9. Receivable from Related Party

The receivable from related party primarily consists of the “excess organization and offering costs” (defined below) paid to CRA related to our follow-on offering which terminated on June 10, 2012, operating costs reimbursed to CRA that exceed limits set forth in our charter, excess reimbursements for direct expenses paid to CRA, and excess asset management fees paid to CRA.

According to our Advisory Agreement, within sixty days after the end of the month in which the offering terminates, CRA is obligated to reimburse us the organization and offering expenses that exceed 3.5% of our offering gross proceeds. Consequently, we recorded a receivable from CRA for $1.0 million related to the organization and offering expenses related to our primary and secondary stock offerings, but reserved the full amount based on our collectability analysis. As of June 30, 2014, the gross balance of this receivable was $0.7 million before full reserve. CRA repaid varying amounts against this receivable quarterly during 2013, but no repayment has occurred in 2014 (see Note 13).

Our total operating expenses are limited to certain amounts as defined in our charter. For the two fiscal quarters ended June 30, 2014, our total operating expenses exceeded such limit by $1.7 million. We recorded this excess as receivable from related party on March 31, 2014 Condensed Consolidated Balance Sheet and reserved for the entire amount due to the uncertainty of collectability (see Note 13).

We over-reimbursed CRA $189,000 for various operating expenses in the first quarter of 2014. We recorded this amount as receivable from related party and reserved for the entire amount due to uncertainty of collection.

Additionally we over paid CRA $32,000 for asset management fees in 2013 and 2014. We recorded this amount as receivable from related party and reserved for the entire amount due to uncertainty of collectability.