| Related Party Notes Payable |
6. RELATED PARTY NOTES PAYABLE
The following table summarizes the Company’s
related party notes payable:
| |
|
|
|
|
|
|
Balance at: |
|
| |
|
Interest rate |
|
|
Date of maturity |
|
September 30, 2020 |
|
|
December 31, 2019 |
|
| Lee Lytton (x) |
|
|
— |
|
|
On demand |
|
|
— |
|
|
|
3,500 |
|
| Quinten Beasley |
|
|
10 |
% |
|
October 14, 2016 |
|
|
10,000 |
|
|
|
10,000 |
|
| Joel Oppenheim (i), (x) |
|
|
— |
|
|
On demand |
|
|
— |
|
|
|
217,208 |
|
| Joel Oppenheim (i), (x) |
|
|
— |
|
|
On demand |
|
|
— |
|
|
|
15,000 |
|
| Jovian Petroleum Corporation (ii) |
|
|
3.5 |
% |
|
February 9, 2019 |
|
|
447,486 |
|
|
|
362,583 |
|
| Mark M Allen – SUDS Development (ix), (x) |
|
|
9 |
% |
|
June 30, 2021 |
|
|
55,000 |
|
|
|
— |
|
| Mark M Allen – SUDS Development (vii), (x) |
|
|
10 |
% |
|
June 30, 2021 |
|
|
135,000 |
|
|
|
— |
|
| Mark M Allen (viii), (x) |
|
|
12 |
% |
|
June 30, 2021 |
|
|
200,000 |
|
|
|
— |
|
| Mark M Allen (iv), (x) |
|
|
10 |
% |
|
June 30, 2021 |
|
|
100,000 |
|
|
|
— |
|
| Discount on Mark M Allen ($100K) |
|
|
— |
|
|
June 30, 2021 |
|
|
(16,861 |
) |
|
|
— |
|
| Mark M Allen (v), (x) |
|
|
10 |
% |
|
June 30, 2021 |
|
|
125,000 |
|
|
|
— |
|
| Discount on Mark M Allen ($125K) |
|
|
— |
|
|
June 30, 2021 |
|
|
(17,130 |
) |
|
|
362,583 |
|
| Ivar Siem (vi) |
|
|
12 |
% |
|
On demand |
|
|
100,000 |
|
|
|
100,000 |
|
| Ivar Siem (vi) |
|
|
12 |
% |
|
On demand |
|
|
75,000 |
|
|
|
75,000 |
|
| Ivar Siem (vi) |
|
|
Non interest |
|
|
On Demand |
|
|
50,000 |
|
|
|
— |
|
| Joel Oppenheim (x) |
|
|
12 |
% |
|
October 17, 2018 |
|
|
— |
|
|
|
200,000 |
|
| |
|
|
|
|
|
|
|
$ |
1,263,495 |
|
|
$ |
983,291 |
|
| |
(i) |
Not used |
| |
|
|
| |
(ii) |
On February 9, 2018, the Company entered into a Revolving Line of Credit Agreement (“LOC”) for $200,000 (subsequently increased to $500,000 on April 12, 2018) with Jovian Petroleum Corporation (“Jovian”). The CEO of Jovian is Quinten Beasley, our former director (resigned October 31, 2018), and 25% of Jovian is owned by Zel C. Khan, our former CEO and director. The initial agreement was for a period of 6 months and it can be extended for up to 5 additional terms of 6 months each. All amounts advanced pursuant to the LOC will bear interest from the date of advance until paid in full at 3.5% simple interest per annum. Interest will be calculated on a basis of a 360-day year and charged for the actual number of days elapsed. Subsequent to period-end this LOC has been extended until December 31, 2020. |
| |
(iii) |
Not used. |
| |
|
|
| |
(iv) |
On January 3, 2020, the Company entered into a loan
agreement in the amount of $100,000 with Mark M Allen. The note bore interest at an interest rate of $10% per annum and matures on June
1, 2020, with warrants to purchase 400,000 shares of common stock (the “Loan Warrants”), at an exercise price of $0.10 per
share in Canadian dollars and expire on January 3, 2023. The fair value of issued warrants were recorded as a debt discount of $31,946
and monthly amortization of $1,775.
