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 years ended December 31, 2021 and 2020, the Company incurred expenses of approximately $ 225,000 93,750 Non-Accountable Expense Reimbursement On September 7, 2021, Bristol Capital received a one-time non-accountable expense reimbursement of $ 200,000 Related Party: Bristol Capital Advisors, LLC Bristol Capital Advisors, LLC (“Bristol Capital Advisors”), is managed by Bristol Capital Advisors, which in turn 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 beginning on July 1, 2016, with monthly payments of approximately $ 8,000 . During the year ended December 31, 2021 and 2020, the Company paid lease obligations of $ 83,054 and $ 108,046 , respectively, under the Sublease. On September 30, 2021, the lease term ended, and the Company vacated the premises. Related Party: Bristol Investment Fund, Ltd. Bristol Investment Fund, Ltd. (“Bristol Investment Fund”) 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 entered issued a secured 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 secured 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 secured convertible debenture (only as to that principal amount then being redeemed) and on the maturity date The secured 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 secured convertible debenture contains anti-dilution provisions where, if the Company, at any time while the secured 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 secured convertible debenture was amended to December 30, 2021 On May 1, 2020, the maturity date of the secured 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 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 secured convertible debenture was amended to reduce the conversion price to $ 0.175 14,285,714 As of December 31, 2021, and 2020, the amount of accrued interest payable to Bristol Investment Fund under the secured convertible debenture was $ 1,525,479 1,223,835 (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 a senior secured convertible debenture to Barlock 2019 Fund, LP with a conversion price of $ 2.50 increased the number of shares of common stock issuable upon exercise of the series A common stock purchase warrants to 1,000,000 , and decreased the exercise price to $ 2.50 . On December 19, 2019, Bristol Investment Fund assigned 300,000 series A common stock purchase warrants to Barlock Capital Management, LLC, and the expiration date of the warrants was extended to December 1, 2024 . After the assignment, Bristol Investment Fund held series A common stock purchase warrants to acquire 700,000 shares of common stock at an exercise price to $ 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 increased the number of shares of common stock issuable upon exercise of the series A common stock purchase warrants to 7,000,000 , and decreased the exercise price to $ 0.25 . As of December 31, 2020, Bristol Investment Fund held series A common stock purchase warrants to acquire 7,000,000 shares of common stock at an exercise price to $ 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 increased the number of shares of common stock issuable upon the exercise of the series A common stock purchase warrants to 10,000,000 , and decreased the exercise price to $ 0.175 . As of December 31, 2021, Bristol Investment Fund held series A common stock purchase warrants to acquire 10,000,000 shares of common stock at an exercise price to $ 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 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 $ 1,448,293 0 Related Party: Barlock 2019 Fund, LP Barlock 2019 Fund, LP (“Barlock”), is managed by Scott D. Kaufman who has served as Chief Executive Officer of the Company since November 24, 2020. 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 a secured 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, 2017, (ii) on each date the purchaser converts, in whole or in part, the secured 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 secured convertible debenture (only as to that principal amount then being redeemed) and on the maturity date The secured 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 20 The secured convertible debenture contains anti-dilution provisions where, if the Company, at any time while the secured 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 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 secured convertible debenture was amended to reduce the conversion price to $ 0.175 December 31, 2023 14,285,714 As of December 31, 2021, and 2020, the amount of accrued interest payable to Barlock 2019 Fund, LP under the secured convertible debenture was $ 612,239 300,000 (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 increased the number of shares of common stock issuable upon exercise of the series A common stock purchase warrants to 3,000,000 , and decreased the exercise price to $ 0.25 . As of December 31, 2020, Barlock Capital Management, LLC held series A common stock purchase warrants to acquire 3,000,000 shares of common stock at an exercise price to $ 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 increased the number of shares of common stock issuable upon exercise of the series A common stock purchase warrants to 4,285,714 , and decreased the exercise price to $ 0.175 . As of December 31, 2021, Barlock Capital Management, LLC held series A common stock purchase warrants to acquire 4,285,714 shares of common stock at an exercise price to $ 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 0 535,784 25,400 Related Party: Barlock Capital Management, LLC Barlock Capital Management, LLC, is managed by Scott D. Kaufman who has served as Chief Executive Officer of the Company since November 24, 2020. In December 2020, the Company started renting executive office space located at 2700 Homestead Road, Park City, UT 84098, for approximately $ 3,000 30,600 3,000 Related Party: American Natural Energy Corporation Scott D. Kaufman, who has served as Chief Executive Officer of the Company since November 24, 2020, is a director and shareholder of American Natural Energy Corporation (“ANEC”). In addition, Richard G. Boyce is a current director, and 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 charges 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 during the initial 90-day term, and $ 2,000 thereafter, for the use of their operations site to moor the barge. The agreement has an initial term of 90 days and continues on a month-to-month basis for 3 additional months. Either party may terminate the agreement at the end of the initial term, or at any time during the additional 3 months term by providing the other party 30-day notice. ANEC may terminate the agreement at any time under certain conditions. The total amount paid to ANEC under the agreement for the year ended December 31, 2021 amounted to approximately $ 150,000 . Related Party: Scott D. Kaufman, Chief Executive Officer On September 7, 2021, Scott D. Kaufman, who has served as Chief Executive Officer of the Company since November 24, 2020, received a one-time non-accountable expense reimbursement of $ 200,000 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. 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 0 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 0 224,241 |