| 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. 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 holds approximately 96% of the Company’s Series A Preferred as March 31, 2014, and its affiliated entities Mosaic Financial Services LLC, Mosaic Private Equity Fund, L.P., Mosaic Capital Management, Ltd. and its affiliated accredited investor (collectively, “Mosaic”). |
| ● |
Pinewood Trading Fund, L.P., owner of approximately 93.5% of the Company’s Series D Preferred Stock and 11% of the Company’s Series B Preferred as of March 31, 2014, and its managing partner Jack E. Brooks. |
Outstanding debt to related parties consisted of the following at
March 31, 2014:
| |
|
|
|
|
|
|
|
|
|
| |
|
DelVecchio |
|
|
Pinewood |
|
|
Total |
|
| |
|
|
|
|
|
|
|
|
|
| Notes payable - revolving |
|
$ |
477,000 |
|
|
$ |
- |
|
|
$ |
477,000 |
|
| Notes payable |
|
|
- |
|
|
|
440,000 |
|
|
|
440,000 |
|
| Accrued interest |
|
|
30,914 |
|
|
|
23,759 |
|
|
|
54,673 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
$ |
507,914 |
|
|
$ |
463,759 |
|
|
$ |
971,673 |
|
|