|
| |
(v) |
On February 14, 2020, the Company entered into a loan
agreement in the amount of $125,000 with Mark M Allen. The note bore interest at an interest rate of $10% per annum and matures on June
1, 2020, with warrants to purchase 750,000 shares of common stock (the “Loan Warrants”), at an exercise price of $0.10 per
share in Canadian dollars and expire in February 14, 2022. The fair value of issued warrants were recorded as a debt discount of $38,249
and monthly amortization of $1,903.
|
| |
(vi) |
On August 15, 2019, the Company entered into a loan
agreement in the amount of $75,000 with Ivar Siem. The note bears interest at an interest rate of 12% per annum with a four (4) month
maturity.
On December 4, 2019, the Company entered into a loan
agreement in the amount of $100,000 with Ivar Siem. The note bears interest at an interest rate of 12% per annum with a six (6) month
maturity. At the maturity date, the note holder has the right to collect the principal plus interest or convert into 1,250,000 shares
of common stock at $0.08 per share. In addition, if converted, the note holder will also receive 5,000,000 warrants at an exercise price
of $0.10 per share, vesting immediately with a 36 month expiration period.
On February 28, 2020, the Company entered into a $50,000
loan agreement with a related party. The note does not bear any interest (0% interest rate) is due on demand. The note includes warrants
to purchase 200,000 shares of common stock (the “Loan Warrants”), at an exercise price of $0.10 per share in Canadian dollars
and expire on March 1, 2022. The warrants vest and will be issued on January 1, 2021.
|
| |
(vii) |
On January 6, 2020, the Company entered into a consulting
agreement, with Mark M Allen, that included a funding clause where the Company borrowed $135,000 ($62,000 on January 6, 2020, $45,000
on May 18, 2020 and $28,000 on June 26, 2020) from a third party. The third party is responsible for the future oversight and management
of the SUDS field located in Creek County, Oklahoma. The note bore interest at an interest rate of 10% per annum and mature on June 30,
2020.
|
| |
(viii) |
During 2019, the Company entered into a loan agreement
in the amount of $200,000 with Mark M Allen. The note bears interest at an interest rate of 12% per annum and matures on June 30, 2021.
At the maturity date, the note holder has the right to collect the principal plus interest or convert into 2,500,000 shares of common
stock at $0.08 per share. In addition, upon conversion, the note holder will also receive 10,000,000 warrants at an exercise price of
$0.10 per share, vesting immediately with a 36 month expiration period.
|
| |
(ix) |
On April 15, 2020, the Company entered into a consulting
agreement, with Mark M Allen, that included a funding clause where the Company borrowed $55,000 from Mr. Allen. Mr. Allen is responsible
for the future oversight and management of the SUDS field located in Creek County, Oklahoma. The note bore interest at an interest rate
of 9% per annum and matures on August 15, 2021.
|
| |
(x) |
These lenders are included in both Note 5 – Notes Payable and Note 6 – Related Party Notes Payable because their classification changed from the prior year to the current year. Specifically, in the prior year they were a third party lender and then they became a related party lender in the current year, or vice versa. |
During 2019, $120,000 of related party notes and payables
were converted to shares. Specifically, Leo Womack for $ 20,000, Joel Oppenheim for $40,000, Jovian for $40,000 and American Resources
for $20,000. See Note 10 for further explanation.
The following is a schedule of future minimum repayments
of related party notes payable as of September 30, 2020:
| 2020 |
|
$ |
1,263,495 |
|
| Thereafter |
|
|
— |
|
| |
|
$ |
1,263,495 |
|
|