Note 15 - Related Party Transactions

12 Months Ended

Dec. 31, 2012

Related Party Transactions Disclosure [Text Block]

NOTE 15:                    RELATED PARTY TRANSACTIONS

Information related to the Company’s related party transactions is as follows:

Transactions with ICP and ICP Holdings

The Company has entered into various agreements with ICP and ICP Holdings including a Contribution Agreement, an LLC Interest Purchase Agreement, a Limited Liability Company Agreement and a Marketing Agreement.   Based on the facts and circumstances that existed at December 31, 2012, including recurring losses experienced, forecasted losses expected for 2013, the expiration of ICP’s revolving credit agreement resulting in no assured liquidity source and the Company’s plan to substantially reduce the sourcing of their product from ICP, the Company’ management decided to assess their investment in ICP for impairment.  These agreements and management’s assessment of ICP’s current status are further described in Note 3. Equity Method Investments.  

As of December 31, 2012 and 2011, the Company recorded $4,008 and $6,167,  respectively, of amounts due to ICP that is included in the Accounts payable to affiliate, net caption on the accompanying Consolidated Balance Sheets and purchased approximately $48,611, $40,159 and $57,482 of product from ICP during the year ended December 31, 2012, the six month transition period ended December 31, 2011 and the year ended June 30, 2011, respectively, which is included in the Cost of sales caption of the Consolidated Statements of Operations.

Randy M. Schrick serves as the Vice President of Engineering of the Company and served as President of ICP from November 2009 to December 2011.

Long term debt

On July 20, 2009, Union State Bank – Bank of Atchison (“Bank of Atchison”), which previously had loaned the Company $1,500, agreed to loan the Company an additional $2,000.  The Company’s President and Chief Executive Officer, Mr. Newkirk, is a director of the Bank.  At December 31, 2012 and 2011, the Company had $1,070 and $1,374 outstanding, respectively on a 6.39% Secured Promissory Noted, due monthly to July 2016.

Consulting contract

The Company had a consulting contract with Ladd Seaberg, its former Chairman of the Board, who is also the son-in-law of Mr. Cloud L. Cray, Jr., spouse of a member of the Board of Directors and a voting trustee of the voting trust.  Under the contract, $250 was paid annually in exchange for consulting services.  The contract expired June 14, 2011.