Related Party Transactions

9 Months Ended

Sep. 30, 2024

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

6. RELATED PARTY TRANSACTIONS

Advances – Related party

From February 16, 2023 (inception) to December 31, 2023, a member   of Global Hydrogen Energy, LLC advanced the Company a total of $852 to cover start-up and other operating costs. These amounts are due on demand. At September 30, 2024 and December 31, 2023, the balance of $2,352 of advances – related party includes $852 of start-up and other expenses and $1,500 of reimbursable expenses to an affiliate as discussed below.

Accounts payable - related party

Commencing on the date that the Dune’s securities were first listed on Nasdaq and ending on the consummation of Dune’s Business Combination, Dune was obligated to pay the Sponsor a total of $10,000 per month for office space, secretarial and administrative services provided to members of the Company’s management team. As of September 30, 2024 and December 31, 2023, the Company had $110,000 outstanding for these services in connection with such agreement due to related parties within Accounts payable – related party on the accompanying consolidated balance sheets.

Prior to the consummation of the Business Combination, Dune agreed to reimburse its Sponsor, officers and directors, or any of their respective affiliates for any out-of-pocket expenses incurred in connection with activities on its behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. As of September 30, 2024 and December 31, 2023, there was $14,867 included in accounts payable – related party and $1,500 included in due to a related party on the accompanying consolidated balance sheet related to reimbursement of such expenses.

Promissory Note – Related Party

On June 21, 2023, the Company entered into an unsecured promissory note (the “Note”) with an affiliate pursuant to which the affiliate agreed to loan the Company up to an aggregate principal amount of $250,000 for working capital purposes and to pay expenses related to the Business Combination. The Note is non-interest bearing and was payable on the earlier of the Closing Date or December 31, 2023. The Note is not convertible. As of September 30, 2024 and December 31, 2023, there were $103,950 outstanding under the Note. The Note is due on demand.

On June 21, 2023, the Company issued an unsecured promissory note (the “Sponsor Note”) to the Sponsor, which provided for borrowings from time to time of up to an aggregate of $300,000 that was allowed to be drawn by the Company and used for working capital purposes and to pay expenses related to the Business Combination. The Sponsor Note does not bear interest and was payable on the earlier of December 31, 2023 and the Closing Date. The Sponsor Note is subject to customary events of default, the occurrence of any of which automatically triggers the unpaid principal balance of the Sponsor Note and all other sums payable with regard to the Sponsor Note to become immediately due and payable. As of September 30, 2024 and December 31, 2023, the Company had borrowed $170,000 under the Sponsor Note. The Sponsor Note is due on demand.

CEO Employment Agreement

On March 4, 2024, Global Hydrogen entered into an employment agreement amendment (the “Employment Agreement Amendment”) with William Bennet Nance, Jr., the former Chief Executive Officer and Founder of Global Hydrogen and a former director of the Company. Pursuant to the Employment Agreement Amendment, Mr. Nance’s compensation was restructured to entitle him to contingent payments (“Gross Profit Payments”) equal to 15% of the Gross Profit (as defined in the Employment Agreement Amendment) of the Company, determined in accordance with U.S. generally accepted accounting principles, up to a maximum amount of $250,000 on an annualized basis, less applicable taxes and withholdings, in lieu of the base salary he had previously been entitled to. The Employment Agreement Amendment also made conforming changes to Mr. Nance’s employment agreement, such that (i) the change in his compensation structure effected by the Employment Agreement Amendment would not constitute “good reason” for Mr. Nance to terminate his employment with Global Hydrogen, other subsidiaries of the Company or the Company itself, and (ii) if Mr. Nance’s employment was terminated by him for good reason, or by the Company without cause (and not due to death or disability), Mr. Nance was to be entitled to consideration updated to include any earned but unpaid Gross Profit Payments through the date of termination. The Employment Agreement Amendment also shortened the restricted period during which certain non-competition and non-solicitation provisions of Mr. Nance’s original employment agreement remained in effect. Effective June 17, 2024, Mr. Nance was terminated by the Company for “Cause” (as defined in the employment agreement) and the employment agreement was terminated.