RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2012

NOTE 8 – RELATED PARTY TRANSACTIONS

Due to related party

During the year ended December 31, 2011 the Company’s prior year’s officers advanced an aggregate of $67,427 for working capital purposes to the Company. The advances are short term, non-interesting bearing and are due upon demand. As of March 31, 2012 the total outstanding to the officers is $65,927.

Notes payable, related party

A summary of notes payable, related party as of March 31, 2012 and December 31, 2011 are as follows:


	2012		2011


Note payable, issued May 15, 2011 with interest at 9% per annum, due on demand, unsecured	$	50,000	$	50,000
Note payable, issued August 5, 2011 with interest at 6% per annum, due on demand, unsecured		100,000		100,000
Note payable, issued August 11, 2011 with interest at 6% per annum, due on demand, unsecured		68,000		68,000
Note payable, issued August 19, 2011 with interest at 6% per annum, due on demand, unsecured		68,000		68,000
Note payable, issued November 21, 2011 with interest at 6% per annum, due on demand, unsecured		8,000		20,000


Total		294,000		306,000
Less current portion		294,000		306,000

Long term portion	$	—	$	—

In connection with the issuance of the August, 2011 promissory notes, the Company issued detachable warrants granting the holders the right to acquire an aggregate of 180,000 shares of the Company’s common stock at $3.00 per share. The warrants expire three years from the issuance. In accordance with ASC 470-20, the Company recognized the value attributable to the warrants in the amount of $139,145 to additional paid in capital and a charge to interest in 2011’s operations. The Company valued the warrants in accordance with ASC 470-20 using the Black-Scholes pricing model and the following assumptions: contractual terms of 3 years, an average risk free interest rate of 0.34% to 0.49%, a dividend yield of 0%, and volatility of 126.31% to 127.23%.

Facilities

Since April 1, 2008, the Company has occupied warehouse space provided by one of the Company’s founders. The Company agreed to pay a total of $1 per month for the space. The Company records this fee as rent expense when incurred. During this time period, the Company constructed a leasehold improvement to the leased warehouse space for the purpose of locating our bio-fuel manufacturing facility.

Receivable from purchase of treasury stock

Pursuant to his employment agreement, Frederick C. Berndt entered into a revolving note agreement with the Company beginning on November 11, 2007. The Company initiated the note arrangement to allow Mr. Berndt to assist the Company, primarily in the early stages of development, personally with operating capital as required. In addition, the Company initiated the note to allow the Company to assist Mr. Berndt with cash advances used for costs incurred during the process of improving the Company’s marketing, political and regulatory exposure. The cash advances exceeded the amounts of reimbursable costs resulting in amounts Mr. Berndt owed back to the Company. Mr. Berndt has agreed to reimburse the Company for the excess costs of these promotions. These costs consisted primarily of travel and sponsorship costs. The Company charges 5% interest per annum calculated on the last day of the year based on an average of the quarterly balance of the note. The balance of the note including interest of $27,915 becomes due on December 31, 2009, with a term of 30 days to settle the note payable.

On December 15, 2009, the Company accepted 425,000 shares of the Company’s common stock held by Mr. Berndt in full settlement of the outstanding note receivable and related accrued interest for $787,144 and recorded an accrued liability due to Mr. Berndt for $62,856. The fair value of the shares issued was determined based on the recent sale of the Company’s common stock. The amount due from Mr. Berndt at March 31, 2012 was $65,927.

In November 2010, the Company advanced $53,519 to acquire the Company’s common stock (treasury stock) from a shareholder. During the year ended December 31, 2011, the Company advanced an additional $55,000 to acquire the Company’s common stock (treasury stock) from the same shareholder. As of December 31, 2011, the common stock has not been received and accordingly was accounted for as due from shareholder and included in the stockholders’ equity.

Consistent with ASC 505-10-45 (“Equity-Other Presentation”), the amount recorded on the balance sheet at December 31, 2011 was presented as a deduction from stockholders’ equity. This is also consistent with Rule 5-02.30 of Regulation S-X of the Code of Federal Regulations.

As of March 31, 2012, the Company’s management performed an assessment of the collectability of the amount due from shareholder of $108,519 and provided a full reserve and charged to operations for the three months ended March 31, 2012.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

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Reference 2: http://www.xbrl.org/2003/role/presentationRef

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Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

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Reference 4: http://www.xbrl.org/2003/role/presentationRef

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-Name Statement of Financial Accounting Standard (FAS)

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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef

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Reference 6: http://www.xbrl.org/2003/role/presentationRef

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Reference 7: http://www.xbrl.org/2003/role/presentationRef

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Reference 8: http://www.xbrl.org/2003/role/presentationRef

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Reference 9: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Regulation S-X (SX)

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+ Details

11 GOOD ENERGY INC 10-Q