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Related Party Transactions
12 Months Ended
Dec. 31, 2016
Related Party Transactions [Abstract]  
Related Party Transactions
Related Party Transactions
 
Richmont Holdings

During the fourth quarter of 2016, the Company renewed a Reimbursement of Services Agreement for a minimum of one year with Richmont Holdings - a closely held company owned by the Company's Chairman and CEO. The Company has an infrastructure of personnel and resources used to identify, analyze, negotiate and conduct due diligence on direct-to-consumer acquisition candidates. However, the Company continues to rely on advice and assistance from Richmont Holdings in areas related to identification, analysis, financing, due diligence, strategic planning, accounting, tax, and legal matters associated with such potential acquisitions. Richmont Holdings and its affiliates have experience in these areas and the Company wishes to draw upon such experience. In addition, Richmont Holdings had already developed a strategy of acquisitions in the direct-to-consumer industry and has assigned and transferred to us the opportunities it has previously analyzed and pursued.

The Company has agreed to pay Richmont Holdings a reimbursement fee (the "Reimbursement Fee") each month of $160,000, and to reimburse or pay the due diligence, financial analysis, legal, travel, and other costs Richmont Holdings incurred in identifying, analyzing, performing due diligence, structuring, and negotiating potential transactions. During the fiscal year ended December 31, 2016 and 2015, the Company recorded approximately $1.9 million and $2.2 million, respectively, of Reimbursement Fee expenses that are included in "General and administrative expense" on the consolidated statements of operations. The Board of Directors approved an additional reimbursement fee of $232,000 over the base agreement in 2015.

As of December 31, 2016 and December 31, 2015, there was a related party payable due to Richmont Holdings of approximately $0.8 million and $580,000, respectively, that is included in "Related party payables" within current liabilities on the consolidated balance sheets. This amount recorded as December 31, 2016, includes the payable for unpaid reimbursement fees of $624,000 and short term advances of $219,000. The short-term advances do not bear interest and do not have a set maturity date.
 
Rochon Capital Partners

On September 25, 2012, the Company assumed a note payable in the principal amount of $25,000 from Rochon Capital Partners - a closely held company owned by the Company's Chairman and CEO. The loan was made with Happenings’ prior to the Company's acquisition of the business and was used for working capital needs. The loan is included in "Related party payables" within current liabilities. The loan does not currently have a set maturity date.

On June 6, 2017, Rochon Capital Partners purchased $1.0 million in aggregate principal amount and $23,000 in accrued and unpaid interest of the Note from Dominion. The promissory note bears interest at 9.75% per annum. The note is secured by a lien on the assets of the Company. The loan is subordinate to the lien from the Dominion debt. The original note issued to Dominion has a provision that limits the conversion of the note if such conversion would cause the beneficial ownership to exceed 4.99% of the Company's outstanding shares of common stock. As such, Rochon Capital Partners is currently not able to convert the note.

On October 18, 2017, the Company's Audit Committee, after conducting due diligence to substantiate the credit funding agreement's financial wherewithal cash draw formula, and Rochon Capital Partners have negotiated a Funding Request Agreement. The agreement provides periodic loans to the Company in the event of cash shortages arising in the ordinary course of business. The loans bear interest at 14.0% per annum, payable quarterly in arrears, and will be convertible into preferred or common JRJR shares at a price equal to the preceding 30-day average closing price of the shares. Notes will be convertible at the holder's option quarterly at any interest payment date upon the holder providing a 30-day notice. Any conversion of the notes will be subject to approval by the NYSE American. Issued notes, if any under the agreement, have a maturity date of five years post issuance. The notes will be subordinate to any senior secured loans. The Funding Request Agreement will stay active through October 31, 2018. The Company has not utilized the Funding Request Agreement as of the filing date of this annual report. The Company's evaluation as a going concern is heavily dependent upon the funding set forth in this agreement.

See Note (15), Stockholders' Equity and Non-controlling Interest, to the consolidated financial statements included in this report, for details about the Share Exchange Agreement with Rochon Capital Partners, which was amended during the fourth quarter of 2014.

Capital Partners V ("RCP V")

On February 26, 2015, the Company received a loan from Richmont Capital Partners V ("RCP V") - a closely held company owned by the Company's Vice-chairman and CFO - in the amount of $425,000. The loan does not currently bear interest and has no set maturity date.

Tamala L. Longaberger

On June 27, 2014, Longaberger received a promissory note in the principal amount of $42,000 from Tamala L. Longaberger. The note bears interest at the rate of 10.0% per annum, matured on June 27, 2015, and is guaranteed by the parent company, JRjr33, Inc. The Company has accrued interest of $11,000 in connection to this note. These amounts are included in "Related party payables" within current liabilities.

On July 1, 2014, Agel received a promissory note in the principal amount of $158,000 from Tamala L. Longaberger. The note bears interest at the rate of 10.0% per annum, matured on July 1, 2015, and is guaranteed by the parent company, JRjr33, Inc. The Company has accrued interest of $40,000 in connection to this note. These amounts are included in "Related party payables" within current liabilities.

On July 11, 2014, Agel received a promissory note in the principal amount of $800,000 from Tamala L. Longaberger. The note bears interest at the rate of 10.0% per annum, matured July 11, 2015, and is guaranteed by the parent company, JRjr33, Inc. The Company has accrued interest of $200,000 in connection to this note. These amounts are included in "Related party payables" within current liabilities.

The Company determined not to make payment on the notes due to Tamala L. Longaberger pursuant to the contractual agreements. As a result, in connection with these notes, Ms. Longaberger filed a State Court Action seeking re-payment of the notes on August 12, 2015. On August 17, 2016, the Court eliminated the trial setting and further stated it will issue a new case schedule upon conclusion of the arbitration scheduled for the week of December 4, 2017. The Company’s position is that Ms. Longaberger's claims are inextricably tied to the broader issues related to her terminated employment and the claims asserted against Ms. Longaberger by the Company and The Longaberger Company. The Company is claiming Ms. Longaberger was in breach of fiduciary duty, fraud, negligence, conversion, misappropriation of company funds, civil theft, breach of contract, and misappropriation of trade secrets, in an arbitration action in Columbus, Ohio. Therefore, as a result of Ms. Longaberger's misconduct, the Company believes it is owed more in damages than the amounts owed on the loans.

Actitech

On May 31, 2016, the Company entered into an agreement with Actitech, which is owned by Michael Bishop, a member of the Board of Directors. The agreement was not approved by the Company's Audit Committee at the time it was signed. The agreement set forth the supply terms of the manufactured product made by Actitech to be sold to one of the Company's subsidiaries, Agel. In addition to the terms for supply, the agreement provided for the payment of "fees" based upon a calculation stipulated in the agreement. Pursuant to the agreement, Agel purchased approximately $4.3 million of products from Actitech during 2016. The Company paid approximately $1.0 million and $1.4 million, during the fiscal year ended December 31, 2016 and 2015, respectively, for purchases of product. The Company has a trade payable on its books of $3.3 million and $98,000 as of December 31, 2016 and December 31, 2015, respectively. The trade payable to Actitech is included in "Related party payables" on the consolidated balance sheets. Included in the $3.3 million December 31, 2016 payable balance is approximately $1.9 million of fees for penalties and interest as a result of untimely payments during the fiscal year ended December 31, 2016. Even though the Company believes these fees to be usurious in nature, the Company has recorded the fees and will maintain a balance for the fees until either the fees are paid-in-full or a resolution has been reached with Actitech.