Related Party Transactions | Note 8. Related Party Transactions The Company has entered into transactions with the following related parties: Related Party: Bristol Capital, LLC Bristol Capital, LLC (“Bristol Capital”) is managed by Paul L. Kessler. Mr. Kessler served as Executive Chairman of the Company from December 29, 2016, through November 24, 2020, when Mr. Kessler resigned his position, but continued to serve as member of the Board of Directors. On December 1, 2021, Mr. Kessler was again appointed Consulting Agreement On December 29, 2016, the Company entered into a Consulting Services Agreement with Bristol Capital. Pursuant to the Consulting Agreement, Mr. Kessler agreed to serve as Executive Chairman of the Company. The initial term of the Agreement is from December 29, 2016 through March 28, 2017. The term of the Consulting Agreement will be automatically extended for additional terms of 90-day periods, unless either the Company or Bristol Capital gives prior written notice of non-renewal to the other party no later than thirty (30) days prior to the expiration of the then current term. Upon the execution of the agreement the Company granted Bristol Capital options to purchase up to an aggregate of 30,000 0.25 During the term, the Company will pay Bristol Capital, as amended, a monthly fee $ 18,750 5 200,000 On November 22, 2018, the Company agreed to issue 202,022 496,875 On August 3, 2020, the Company cancelled the 202,022 49,688 38,438 384,375 On March 1, 2021, the Company issued 22,500 225,000 During the three months ended March 31, 2023 and 2022, the Company incurred expenses of approximately $ 56,250 375,000 318,750 Non-Accountable Expense Reimbursement On September 7, 2021, Bristol Capital received a one-time non-accountable expense reimbursement of $ 200,000 Reimbursement of Legal Fees In January 2022, Bristol Capital was reimbursed for $ 12,040 Related Party: Bristol Capital Advisors, LLC Bristol Capital Advisors, LLC (“Bristol Capital Advisors”) is managed by Paul L. Kessler. Operating Sublease On June 16, 2016, the Company entered into a Standard Multi-Tenant Sublease with Bristol Capital Advisors. The leased premises are owned by an unrelated third party and Bristol Capital Advisors passes the lease costs down to the Company. The term of the Sublease is for 5 years and 3 months 8,000 0 83,054 Related Party: Bristol Investment Fund, Ltd. Bristol Investment Fund, Ltd. (“Bristol Investment Fund”) is managed by Bristol Capital Advisors, which in turn is managed by Paul L. Kessler. Securities Purchase Agreement – December 2016 On December 1, 2016, the Company entered into the Purchase Agreement with Bristol Investment Fund, pursuant to which the Company sold to Bristol Investment Fund, for a cash purchase price of $ 2,500,000 25,000 25,000 85,000 25,791 (i) Secured Convertible Debenture On December 1, 2016, the Company issued the Bristol Convertible Debenture with an initial principal balance of $ 2,500,000 December 30, 2018 12 Interest is payable quarterly on (i) January 1, April 1, July 1 and October 1, beginning on January 1, 2017, (ii) on each date the purchaser converts, in whole or in part, the Bristol Convertible Debenture into common stock (as to that principal amount then being converted), and (iii) on the day that is 20 days following the Company’s notice to redeem some or all of the of the outstanding principal of the Bristol Convertible Debenture (only as to that principal amount then being redeemed) and on the maturity date The Bristol Convertible Debenture is convertible into shares of the Company’s common stock at any time at the option of the holder. The initial conversion price was $ 3.00 3.00 50 The Bristol Convertible Debenture contains anti-dilution provisions where, if the Company, at any time while the Bristol Convertible Debenture is outstanding, sells or grants any option to purchase, right to reprice, or otherwise dispose of or issue any common stock or common stock equivalents, at an effective price per share less that is lower than the conversion price then in effect, the conversion price shall be reduced to the lower effective price per share. On December 19, 2019, the maturity date of the Bristol Convertible Debenture was amended to December 30, 2021 On May 1, 2020, the maturity date of the Bristol Convertible Debenture was amended to December 31, 2022. On August 3, 2020, as a result of the anti-dilution provisions, the effect of repricing stock options held by directors and employees to $ 0.25 0.25 10,000,000 On October 31, 2021, in consideration for the release of senior security