(7)Related Party Transactions

Some of the board members and officers of EVO, Inc. have partial ownership interests in certain related companies. The Company advances funds to and receives funds from these related companies, incurs commission expenses, and sells equipment and services to these companies. The related party commission expenses amounted to $9.9 million and $10.2 million for the three months ended June 30, 2018 and 2017, respectively. The related party commission expenses amounted to $18.8 million and $20.8 million for the six months ended June 30, 2018 and 2017, respectively. The sale of equipment and services amounted to $0.1 million for the three months ended June 30, 2018 and 2017. The sale of equipment and services amounted to $0.2 million and $0.3 million for the six months ended June 30, 2018 and 2017, respectively.

Related party balances consist of the following:


	June 30,		December 31,
	2018		2017
	(In thousands)
Receivables from sale of POS devices and peripherals	$	1,451	$	1,609
Receivables from related companies		18		974
Notes receivable, short term		172		42
Due from related parties, short term	$	1,641	$	2,625

Notes receivable, long term		—		109
Due from related parties, long term	$	—	$	109

Liabilities to related companies		5,398		7,847
Due to related parties, short term	$	5,398	$	7,847

ISO commission reserve		560		675
Due to related parties, long term	$	560	$	675

Madison Dearborn Partners, LLC (“MDP”), a member of EVO, LLC and shareholder of EVO, Inc., provides the Company with consulting services on an as needed basis. In addition, the Company will reimburse MDP for certain out of pocket expenses. MDP primarily provides consulting services related to business development, financing matters, and potential acquisition activities. The Company reimbursed less than $0.1 million in expenses to MDP for three and six months ended June 30, 2018 and less than $0.1 million and $5.7 million for three and six months ended June 30, 2017, respectively.

Additionally, the Company provides certain treasury, payroll, tax preparation and other services, to Blueapple Inc. (“Blueapple”), a member of EVO, LLC and owner of all outstanding shares of Class B common stock of EVO, Inc. The expense related to these services was $0.1 million for the three and six months ended June 30, 2018 and 2017.

The Company provides card-based processing services and risk assessment to Federated Payment Systems, LLC (“Federated”) in the ordinary course of business. The Company also holds a one-third ownership position in Federated, while JGRG Equities, LLC, an entity wholly owned by relatives of the Company’s chairman, and an unrelated third party each also hold a one-third ownership position. The Company receives a nominal fee for providing services to Federated. The Company has a right to hold a reserve on Federated’s merchant transaction proceeds to secure potential losses the Company may incur in connection with the services it provides to Federated. For the three months ended June 30, 2018 and 2017, the Company received $0.1 million in revenues in connection with providing services to Federated. For the six months ended June 30, 2018 and 2017, the Company received $0.3 million and $0.2 million, respectively, in revenues in connection with providing services to Federated.

EVO, LLC also relies on Federated Payments Canada Corp. (“Federated Canada”) to provide certain marketing services to the Company’s business in Canada. While the Company does not hold a direct ownership interest in Federated Canada, the Company’s chairman holds a one third interest in Federated Canada. For the three months ended June 30, 2018 and 2017, the Company paid $2.7 million and $2.1 million, respectively in fees to Federated Canada for these services. For the six months ended June 30, 2018 and 2017, the Company paid $3.9 million and $4.0 million, respectively in fees to Federated Canada for these services.

The Company leases office space located at 515 Broadhollow Road in Melville, New York for $0.1 million per month from 515 Broadhollow, LLC. 515 Broadhollow, LLC is majority owned, directly and indirectly, by the Company’s chairman.

Receivables from related companies include amounts receivable from members of EVO, LLC and shareholders of the Company of $0.6 million and $0.8 million and receivables from minority held affiliates of $0.2 million and $0.3 million as of June 30, 2018 and December 31, 2017. Additionally, the Company has notes receivable from employees maturing on June 24, 2021 with an interest rate of 3.25%. The balance of the outstanding notes is not significant as of June 30, 2018 and December 31, 2017. The outstanding notes are presented in “Other current assets” and “Other assets” on the unaudited condensed consolidated balance sheets. In connection with the vesting of the Class A restricted shares, the Company issued loans to certain employees for the purposes of paying withholding taxes in the amount of $0.6 million.

The Company, through one wholly owned subsidiary and one minority held affiliate, conducts business under ISO agreements with a relative of the Company’s chairman pursuant to which the relative provides certain marketing services and equipment in exchange for a commission based on the volume of transactions processed for merchants acquired by the related party. For the three months ended June 30, 2018, the Company paid $0.2 million and $0.1 million, respectively, for commissions paid related to this activity. For the six months ended June 30, 2018 and 2017, the Company paid $0.3 million and $0.1 million, respectively, for commissions paid related to this activity.

NFP is the Company’s benefit broker and 401(k) manager. NFP is a portfolio company of MDP and one of the Company’s executive officers maintains a minority ownership interest in NFP. For the three and six months ended June 30, 2018 and 2017, the Company paid $0.1 million in commissions and other expenses to NFP.