Related Party Transactions

6 Months Ended

Jun. 30, 2016

10.

Related Party Transactions

On March 26, 2009, the Company entered into a $50,000 revolving credit promissory note (the “Revolver”) with Vector Group Ltd. (“Vector”), the former controlling stockholder of the Company. On January 26, 2011, the Company and Vector entered into an amendment to the Revolver increasing the amount that the Company may borrow from $50,000 to $100,000. The loan bears interest at 11% per annum and was due on December 31, 2013. During January 2014, the Revolver was extended from December 31, 2013 to June 30, 2015. The Revolver is currently in default but the Company has obtained waivers from the Convertible Debenture holders in regards to a cross default provision outlined in the underlying agreements. As of June 30, 2016 and December 31, 2015, the balance due to Vector amounted to $73,500. In connection with the Plan the total amount including accrued interest due to Vector was adjusted to $100,000. As of June 30, 2016 and December 31, 2015, accrued interest related to the Revolver amounted to $26,500 and $43,301, respectively, and is included in accrued interest, related party on the accompanying condensed consolidated balance sheets. Due to the Company filing a voluntary petition for relief under Chapter 11 of Title 11 of the Bankruptcy Court, interest stopped accruing on October 15, 2015. Additional contractual interest through March 31, 2016 would have resulted in $3,773 of additional interest. Subsequent to March 31, 2016, in connection with the Plan, the Revolver was treated as an unsecured claim and paid in accordance with the Plan. Interest expense for other related party notes payable amounted to $2,044 and $4,065 for the three months and six months ended June 30, 2015, respectively.

ConGlobal Industries, Inc. is a minority stockholder of the Company and provides containers and labor on domestic projects. The Company recognized Cost of Goods Sold of $105,869 and $176,990, for services ConGlobal Industries, Inc. rendered during the three months ended June 30, 2016 and 2015 respectively. The Company recognized Cost of Goods Sold of $209,228 and $545,569, for services ConGlobal Industries, Inc. rendered during the six months ended June 30, 2016 and 2015 respectively. As of June 30, 2016 and December 31, 2015, $154,567 and $317,468, respectively, of such expenses are included in related party accounts payable and accrued expenses in the accompanying condensed consolidated balance sheets.

The Lawrence Group is a minority stockholder of the Company and is a building design, development and project delivery firm. As of June 30, 2016 and December 31, 2015, $52,683 of expenses were included in related party accounts payable and accrued expenses in the accompanying condensed consolidated balance sheets.

An affiliated accounting firm of the Company’s former Chief Financial Officer provided accounting and consulting services to the Company. The Company recognized General and Administrative expenses in the amount of $10,000 and $42,000, respectively, for the three months and six months ended June 30, 2015.

A preferred stockholder holds the 2016 Debenture as disclosed in Note 6.