RELATED PARTY TRANSACTIONS AND BALANCES | 9 Months Ended |
Sep. 30, 2014 |
Related Party Transactions [Abstract] | ' |
RELATED PARTY TRANSACTIONS AND BALANCES | ' |
NOTE 12 - RELATED PARTY TRANSACTIONS AND BALANCES |
In addition to reimbursement of business expenses, transactions with related parties include: |
On April 19, 2011, the Company’s Board ratified a Services Agreement (the “Orchard Agreement”) between the Company and Orchard Capital Corporation (“Orchard”) which was approved by the Company’s Compensation Committee and was effective January 30, 2011. Under the Orchard Agreement, Orchard agreed to provide services that may be mutually agreed to by and between Orchard and the Company including those duties customarily performed by the Chairman of the Board and executive of the Company as well as providing advice and consultation on general corporate matters and other projects as may be assigned by the Company’s Board as needed. Orchard is controlled by Richard Ressler. Certain affiliated entities of Orchard as well as Richard Ressler own shares of the Company. On August 1, 2013, the Company’s Board ratified a change to the terms of the Orchard Agreement increasing compensation under the agreement to $430,000 from $300,000 per annum. |
During the nine month periods ended September 30, 2014 and 2013, management fees charged to operations amounted to $322,500 and $246,667, respectively. During the three month periods ended September 30, 2014 and 2013, management fees charged to operations amounted to $107,500 and $96,667, respectively. |
As at September 30, 2014, $107,500 (December 31, 2013 - $107,500) is included in accrued liabilities. |
Mr. Nitin Amersey, a director of the Company, is listed as a control person with the Securities and Exchange Commission of Bay City Transfer Agency Registrar Inc., the Company’s transfer agent, and of Freeland Venture Resources Inc., which provides Edgar filing services to the Company. |
For the nine month period ended September 30, 2014, the Company paid $30,587 to Bay City Transfer Agency Registrar Inc., for services rendered and $20,880 to Freeland Venture Resources Inc., for services rendered. For the three month period ended September 30, 2014, the Company paid $2,010 to Bay City Transfer Agency Registrar Inc., for services rendered and $6,930 to Freeland Venture Resources Inc., for services rendered. For the nine month period ended September 30, 2013, the Company paid $46,354 to Bay City Transfer Agency Registrar Inc., for services rendered and $14,440 to Freeland Venture Resources Inc., for services rendered. For the three month period ended September 30, 2013, the Company paid $525 to Bay City Transfer Agency Registrar Inc., for services rendered and $2,240 to Freeland Venture Resources Inc., for services rendered. |
At September 30, 2014, accounts payable includes $0 (December 31, 2013 - $1,000) due to these entities. |
During the nine month periods ended September 30, 2014 and 2013 the Company paid Mr. Amersey $27,000 and $23,000, respectively, as fees, for services performed as audit committee chairperson. During the three month periods ended September 30, 2014 and 2013 the Company paid Mr. Amersey $9,000 and $8,000, respectively, as fees, for services performed as audit committee chairperson. |
Mr. John Dunlap, a director of the Company, is the President of Dunlap Group, which provides consulting services to the Company related to regulatory compliance matters. During the nine month periods ended September 30, 2014 and 2013, the Company paid fees to Dunlap Group amounting to $5,493 and $22,766, respectively. During the three month periods ended September 30, 2014 and 2013, the Company paid fees to Dunlap Group amounting to $1,140 and $1,770, respectively. |
During the nine month periods ended September 30, 2014 and 2013 the Company paid Mr. Dunlap $27,000 and $23,000, respectively, as fees, for services performed as compensation committee chairperson. During the three month periods ended September 30, 2014 and 2013 the Company paid Mr. Dunlap $9,000 and $8,000, respectively, as fees, for services performed as compensation committee chairperson. |
During the nine month periods ended September 30, 2014 and 2013 the Company paid each of Mr. John Suydam and Mr. Zohar Loshitzer $15,000 and $1,667, respectively, as fees, for serving as a director of the Company. During three month periods ended September 30, 2014 and 2013 the Company paid each of Mr. John Suydam and Mr. Zohar Loshitzer $5,000 and $1,667, respectively, as fees for serving as a director of the Company. |
During the nine and three month periods ended September 30, 2014 and 2013, $114,000 and $0 respectively, has been recorded as directors fees under officers' compensation and directors' fees related to the services provided by seven board members, as per the approved board compensation structure, these services will be compensated through restricted stock grants on or prior to December 31, 2014. At September 30, 2014, $114,000, is included in accrued liabilities (December 31, 2013 - $0) related to these services. |
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Effective December 10, 2012, the Board approved a one-time grant of 4,114 shares of restricted common stock from treasury to Mr. Mark Yung, a member of the Company’s Board, for services rendered as Executive Chairman, 2,057 shares of which were issued upon the date of grant, and 2,057 shares of which were issued on February 28, 2013 (Note 11). The issued shares were valued at the quoted market price on the grant date. During the nine month periods ended September 30, 2014 and 2013, $0 and $152,245, respectively, has been recorded in officers’ compensation and directors’ fees in the consolidated condensed statements of operations and comprehensive income / (loss) for the fair value related to the grant of restricted common stock to Mr. Yung. The shares of common stock were issued from treasury, not under the Company’s 2010 stock incentive plan. During the three month periods ended September 30, 2014 and 2013, no expense was incurred with respect to such shares. |
On March 22, 2013, April 23, 2013, June 27, 2013 and May 23, 2014, the Company issued an aggregate amount of $5,064,423 unsecured convertible promissory notes to certain shareholders and deemed affiliates of certain members of the Board of Directors (Note 8). During the nine month periods ended September 30, 2014 and 2013, interest expense on the Notes amounted to $388,556 and $200,000, respectively. During the three month periods ended September 30, 2014 and 2013, interest expense on the Notes amounted to $132,679 and $127,689, respectively. At September 30, 2014 and December 31, 2013, interest expense accrued on the Notes included in accrued liabilities on the consolidated condensed balance sheets amounted to $260,034 and $127,778, respectively. As of September 30, 2014 the Company has issued 5,126 shares as interest payment (December 31, 2013 – 8,000 shares). |