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RELATED PARTY TRANSACTIONS
 12 Months Ended
Dec. 31, 2013
Notes to Financial Statements  
8. RELATED PARTY TRANSACTIONS

Transactions with related parties and their affiliates are made in the ordinary course of business on substantially the same terms and conditions, including interest rates and collateral, as those prevailing at the same time for comparable transactions with other unaffiliated third parties, and do not, in the opinion of management, involve more than normal credit risk or present other unfavorable features.  For the years ended December 31, 2013 and 2012, related parties include the following:

 

·   Robert DelVecchio, an officer and a member of the board of directors of the Company and his affiliate Brockington Securities, Inc. (collectively, "DelVecchio").

 

·   Mosaic Capital Advisors, LLC, directly appointed directors and owner of approximately 96%  of the Company’s Series A Preferred as December 31, 2013, respectively, and its affiliated entities Mosaic Financial Services (“MFS”), LLC, Mosaic Private Equity Fund, L.P., Mosaic Capital Management, Ltd. and its affiliated accredited investor (collectively, “Mosaic”).

 

·   Pinewood Trading Company, owner of approximately 93.5% of the Company’s Series D Preferred Stock and 11% of the Company’s Series B Preferred as December 31, 2013, and its managing partner Jack E. Brooks.

 

Outstanding debt to related parties consisted of the following at December 31, 2013 and 2012:

 

2013                        
    DelVecchio     Mosaic     Pinewood     Total  
                         
Notes payable - revolving   $ 477,000     $ -     $ -     $ 477,000  
Unsecured convertible debentures, net     -       -       -       -  
Accrued interest     23,170       -       16,200       39,370  
                                 
    $ 500,170     $ -     $ 16,200     $ 516,370  
                                 
2012                                
    DelVecchio     Mosaic     Pinewood     Total  
                                 
Notes payable - revolving   $ 447,000     $ -     $ -     $ 447,000  
Unsecured convertible debentures, net     -       498,798       46,876       545,674  
Accrued interest     27,392       134,520       5,376       167,288  
                                 
    $ 474,392     $ 633,318     $ 52,252     $ 1,159,962  

 

On July 9, 2012, we entered into a consulting agreement with Jack E. Brooks, managing partner of Pinewood Trading Company.  We issued 65,000 restricted common shares as payment in full for financial advisory services rendered to us.  The market value of the stock on July 9, 2012, the date of issuance, was $0.51 per common share.