Related Party Transactions

9 Months Ended

Sep. 30, 2013

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

The Company provides cloud and managed video services (the “Video Services”) to ABM Industries, Inc. ("ABM"). James S. Lusk, who serves on the Board of Directors of the Company, is an officer of ABM. Video Services revenue from ABM for the nine months ended September 30, 2013 and 2012 was $103,000 and $168,000, respectively, and for the three months ended September 30, 2013 and 2012 was $33,000 and $43,000, respectively. As of September 30, 2013, the accounts receivable attributable to ABM was $22,000.

The Company receives general corporate strategy and management consulting services under a Consulting Agreement entered into on September 1, 2010 from Jon A. DeLuca, who serves on the Board of Directors for the Company. The Consulting Agreement is a month-to-month engagement pursuant to which the Company pays Mr. DeLuca $12,500 per month, plus any pre-authorized expenses incurred in providing services, under the Consulting Agreement. Related party consulting fees pursuant to this agreement for the nine months ended September 30, 2013 and 2012 were $113,000 and $113,000, respectively, and for the three months ended September 30, 2013 and 2012 were $38,000 and $38,000, respectively. As of September 30, 2013, the accounts payable to Mr. DeLuca was $36,000.

The Company received financial advisory services from Burnham Hill Partners, LLC ("BHP") under certain engagement agreements. Jason Adelman, a principal of BHP, is a greater than 5% shareholder of the Company. In October 2013, the Company terminated all such engagement agreements with BHP. In connection with the termination of the agreements with BHP and to settle amounts due to BHP for financial advisory services, the Company agreed to pay BHP $100,000 and issue 100,000 of shares of Common Stock to BHP. This $100,000 fee was recorded in accrued expenses as of September 30, 2013 and is included as a cost of the Preferred Stock Exchange discussed in Note 8. Financial advisory fees for BHP for the nine months ended September 30, 2013 and 2012 were $196,000 and $233,000, respectively, and for the three months ended September 30, 2013 and 2012 were $124,000 and $161,000, respectively. As of September 30, 2013, there was $100,000 of BHP fees recorded in accrued expenses.

Pursuant to a Sales Partner Agreement between Glowpoint and Nancy K. Holst, Ms. Holst is entitled to certain sales commissions. Ms. Holst is the wife of Peter Holst, the Company's President and CEO. For the nine months ended September 30, 2013, she earned the sum of $18,000. As of September 30, 2013, there was $6,000 accrued for payment to Ms. Holst.

Transactions with related parties, including the transactions referred to above, are reviewed and approved by independent members of the Board of Directors of the Company. The independent members of the Company's Board reviewed and approved each of the related party transactions referred to above.