Note 3 – Related Parties

Common Stock Issuances (2014)

On October 20, 2014, we sold 74,075 shares of our common stock and warrants to purchase another 37,038 shares, exercisable at $0.75 per share over a thirty six month period, to one of our directors, a qualified investor pursuant to a unit offering in exchange for proceeds of $50,000. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On September 29, 2014, we sold 3,704 shares of our common stock and warrants to purchase another 1,852 shares, exercisable at $0.75 per share over a thirty six month period, to our VP of Business Development, a qualified investor pursuant to a unit offering in exchange for proceeds of $2,500. The proceeds received were allocated between the common stock and warrants on a relative fair value basis. The shares were subsequently issued on October 31, 2014.

Product sales, Groupe Regenord, Inc.

The Company recorded revenues related to the sale of products to Groupe Regenord, Inc. during the year ended December 31, 2014, totaling $6,000. Groupe Regenord, Inc. made payments to the Company totaling $6,000 during the year ended December 31, 2014, and no amounts were due from Groupe Regenord, Inc. at December 31, 2014. Groupe Regenord, Inc. is a company in which Alain Belanger, the Company's CEO and majority shareholder, owns a majority stake.

R&D and License Agreements, Corruven Canada, Inc.

On January 5, 2010, the Company entered into an Intellectual Property License Agreement with Corruven Canada, Inc. (the “License”). The License provided the Company an exclusive license for various patents and patent applications related to materials, methods and devices relating to Corruven wood panel. The License provides that the Company shall pay to Corruven Canada, Inc. an annual royalty license fee of one percent (1%) of net sales of the products sold by the Company pursuant to the License. In addition, the Company entered into a Research and Development Agreement (the “R&D Agreement”) with Corruven Canada, Inc. in which the Company agreed to expend certain funds for the right of using the technologies and patents developed by Corruven Canada, Inc. Corruven Canada, Inc. is considered a related party due to the ownership by Alain Belanger, the Company's CEO and majority shareholder. The R&D Agreement provided that Corruven Canada was required to perform all research and development related to the finalization and commercial application of the Corruven Composite Panel, for which the Company was required to pay certain research and development costs to Corruven Canada consisting of: (i) a total of $1,928,820 over a five year period as follows: $495,982 on or before January 5, 2012; $440,873 on or before January 5, 2013; $385,764 on or before January 5, 2014; $330,655 on or before January 5, 2015; and (ii) $275,546 on or before January 5 of each following year thereafter for the life of the R&D Agreement. On June 30, 2014, the Company and Corruven Canada amended and restated the R&D Agreement wherein the above scheduled research and development cost payment schedule was terminated and the parties agreed that the Company would provide such research and development costs to Corruven Canada on an “as needed” basis when requested by Corruven Canada. In addition the Company is required to pay to Corruven Canada a “development fee” of two percent (2%) of net sales proceeds of the Company after January 5, 2013.

The R&D Agreement can be terminated by either party at any time upon the receipt of 90 days written notice to the other party. Upon notification of termination, Corruven Canada Inc. shall proceed in an orderly fashion to limit or terminate any outstanding commitments and/or to conclude any research being developed as a result of the R&D Agreement.

The following represents payments the Company has made to Corruven Canada through December 31, 2014:

	Amount
	Paid
2014	$	713,950
2013		312,945
2012		647,651
2011		463,738
2010		150,000
Total	$	2,288,284

The amounts paid in 2010 of $150,000 were applied to the accrual of and balance due at January 5, 2013. Due to the June 30, 2014 amendment, there are no longer any liabilities for amounts due under this agreement.

Cost of Goods Sold, Corruven Canada, Inc.

The Company is a sales and research company with exclusive commercialization rights over the Corruven® technology. The Company does not maintain inventory on hand. The Company currently purchases finished panels and/or core from Corruven Canada, Inc. and resells it without holding the inventory. Currently, all manufacturing operations and inventory are manufactured and held by Corruven Canada, Inc. The Company made purchases related to products sold totaling $26,660 during the year ended December 31, 2014.

Lease Agreement, Corruven Canada, Inc.

Effective May 1, 2013, the Company entered into a lease agreement with Corruven Canada, Inc., a related party, wherein the Company leased a portion of industrial space at the Property to Corruven Canada, Inc. The lease agreement terminates on May 1, 2015, and Corruven Canada, Inc. is required to pay $30,000 per year in base rent to the Company. Rental income related to this lease agreement is classified as other income on the accompanying unaudited statement of operations. The Company is due $-0- under this agreement at December 31, 2014.