Note 5 - Notes Receivable - Related Party

12 Months Ended

Dec. 31, 2012

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

(5)           NOTES RECEIVABLE – RELATED PARTY

2010 Senior Secured Note Receivable - In September 2010, we issued a Senior Secured Loan and Security Agreement with Global (“Global Note Receivable”) in exchange for cash in the principal amount of $5 million.  During August 2012, we agreed to extend the maturity date of our Global Note Receivable by seven months, resulting in a new maturity date of April 14, 2013.  In association with this amendment, we increased the interest rate from 10.5% up to 12.5%. Global also paid to us a 1% transaction fee of approximately $50 thousand, of which $25 thousand is deferred and netted against our long term notes receivable at December 31, 2012.  These fees will be recognized over the remaining term of the Global Note Receivable. During the years ended December 31, 2012 and 2011, Global paid $558 thousand and $523 thousand, respectively, in interest on the Global Note Receivable.

2012 Note Receivable - In January 2012, we executed a separate loan agreement (the “Global Loan”) with Global which provides principal in the amount of $12 million. The Global Loan is currently unsecured, but we can require Global to provide adequate collateral security in the event of a material adverse effect, as determined in our sole discretion. The Global Loan is due and payable to us on or before September 30, 2013 and originally carried an interest rate of 10.5% per annum. In September 2012, pursuant to provisions of the Global Loan agreement, the interest rate charged was increased from 10.5% up to 12.5% per annum due to Gobal’s nonconformity with a performance condition as of June 30, 2012.  The new stated interest rate will remain in effect until the maturity of the loan agreement.  Accrued and unpaid interest on the outstanding principal amount is due and payable on the last day of each quarter.

During the year ended December 31, 2012, Global paid $1.2 million in interest on the Global Loan. Global also paid to us a 1.75% transaction fee of $210 thousand, of which $94 thousand was deferred and presented net of our long term notes receivable at December 31, 2012 and will be recognized over the term of the Global Loan.

Currently, our related party loans are classified as long-term due to the uncertainty around the timing of collection in spite of the stated repayment terms in the agreements.  As a related party, it is in our best interest to work with Global on payment terms to maximize our return on this investment.  We assess the collectability of our related party loans with Global on a semi-annual basis based on review of their publically disclosed financial information.  Additionally, we continually monitor all Global disclosures for any events that could adversely affect their liquidity or results of operations.  As of the date of this annual report on Form 10-K we do not have any reason to believe that our Global Note Receivable or our Global Loan is not collectible or is impaired.  Accordingly, we did not record any allowance for doubtful accounts related to our notes receivable at December 31, 2012.