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Related Party Transactions

3 Months Ended

Mar. 31, 2017

3.	RELATED PARTY TRANSACTIONS

The Company’s current office space consists of approximately 800 square feet, which is donated to it from one of its executive officers. There is no lease agreement and the Company pays no rent.

Effective February 4, 2016, the Company sold 526,316 shares of common stock to Reza Enterprises, Inc., an entity beneficially owned by Rezaul Karim. In connection with, and as a condition of closing, the Company agreed to appoint Rezaul Karim to its Board.

In June 2016, the Company entered into a contract with Rezaul Karim, one of its then directors, for the installation of an HC-1 system. The system installation was approximately 50% complete as of March 31, 2017 and generated $16,090 of revenue for the three months ended March 31, 2017. The Company subcontracted the installation of the system to Renewable Energy Holdings LLC (“REH”), a company owned by Mike Strizki, one of the Company’s executive officers. James Strizki, one of the Company’s executive officers, is vice president of operations at REH. Costs incurred were $15,905 for REH for the three months ended March 31, 2017.

The Company has entered into agreements to indemnify its directors and executive officers, in addition to the indemnification provided for in the Company’s articles of incorporation and bylaws. These agreements, among other things, provide for indemnification of the Company’s directors and executive officers for certain expenses (including attorneys’ fees), judgments, fines and settlement amounts incurred by any such person in any action or proceeding, including any action by or in the right of the Company, arising out of such person’s services as a director or executive officer of the Company, any subsidiary of the Company or any other company or enterprise to which the person provided services at the Company’s request. The Company believes that these provisions and agreements are necessary to attract and retain qualified persons as directors and executive officers.

At March 31, 2017 and December 31, 2016, the balances due to Turquino Equity LLC, a significant shareholder, amounted to approximately $61,000 and $52,000, respectively, which are included in accounts payable on the balance sheet. These balances represent expenses for management services. For the three months ended March 31, 2017 and 2016, management fees expensed totaled $45,826 and $38,345, respectively.