Quarterly report pursuant to Section 13 or 15(d)

Notes Payable - Related Party (Tables)

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Notes Payable - Related Party (Tables)
9 Months Ended
Sep. 30, 2018
Debt Disclosure [Abstract]  
Schedule of Notes Payable - Related Party

    September 30, 2018     December 31, 2017  
13.25% unsecured note payable due May 5, 2017 (1)   $ 1,250,000     $ 1,250,000  
0% unsecured note payable due September 30, 2018 (2)     6,000,000       6,000,000  
Less: unamortized discount of imputed interest of 4% (2)     -       (114,268 )
Total debt     7,250,000       7,135,732  
Less: current maturities     7,250,000       7,135,732  
Long-term debt, net of current maturities   $ -     $ -  

  

(1) Effective January 5, 2017, Foothills borrowed $1,250,000 from Berwin Trading Limited that, due to its 20% beneficial ownership in the Company, is a related party. This note called for interest at 9% per annum; but because it was not paid when due interest was to have accrued at a default rate of 11% from the due date of the note. 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.
   
(2) On December 30, 2016, in connection with the TBL acquisition, Foothills entered into a promissory note in the amount of $6,000,000. This note bears no interest during its term. The Company calculated and recorded $342,804 of imputed interest as debt discount.