NOTE 10 – RELATED PARTY TRANSACTIONS

Notes payable, related parties

Notes payable, related parties and accrued interest due to certain related parties as of September 30, 2014 and December 31, 2013 are as follows:

We believe the stated interest rates on the related party notes payable represent reasonable market rates based on the note payable arrangements we have executed with third parties.

For the three months ended September 30, 2014 and 2013 we had revenues of $129,100 and $107,400, respectively, and for the nine months ended September 30, 2014 and 2013 we had revenues of $356,500 and $401,100 from a customer, in which our CEO/President was a member of the Board of Directors of Armada Water Assets, Inc, the parent company of the customer until his resignation on September 30, 2014. Our CEO and Black Stone, in which its Chairman is also a managing member and President of our subsidiary PWS, are minority shareholders of Armada Water Assets, Inc.

In September 2013, PWS entered into an Exclusive Use License and Joint Operations Agreement ("License Agreement") with Sterall Inc. ("Sterall"). Black Stone, in which its Chairman is also a managing member and President of our subsidiary PWS, is a minority shareholder of Sterall.

In August 2014, the Company entered into a second Exchange and Acquisition Agreement ("New Technologies Agreement") with Black Stone for the acquisition of additional intellectual property ("IP") from Black Stone in exchange for 1,000,000 shares of common stock valued at $1,050,000. The new IP shall include 1) all filed or to-be-filed patents, patents pending, and any applications therefor, copyrights, trademarks, and trade names, 2) any agreements, licenses, proposed licenses, memoranda of understanding, and letters of intent arising out of or related to the New Technologies, 3) all business plans, customer lists, market surveys, trade secrets and other proprietary information of Seller arising out of or related to the New Technologies, 4) test and technical data, research materials, records, blue-prints, drawings, specifications, diagrams, programs, software or other computer records, and other materials arising out of or related to the New Technologies.

The Company is obligated to issues additional shares upon the following conditions: 1) an additional five hundred thousand (500,000) shares upon "commercialization" of any one of the New Technologies; and 2) an additional five hundred thousand (500,000) shares upon "commercialization" of the second of the New Technologies. For purposes of determining the Company’s obligation to issue the additional shares as recited above, "commercialization" shall mean the successful installation and operation of any one of the separate New Technologies. Additionally, Black Stone shall receive a ten percent (10%) royalty payment based on all gross revenue generated by the Company or its subsidiaries or any other related entity from the exploitation, utilization, commercialization, sublicensing or any other revenue generated from the New Technologies.

In September 2014, the Company entered into an Equity Purchase Agreement ("Equity Agreement") whereby the Company issued 1,200,000 shares of the Company’s common stock, valued at $1,212,000, in exchange for a 22.5 membership interests, representing 15% ownership interest in Sterall, LLC, a Delaware corporation. Sterall Inc., a PWS customer, is the operator of various waste destruction facilities and is an affiliate of Sterall LLC.