Related Party Transactions

6 Months Ended

Jun. 30, 2016

Note 8 - Related Party Transactions

Stephen M. Merrick, President of the Company, is of counsel to the law firm of Vanasco Genelly and Miller PC which provides legal services to the Company. Legal fees paid by the Company to this firm for the three months ended June 30, 2016 and 2015, respectively, were $33,000 and $54,000. Legal fees paid by the Company to this firm for the six months ended June 30, 2016 and 2015, respectively, were $71,000 and $92,000.

Interest payments have been made or accrued to John H. Schwan, Chief Executive Officer of the Company, for loans made to the Company. During the three months ended June 30, 2016 and 2015, these interest payments totaled $23,000. During the six months ended June 30, 2016 and 2015, these interest payments totaled $46,000 and $43,000, respectively.

On July 1, 2011, Flexo Universal, S.R.L. de C.V. (“Flexo”) entered into a lease agreement with Venture Leasing S.A. de R.L. (“Venture Leasing Mexico”) for the lease of balloon production equipment financed and owned by Venture Leasing Mexico and used by Flexo for the production of latex balloons. Venture Leasing Mexico is wholly owned by entities owned by John H. Schwan, Chief Executive Officer of the Company and Stephen M. Merrick, President of the Company. Venture Leasing Mexico and Venture Leasing L.L.C., also owned by entities owned by Mr. Schwan and Mr. Merrick, are deemed variable interest entities and are consolidated with the accounts of the Company. During the three and six months ended June 30, 2016, Flexo made lease payments to Venture Leasing Mexico totaling $26,000 and $65,000. During the three and six months ended June 30, 2015, Flexo made lease payments to Venture Leasing Mexico totaling $36,000 and $72,000.

John H. Schwan, Chief Executive Officer of the Company, through an investment entity, and Stephen M. Merrick, President of the Company, also through an investment entity own, in aggregate, a 50% interest in Clever Container Company L.L.C., an Illinois limited liability company. During the three months ended June 30, 2016 and 2015, Clever Container purchased various products from the Company in the amount of $293,000 and $217,000, respectively. During the six months ended June 30, 2016 and 2015, Clever Container purchased various products from the Company in the amount of $478,000 and $225,000, respectively. As of June 30, 2016 and 2015, the balance of accounts receivable from Clever Container to the Company were $397,000 and $498,000, respectively. On January 8, 2016, the Company purchased interests in Clever Container representing 28.5% ownership of Clever Container for an aggregate consideration of $498,750, of which $411,250 (consisting of 24,746 share of common stock of the Company valued at $122,500, cash of $105,000 and forgiveness of accounts receivable in the amount of $183,750) was contributed to capital in Clever Container in exchange for interests in that company and $87,500 was paid for the purchase of a 5% interest from an unrelated third party. The contributions to capital were made in connection with the purchase and redemption of interests in Clever Container from unrelated third parties.