Related Party Transactions

6 Months Ended

Jun. 30, 2011

Related Party Transactions [Abstract]

Related Party Transactions

Note 5.  Related Party Transactions

As of March 31, 2011, GEM entered into a $500,000 Line of Credit Agreement (the “LoC Agreement”) with a related-party lender, pursuant to which the lender initially advanced to GEM $100,000, evidenced by a promissory note of the same amount dated as of equal date. During the second quarter ended June 30, 2011, we borrowed the balance of $400,000 available under the LoC Agreement. The note bears interest at a rate of 12% per year, with interest on the note paid monthly in arrears. The note matures on March 31, 2012 and constitutes an unsecured obligation of GEM. We used the proceeds from the loan for project financing and general corporate purposes. The related-party lender is controlled by Ronald P. Ulfers, Jr., the Chairman, President and Chief Executive Officer and a director of the Company.

On April 26, 2011, we entered into a one-year consulting agreement (the “Watz Agreement”). Watz Enterprises LLC. (“Watz”) is a greater than 5% stockholder of the Company. Under the Watz Agreement, Watz agreed to advise us on business development and marketing matters in exchange for (i) a one-time payment of $65,000 and (ii) a monthly management fee of $25,000 payable from June 16, 2011 to May 15, 2012.  Within 60 days of the expiration of the Watz Agreement, the Watz Agreement will automatically renew on a month-to-month basis and can be terminated with 10 days notice by either us or Watz. The managing member of Watz is the brother-in-law of Michael Samuel, our former Chairman, President and CEO and current member of the Board of Directors.

On June 28, 2011, certain of our affiliates and a consultant of the Company (the “Lenders”) provided us with a short-term bridge loan in the amount of $108,000 (the “Loan”).  The Loan was not evidenced by a promissory note and does not bear interest.  We intend to repay the Loan from the proceeds of a third-party financing that we hope to obtain during the third quarter of 2011.  There can be no assurance as to the amount of any such financing or that any such financing will be available to us within such period, on satisfactory terms and conditions or at all.  If we do not receive such financing proceeds, we intend to proceed to negotiate terms of repayment of the Loan with the Lenders and to execute formal Loan documentation.  We used the proceeds of the Loan for project financing and general corporate purposes.