Related Party Transactions

12 Months Ended

Dec. 31, 2013

Related Party Transactions [Abstract]

Related Party Transactions

Note 14.  Related Party Transactions

As of March 31, 2011, GEM entered into the $500,000 Line of Credit Agreement pursuant to 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 repayment of the note was originally due on March 31, 2012.  The parties are in discussions to extend the maturity date of the loan. This balance was outstanding at December 31, 2013 and 2012.

During the year ended December 31, 2012, certain of our affiliates, a consultant of our Company and a related party provided us with short-term bridge loans in aggregate amount of $280,000 (the “Loans”).  The Loans were not evidenced by promissory notes and do not bear interest.   At December 31, 2013 and 2012, there was a balance owed of $171,000 and 239,900.  We borrowed an additional $40,000 from one of these affiliates during the year ended December 31, 2012, which amount was repaid as of December 31, 2012.

During the year ended December 31, 2012, we borrowed $310,000 from a director of the Company and issued a promissory note to such party dated December 31, 2012.  The note initially matured on February 28, 2013; however, per the terms of the note, it automatically was extended until the date when we consummate a debt and/or equity financing resulting in gross proceeds to us of at least $310,000.  The related debt discount of $310,000 was fully amortized to interest expense during the year ended December 31, 2013.  During the year ended December 31, 2013, we borrowed an additional $288,857 from the director and repaid $340,000 of the aggregate outstanding amount and $13,722 of accrued interest on the loans.

As of December 31, 2013, the balance of notes payable to related parties, including advances, was $979,157.  We are currently engaged in negotiations to extend the term of notes payable to certain related parties.

In addition, see Note 7. Debt, Warrants and Preferred Stock Issuance― Debt and Warrants Financing for a discussion of the 8% secured promissory note and warrants that we issued to Water Tech, along with the advance to Water Tech.

During the year ended December 31, 2013, we borrowed approximately an additional $23,500 from related parties related to invoices that were paid by the former CFO, and repaid $45,000 of amounts previously borrowed from related parties.