Related Party Transactions

12 Months Ended

Dec. 31, 2020

Finance Lease Obligations

On December 1, 2019, the Company refinanced its lease agreement with a subsidiary of The Modern Group, Ltd. (“The Modern Group”) for equipment purchases totaling approximately $3.2 million. Under the terms of the lease agreement, the Company’s monthly principal and interest payments were $232 thousand for the 12 month term at an annual rate of 8.9%. An upfront fee payment of $131 thousand became due July 1, 2020 and the remaining outstanding lease obligation of approximately $648 thousand is due by January 25, 2021. The following individuals serve in various leadership capacities for The Modern Group: Casey Crenshaw (our Executive Chairman and Chairman of our Board) as President and Ben Broussard (a member of our Board) as Director of Finance and as COO of M/G Finance Co., Ltd., a subsidiary of The Modern Group. Casey Crenshaw is the beneficial owner of 25% of the Modern Group and is deemed to jointly control The Modern Group with family members. Stacey Crenshaw (a member of our Board) is the spouse of Casey Crenshaw.

During 2018, Stabilis LLC entered into lease agreements with a subsidiary of The Modern Group to finance vehicles and machinery and equipment totaling approximately $1.5 million. Under the terms of the leases, the balance is due in equal monthly installments over 24 months at an annual interest rate of 10%. The finance lease agreements included purchase options, which were reasonably certain to occur. During 2020, the Company exercised its purchase options on these agreements, which included remaining outstanding lease obligations of $413 thousand. The assets are now owned outright. These assets are included in the Company's property, plant and equipment, net on the consolidated balance sheets and the purchase had no effect on the net book value of these assets.

The Company’s carrying value of finance lease obligations to related parties consisted of the following (in thousands):


	December 31,
	2020		2019
Finance lease obligations with subsidiary of The Modern Group, Ltd	$	648	$	4,088
Less: amounts due within one year	(648)		(3,440)
Total long term finance lease obligations to related parties	$	—	$	648

Secured Term Note Payable

The Company has a Secured Term Note Payable with Chart E&C in the principal amount of $1.1 million, at the rate of 3.0% plus the London interbank offered rate (3.15% at December 31, 2020), in connection with a Master Sales Agreement whereby Chart E&C agreed to sell the Company certain equipment for its liquefaction plant. See Note 10—Debt for further discussion of the Note Payable.

Secured Promissory Note

On August 16, 2019, the Company issued a Secured Promissory Note to M/G Finance Co., Ltd. in the principal amount of $5.0 million, at an interest rate per annum of 6% until December 10, 2020, and 12% thereafter. Casey Crenshaw, our Executive Chairman and Chairman of our Board, serves as the President of M/G Finance Co., Ltd. M/G Finance Co. Ltd. is a subsidiary of The Modern Group. See Note 10—Debt for further discussion of the Promissory Note.

Term Loan Facility

In connection with the acquisition of American Electric (see Note 2—Acquisition), the Company assumed a loan facility between M&I Brazil, a subsidiary, and an employee of the Company. The loan facility provided the Company with a $0.3 million loan facility of which $0.2 million was drawn and outstanding as of December 31, 2019. All outstanding amounts, including accrued but unpaid interested, became due in June 2020. Under the loan agreement, the interest rate on the loan facility was 10.0%, per annum, payable each quarter. The loan facility was secured by the assets held by M&I Brazil.

Operating Leases

The Company subleased land in Fort Lupton, Colorado to a subsidiary of The Modern Group. During the year ended December 31, 2019, amounts billed to The Modern Group under the agreement totaled $10 thousand.

The Company subleased space in Denver, Colorado to a subsidiary of The Modern Group. During the years ended December 31, 2020 and 2019, the Company billed $8 thousand and $24 thousand, respectively, to The Modern Group under the agreement.

Payroll and Benefits

The Company utilized payroll and benefit resources from The Modern Group. During the year ended December 31, 2019, the Company incurred expenses of $4 thousand for processing and administrative charges associated with payroll processing. There were no expenses incurred for processing and administrative charges during the year ended December 31, 2020 due to a transition to a third party.

Other Purchases and Sales

During the years ended December 31, 2020 and 2019, the Company paid Applied Cryo Technologies, Inc. (“ACT”), a company owned 51% by Crenshaw Family Holdings International, Inc., $516 thousand and $447 thousand, respectively, for equipment, repairs, and services. The Company also sold $2 thousand and $4 thousand of LNG to ACT during the years ended December 31, 2020 and 2019, respectively. As of December 31, 2020 and 2019, respectively, we had $2 thousand and $4 thousand due from ACT included in accounts receivable on the consolidated balance sheets. As of December 31, 2020 and 2019, respectively, we had $121 thousand and $24 thousand due to ACT included in accounts payable on the consolidated balance sheets.

The Company purchases supplies and services from a subsidiary of The Modern Group. During the years ended December 31, 2020 and 2019, purchases from The Modern Group totaled $650 thousand and $175 thousand, respectively. The Company also sold $52 thousand of supplies and services to The Modern Group in 2019. There were no sales in 2020. There was no receivable due from The Modern Group as of December 31, 2020 and 2019. As of December 31, 2020 and 2019, respectively, we had $582 thousand and $22 thousand due to The Modern Group included in accounts payable on the consolidated balance sheets.

Chart Energy & Chemicals, Inc. (“Chart E&C”) beneficially owns 8.7% of our outstanding common stock. The Company purchases services from Chart E&C. During the years ended December 31, 2020 and 2019, purchases from Chart E&C totaled $23 thousand and $80 thousand. As of December 31, 2020 and 2019, we had $14 thousand and $8 thousand due to Chart E&C included in accounts payable on the consolidated balance sheets.