resources, LLC (“GPR”), a related party, evidenced by a convertible promissory note. The LOC is for up to $2,500,000, matures over three years and may be increased by up to another $1,000,000 and extended an additional two years at GPR’s sole option. The LOC is for funding operating expenses critical to the Company’s basic operations and redirection and all requests for funds may be approved or disapproved in GPR’s sole discretion. The LOC bears interest at 10% per annum, was convertible into shares of the Company’s common stock at a per share price of $1.65 and is secured by the real and personal property of the Company and its subsidiaries, and the subsidiaries’ stock GPR already has under lien (See Note 8).

The Company entered into an Amendment and Forbearance Agreement with GPR on January 5, 2023 wherein GPR agreed to: (a) increase the existing LOC from $5,000,000 due March 16, 2025 to $35,000,000 due March 16, 2027, (b) roll two existing promissory notes and the judgement purchased by GPR into the LOC resulting in the extinguishment of such notes and judgement as separate instruments, and (c) to forebear until January 12, 2024, on exercising its foreclosure rights under its Senior Secured Note. The Company’s Board of Directors approved a revision in the conversion price at which the LOC may convert into the Company’s common stock from $1.65 per share to $1.05 per share, based upon the market price of the Company’s common stock over the 3 days preceding the agreement. GPR is the Company’s majority shareholder and largest debtholder. GPR holds a senior secured interest in all of the assets of the Company, including the stock of its subsidiary entities. Effective June 12, 2023, the Company entered into a Third Amendment Agreement with GPR, wherein the LOC was increased to $52,500,000 and both the Senior Secured Promissory Note (previously held by Pure Path and acquired in 2019- see the Company’s 10-K for 2022) and the Flechner Judgment (defined in Note 7 below) were rolled into the balance of the LOC and the Deed of Trust was increased to $250,000,000.

Advances by GPR to pay directly certain operating expenses, reduce certain accounts payable, or acquire certain notes payable on the Company’s behalf have been included in the convertible promissory issued by the Company in connection with the LOC and classified accordingly in the accompanying consolidated condensed financial statements. During the six months ended June 30, 2023, the Company had $162,404 of expenses, and $8,938,877 of notes payable and accrued interest, and a legal judgment sold by their respective holders, that were purchased directly by GPR, a related party and the Company’s convertible line of credit with GPR was increased by this same amount. During the year ended December 31, 2022, the Company had $162,404 of expenses that were paid directly by GPR, and the Company’s convertible line of credit with GPR was increased by this same amount of the related accounts payable and liabilities. At June 30, 2023 and December 31, 2022 the balance due GPR under the LOC is $10,238,404 and $1,199,527 principal and $293,344 and $184,928 accrued interest, respectively.

The entire balance of the LOC was converted into shares of restricted common stock of the Company in August 2023. See Subsequent Events.