Annual report pursuant to section 13 and 15(d)


12 Months Ended
Dec. 31, 2013
Related Party Transactions [Abstract]  

We lease our offices from the Saucier Business Trust, an entity that is related to the wife of our CEO. The lease was entered into effective September 1, 2010 for a period of two years requiring a monthly rental payment of $10,359. Our lease expired at the end of August 2012 and is currently on a term of month-to-month. Total payments made to this related party was $124,308 in 2013 and 2012. In accordance with the terms of the settlement agreement with BofA (see Note 11), we have agreed to vacate the property on or before April 30, 2014.


We have a note receivable from Abyss Group, LLC, an entity that was related to the wife of our CEO. This note receivable was acquired as part of the 2007 asset purchase agreement with GGLLC. The note receivable is a ten-year unsecured note with a 6% fixed interest rate, monthly principal and interest payments of $6,598 with the unpaid principal and interest due in February 2017. The terms of the note were amended whereby the monthly principal and interest payment was reduced to $3,332 and the unpaid principal and interest is due August 2015. The balance of the note receivable was $383,298 and $388,261, at December 31, 2013 and 2012, respectively. Interest income associated with this note receivable was $23,070 and $21,600 for December 31, 2013 and 2012, respectively.


We have a note payable to GGLLC, an entity that is controlled by our CEO. The note payable required monthly principal and interest payments of $9,159, at a fixed interest rate of 7.3% through February 2017, at which time there is a balloon payment due of $1,003,000. The balance was $1,095,181 and $1,122,915, respectively. This note payable is a result of the asset purchase agreement with GGLLC and under the direction of GGLLC the payments were formerly made on GGLLC’s behalf directly to BofA. As of August 1, 2013, GGLLC directed us to begin making payments to Carpathia Associates, LLC (“Carpathia”), an entity related to our CEO. The note agreement remains in the name of GGLLC and we have not and do not have any direct obligation to BofA. Additionally, we were in engaged in litigation with BofA which was settled in February 2014. See Note 11 for further details.


Certain administrative, accounting and legal support services are performed by Carpathia. We accrued or paid fees to the related party in the amount of $4,435 and $29,875 for 2013 and 2012, respectively.