2.4.0.82113100 - Disclosure - Related Party Transactionstruefalsefalse1falsefalsefalseD2013Q4http://www.sec.gov/CIK0000725876duration2012-07-01T00:00:002013-06-30T00:00:001true1us-gaap_RelatedPartyTransactionsAbstractus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsexbrli:stringItemTypestringfalse02false2us-gaap_RelatedPartyTransactionsDisclosureTextBlockus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalseterseLabel1falsefalsefalse00<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Related Party Transactions</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Recapitalization Note</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In Fiscal 2011, Mr. Sillerman (and his spouse and entities controlled by him), executed a promissory note in accordance with his subscription agreement for the payment of the purchase price of certain shares of common stock, in the amount of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$3,242</font><font style="font-family:inherit;font-size:10pt;">.  The note is an unsecured five-year note with interest accruing at the annual rate equal to the long-term Applicable Federal Rate in effect as of the date of the Recapitalization Agreement (which was </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">4.15%</font><font style="font-family:inherit;font-size:10pt;"> per annum).  The note is due five years after issuance, with interest accrued at the rate of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">4.15%</font><font style="font-family:inherit;font-size:10pt;"> per annum.  Interest income recorded on these notes for the years ended June 30, 2013 and June 30, 2012 was </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$135</font><font style="font-family:inherit;font-size:10pt;"> and </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$135</font><font style="font-family:inherit;font-size:10pt;">, respectively.</font><font style="font-family:inherit;font-size:8pt;"> </font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Shared Services Agreements</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In an effort to economize on costs and be efficient in its use of resources, the Company entered into a shared services agreement with Circle Entertainment Inc. (“Circle”) as of February 15, 2011, pursuant to which it shares costs for legal and administrative services in support of Mitchell J. Nelson, its then-General Counsel and General Counsel to Circle.  The shared services agreement provides, in general, for sharing of the applicable support provided by either company to Mr. Nelson in connection with his capacity as General Counsel, and an allocation generally based on the services provided by Mr. Nelson, which are initially estimated to be divided evenly between the companies.  The Company is responsible for advancing the salary to Mr. Nelson for both companies and will be reimbursed by Circle for such salary and benefits (but not for any bonus, option or restricted share grant made by either company, which will be the responsibility of the company making such bonus, option or restricted share grant).  The agreement provides for the Chief Executive Officer or President of each Company to meet periodically to assess whether the services have been satisfactorily performed and to discuss whether the allocation has been fair.  The Audit Committee of each company's Board of Directors will then review and, if appropriate, approve the allocations made and whether payments need to be adjusted or reimbursed, depending on the circumstances.  Because this transaction is subject to certain rules regarding “affiliate” transactions, the Audit Committee and a majority of the independent members of the Company's Board of Directors have approved the shared services agreement.  This is deemed to be an affiliate transaction because Mr. Sillerman is the former Chairman, a Board member, and a greater than 10% stockholder of Circle and Mr. Nelson is Executive Vice President and General Counsel of Circle.  For the years ended June 30, 2013 and June 30, 2012, the Company billed Circle </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$253</font><font style="font-family:inherit;font-size:10pt;"> and </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$322</font><font style="font-family:inherit;font-size:10pt;">, respectively. Such billings primarily relate to support consisting of legal and administrative services. These services are to be reviewed and, if appropriate, approved by Circle's Audit Committee and the Company's Audit Committee. The balance due from Circle as of June 30, 2013 and June 30, 2012 was </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$23</font><font style="font-family:inherit;font-size:10pt;"> and </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$53</font><font style="font-family:inherit;font-size:10pt;">, respectively.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company also entered into a shared services agreement with SFX Entertainment Inc. ("SFX"), a company affiliated with Mr. Sillerman, pursuant to which it shares costs for legal and administrative services in support of Mr. Nelson, and several other of the Company's employees. The shared services agreement provides, in general, for sharing generally based on the services provided by Mr. Nelson and such other employees. Mr. Nelson and such other employees will continue to be paid by the Company, and SFX will either reimburse Circle (which will reimburse the Company, if applicable) or reimburse the Company directly for its portion of such salary and benefits (but not for any bonus, option or restricted share grant made by either company, which will be the responsibility of the company making such bonus, option or restricted share grant). The agreement provides for the Chief Executive Officer or President of each company to meet periodically to assess whether the services have been satisfactorily performed and to discuss whether the allocation has been fair. The Audit Committee of each company's Board of Directors will then review and, if appropriate, approve the allocations made and whether payments need to be adjusted or reimbursed, depending on the circumstances. Because this transaction is subject to certain rules regarding “affiliate” transactions, the Company's Audit Committee and a majority of the independent members of the Company's Board of Directors have approved this shared services agreement. For the year ended June 30, 2013, the Company billed SFX </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$263</font><font style="font-family:inherit;font-size:10pt;">.  The balance due from SFX as of June 30, 2013 was </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$47</font><font style="font-family:inherit;font-size:10pt;">. The Company did not bill any amounts to SFX in 2012. </font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Certain Company accounting personnel may provide personal accounting services to Mr. Sillerman.  To the extent that such services are rendered, Mr. Sillerman shall reimburse the Company theretofore.  The reimbursement for any such services shall be reviewed by the Company's Audit Committee.  For the years ended June 30, 2013 and June 30, 2012, the Company billed Mr. Sillerman </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$245</font><font style="font-family:inherit;font-size:10pt;"> and </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$148</font><font style="font-family:inherit;font-size:10pt;">, respectively.  