Related Party Transactions

12 Months Ended

Dec. 31, 2012

Related Party Transactions [Abstract]

Related Party Transactions

Note 16. Related Party Transactions

The Company leased office space and received office services from Patriot Rail Corp., a company previously related by certain common management and ownership. In July 2011 the lease cost increased from $5,000 per month to $6,000 per month to include additional support services. The arrangement was terminated in September 2012. These costs are included in General and Administrative expenses in the statement of operations. The costs are included in the General and Administrative section of the statement of operations, and were: $54,000 and $65,000 for the year ended December 31, 2012 and 2011, respectively. The Company is currently sharing office space with International Rail Partners, LLC., a related party through the same common officers and directors, at no cost.

The Company’s directors and chief executive officer are currently not receiving cash compensation for their services, and no amounts have been recorded in the Company’s financial statements for the cash value of their services.

The Company’s board of directors, officers, and officers of its subsidiary directly or beneficially own 49,950 shares of the Company’s preferred stock and 1,485,858 shares of common stock as of December 31, 2012 or 3,500,531 shares, if the preferred is converted.

In September 2009, the Company entered into two 5-year employment agreements and one month-to-month consulting agreement with individuals who were shareholders and/or officers. The aggregate expense under these agreements for the periods ending December 31, 2012 and 2011 were $58,113 and $331,240, respectively. In October 2011, the Company renegotiated the 5-year employment contract of one of the shareholders whereby the old agreement was terminated and the Company and the employee entered into a new at-will employee agreement. In January 2012, the former President of Wood Energy resigned and the other individual was terminated in December of 2012.

On December 28, 2012, the Company entered into a demand loan with Banyan Holdings in the amount of $225,000 at an annual interest rate of 6%. The proceeds received were used to fund working capital requirements.

During the year ended December 31, 2011, the Company sold approximately $150,000 of relay ties to a related party for use in its track maintenance. The Company believes the term of sales were at arms-length.

During the year ended December 31, 2012, the Company entered into a lease with a former related party for a new facility in Gibsland, La., which commenced in January 2012. This facility replaced the Company’s facility in Shreveport, La. The lease calls for annual rental payments of $10,000 per year and an additional commitment of 1,200 railcars annually to the leased facility at a rate of $300 per car.