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12. RELATED PARTY TRANSACTIONS
3 Months Ended
Mar. 31, 2016
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

In 2009, the Company executed a 10% convertible note payable in the amount of $102,236 originally due December 31, 2010 to John Evey for amounts loaned to the Company. Mr. Evey joined the Board of Directors on April 27, 2010. Through a series of extensions, the note due date was extended to December 31, 2016. During the three month period ended March 31, 2016, the Company made principal payments totaling $3,000 on this note. The balance of the note as of March 31, 2016 is $83,616 with accrued interest amounting to $39,795 (See Note 6).

 

In June 2015, Gemini Master Fund Ltd sold a 70.0066819% stake in its’ note to Robert Noble, our former Chairman and current owner of over 10% of our outstanding common stock, in a private transaction. The Company issued two replacement notes for their respective ownership values based on this transaction. In regards to the note for Mr. Noble, he agreed to an extension of his note to March 31, 2016. During the twelve months ended December 31, 2015, the Company made a $100,000 payment to Mr. Noble to pay down the accrued interest on this note. The balance of the note as of March 31, 2016 is $600,000 with accrued and unpaid interest amounting to $47,224. Effective January 20, 2016, Mr. Noble entered into a Purchase Option Agreement with a firm affiliated with Jay S. Potter, a director of the Company (the “Optionee”), pursuant to which the Optionee has the right to purchase or arrange for the purchase of the Note from Mr. Noble and all of Mr. Noble’s shares in the Company (the “Option”), at any time until March 31, 2016. This date was subsequently amended to May 31, 2016. The Company has consented to the Purchase Option Agreement. Under a Note Settlement and General Release Agreement, provided that the Option is fully exercised and honored, the Company agreed to grant Mr. Noble the right to acquire, for one dollar, at any time until June 30, 2017, a worldwide, perpetual, irrevocable, nonexclusive, royalty-free license to utilize all of the Company intellectual property developed prior to January 1, 2011, except for the following: (i) EV ARC™ and (ii) EnvisionTrak™. Further, provided the Option is exercised in full and Mr. Noble complies with it, the Company will extend the expiration date of the 1,138,120 warrants to purchase 1,138,120 shares of the Company’s common stock owned by Mr. Noble (the “Warrants”) from December 31, 2016 to December 31, 2017, and will reduce the exercise price of such Warrants from $0.24 to $0.20 per share (See Note 6).

 

As partial payment for professional services provided by GreenCore Capital, LLC (“GreenCore’) during the three months ended March 31, 2016, the Company made cash payments amounting to $15,000, recorded additional payments owed netting to $5,000 in accounts payable and issued 128,571 shares of the Company’s common stock with a per share fair value of $0.15 (based on contemporaneous cash sales prices) or $19,286 and expensed the payments at issuance. The Company recorded a loss on debt settlement of $1,286 on this transaction. Jay Potter, our director, is the managing member of GreenCore and the primary individual performing the services (See Note 10).

 

During the three month period ended March 31, 2016, the Company released 291,666 shares of common stock with a per share fair value of $0.15, or $43,750 (based on the market price at the time of the agreements), to three directors for their service as defined in their respective Restricted Stock Grant Agreements. The payments were expensed at issuance (See Note 10).