Related Party Transactions

6 Months Ended

Jun. 30, 2023

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 8 – related party TRANSACTIONS

As further detailed in Note 4, in March 2020, the Company executed a Line of Credit (“LOC”) with GPR, a related party, evidenced by a 10% convertible promissory note. The LOC was for up to $2,500,000, matured over three years and may be increased by up to another $1,000.000 and extended an additional two years, respectively at GPR’s sole option. The LOC, like the Secured Note, is secured by all the Company’s assets including a pledge of 100% of its subsidiaries’ stock. As such, the LOC’s outstanding balance and accrued interest increase the amount of secured debt owned by GPR.

The Company entered into an Amendment and Forbearance Agreement with GPR effective July 12, 2021, wherein the LOC was increased to $5,000,000, the due date was extended to March 16, 2025 with an option to increase the LOC by an additional $5,000,000 with an extension for five additional years and the exercise price was reduced to $1.65 per share based on the current market price. The Company entered into a Second 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 purchased by GPR into the LOC resulting in the extinguishment of such notes 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. 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 Convertible Note (previously held by Pure Path) and the Flechner Judgment (defined in Note 7) were rolled into the balance of the LOC and the Deed of Trust was increased to $250,000,000.

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