interest in certain of the assets, properties, and rights of discontinued operations that were sold during the year, the Bristol Convertible Debenture was amended to reduce the conversion price to $ 0.175 During March 31, 2022, the Bristol Convertible Debenture principal in the amount of $ 3,150 18,000 0.175 On December 31, 2022 the maturity date of the Bristol Convertible Debenture was amended to May 31, 2023. As of March 31, 2023, the Bristol Convertible Debenture with a principal amount of $ 2,496,850 14,267,714 0.175 As of March 31, 2023 and December 31, 2022, the amount of accrued interest payable to Bristol Investment Fund under the Bristol Convertible Debenture was $ 1,899,074 1,825,195 (ii) Series A Common Stock Purchase Warrants On December 1, 2016, the Company issued series A common stock purchase warrants to acquire up to 833,333 3.00 December 1, 2021 On December 19, 2019, as a result of the anti-dilution provisions, the issuance of the Barlock Convertible Debenture with a conversion price of $ 2.50 1,000,000 2.50 On December 19, 2019, Bristol Investment Fund assigned 300,000 December 1, 2024 700,000 2.50 On August 3, 2020, as a result of the anti-dilution provisions, the effect of repricing stock options held by directors and employees to $ 0.25 7,000,000 0.25 7,000,000 0.25 On October 31, 2021, as a result of the anti-dilution provisions, the effect of reducing the conversion price of the Convertible Debentures to $ 0.175 10,000,000 0.175 On September 9, 2022, Bristol Investment Fund assigned 20 As of March 31, 2023, Bristol Investment Fund held series A common stock purchase warrants to acquire 10,000,000 0.175 In addition, the warrants may be exercised, in whole or in part, at any time until they expire. If at any time after the 6-month anniversary of the closing date there is no effective registration statement, or no current prospectus available for the resale of the warrant shares, then the warrants may be exercised, in whole or in part, on a cashless basis at any time until they expire. (iii) Series B Common Stock Purchase Warrants On December 1, 2016, the Company issued series B common stock purchase warrants to acquire up to 833,333 0.002 December 1, 2021 1,667 Upon issuance of the Bristol Convertible Debenture, the Company valued the warrants using the Black-Scholes Option Pricing model and accounted for it using the relative fair value of $ 1,448,293 no Related Party: Barlock 2019 Fund, LP Barlock is managed by Scott D. Kaufman, who served as Chief Executive Officer of the Company from November 24, 2020, through May 11, 2022, and as co-Chief Executive Officer from May 12, 2022 through August 8, 2022, and as a Director from November 4, 2019, through August 8, 2022, and as Chairman of the Board of Directors from November 24, 2020, through December 1, 2021. Securities Purchase Agreement – December 2019 On December 19, 2019, the Company entered into the purchase agreement with Barlock, pursuant to which the Company sold to Barlock, for a cash purchase price of $ 2,500,000 25,400 (i) Secured Convertible Debenture On December 19, 2019, the Company entered issued the Barlock Convertible Debenture with an initial principal balance of $ 2,500,000 December 30, 2021 12 Interest is payable quarterly on (i) January 1, April 1, July 1 and October 1, beginning on January 1, 2020, (ii) on each date the purchaser converts, in whole or in part, the Barlock Convertible Debenture into common stock (as to that principal amount then being converted), and (iii) on the day that is 20 days following the Company’s notice to redeem some or all of the of the outstanding principal of the Barlock Convertible Debenture (only as to that principal amount then being redeemed) and on the maturity date. The Barlock Convertible Debenture is convertible into shares of the Company’s common stock at any time at the option of the holder. The initial conversion price was $ 2.50 2.50 50 The Barlock Convertible Debenture contains anti-dilution provisions where, if the Company, at any time while the Barlock Convertible Debenture is outstanding, sells or grants any option to purchase, right to reprice, or otherwise dispose of or issue any common stock or common stock equivalents, at an effective price per share less that is lower than the conversion price then in effect, the conversion price shall be reduced to the lower effective price per share. On August 3, 2020, as a result of the anti-dilution provisions, the effect of repricing stock options held by directors and employees to $ 0.25 0.25 10,000,000 On October 31, 2021, in consideration for the