v3.25.2
Related Party Transactions
3 Months Ended
May 31, 2025
Related Party Transactions [Abstract]  
Related Party Transactions

Note 5 – Related Party Transactions

 

Promissory Note to JBB

 

On December 28, 2017, the Company borrowed $1,550,000 from JBB to complete the purchases of a series of oil and gas leases (the “Loan Note”). The loan has an interest rate of 3% per annum, a maturity date of December 28, 2018 and is secured by all assets of the Company. The loan is convertible to the Company’s common stock at the conversion rate of $0.20 per share.

 

On June 26, 2018, the Company and JBB entered into a modification of the existing Loan Note, to add provisions to permit the Company to obtain additional advances under the Loan Note up to a maximum of $1,000,000. The Company may request an advance in increments of $100,000 no more frequently than every 30 days, provided that (i) it provides a description of the use of proceeds for the advance reasonably acceptable to JBB, and (ii) the Company is not otherwise in default of the Loan Note. The original loan amount and the advances are secured by all the assets of the Company and are convertible into common stock of the Company at the rate of $0.20 per common share, subject to adjustment for any reverse and forward stock splits. The Loan Note may be repaid at any time, without penalty, however, any advance that is repaid before maturity may not be re-borrowed as a further advance.

 

On May 21, 2019, the Company entered into an extension agreement with JBB to extend the maturity of its outstanding Loan Note to September 30, 2020.

 

On June 13, 2019, JBB lent the Company $250,000 under a secured promissory note. The funds were used to acquire the remaining working interest in the Marshall Walden oil and gas property from Odyssey Enterprises LLC. The loan has an interest rate of 5% per annum, a maturity date of June 30, 2022, and is secured by all assets of the Company. The loan is convertible into the Company’s common stock at a conversion rate of $0.20 per common share.

 

 

On October 1, 2019, the Company entered into another amendment of its Loan Note with JBB to increase the line of credit by an additional $500,000, for a total of $1,500,000, and extend the maturity date for the original note and line of credit to December 31, 2020.

 

On May 29, 2020, the Company entered into an extension agreement with JBB to extend the maturity of its outstanding Loan Note to September 30, 2021.

 

On December 22, 2020, the Company entered into an extension agreement with JBB to extend the maturity of all its outstanding indebtedness under credit line and Loan Note to May 31, 2022.

 

On May 1, 2021, the Company entered into a new funding agreement with a maturity date of May 31, 2022 and an interest rate of five percent annual percentage rate (5% APR) with JBB for a further $1 million drawable in $100,000 increments at the discretion of JBB to cover the Company’s current and projected working capital requirements in the near term. The loan is convertible into common stock of the Company at the rate of $0.08 per share, subject to adjustment for any reverse and forward stock splits.

 

On May 2, 2022, the Company entered into an extension agreement with JBB to extend the maturity of its outstanding Loan Note to September 30, 2023.

 

On September 6, 2023, the Company entered into another amendment of its Loan Note with JBB to increase the line of credit by an additional $500,000, for a total of $2,000,000, and extend the maturity date for the original note and line of credit to September 30, 2026.

 

On November 19, 2024, the Company entered into agreements with JBB to convert $1,300,000 million outstanding notes and respective accrued interests of $89,014 into 17,362,675 shares of common shares. The conversion was executed at a ratio of $0.08 per share, as outlined in the original funding agreements.

 

During the three months ended May 31, 2025, the loan agreement was amended to increase available borrowing by $500,000. As of May 31, 2025, the Company had availability of $800,000 on its existing credit line with JBB.

 

The Company recognized interest expense of $27,348 and $33,904 for the three months ended May 31, 2025, and 2024, respectively. Accrued interest as of February 28, 2025, and May 31, 2025 was $639,532 and $666,880, respectively, As of February 28, 2025 and May 31, 2025, there was $3,300,000 and $3,400,000, respectively, outstanding under notes payable to JBB.