NOTES PAYABLE – RELATED PARTY
The Company entered into a loan agreement with Kilpatrick’s Rose-Neath Funeral Homes, Crematorium and Cemeteries, Inc. on December 3, 2007. This company is controlled through ownership by a shareholder/director of International Star, Inc. Under terms of the agreement, the Company has an available credit line balance of $500,000 with interest accruing at 6% per annum. The interest is due and payable on a quarterly basis (every three months). The loan is collateralized by a security interest to the above mentioned lender in the amount of 51% interest in the mineral rights of all mining claims owned by the Company or in which the Company has an interest in its properties located in Mohave County, Arizona, along with any future claims acquired by the Company. At September 30, 2011, the Company had borrowed $500,000 under the terms of this loan agreement and had accrued interest of $97,500. This note has a maturity date of December 3, 2012 and has remained unpaid.
The Company entered into another loan agreement with Kilpatrick’s Rose-Neath Funeral Homes, Crematorium and Cemeteries, Inc. on December 1, 2008. Under terms of the agreement, the Company has an available credit line of $200,000 with interest accruing at 10% per annum. The interest rate increased from 10% to 18% per annum as of March 31, 2009, which was the maturity date of the Note. At September 30, 2011, the Company had borrowed $200,000 under the terms of this loan agreement, and had accrued interest of $93,950. The credit line has remained unpaid.
ADVANCES FROMSHAREHOLDER
As of September 30, 2011, the Company owes a total of $200,000 for repayment of funds advanced in prior periods by the Chairman of the Board of Directors. These advances are non-interest bearing and payable on demand.
During the first quarter of 2016, a shareholder lent the Company $20,000 on a one year convertible note basis. The note is convertible into common shares at a 50% discount, or is required to be repaid, in an amount of $30,000, with the first $150,000 raised via the Company’s Reg. D 506C offering.
NOTES PAYABLE – BEAIRD
The Company entered into a loan agreement with Beaird Operating Companies on October 13, 2010. Under the terms of the loan agreement the Company received $200,000 and in
correlation with the note the Company issued 20,000,000 warrants. This note is due on December 13, 2011. All principal and interest at the rate of 12%, per annum, is due at that time. Accrued interest for this loan was $23,000 at September 30, 2011. The loan is collateralized by a security interest to the above mentioned lender in the amount of 49% interest in the mineral rights of all mining claims owned by the Company or in which the Company has an interest in its properties located in Mohave County, Arizona, along with any future claims acquired by the Company.
On April 25, 2011 the Company received an additional $150,000 under a note payable due December 13, 2011 with interest of 12% secured by a 49% interest in the Company’s mineral rights in Mohave County, Arizona . Accrued interest as of September 30, 2011 for this note was $7,750. In connection with the debt, the Company issued 15,000,000 warrants to purchase the Company’s common stock at an exercise price of $.01 per share, any time prior to the later of April 25, 2013 or the date that the principal is fully paid. These warrants may be cancelled by the Company after April 25, 2012. No value has been recognized for the warrants.
During the first Quarter of 2015, the Beaird Operating Companies sold a $20,000 note to a third party. Concurrently, the Company issued to Beaird Operating Companies an Original Issuance Discount note for $20,000 in return for $10,000.
During the second Quarter of 2015, the Beaird Operating Companies sold a $20,000 note to a third party. Concurrently, the Company issued to Beaird Operating Companies an Original Issuance Discount note for $20,000 in return for $10,000.
During the third Quarter of 2015, the Beaird Operating Companies sold a $22,500 note to a third party. Concurrently, the Company issued to Beaird Operating Companies an Original Issuance Discount note for $22,500 in return for $15,000.
As of June 30, 2016, 35,000,000 warrants were still outstanding.
NOTES PAYABLE –
The Company entered into a two loan notes with a third party each for $10,000. The terms are one year with 6% annual interests. The notes mature on August 21, 2015 and September 29, 2015, respectively.
The Company entered into a loan note with a third party for $15,000. The terms are one year with 6% annual interests. The notes mature on August 21, 2016.
COMMITMENTSANDCONTINGENCIES
Under the terms of the Beaird loans explained in Footnote G above, any unpaid principal on the maturity date of December 13, 2011, will increase by 1.5 times and will continue to
accrue interest at a rate of 12% per annum. No amounts have been recorded for this contingency in these consolidated financial statements.
STOCKOPTIONS
The Company entered into an employment agreement effective April 1, 2008 whereby the Company would issue two separate option agreements to the Company president. The first option agreement would have allowed the Company president to purchase up to 5,000,000 shares of the Company’s common stock at $.01 per share and the second option agreement would have allowed the Company president to purchase up to 5,000,000 shares of the Company’s common stock at $.03 per share. The vesting of the option agreements were to be based upon performance incentives to be determined by the Board of Directors. The employment agreement was amended on August 13, 2008, to allow the Company to issue stock options for an aggregate of 10,000,000 shares
of common stock of the Company on such dates and according to such terms as designated by the Board of Directors of the Company.
On April 28, 2010, the Company issued 10,000,000 stock options to its President. These options are fully vested as of the grant date, have a contractual term of 5 years, and are exercisable at $0.01 per share. As no options were exercised subsequent to grant date, all 10,000,000 options are have expired.
SERIES A PREFERRED STOCK
Upon new management taking control of the company, the Board voted to issue each Director 73,628,069 shares of Series A Preferred Stock with no designated value. The shares can convert on a 1:1 basis into common stock, and provide the Board with voting control.
