Related Party Transactions

12 Months Ended

Sep. 30, 2016

Note 13 - Related Party Transactions

During the years ended September 30, 2016 and 2015, building lease payments of $1,000,000 and $961,000, respectively were paid to Charles River Realty, dba Bachrach, Inc., which is owned by Gerald Entine and family. Dr. Entine is a former director and employee of the Company, as well as a greater than 5% beneficial owner of the Company’s stock.

Dr. William Hagan, a member of the Company’s Board of Directors, provides consulting services to RMD through his consulting company, Hagan & Associates LLC (“H&A”). During the year ended September 30, 2016, H&A was paid approximately $1,000 in fees. No amounts were paid during 2015. This consulting arrangement is expected to continue into the future.

In 2014, the Company was awarded a grant from the National Institute of Heart Lung and Blood to develop new and improved monitors to detect blood loss and potentially fatal hemorrhage in trauma victims. The Company is using the Mayo Clinic in Rochester, MN as its primary subcontractor to conduct animal and human trials with respect to this grant. Dr. Michael J. Joyner of the Mayo Clinic is a co-investigator under this grant. He is also a member of the Xcede Board of Directors. In fiscal year 2016, the Mayo Clinic received approximately $79,000 under this grant. A small fraction of Dr. Joyner’s Mayo salary is charged to this grant. The subcontract awards to, and the work performed by, the Mayo Clinic are administered by the Mayo Foundation for Medical Education and Research and adheres to the approval and conflicts-of-interest policies of both the Mayo Clinic and the Company. We will continue to monitor this relationship.

In October 2013, the Company’s subsidiary, Dynasil Biomedical, formed Xcede Technologies, Inc., a joint venture with Mayo Clinic, to spin out and separately fund the development of its tissue sealant technology. Xcede issued $5.1 million of convertible promissory notes in order to fund its operations, including $2.2 million to the Company, which is eliminated in the consolidated financial statements. Mr. Sulick and family members invested $1,065,000, Mr. Lawrence Fox invested, $150,000, Dr. Zuckerman (Xcede CEO) and family invested $125,000, Ms. Lunardo (Optometrics COO) invested $25,000, Dr. Hagan invested $25,000, Kanai Shah (RMD President) invested $25,000 and Dr. Entine’s Family Trust invested $100,000 in Xcede and were issued convertible promissory notes in those original principal amounts. In November 2016, the company converted these promissory notes into preferred stock.

As of December 1, 2016, Mr. Sulick and family own the equivalent of 12.7% of Xcede’s outstanding common stock, Mr. Fox owns the equivalent of 1.9% of Xcede’s outstanding common stock, Dr. Zuckerman and family own the equivalent of 1.5% of Xcede’s outstanding common stock, Ms. Lunardo owns the equivalent of 0.3% of Xcede’s outstanding common stock, Dr. Hagan owns the equivalent of 0.3% of Xcede’s outstanding common stock, Dr. Shah owns the equivalent of 0.3% of Xcede’s outstanding common stock and Dr. Entine owns the equivalent of 1.3% of Xcede’s outstanding common stock.

Patricia Tuohy is the Company’s Director of Business Development. During the year ended September 30, 2016, Ms. Tuohy worked a full year in this position and earned $168,000 in compensation. During the year ended September 30, 2015, Ms. Tuohy worked a partial year and earned $103,000. Ms. Tuohy is Peter Sulick’s daughter.