Related Party Transactions
|6 Months Ended|
Jun. 30, 2013
|Related Party Transactions [Abstract]|
|Related Party Transactions||
Notes Payable and Advances
In January 2013, the Company borrowed $250,000 from a stockholder under a secured convertible note payable that was due at the earliest of February 28, 2013 or upon completion of a $1,000,000 financing event. The note accrued interest at the rate of 12% and is convertible at the lender’s option into common stock at 85% of the price of a future financing or $3.6056 per share. The note and accrued interest was repaid using funds from the March 2013 $260,200 convertible note payable. The note was secured by the intangible assets of the Company.
In March 2013, the Company borrowed $260,200 from a stockholder under a note payable that was due March 28, 2014, or earlier, upon completion of the merger. The note accrued interest at the rate of 12% and was convertible at the lender’s option into common stock at $0.75 per share. The note was subsequently converted in April 2013 as described in Note 7. As the note was outstanding less than one month no interest was due to the lender.
In March 2013, a stockholder advanced the Company $184,127 for operating capital. The advance did not bear interest and was due on demand. In April 2013, the advance was converted into common stock of the Company at $0.75 per share at the stockholders’ election, as described in Note 7.
In June 2013, the Company borrowed $100,000 from each of three individual stockholders under notes payable that were due December 31, 2013, or earlier, upon completion of the merger. The notes accrued interest at the rate of 8% and are convertible at the lender’s option into common stock at $.75 per share. On July 1, 2013, $100,000 was converted into shares of common stock in the Merger-related private placement and $200,025, which included $25 of accrued interest, was repaid at the closing of the Merger.
There were a number of Parent Company debt instruments issued in 2012 which were with significant stockholders of the Company, who are related parties. All assets of the Parent Company were held as collateral as part of the debt instruments. Under the terms of the Restructuring Agreement dated November 12, 2012 all debt was converted to equity and all collateral was released from encumbrance without recourse.
The Predecessor recorded allocated related party interest expense related to the Parent Company’s debt of $316,417 and $451,933 for the three and six month periods ended June 30, 2012 (Predecessor), respectively. The allocation of interest expense was based on the net loss of the predecessor compared to the aggregate net income loss of the parent Company of the predecessor.
Successor interest expense was $10,138 for the three and six months ended June 30, 2013.
During the second quarter of 2013, the Company recorded $8,530 in revenue associated with providing engineering services to Professional Energy Solutions which is owned by the Company’s VP of Engineering. Costs associated with these revenues totaled $5,978.
The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.
Reference 1: http://www.xbrl.org/2003/role/presentationRef