Note 6 - Significant Transactions With Related Parties

12 Months Ended

Dec. 31, 2014

Note 6 - Significant Transactions With Related Parties

Note 6 - Significant Transactions With Related Parties

The Company has a number of transactions that warrant disclosure per ASC 850, Related Party Disclosures.

Credit Agreements – The Company had credit agreements with Terry Anderton, the Company's former co-founder and CEO and Les Anderton, co-founder and a member of the Company's board of directors, that allowed the Company to borrow up to $0.9 million, as needed, to fund working capital needs. These agreements carry an interest rate of 10% per annum and were amended with board consent, to expire December 31, 2014. As of December 31, 2014, Terry Anderton and Les Anderton have shareholder receivables/loans that are comprised of $0 balances. As of December 31, 2013, only Les Anderton had a shareholder loan of $252.

Effective Januray 1, 2015, Les Anderton provided a new $1.5 million line of credit to the Company on the same terms as in his prior credit agreement, with a maturity date of the earlier of December 31, 2015, or the closing of a Company financing with gross proceeds of at least $5 million. The line of credit will be used to fund working captial needs. No draws have been made on the line of credit.

Transactions with Officers – The Company’s Interim CEO and CFO, Nicole Fernandez-McGovern, is one of the managing principals of both RCM Financial, a financial consulting firm, and Premier Financial Filings, a full-service financial printer; companies which have provided contracted financial services to Trunity. For the years ended December 31, 2014 and 2013, RCM Financial provided outside accounting and tax professional services to Trunity which resulted in accrued fees of $18,946 and $42,630, respectively. Ms. Fernandez-McGovern’s services as CFO in a consulting capacity were paid to RCM through April 2013, until she became the Company’s full-time CFO. Premier Financial Filings provided services to the Company resulting in accrued fees of $4,776 and $2,163 for the years ended December 31, 2014 and 2013, respectively.

Ms. Fernandez-McGovern also invested $24,000 in the Company’s 2014 equity private placement resulting in 153,110 shares and 40,298 warrants at $0.50 being issued to her. In addition, Ms. Fernandez-McGovern was issued, in exchange for $35,000 of consideration, a Series D Convertible Debenture resulting in 45,455 warrants at $0.20 being issued to her, and, in exchange for $7,500 of consideration, a July 2014 Convertible Note resulting in 175,000 warrants at $0.50 being issued to her. See Note 8 for further details of the terms of debenture and promissory note.

The Company’s Chief Education Officer, Cutler Cleveland, currently authors on the Trunity platform. In his capacity as an author and former consultant of the Company, he has accrued fees for the years ended December 31, 2014 and 2013 of $37,642 and $33,458, respectively. As a result of his full-time employment with Trunity that began June 2013, the Company has discontinued payment of his consulting fees on a go-forward basis.

At December 31, 2014, the Company’s Chief Technology Officer, Joakim Lindblom, had an outstanding shareholder loan in the principal amount of $4,162. Mr. Lindblom was a holder of a Series B Convertible Debenture in the principal amount of $81,270 and accrued interest of $10,836 which in November 2014 was exchanged for a Series D Convertible Debenture in the principal amount of $92,106, resulting in 406,350 warrants at $0.20 being issued to him. See Note 8 for further details of the terms of the debenture.

Transactions with Board Members – An investment of $25,000 in the Company’s 2014 equity private placement was made by board member and founder, Les Anderton, and his wife, resulting in 159,490 shares and 39,874 of warrants at $0.50 being issued to them. In addition, in exchange for $75,000 of total consideration, Mr. Anderton was issued Series E Convertible Debentures, resulting in 75,000 warrants at $0.15 being issued to him, and, in exchange for $10,000 of consideration, also was issued a July 2014 Convertible Note, resulting in 60,606 warrants at $0.50 being issued to him. Also, Mr. Anderton was a holder of a Series B Convertible Debenture in the principal amount of $180,370 and accrued interest of $14,683 that in November 2014 was exchanged for a Series D Convertible Debenture in the principal amount of $195,052, resulting in 901,850 warrants at $0.20 being issued to him. See Note 8 for further details of the terms of the debentures and promissory note.

An investment of $50,000 in the Company’s 2014 equity private placement was made by board member Ivan Berkowitz’s foundation that resulted in 303,030 shares and 75,758 of warrants at $0.50 being issued to the foundation. In addition, in exchange for total consideration of $10,000, Mr. Berkowitz was issued a July 2014 Convertible Promissory Note, resulting in 60,606 warrants at $0.50 being issued to him. See Note 8 for further details of the terms of debenture and promissory note.