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RELATED PARTY TRANSACTIONS AND BALANCES
12 Months Ended
Dec. 31, 2012
Related Party Transactions [Abstract]  
Related Party Transactions Disclosure [Text Block]

NOTE 6 - RELATED PARTY TRANSACTIONS AND BALANCES

 

The following schedule sets forth various obligations of the Company to related parties.

 

Transactions

 

    2012     2011  
             
Compensation and related expenses of the Company’s Chairman of the Board and Chief Executive Officer (1)   $ 298,000     $ 291,000  
                 
Compensation of the Company’s Chief Financial Officer (2)     120,000       120,000  
                 
Cash advances from Royal HTM Group  (3)     174,000       209,000  
                 
Cash advances in the form of direct payment of expenses by Royal HTM Group  (3)     -       36,000  
                 
Business development services provided by Royal HTM Group  (4)     30,000       120,000  
                 
Royal HTM Group expense allowance (4)     20,000       15,000  
    $ 642,000     $ 791,000  

 

1) Boris Birshtein serves as the Company’s Chairman of the Board of Directors and its Chief Executive Officer on a month-to-month basis. Mr. Birshtein owns 50% of Royal HTM Group, our majority shareholder.

 

2) Jack Braverman serves as a member of the Company’s Board of Directors and as the Company’s Chief Financial Officer on a month-to-month basis. Mr. Braverman owns 50% of Royal HTM Group, our majority shareholder.

 

3) Royal HTM Group, a Canadian company owned and controlled by the Company’s two members of its Board of Directors, renders certain business development services to the Company. Royal HTM Group has also advanced money to the Company to fund its expenses, and is the Company’s majority shareholder.

 

4) Royal HTM Group renders certain business development services to the Company. Beginning as of January 1, 2012, the monthly rate for such services is $2,500 (reduced from $10,000 per month in year 2011). Additionally, Royal HTM Group is entitled to a quarterly expense allowance of $5,000 for expenses incurred in connection with its business development services rendered to the Company

 

Balances

 

Payables to related parties consist of the following:

 

    DECEMBER 31,  
    2012     2011  
Amount due to Royal HTM Group   $ 3,627,000     $ 3,403,000  
                 
Accrued compensation due to the Company’s Chief Financial Officer     480,000       360,000  
                 
Accrued compensation due to the Company’s Chairman of the Board     2,087,000       1,790,000  
    $ 6,194,000     $ 5,553,000  

 

These amounts are non-interest bearing and due on demand.