Note 10 - Related Party Relations and Transactions

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

Note

10.

Related Party Relations and Transactions

Gary O. Marino, the Company’s chairman of the board, is the chairman, president, and chief executive officer of Boca Equity Partners LLC (“BEP”), Patriot Equity LLC (“Patriot”), Banyan Medical Partners LLC (“BMP”), and Banyan Surprise Plaza LLC (“BSP”). Mr. Marino owns

100%

of Patriot, Patriot owns

100%

of BMP and BSP through and along with other wholly owned subsidiaries. Mr. Marino, Mr. Paul S. Dennis, a member of the Company's board of directors, and Mr. Donald S. Denbo, a member of the Company's board of directors, also hold membership interests in BEP.

During

2016,

the Company established BMP, and certain other subsidiaries wholly-owned by BMP. The Company formed these entities to acquire medical office buildings in the United States. The Company was unable to raise the capital needed to consummate the

first

medical building opportunity. On

March 9, 2017,

the Company sold BMP and BMP’s wholly-owned subsidiaries to Patriot. The selling price was

$277,756

in the form of BMP assuming a portion of the Company’s note payable balance due to BEP. The consideration of

$277,756

was used to recoup the

$110,000

in property deposits as of

December 31, 2016

and reimbursement of

$117,756

of other

2016

and

2017

expenses incurred by the Company on behalf of BMP. This reimbursement of expenses is offset in general and administrative expenses as of

June 30, 2017,

which caused general and administrative expenses to have a credit balance of

$7,270

during that quarter.

On

July 27, 2016,

the Company entered into a Demand Note and Loan Agreement (the “Note”) with BEP providing for draws of up to

$250,000.

Loans under the Note bore interest at an annual rate of

10%

and outstanding principal and interest were due on demand. This Note was cancelled and terminated on

December 31, 2016

when the Company entered into a new Demand Note and Loan Agreement (the “New Note”) with BEP for

$471,826.

The New Note represents advances from BEP under the New Note, payments made since the date of the New Note and interest accrued thereon. The New Note bore interest at the rate of

10%

per annum and is payable upon demand. BEP

may,

but is

not

required to, make advances to the Company as the Company

may

from time to time request. The balance drawn on the New Note including accrued interest was paid in full

May 31, 2017.

The Note remains available to the Company to draw upon.  

On

June 8, 2017,

MedAmerica entered into an office lease and administrative support agreement (the “Agreement”) with BEP. The Agreement has a month-to-month term commencing on

June 1, 2017.

The Agreement provides for the Company’s use of a portion of BEP’s offices and certain overhead items at the BEP offices such as space, utilities and other administrative services for

$15,000

a month. The Agreement replaces the

February 3, 2017

office lease and administrative support agreement between the Company and BEP and includes additional general office and administrative staff support services. Total expense incurred under these agreements amounted to

$90,000

and

$48,025

for the

six

months ended

June 30, 2018

and

2017,

respectively and

$45,000

and

$28,210

for the

three

months ended

June 30, 2018

and

2017,

respectively.

On

June 14, 2017,

the Company entered into a letter of intent with Patriot to reacquire all of the capital units of BMP from Patriot, for

$9,536,582

which is the purchase price of the Medical Office Building. The letter of intent is non-binding, provides for a

ninety

-day exclusive diligence period, and is contingent upon the Company obtaining financing to complete the acquisition. The letter of intent was extended to

December 15, 2017

at which time it expired. The Company has

no

current plans to further pursue this acquisition.

During

2018

the Company's President and CEO performed work for International Rail Partners LLC (“IRP”), an entity majority owned and controlled by the Company’s Chairman. The Company billed back IRP for compensation and expenses in the amount of

$111,879

and received payment of

$77,265

during the quarter ended

June 30, 2018.

The outstanding amount of

$34,614

is shown as a due from related party.

The Company’s directors have

not

received cash compensation for their services in

2018

or

2017

but were compensated with stock options. See footnote

9

 Stock-Based Compensation for further discussion. In the

third

quarter of

2017,

the Company hired a new president and chief executive officer and a new chief financial officer who are husband and wife. Also, in the

third

quarter of

2017,

the Company issued

15,000

common stock options to the president and CEO and

45,000

shares to other board members and officers. The related stock compensation was

not

material.

As of

June 30, 2018,

the Company’s board of directors and officers beneficially own

838,060

shares of the Company’s common stock or

32.10%

of the outstanding common stock. Included in the

838,060

shares is

91,348

shares owned by Banyan Rail Holdings LLC and

351,966

shares owned by Marino Family Holdings LLC, companies controlled by our chairman, Gary O. Marino.

Paul Dennis, director and previously interim president, interim chief executive officer and interim chief financial officer, participated in the

2017

Private Placement investing

$150,000

for

100,000

shares of common stock.