NOTE PAYABLE - RELATED PARTY

6 Months Ended

Jun. 30, 2014

Notes Payable Related Party Disclosure [Abstract]

NOTE 4 – NOTE PAYABLE – RELATED PARTY

As of December 31, 2011, the Company owed Greenberg & Lieberman, LLC for past services rendered totaling approximately $1,986,000. During 2012, the Company entered into a confidential settlement agreement with Greenberg & Lieberman, LLC. As part of their agreement with the Company, G&A Capital distributed 300,000 shares worth of restricted common stock it owned to Greenberg & Lieberman, LLC and the Company issued a promissory note for $1,000,000 in full settlement of the outstanding balance owed to Greenberg & Lieberman, LLC. There is no interest and no minimum payments for seven and a half years after which time the interest will be prime plus 2%. The Company will be required to begin paying back the debt when the EBITDA reaches $250,000 a year, at which time the Company shall be required to pay back a minimum of 3% of the Company's profits per year until the debt has been paid in full. The Company has classified the promissory note as a long term liability. The original fair value of the promissory notes was valued at $601,017 based upon a present value of future cash flows, discounted at the market rate of interest of 7% per annum over seven and half years. During the three and six months ended June 30, 2014 and 2013, the Company amortized the noncash interest expense of $13,089 and $26,178, respectively; and $13,089 and $26,178 for the three and six months ended June 30, 2013. As of June 30, 2014 and December 31, 2013, net carrying value of the promissory note was $724,517 and $698,194, respectively.

US FUEL CORP 10-Q