Convertible Notes Payable

3 Months Ended

Mar. 31, 2024

Convertible Notes Payable [Abstract]

CONVERTIBLE NOTES PAYABLE

NOTE 4 – CONVERTIBLE NOTES PAYABLE

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, is 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). During the three months ended March 31, 2024, the Company had $138,430 of expenses that were paid directly by GPR, a related party and the Company’s convertible note line of credit with GPR was increased by this same amount. During the year ended December 31, 2023, the Company had $496,173 of expenses that were paid directly by GPR, a related party and the Company’s convertible note line of credit with GPR was increased by this same amount certain accounts payable. At March 31, 2024 and December 31, 2023 the balance due GPR under the LOC is $329,661 and $191,231 principal and $18,579 and $17,384 accrued interest, respectively.

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 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 defaulted 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) and the Flechner Judgment (see the Company’s 10-K for 2022) were rolled into the balance of the LOC and the Deed of Trust was increased to $250,000,000 and the appropriate paperwork was filed with the requisite government office(s).

Advances by GPR to pay directly certain operating expenses, reduce certain accounts payable, or acquire certain notes payable in default 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 condensed consolidated financial statements.