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Related Party Transactions
 6 Months Ended
Jun. 30, 2024
Related Party Transactions  
Related Party Transactions

Note 8 - Related Party Transactions

 

On July 7, 2021, we entered into a manufacturing and services agreement (the “Original M&S Agreement”) to fabricate and manufacture the AirSCWO systems with Merrell Bros. Fabrication, LLC (“Merrell Bros.”). As part of the agreement, the Company appointed Terry Merrell, one of the owners of Merrell Bros., to its board of directors. At June 30, 2024, Merrell Bros. or their affiliates own stock below 5% of the outstanding common stock. 

 

For the six-month period ending June 30, 2024, the Company incurred $272,031 in related party expenses, all of which was related to non-recurring labor and other operating costs associated with the manufacturing of our AirSCWO systems. At June 30, 2024, accounts payable and accrued expenses include $68,691 due to Merrell Bros. for manufacturing related services provided.  

 

On March 27, 2024, we executed a supplemental manufacturing and services agreement (the “Supplemental M&S Agreement”) with Merrell Bros. as Merrell Bros. indicated to us their intent to not renew the Original M&S Agreement and we have indicated our desire to relocate to a larger manufacturer facility with more square footage dedicated to expanding our manufacturing operations. Simultaneous to executing the Supplement M&S Agreement, Merrell Bros. provided us with a written non-renewal notice. Accordingly, the Original M&S Agreement terminated on its original expiration date of July 7, 2024.

 

The Supplemental M&S Agreement became effective on July 7, 2024 and replaced the Original M&S Agreement. Under the Supplemental M&S Agreement, our relationship and the manufacturing services provided by Merrell Bros. will continue an as needed basis based on statements of work to be agreed upon by both parties to fulfill future and current manufacturing orders.  The term of the Supplemental M&S Agreement is one year from July 7, 2024 with a one-year renewal upon a mutually executed written extension.  Either party may terminate this Supplement M&S Agreement upon written notice of such a termination, specifying the extent to which performance of work is terminated and the effective date of termination.

 

Merrell Bros. agreed to extend the expiration date of the Original M&S Agreement through July 31, 2024 to allow for our transition and move to our own facility.  See subsequent events Note 10.