Related Party Transactions |
6 Months Ended |
|---|---|
Jun. 30, 2025 | |
| Related Party Transactions [Abstract] | |
| Related Party Transactions | Note 10: Related Party Transactions
Outstanding compensation and expense reimbursements due to consultants engaged by the Company $921,750 (2024: $764,385).
Refer to other related party payables in Notes 5.
The Company (the lender) signed a loan agreement with RHBV (the borrower) on June 21, 2022. RAKR agreed to a two-year loan facility with an interest rate of 8% with interest only payments until a bullet payment is made for the principal on the due date. Provisions in the agreement allow for prepayment. First tranche of the loan to RHBV in the amount of $5,000 was issued to RHBV on July 7, 2022. On December 31, 2024, the Company entered into an Agreement whereby this loan to RHBV was applied to certain payables related to RHBV fully eliminating this loan and all accrued interest to this date.
Effective April 1, 2023, the Company divested 60% interest in RWI. On December 31, 2024, RWI went through a restructuring and, combined with an agreement to convert the Company’s investment in RWI into RWI shares, the Company owns 12.38% of RWI (see Note 3 and Note 16 for more details).
On November 6, 2023, the Company issued shares to RWI to finalize the Miranda acquisition. Shares were valued at $48,000 on the date of signature of the agreement with RWI to affect that acquisition. $24,000 was received on January 15, 2024, in payment for these shares. The difference of $ was recorded as stock-based compensation in Q3, 2023.
On January 16, 2024, the Company made an investment in RWI in the amount of $400,000. At the same time, the 60% shareholder of RWI invested $600,000 such that both parties fully funded the first payment due to acquire 60% of Miranda. As of December 31, 2024, $7,000 in distribution payments have been received. Due to the restructuring discussed above, the Company converted the remaining investment into shares of RWI and remains on the balance sheet an investment in the amount of $280,622 (See Note 3 and Note 16 for more details). Based on the information available, we have decided to impair the asset in accordance with standard accounting principles. Specifically, as of December 31, 2024, RWI’s financials reflect insufficient cash, a net liability position, and ongoing net losses. Given these circumstances, we believe it is unlikely that the investment will generate a sufficient return on investment (ROI) to support the continued capitalization of the balance, especially following the loss of the equity method investment. As a result, we have impaired this asset to zero. The Company was well aware of this position in advance of the restructuring. More important than the equity value to the Company is the strategic value of the asset that is expected to jointly generate future revenues and technological advancements. While this cannot be guaranteed, the Company and RWI continue to work together to advance the value of both businesses. The nature of the water infrastructure business is a long sales cycle depending on factors such as developers receiving permits in a timely fashion for projects that would require water treatment.
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