| RELATED PARTY NOTES PAYABLE |
NOTE
7. RELATED PARTY NOTES PAYABLE
The
chart below summarizes the related party Notes Payable as of December 31, 2022 and 2021.
SCHEDULE
OF RELATED PARTY NOTES PAYABLE
| |
|
Interest rate |
|
|
Date of maturity |
|
|
December 31, 2022 |
|
|
December 31, 2021 |
|
| Quinten Beasley |
|
|
10 |
% |
|
|
October 14, 2016 |
|
|
|
5,000 |
|
|
|
— |
|
| Blue Sky Resources (i)
|
|
|
3.5 |
% |
|
|
December 31, 2021 |
|
|
|
178,923 |
|
|
|
— |
|
| Blue Sky Resources (ii)
|
|
|
10 |
% |
|
|
December 31, 2021 |
|
|
|
150,000 |
|
|
|
— |
|
| Blue Sky Resources (iii)
|
|
|
10 |
% |
|
|
December 31, 2022 |
|
|
|
2,085,432 |
|
|
|
— |
|
| Ivar Siem (iv) |
|
|
9 |
% |
|
|
December 31, 2021 |
|
|
|
278,435 |
|
|
|
278,435 |
|
| Mark Allen (v) |
|
|
9 |
% |
|
|
September 2, 2021 |
|
|
|
55,000 |
|
|
|
55,000 |
|
| Mark Allen (vi) |
|
|
12 |
% |
|
|
June 30, 2020 |
|
|
|
200,000 |
|
|
|
200,000 |
|
| Mark Allen (vii) |
|
|
9 |
% |
|
|
June 30, 2021 |
|
|
|
241,125 |
|
|
|
245,938 |
|
| Joel Oppenheim (viii)
|
|
|
10 |
% |
|
|
December 31, 2021 |
|
|
|
266,900 |
|
|
|
— |
|
| |
|
|
|
|
|
|
|
|
|
$ |
3,460,815 |
|
|
$ |
779,373 |
|
| |
(i) |
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, 2021. On September 1, 2021, Zel Khan and Quinten Beasley resigned from their positions at Petrolia
Energy, so this note had been removed from the related party section. On February 2, 2022, the LOC was assigned to Blue Sky Resources and moved to Related Party Notes Payable. |
| |
(ii) |
On February 3, 2022, Joel Oppenheim assigned $150,000 of his note, shown as Credit Note II in Note 5. Notes Payable to Blue
Sky Resources. |
| |
|
|
| |
(iii) |
On December 1, 2021, the Company
signed an amended loan agreement with a third party for $2,085,432,
which combined prior credit notes and accrued interest on those amounts. The loan bears interest at 10%
per annum and had a maturity date of December
31, 2022. The note holds a security interest against the 25%
Working Interest in the Cona assets and a security guarantee of a working interest in the Utikuma oil field and a working interest
in the TLSAU field. The note was assigned to Blue Sky Resources on February 11, 2022, and moved to Related Party Notes Payable. |
| |
|
|
| |
(iv) |
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 noteholder 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 noteholder 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 Ivar Siem. The note does not bear any interest (0%
interest rate) and 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 expired on March
1, 2022. The warrants vest and were issued on January 1, 2021. On January 1, 2021, the Company entered into an amended loan
agreement in the amount of $278,435,
which combined the three previous loans, along with accrued interest. The note bears an interest rate of 9%
and matured on December
31, 2021. |
| |
|
|
| |
(v) |
On
April 15, 2020, the Company entered into an agreement, with Mark Allen, that included a funding clause where the Company borrowed
$55,000 from Mr. Allen. The note bears interest at an interest rate of 9% per annum and matured on September 2, 2021. |
| |
|
|
| |
(vi) |
During
2019, the Company entered into a loan agreement in the amount of $200,000 with Mark Allen. The note bears interest at an interest
rate of 12% per annum and matured on June 30, 2020. 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.
|
| |
|
|
| |
(vii) |
On
January 3, 2020, the Company entered into a loan agreement in the amount of $100,000 with Mark Allen. The note bears interest at
an interest rate of 10% per annum and matured 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. On February 14, 2020, the Company entered
into a loan agreement in the amount of $125,000 with Mark Allen. The note bears 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 expired on February 14, 2022. The fair value of issued warrants were recorded as
a debt discount of $38,249 and monthly amortization of $1,903. On January 1, 2021, the Company entered into an amended loan agreement
in the amount of $245,938, which combined the two previous loans, along with accrued interest. The note bears an interest rate of
9% and matured on June 30, 2021. |
| |
|
|
| |
(viii) |
Various shareholder advances were provided by Joel. Oppenheim during 2018 and 2019. There were no formal documents drawn. Interest rates
were applied based on other similar loan agreements entered into by the Company during that period. On February 12, 2021, the Company
entered into an amended loan agreement in the amount of $416,900 that consolidated these amounts. The loan bears interest at 10% per annum
and has a maturity date of December 31, 2021. On August 31, 2021, this loan was in default due to missed interest payments, and a default
interest rate was applied to the principal balance. On February 3, 2022, $150,000 of this note was assigned to Blue Sky Resources. The
remaining balance has been moved to Notes Payable – Related Party due to Mr. Oppenheim’s beneficial ownership of our common
stock. |
The
following is a schedule of future minimum repayments of related party notes payable as of December 31, 2022:
SCHEDULE
OF FUTURE MINIMUM REPAYMENTS OF RELATED PARTY NOTES PAYABLE
| |
|
|
|
|
| 2023 |
|
$ |
3,460,815 |
|
| Thereafter |
|
|
— |
|
| Total |
|
$ |
3,460,815 |
|
|