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Related Party Transactions
 9 Months Ended
Sep. 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 September 30, 2024, Merrell Bros. or their affiliates own stock below 5% of the outstanding common stock. 

 

For the nine-month period ending September 30, 2024 and 2023, the Company incurred $240,559 and $737,775, respectively, 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 September 30, 2024 and December 31, 2023, accounts payable and accrued expenses include $33,593 and $125,282, respectively, 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 indicated our desire to relocate to a larger manufacturer facility with more square footage dedicated to expanding our manufacturing operations. In connection with 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.