Related Party Transactions |
6 Months Ended | ||
|---|---|---|---|
Jun. 30, 2026 | |||
| Related Party Transactions [Abstract] | |||
| Related Party Transactions |
Employment Agreement with CEO/CFO
On February 19, 2025, effective January 1, 2025, the Company entered into an employment agreement (the “Employment Agreement”) with Mr. Cecil Bond Kyte to serve as the Company’s CEO and CFO, with an annual base salary of $420,000. In addition, the Employment Agreement provides for the payment of a retention bonus (“Bonus”) in the amount of $1,557,500 to Mr. Kyte, $519,167 of which was paid in January 2025 to Mr. Kyte on execution of the Employment Agreement; $519,167 of the Bonus was paid in part in May 2025 in anticipation of the execution of a customer contract with VIPS Petroleum, and the balance of that payment was paid in June and July 2025 to Mr. Kyte; and, $519,166 of the Bonus will be paid to Mr. Kyte upon the execution, closing, and effective date of debt or equity financing in favor of the Company in the amount of no less than $5,000,000.
As of June 30, 2026, certain payroll taxes of approximately $300,000 related to this bonus had not been remitted by either the employee or the Company to the applicable taxing authorities. Although these payroll taxes are the responsibility of the employee, the Company could become contingently liable in the event of nonpayment.
As part of the Employment Agreement, Mr. Kyte was also issued in 2025 a stock option exercisable into shares of the Company’s restricted common stock at an exercise price of $ per share, and a stock option exercisable into shares of the Company’s restricted common stock at an exercise price of $ per share. The stock options had a fair value of $ and vested immediately and expire in ten years. Mr. Kyte was also issued stock options exercisable into shares of the Company’s restricted stock with a fair value of $1,072,000 in his capacity as a member of the Board of Directors and as a Chairman of the Board who oversees financial and audit functions, which vest up to one year, and have an exercise price of $0.02 to $0.15 per share. The above description of Mr. Kyte’s Employment Agreement is qualified in its entirety by reference to Mr. Kyte’s Employment Agreement, a copy of which was filed as part of our report on Form 8-K, filed with the SEC on February 21, 2025.
During the six months ended June 30, 2026, Mr. Kyte received options with a fair value of $75,000 at an exercisable price of $ per share pursuant to the Company’s Director Compensation Policy which will vest over 1 year from issuance. (See Note 7, above.)
Reimbursements for Rent
The Company reimburses Mr. Kyte in rent expenses for a home office and partial storage space in Carson City, Nevada at a rate of $1,000 per month under a month-to-month rental agreement. The rental agreement ended on March 31, 2025. Under Mr. Kyte’s Employment Agreement, he receives a rent allowance of $1,000 per month, which is included as part of his compensation. Total rent expense during the six-month period ended June 30, 2026, and 2025 were $6,000 and $6,000, respectively which are included as part of operating expenses in the attached consolidated statement of operations. |