Related Party Transactions

6 Months Ended

Jun. 30, 2016

Note 10 – Related Party Transactions

Debt with Street Capital

Until the second quarter of 2014, as discussed below, Street Capital was the Company’s majority shareholder. Street Capital remained a related party following the distribution of its investment in HGI to Street Capital shareholders as Allan Silber, an affiliate of Street Capital, is the Company’s chairman of the board, and continues to be a significant shareholder of the Company. At both June 30, 2016 and December 31, 2015, the Company reported amounts owed to Street Capital of $1.7 million as related party debt (see Note 7). Total interest of $0.5 million has been accrued on the debt through June 30, 2016, and remains unpaid.

Street Capital Services Provided to the Company

Beginning in 2004, HGI and Street Capital entered into successive annual management services agreements (collectively, the “Agreement”). Under the terms of the Agreement, HGI agreed to pay Street Capital for ongoing management services provided to HGI by Street Capital personnel. Refer to Note 14 of the Annual Report on Form 10-K filed with the SEC on March 17, 2016 for further detail on the Agreement.

In 2013, Street Capital announced its plan to dispose of its interest in HGI, and on March 20, 2014, Street Capital declared a dividend in kind, consisting of Street Capital’s distribution of its majority interest in HGI to Street Capital shareholders. The dividend was paid on April 30, 2014 to shareholders of record as of April 1, 2014.

Following this disposition, the Company and Street Capital entered into a replacement management services agreement (the “Services Agreement”). Under the terms of the Services Agreement, Street Capital remained as external manager and continued to provide the same services, at similar rates, until the Services Agreement was terminated effective August 31, 2015, as described more fully in the Current Report on Form 8-K filed with the SEC on September 1, 2015.

The amounts charged by Street Capital, which have been accrued and added to the Street Capital Loan balance, are detailed below (in thousands):

	Six Months Ended June 30,
	2016		2015
Management fees	$	—	$	180
Other charges		—		38
Total	$	—	$	218

Transactions with Other Related Parties

During the first six months of 2016, the Company leased office space in Foster City, CA as part of the operations of HGP. The premises are owned by an entity that is jointly controlled by senior officers of HGI. In the second quarter of 2016, the Company terminated its lease agreement for the office space in Foster City, CA. The Company also leases office space in Edwardsville, IL, as part of the ongoing operations of NLEX. The premises are owned by senior officers of NLEX. The lease amounts paid by the Company to the related parties, which are included in selling, general and administrative expenses during the three and six months ended June 30, 2016 and 2015, are detailed below (in thousands):

	Three Months Ended June 30,
Leased premises location	2016		2015
Foster City, CA	$	19	$	57
Edwardsville, IL		25		25
Total	$	44	$	82

	Six Months Ended June 30,
Leased premises location	2016		2015
Foster City, CA	$	76	$	114
Edwardsville, IL		49		49
Total	$	125	$	163

In the first quarter of 2016, the Company entered into a related party loan with a trust controlled by certain executive officers of the Company. The Company received proceeds of $0.4 million. The loan accrued interest at 10% per annum and was payable within 90 days of the loan date. The Company repaid the loan plus accrued interest in March 2016. Interest charged and paid during the three and six months ended June 30, 2016, was $0 and $8,000, respectively.