Debt

9 Months Ended

Sep. 30, 2015

Debt [Text Block]

Note 9 – Debt

Outstanding debt at September 30, 2015 and December 31, 2014 is summarized as follows (in thousands):

		September 30,		December 31,
		2015		2014
Current:
Third Party Debt	$	2,500	$	—
Related Party Debt		1,698		2,985
Credit Facility		—		525
		4,198		3,510
Non-current:
Third Party Debt		—		2,500
Total debt	$	4,198	$	6,010

The Company entered into a loan with an unrelated party (the “Third Party Debt”) during the second quarter of 2014 for a principal amount of $2.5 million. The loan bears interest at 6% and had an original maturity date of January 15, 2015. In December 2014, the maturity date was extended to January 15, 2016 at the same interest rate. The loan is not subject to any covenants or conditions.

The Company’s Related Party Debt (the “Counsel Loan”), which is due on demand, was originally entered into in 2003 and accrued interest at 10% per annum compounded quarterly from the date funds were advanced. The Counsel Loan is secured by the assets of the Company.

In the second quarter of 2014, following Street Capital Group Inc.’s (formerly Counsel Corporation, herein referred to as “Counsel”) distribution of its ownership interest in HGI to Counsel shareholders as a dividend in kind, the unpaid balance of the Counsel Loan began accruing interest at a rate per annum equal to the lesser of the Wall St. Journal (“WSJ”) prime rate + 2.0%, or the maximum rate allowable by law. As of September 30, 2015 and December 31, 2014, the interest rate on the loan was 5.25% . Please see Note 11 for further discussion of transactions with Counsel.

The Credit Facility in existence at December 31, 2014, which is included within third party debt on the condensed consolidated balance sheet, was provided to HG LLC by a U.S. bank. The Credit Facility was repaid in full and terminated in March 2015.