5. Debt

Convertible Promissory Notes Payable – Related Party

On March 16, 2020, the Company entered into a Line of Credit (“LOC”) agreement with Granite Peak Resources LLC (“GPR”), a related party and the majority shareholder of the Company. The initial LOC provided for borrowings up to $2.5 million, with a maturity date of March 16, 2023. At GPR’s sole discretion, the LOC could be increased by an additional $1.0 million and extended for two years. The LOC accrued interest at 10% per annum and was convertible into common stock at $2.00 per share, based on the closing price on the date of issuance. The LOC was secured by substantially all of the Company’s real and personal property.

On July 12, 2021, the LOC was amended (the “First Amendment”) to:

The First Amendment also granted GPR the option to further increase the LOC by $5.0 million and extend the maturity date by an additional five years.

On January 5, 2023, the Company entered into a Second Amendment to the LOC (the “Second Amendment”) with GPR. The amendment significantly restructured the existing LOC agreement. Key terms of the Second Amendment included:

The Company evaluated the amendment under ASC 470-50 and ASC 470-60 and concluded it constituted a debt extinguishment, as the present value of the revised cash flows exceeded the 10% threshold. No gain or loss was recognized, as the reacquisition price equaled the carrying amount of the extinguished debt.

On June 12, 2023, the Company entered into a Third Amendment to the LOC (the “Third Amendment”) with GPR. Key terms of the Third Amendment included:

The Company determined the amendment met the criteria for a troubled debt restructuring (TDR) under ASC 470-60, as the Company was experiencing financial difficulty and GPR granted a concession. The amendment was accounted for as a debt extinguishment under ASC 470-50, with no gain or loss recognized.

On August 2, 2023, GPR converted $5,250,000 of LOC principal into 5,000,000 shares of restricted common stock. On August 15, 2023, GPR converted the remaining $4,969,551 (principal and accrued interest) into 5,244,230 shares of restricted common stock, at the conversion price of $1.05 per share, as provided in the Third Amendment.

As of June 30, 2025 the outstanding balance under the LOC consisted of $937,080 in principal and $55,925 in accrued interest. As of December 31, 2024, the outstanding balance was $425,589 in principal and $28,857 in accrued interest.

During the six months ended June 30, 2025 and 2024, the Company recognized non-cash borrowings of $0 and $127,862, respectively, under the LOC. These amounts represent expenses paid directly by GPR on behalf of the Company and were recorded as increases to the LOC principal balance.

During the six months ended June 30, 2025, the Company had $511,492 proceeds from convertible notes - related party. The Company’s convertible note line of credit with GPR was increased by this same amount.

Acquisition of Outstanding Defaulted Debt and Material Judgement

Tina Gregerson Promissory Note

On February 11, 2015, the Company issued an unsecured promissory note (the “TG Note”) to Tina Gregerson Family Properties, LLC, an entity controlled by a former director of the Company. The TG Note provided for borrowings of up to $750,000, to be funded in multiple tranches. In connection with the issuance, the Company also granted 250,000 common stock warrants with an exercise price of $1.23 per share and an expiration date of February 11, 2022.

Each tranche under the TG Note matured one year from the date of funding and accrued interest at a rate of 8% per annum. The Company received the following advances under the TG Note:

On August 12, 2021, GPR and Tina Gregerson entered into an Exchange Agreement, under which GPR acquired the TG Note. Subsequently, on January 5, 2023, the outstanding balance of the TG Note was consolidated into the Company’s LOC with GPR as part of the Second Amendment to the LOC.

As of the date of consolidation, the total balance of the TG Note was $771,463, consisting of $477,500 in principal and $293,963 in accrued interest. Following the consolidation, the TG Note ceased to exist as a separate obligation and became part of the LOC principal balance.

Peter Krupp Promissory Note

On August 4, 2011, the Company issued an unsecured promissory note (the “Krupp Note”) to Peter Krupp in the principal amount of $100,000, bearing interest at a rate of 5% per annum.

On August 12, 2021, GPR and Peter Krupp entered into an Exchange Agreement, under which GPR acquired the Krupp Note. Subsequently, on January 5, 2023, the outstanding balance of the Krupp Note was consolidated into the Company’s LOC with GPR as part of the Second Amendment to the LOC.

As of the date of consolidation, the total balance of the Krupp Note was $159,795, consisting of $100,000 in principal and $59,795 in accrued interest. Following the consolidation, the Krupp Note ceased to exist as a separate obligation and was included in the principal balance of the amended LOC.

Stephen Flechner Judgement

On August 12, 2015, the court entered an Amended Final Judgment in favor of Stephen E. Flechner and against the Company in connection with breach of contract claims. The judgment awarded $2,157,000, with interest accruing at 8% per annum from the date of judgment until paid in full.

On November 29, 2021, GPR, a related party and majority shareholder, entered into a Purchase and Sale Agreement with Mr. Flechner, under which GPR acquired all rights, title, and interest in the judgment.

On January 5, 2023, in connection with the Second Amendment to the Company’s LOC with GPR, GPR agreed to forbear from exercising its rights and remedies under the loan documents, including foreclosure rights related to the Flechner Judgment, through January 12, 2024.

On June 12, 2023, pursuant to the Third Amendment to the LOC, the Flechner Judgment was formally consolidated into the LOC. As of the date of consolidation, the total balance of the judgment was $3,737,248, consisting of the original $2,157,000 judgment amount and $1,580,248 in accrued interest. Following the consolidation, the judgment ceased to exist as a separate obligation and was included in the principal balance of the amended LOC.

Pure Path Capital Senior Secured Convertible Promissory Note

On October 10, 2013, the Company issued a Senior Secured Convertible Promissory Note (the “Senior Secured Note”) to Pure Path Capital Management Company, LLC (“PPMC”) in the principal amount of up to $2.5 million, pursuant to a Settlement and Release Agreement. As part of the settlement, the Company also issued 27 million shares of common stock to PPMC, resulting in PPMC becoming a related party.

The Senior Secured Note was secured by a blanket lien on all of the Company’s tangible and intangible assets, whether currently owned or subsequently acquired. This included, but was not limited to, machinery, inventory, accounts receivable, cash, computer equipment, hardware, land, and mineral rights.

On March 29, 2019, GPR, a related party and majority shareholder, acquired the Senior Secured Note from PPMC pursuant to an Exchange and Assignment Agreement.

On June 12, 2023, in connection with the Third Amendment to the Company’s LOC with GPR, the Senior Secured Note was formally consolidated into the LOC. As of the date of consolidation, the total balance of the note was $3,938,251, consisting of $2,229,187 in principal and $1,709,064 in accrued interest. Following the consolidation, the Senior Secured Note ceased to exist as a separate obligation and was included in the principal balance of the amended LOC.