XML 20 R11.htm IDEA: XBRL DOCUMENT

RELATED PARTY TRANSACTIONS

6 Months Ended

Mar. 31, 2018

NOTE 6 – RELATED PARTY TRANSACTIONS

Services provided by related parties

From time to time, Craig Marshak, a director of the Company, provides consulting services to the Company. Mr. Craig Marshak is a principal of Triple Eight Markets. All professional services fee payable to Craig Marshak is paid to Triple Eight Markets. As compensation for professional services provided, the Company recognized consulting expenses of $0 and $15,000 for the three months ended March 31, 2018 and 2017, respectively, which have been included in general and administrative expense – related party on the accompanying unaudited condensed consolidated statements of operations. As compensation for professional services provided, the Company recognized consulting expenses of $6,000 and $65,000 for the six months ended March 31, 2018 and 2017, respectively, which have been included in general and administrative expense – related party on the accompanying unaudited condensed consolidated statements of operations. As of March 31, 2018 and September 30, 2017, the accrued and unpaid services charge related to Craig Marshak amounted to $0 and $8,000, respectively, which have been included in accrued liabilities – related party on the accompanying consolidated balance sheets.

The Company uses affiliate employees for various services such as the use of accountants to record the books and accounts of the Company at no charge to those affiliates, which are considered immaterial.

Office space from related parties

The Company uses office space of affiliate companies, free of rent, which is considered immaterial.

Revenue from related party and cost of revenue from related party

On May 24, 2016, the Company entered into a General Service Agreement with FXDD Malta, a related party. The Company is to invoice FXDD Malta a minimum of $2,000,000 per month in consideration for providing personnel and technical support, marketing, accounting, risk monitoring, documentation processing and customer care and support. On October 17, 2017, the Company entered into an amendment of the General Service Agreement with FXDD Malta. In according to the amendment, which was effective as of October 1, 2017, the minimum amount payable by FXDD Malta to the Company for services was reduced from $2,000,000 per month to $1,600,000 per month. Emil Assentato is also the majority member of Max Q Investments LLC (“Max Q”), which is managed by Derivative Marketing Associates Inc. (“DMA”). Mr. Assentato is the sole owner and manager of DMA. Max Q owns 79% of Currency Mountain Malta LLC, which in turn is the sole shareholder of FXDD Malta.

In addition, on May 24, 2016, the Company entered into a General Service Agreement with FXDIRECT to pay a minimum of $1,975,000 per month for receiving personnel and technical support, marketing, accounting, risk monitoring, documentation processing and customer care and support. On October 17, 2017, the Company entered into an amendment of the General Service Agreement with FXDIRECT. Pursuant to the amendment, which was effective as of October 1, 2017, the minimum amount payable by the Company to FXDIRECT for services was reduced from $1,975,000 per month to $1,575,000 per month. Currency Mountain Holdings LLC is the sole shareholder of FXDIRECT. Max Q is the majority shareholder of Currency Mountain Holdings LLC.

Both of the above entities are affiliates through common ownership.

During the three and six months ended March 31, 2018 and 2017, service provided to related party which was recorded as revenue - related party on the accompanying unaudited condensed consolidated statements of operations was as follows:

	Three Months Ended March 31, 2018		Three Months Ended March 31, 2017		Six Months Ended March 31, 2018		Six Months Ended March 31, 2017
Service provided to:
FXDD Malta	$	4,800,000	$	6,000,000	$	9,600,000	$	12,000,000
	$	4,800,000	$	6,000,000	$	9,600,000	$	12,000,000

During the three and six months ended March 31, 2018 and 2017, service received from related party which was recorded as cost of revenue - related party on the accompanying unaudited condensed consolidated statements of operations was as follows:

	Three Months Ended March 31, 2018		Three Months Ended March 31, 2017		Six Months Ended March 31, 2018		Six Months Ended March 31, 2017
Service received from:
FXDIRECT	$	4,725,000	$	5,925,000	$	9,450,000	$	11,850,000
	$	4,725,000	$	5,925,000	$	9,450,000	$	11,850,000

Due to affiliates

At March 31, 2018 and September 30, 2017, due to related parties consisted of the following:

	March 31, 2018		September 30, 2017
Forexware LLC	$	299,782	$	403,994
FXDIRECT		180,327		—
	$	480,109	$	403,994

The balances of due to related parties represent expenses paid by Forexware LLC and FXDIRECT on behalf of the Company. The balances due to FXDIRECT may also include unsettled funds due related to the General Service Agreement. The related parties’ payables are short-term in nature, non-interest bearing, unsecured and repayable on demand.