Note 12. RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2012

Related Party Transactions Disclosure [Text Block]

Note 12.  RELATED PARTY TRANSACTIONS

Kohlberg & Co., L.L.C., whose affiliate holds all 1,131,551 shares of the Company’s Convertible Preferred Stock, provides ongoing management oversight and advisory services to the Company.  At December 31, 2012 and 2011, the Company owed Kohlberg $2.3 million and $1.8 million, respectively, for these services which is recorded in current liabilities in the Consolidated Balance Sheets.  The Company incurred expense of $0.5 million for these services in both 2012 and 2011, which is recorded in selling, general and administrative expenses in the Consolidated Statements of Operations.  The Company expects to incur $0.5 million annually for these services in future years.

In February 2011, loans of $0.1 million each were received from two directors of the Company, and a loan of $50,000 was received from the Company’s Chief Executive Officer.  In connection with these loans, the Company entered into subordinated promissory notes with these individuals.  These notes were set to mature on November 26, 2013 and accrued interest at a rate of 15% per year, to be paid in quarterly installments, which was paid by capitalizing such interest and adding such capitalized interest to the principal amount of the subordinated notes.  These notes were repaid by the Company in October 2011.  During the outstanding period of the notes, a total of $24,000 of interest was capitalized into the principal amount of the notes and repaid in October 2011.