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10. Related Party Transactions
6 Months Ended
Jun. 30, 2014
Related Party Transactions [Abstract]  
10. Related Party Transactions

On February 28, 2014, the Company entered into a Deed of Sale with SGM EXE, LLC, a Nevada limited liability company controlled by Steven G. Mihaylo, the Chairman of the Board, Chief Executive Officer and principal shareholder of the Company.  The land, building and furniture of the corporate headquarters were sold for $2.0 million in cash, which resulted in a deferred gain on sale of disposal of $281,000.

 

On March 1, 2014, the Company entered into a sale-leaseback agreement with SGM EXE, LLC.  The Company has signed a three-year lease agreement, with the option to renew the lease at fair market value rates for two consecutive three-year terms.  The lease agreement called for rent payments for the initial three year term to be made in advance in the form of 300,000 shares of common stock of Crexendo, Inc.  The fair value price per share at the time of the lease was $3.22 per share, resulting in rent expense of $322,000 per year for three years. The Company has the option to pay rent expense for the subsequent renewal periods in stock or cash.  If stock, the number of shares is computed as the average of the last sale price for each business day for the thirty (30) days prior to the first day of the three year renewal term.