Quarterly report pursuant to Section 13 or 15(d)

Notes Payable, Related Party

v3.7.0.1
Notes Payable, Related Party
6 Months Ended
Jun. 30, 2017
Debt Disclosure [Abstract]  
Notes Payable, Related Party

Note 6 – Notes Payable, Related Party

 

Effective January 5, 2017, Foothills borrowed $1,250,000 from Berwin Trading Limited. The Company executed a promissory note, titled as a Debenture, with the lender dated as of December 30, 2016, with proceeds being received by the Company on January 5, 2017. This loan is unsecured, bears interest at 9% per year and is due and payable in 120 days from the receipt of funds. If any amount payable is not paid when due, any such overdue amount shall bear interest at the default rate of 11% from the date of such non-payment until such amount is paid in full. The Company used net proceeds of this loan to satisfy certain obligations under a Purchase and Sale Agreement with Total Belief Limited, dated December 30, 2016, for general working capital and to support certain target drilling activities. On May 4, 2017, the Company and Berwin agreed to extend the maturity date of the debenture to June 20, 2017, in return for an annual interest rate increase from 9% to 13.5% per annum for the life of the debenture. The Company and Berwin have been in discussions to extend the term of this debenture and the Company believes it will either extend or repay the obligation to the satisfaction of Berwin. As of June 30, 2017, the balance of accrued interest was $81,370. During the three months and six months ended June 30, 2017, the Company recorded interest expense in the amount of $53,322 and $81,370, respectively.