Related Party Transactions

12 Months Ended

Dec. 31, 2012

Related Party Transactions

Related Party Transactions

15. Related Party Transactions

On June 1, 2007, the Company loaned $500,000 to SAAH, an entity controlled by two of our then directors, and the initial stockholder and founder of SAAC. SAAC was formed for the purpose of acquiring, or acquiring control of, through a merger, capital stock exchange, asset acquisition, stock purchase or other similar business combination, one or more domestic or international operating businesses. SAAH, in turn, loaned the $500,000 to SAAC. SAAC ultimately consummated its initial business combination with UEI.

The loan was evidenced by a note bearing 5% interest per annum and was due on or before May 31, 2011, with no prepayment penalties (see discussion concerning CEO special bonus under Item 11, Executive Compensation). The loan was guaranteed in its entirety by our Chairman and Chief Executive Officer. The Company expected repayment of the loan from the proceeds of the sale by SAAH of its founder warrants and ultimately by UEI. On September 20, 2010, UEI filed for bankruptcy protection. At December 31, 2011 the note, including interest, was $458,453. The Company recorded interest income related to this note of $761 for the year ended December 31, 2012, $9,326 for Transition Period ended December 31, 2011 and $18,500 for the fiscal year ended June 30, 2011. On January 15, 2012, our Chairman and Chief Executive Officer paid the Company $459,214, through a reduction of a special bonus due him, paying in full this note and accrued interest through that date.

On July 6, 2011, the Company formed a wholly-owned subsidiary, Fiducia Holdings, LLC (Holdings), and purchased Class A membership units of Holdings. The Company’s Chief Executive Officer and the Company’s Chief Financial Officer purchased Class B membership units of Holdings for nominal amounts. The Class B membership interests may be deemed to own twenty percent (20%) of Holdings, but only after the Company receives its initial purchase price, plus any accrued interest. On December 29, 2011, the Company exchanged its Class A membership units in Holdings for 145 Series A Preferred Shares and 51 common shares of FHC, a newly formed corporation. On the same date our Chief Executive Officer and Chief Financial Officer exchanged their Class B membership units for 37 and 12 common shares, respectively, of FHC. Through this exchange, the Chief Executive Officer and Chief Financial Officer may be deemed to own twenty percent (20%) of FHC, if the Company receives its initial purchase price plus accrued interest.

On August 28, 2012, our Chief Executive Officer and our Chief Financial Officer exchanged their shares in FHC for an aggregate of 95 shares of Series J Preferred and 1,759,288 shares of Common Stock as discussed in Note 10.

Also on August 28, 2012, our Chief Operating Officer exchanged his shares of Series A Preferred Stock in Fuducia Real Estate Solutions, Inc. for 238,095 shares of Series J Preferred and 170,931 shares of Common Stock as discussed in Note 10.