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Related Parties
9 Months Ended
Sep. 30, 2019
Related Parties  
Related Parties

Note 15 – Related Parties

As discussed in Note 7– “Income Taxes,” the Company has accrued tax distributions that are payable to holders of Class B common stock and LLC Interests to facilitate the payment of periodic estimated tax obligations by such holders. At September 30,  2019, the Company had paid $0.3 million in advance on required tax distributions which has been included in other current assets on the condensed balance sheets. At December 31,  2018, the Company had recorded an accrual of $1.2 million, for estimated tax distributions, which is included in accounts payable on the condensed consolidated balance sheets.

As discussed in Note 5– “Debt,” the Company has notes payable to the sellers of VIP, who are significant shareholders of the Company, of $17.5 million in aggregate as of September 30,  2019 and December 31,  2018 and accrued interest of $290 thousand and $169 thousand as of September 30, 2019 and December 31,  2018, respectively. The Company paid no interest in the three months ended September 30,  2019 and 2018 respectively. The Company paid $692 thousand and $257 thousand of interest in the nine months ended September 30,  2019 and 2018, respectively. Additionally, up to $10 million may be due under the 2019 Contingent Note, in the event the note is earned.

The Company leases office and warehouse space from a company under common control of the sellers of VIP, commencing on January 17, 2018. The Company incurred rent expenses of $91 thousand and $274 thousand in the three and nine months ended September 30, 2019, respectively. The Company incurred rent expenses of $89 thousand and $268 thousand in the three and nine months ended September 30, 2018, respectively.

 

Chris Christensen, the brother of CEO, McCord Christensen, acts as the Company’s agent at Moreton Insurance (“Moreton”), which acts as a broker for a number of the Company’s insurance policies. The Company’s premium expense, paid to Moreton and subsequently transferred to insurance providers, was $555 thousand and $693 thousand for the three and nine months ended September 30, 2019, respectively, and $522 thousand for the three and nine months ended September 30, 2018. Mr. Chris Christensen was paid a commission of approximately $28 thousand and $35 thousand for the three and nine months ended September 30, 2019, respectively, and $20 thousand and $25 thousand for the three and nine months ended September 30, 2018, respectively, by Moreton for the sale of such insurance policies to the Company.