Loan Default: Be careful out there 12/5/2019 8k:
Item 8.01. Other Events
On March 6, 2019, Foothills Exploration, Inc. (the “Company”), closed on a loan transaction by which the Company issued FirstFire Global Opportunities Fund, LLC (“Lender”) a senior secured convertible promissory note (“Note”) in the principal amount of $705,882, and received proceeds of $600,000 before giving effect to certain transactional costs and legal fees. This loan is secured by the Company’s Green River Basin Assets located in Wyoming. For additional description of this secured loan transaction, please see the Company’s current report on Form 8-K filed with the Commission on March 12, 2019.
Since closing on this transaction, the Company made principal payments to Lender totaling $100,000. Lender asserts that amounts owing to it as of September 1, 2019 are approximately $705,882. Following a notice of default, the parties entered into a forbearance agreement to extend the maturity date of the note into January 2020, which included payments of $352,941.17 to be paid on November 29, 2019, and $427,941.18 to be paid on the maturity date as extended.
The Company was unable timely to comply with the payment terms of the forbearance agreement. The Company and Lender may or may not continue discussions concerning possible extensions of payment terms and amounts, however no assurance can be given that the Company will be able to reach agreement with Lender. In that event, Lender has advised the Company that Lender intends to pursue its available legal remedies, including by not limited to litigation, to recover all amounts asserted to be owed to Lender under the applicable loan documents.
Litigation pursued by Lender against the Company can further erode the financial condition and materially and adversely affect operations of the Company and could result in cross-defaults with other lenders. Management is actively working with all of its debtholders to seek resolution on these matters; however, no assurances can be given that management will be able to reach agreement with any of its lenders. As a further result the foregoing the Company may be compelled to seek protection under appropriate state or federal insolvency laws.
