|
RELATED PARTY TRANSACTIONS
|
6 Months Ended |
|---|---|
|
Jun. 30, 2013
|
|
| Related Party Transactions [Abstract] | |
| RELATED PARTY TRANSACTIONS |
We lease our offices from the Saucier Business Trust, an entity that is related to 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 $62,159 for each six month period ended June 30, 2013 and 2012. The Saucier Business Trust filed for bankruptcy on May 2, 2013 (the “Bankruptcy”), however it is not expected the Bankruptcy will have a direct impact on our tenancy.
We have a note receivable from Abyss, LLC, an entity that is related to 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 as of the six month period ended June 30, 2013 and 2012 were $384,084 and $399,323, respectively. Interest income associated with this note receivable was $11,560 and $10,570 for the six month period ended June 30, 2013 and 2012, respectively.
We have a note payable to a related party, 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. This note payable is a result of the asset purchase agreement with GGLLC and under the direction of GGLLC the payments were to be made on GGLLC’s behalf directly to Bank of America. 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 no direct obligation to Bank of America. Additionally, Bank of America has filed a complaint against us. 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 $3,105 and $14,550 for the six months ended June 30, 2013 and 2012, respectively. |