The balance due from Mr. Sillerman as of June 30, 2013 and June 30, 2012 was </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$0</font><font style="font-family:inherit;font-size:10pt;"> and </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$21</font><font style="font-family:inherit;font-size:10pt;">, respectively.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Private Placements</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Mr. Sillerman purchased units for </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$3,000</font><font style="font-family:inherit;font-size:10pt;"> in the May 10, 2012 private placement.</font><font style="font-family:inherit;font-size:10pt;font-weight:bold;"> </font><font style="font-family:inherit;font-size:10pt;">As a result of Mr. Sillerman's participation in the placement, </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">545,455</font><font style="font-family:inherit;font-size:10pt;"> units with a fair value of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$5,116</font><font style="font-family:inherit;font-size:10pt;"> were issued by the Company. The fair value of the associated warrants was determined utilizing the Binomial Lattice Model in accordance with ASC 820-10, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Fair Value Measurements </font><font style="font-family:inherit;font-size:10pt;">(see Note 13)</font><font style="font-family:inherit;font-size:10pt;font-style:italic;">. </font><font style="font-family:inherit;font-size:10pt;">This resulted in a non-cash compensation charge of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$2,116</font><font style="font-family:inherit;font-size:10pt;">, which is included in selling, general and administrative expenses in the Consolidated Statement of Operations for the year ended June 30, 2012.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">SIC purchased units for </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$11,376</font><font style="font-family:inherit;font-size:10pt;"> in the August 25, 2011 private placement.</font><font style="font-family:inherit;font-size:10pt;font-weight:bold;"> </font><font style="font-family:inherit;font-size:10pt;">As a result of SIC's participation in the placement, </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">1,280,000</font><font style="font-family:inherit;font-size:10pt;"> units were acquired by Mr. Sillerman with a fair value, based upon the traded value of the stock at the time, in excess of the price paid.  This resulted in a non-cash compensation charge of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$19,456</font><font style="font-family:inherit;font-size:10pt;">, which is included in Selling, general and administrative expenses in the Consolidated Statement of Operations for the year ended June 30, 2012.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Consultant</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Benjamin Chen, previously an independent director of the Company, was acting as a consultant to the Company in the area of technology, systems architecture and technical operations.  Mr. Chen was paid </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$188</font><font style="font-family:inherit;font-size:10pt;"> for his services through June 30, 2013. On May 6, 2013, Mr. Chen resigned as a director of the Company.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">NetJets</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company executed an agreement with NetJets to bundle a </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">3.125%</font><font style="font-family:inherit;font-size:10pt;"> fractional share of a G-IV jet owned by Mr. Sillerman with a value of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$336</font><font style="font-family:inherit;font-size:10pt;"> with a new </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">6.25%</font><font style="font-family:inherit;font-size:10pt;"> fractional share of a G-IV jet which was purchased from NetJets by the Company.  The purchase price for the </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">6.25%</font><font style="font-family:inherit;font-size:10pt;"> interest was </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$1,175</font><font style="font-family:inherit;font-size:10pt;">, payable </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$235</font><font style="font-family:inherit;font-size:10pt;"> upon signing and the balance of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$940</font><font style="font-family:inherit;font-size:10pt;"> is financed with interest at </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">6%</font><font style="font-family:inherit;font-size:10pt;"> per annum, monthly payments of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$9</font><font style="font-family:inherit;font-size:10pt;"> and, a five-year balloon of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$661</font><font style="font-family:inherit;font-size:10pt;">.   Monthly management fees (aggregate for both shares) are approximately </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$26</font><font style="font-family:inherit;font-size:10pt;">.  Based on the anticipated travel schedule for Mr. Sillerman and the anticipated residual value of the plane at the end of the five-year period of usage, the Company expected to realize cost savings. The Company’s Audit Committee approved entering into this related party transaction, and on June 17, 2011, the independent members of the Company’s Board of Directors approved the transaction</font><font style="font-family:inherit;font-size:10pt;font-weight:bold;">. </font><font style="font-family:inherit;font-size:10pt;">The Company accounted for the transaction by recording the interests as investment assets and a loan payable to Mr. Sillerman and NetJets. </font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In 2012, the Company reclassified the </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$336</font><font style="font-family:inherit;font-size:10pt;"> loan from Mr. Sillerman to a capital contribution.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In June 2012, the Company agreed to sell the fractional interests back to NetJets and repay outstanding loan amount. Accordingly, the amount of the loan to NetJets is </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$0</font><font style="font-family:inherit;font-size:10pt;"> at June 30, 2012. In connection with the sale, the Company recorded a loss on the sale of approximately </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$134</font><font style="font-family:inherit;font-size:10pt;"> and </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$166</font><font style="font-family:inherit;font-size:10pt;"> of travel related expenses. These amounts are included in Selling, general and administrative expenses for the year ended June 30, 2012.</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Lines of Credit</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">See Note 7, Loans Payable, for a discussion of lines of credit with related parties.</font></div></div>falsefalsefalsenonnum:textBlockItemTypenaThe entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.
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