Commitments and Contingencies

9 Months Ended

Sep. 30, 2012

Commitments and Contingencies [Abstract]

Commitments and Contingencies

4. Commitments and Contingencies

The Company leased its corporate headquarters on a month-to-month basis. For the nine months ended September 2012 and 2011, rent expense was approximately $18,750 and $12,500, respectively.

The Company entered into a Cooperation Agreement (the “Agreement”) with Hydrogen Union Energy Co., Ltd. (“HUE”) for the purpose of the joint development of the hydrogen generator. Under the terms of the Agreement, HUE will provide hydrogen generators at cost to the Company for demonstration purposes. Once the Company purchases the first H2 generator and pays 90% of the purchase price, the Company will be given first refusal to act as agent for any future business relating to hydrogen generators with HUE’s technology in North America. The Company was to pay the cost of production of a 200 cubic meter H2 generator at 10,000,000 TWD ($338,000 USD as of September 30, 2012) for up to two machines. As previously disclosed, the Company is continuing negotiations with payment terms and accordingly no equipment has been received and no liability has been recorded as of September 30, 2012. At period end the Company was in negotiations with HUE’s parent corporation Energy Technology Services Co., Ltd. (“ETS”) and all agreements with ETS may potentially impact or supersede the agreement with HUE.

On January 12, 2012, the Company entered into an “Investment Intent” agreement with Energy Technology Services Company, Ltd. Pursuant to the agreement, both parties agreed to form a company, Global Hydrogen Energy (“GHE”). The Company has the option to purchase ten percent of the shares of GHE for $450,000, and another option to purchase up to 20% of all shares of GHE. As of September 30, 2012, GHE has not been formed, and the Company has made a good faith cash deposit of $197,500, which is included as a non-current asset at September 30, 2012. The Company does not have a firm commitment to fund the remaining option amount, and accordingly, a commitment liability was not recorded as of September 30, 2012 related to this agreement.

The Company (“TTE”) entered into a Joint Venture Agreement (the “Agreement”) dated July 11, 2012 with Energy Technology Services Co Ltd (“ETS”) for the purpose of the engaging both parties in the manufacture, leasing and /or sale of ETS’s hydrogen generator burning systems (the “Equipment”) in Asia.

The Agreement has a term of one (1) year and renews automatically if not otherwise terminated, provided however, all contracts signed through the joint venture will remain effective regardless of whether the joint venture is still in force. TTE will purchase and own all Equipment to be leased and will review and approve all lease contracts prior to the manufacture of the Equipment. TTE will be the employer of record for all employees of the Joint Venture and will be the sole signatory of all Joint Venture bank accounts. TTE will make monthly payments to the parties, if applicable. Under the Agreement, ETS is granted the right to market, sell, lease, and distribute the Equipment via Sale or Lease agreements in Asia. ETS will arrange for the manufacturing and on-time delivery and installation of the Equipment to order, and will be responsible for providing maintenance, training and services for all the Equipment. All lease and sales revenue is to be deposited into the TTE maintained JV account, and each party is to submit monthly invoices for their reasonable operating expenses. Net Profit of the JV is to be split 50/50 on a monthly basis, after payment of all reasonable operating expenses, taxes and interest. Each party retains the right to audit the other party’s books and records as related to the Joint Venture.