NOTES AND ADVANCES DUE FROM AND TRANSACTIONS WITH RELATED PARTIES

12 Months Ended

Dec. 31, 2020

Loans and Leases Receivable, Related Parties Disclosure [Abstract]

Notes And Advances Due From And Transactions With Related Parties

9.  NOTES AND ADVANCES DUE FROM AND TRANSACTIONS WITH RELATED PARTIES

The Company has an agreement (the “Agreement”) with HMGA, Inc. (the “Adviser”) for its services as investment adviser and administrator of the Company’s affairs. All officers of the Company who are officers of the Adviser are compensated solely by the Adviser for their services.

The Adviser is majority owned by Mr. Wiener, the Company’s Chairman, CEO and President. Mr. Wiener is the Chairman of the Board, President and Chief Executive Officer of HMGA; and Carlos Camarotti is its Vice President - Finance and Assistant Secretary.

Under the terms of the Agreement, the Adviser serves as the Company’s investment adviser and, under the supervision of the directors of the Company, administers the day-to-day operations of the Company. All officers of the Company, who are officers of the Adviser, are compensated solely by the Adviser for their services. The Agreement is renewable annually upon the approval of a majority of the directors of the Company who are not affiliated with the Adviser and a majority of the Company’s shareholders. The contract may be terminated at any time on 120 days written notice by the Adviser or upon 60 days written notice by a majority of the unaffiliated directors of the Company or the holders of a majority of the Company’s outstanding shares.

On August 27, 2020, the shareholders of the Company approved the renewal of the Advisory Agreement between the Company and the Adviser for a term commencing January 1, 2021 and expiring December 31, 2021.

For the years ended December 31, 2020 and 2019, the Company and its subsidiaries incurred Adviser fees of approximately $660,000 and $741,000, respectively. This consisted of $660,000 in regular compensation for 2020 and 2019, and $81,000 in incentive fee compensation for 2019. There was no incentive fee in 2020.

The Adviser leases its executive offices from CII pursuant to a lease agreement. This lease agreement calls for base rent of $64,324 per year payable in equal monthly installments. Additionally, the Adviser is responsible for all utilities, certain maintenance, and security expenses relating to the leased premises. In December 2020, the lease was renewed for one year with an increase in rent of 5% per year.

Mr. Wiener is a 19% shareholder and the chairman and director of T.G.I.F. Texas, Inc., a 49% owned affiliate of CII. As of December 31, 2020, and 2019, T.G.I.F. had amounts due from CII in the amount of approximately $650,000 and $1,000,000, respectively. These amounts are due on demand and bear interest at the prime rate (3.25 % at December 31, 2020). All interest due has been paid.

As of December 31, 2020, and 2019, T.G.I.F. owns 10,200 shares of the Company’s common stock.

As of December 31, 2020, and 2019, T.G.I.F. had amounts due from Mr. Wiener in the amount of approximately $707,000. These amounts bear interest at the prime rate (3.25% at December 31, 2020) and principal and interest are due on demand. All interest due has been paid.

Mr. Wiener received consulting and director’s fees from T.G.I.F totaling approximately $29,000 and $23,000 for the years ended December 31, 2020 and 2019, respectively.