release of senior security interest in certain of the assets, properties, and rights of discontinued operations that were sold during the year, the Barlock Convertible Debenture was amended to reduce the conversion price to $ 0.175 In March 2022, the principal amount of $ 3,150 18,000 0.175 As of March 31, 2023, the Barlock Convertible Debenture with a principal amount of $ 2,496,850 14,267,714 0.175 As of March 31, 2023 and December 31, 2022, the amount of accrued interest payable to Barlock under the Barlock Convertible Debenture was $ 985,923 912,044 (ii) Series A Common Stock Purchase Warrants On December 19, 2019, Bristol Investment Fund assigned to Barlock Capital Management, LLC series A common stock purchase warrants to acquire up to 300,000 2.50 December 1, 2024 On August 3, 2020, as a result of the anti-dilution provisions, the effect of repricing stock options held by directors and employees to $ 0.25 3,000,000 0.25 3,000,000 0.25 On October 31, 2021, as a result of the anti-dilution provisions, the effect of reducing the conversion price of the secured convertible debenture to $ 0.175 4,285,714 0.175 As of March 31, 2023, Barlock Capital Management, LLC held series A common stock purchase warrants to acquire 4,285,714 0.175 In addition, the warrants may be exercised, in whole or in part, at any time until they expire. If at any time after the six month anniversary of the closing date there is no effective registration statement, or no current prospectus available for the resale of the warrant shares, then the warrants may be exercised, in whole or in part, on a cashless basis at any time until they expire. Shares of common stock issuable upon exercise of warrants are subject to a 4.99% beneficial ownership limitation, which may increase to 9.99% upon notice to the Company Upon issuance of the secured convertible debenture, the Company valued the warrants using the Black-Scholes Option Pricing model and accounted for it using the relative fair value of $ 545,336 no Related Party: Barlock Capital Management, LLC Barlock Capital Management, LLC, is managed by Scott D. Kaufman, who served as Chief Executive Officer of the Company from November 24, 2020, through May 11, 2022, and as co-Chief Executive Officer from May 12, 2022 through August 8, 2022, and as a Director from November 4, 2019, through August 8, 2022, and as Chairman of the Board of Directors from November 24, 2020, through December 1, 2021. From September 2021 through December 2021, the Company rented executive office space located at 2700 Homestead Road, Park City, UT 84098, for approximately $ 3,000 Related Party: American Natural Energy Corporation Scott D. Kaufman is a director and shareholder of American Natural Energy Corporation (“ANEC”). In addition, Richard G. Boyce is a former director of the Company who resigned from the Board on July 22, 2022, is also a director of ANEC. On October 22, 2021, the Company entered into an agreement with ANEC, where ANEC would: (i) allow the Company to moor a barge on the ANEC operations site with the Company’s mobile data center that houses cryptocurrency miners and a mobile turbine, and, (ii) supply natural gas to power a mobile turbine that produces electricity that, in turn, is used to power the miners. ANEC charged the Company for the amount of natural gas used based on the daily spot price of an unaffiliated third party, and a daily fee of $ 1,500 2,000 0 230,000 In addition, in January 2022, the Company began renting executive office space located at 2700 Homestead Road, Park City, UT 84098, for approximately $ 3,000 0 19,000 Related Party: Scott D. Kaufman, Chief Executive Officer On September 7, 2021, Scott D. Kaufman received a one-time non-accountable expense reimbursement of $ 200,000 Related Party: K2PC Consulting, LLC K2PC Consulting, LLC is managed by the spouse of Scott D. Kaufman. The company paid marketing fees to K2PC Consulting, LLC in the amount of $ 0 7,850 Related Party: John D. Maatta, Director John D. Maatta is a current director, and served as Chief Executive Officer of the Company until November 24, 2020, as co-Chief Executive Officer from May 12, 2022 through July 8, 2022, and again as Chief Executive Officer beginning on July 9, 2022. On November 22, 2018, the Company agreed to issue 86,466 212,707 On August 3, 2020, the Company cancelled the 86,466 21,271 29,496 294,965 35,100 351,000 100,000 125,000 126,000 no On March 1, 2021, 8,500 85,546 Related Party: CONtv CONtv is a joint venture with third parties and Bristol Capital, LLC. The Company holds a limited and passive interest of 10 0 |