Related Party Transactions

12 Months Ended

Dec. 31, 2015

Related Party Transactions [Abstract]

Related Party Transactions

Note 14 – Related Party Transactions

Debt with Street Capital

Until the second quarter of 2014, as discussed below, Street Capital was the Company’s majority shareholder. Street Capital remained a related party following the distribution of its investment in HGI to Street Capital shareholders as a result of the Services Agreement and the relationship of the chairman of the board discussed below. The Services Agreement terminated on August 31, 2015, however subsequent to its termination Street Capital remained a related party because the Company’s chairman of the board, who is also a significant shareholder of the Company, is also the chairman of the board of Street Capital.  At December 31, 2015 and 2014, the Company reported amounts owed to Street Capital of $1.7 million and $3.0 million, respectively, as related party debt (see Note 10). Total interest of $0.4 million has been accrued to the principal balance of the debt through December 31, 2015, and remains unpaid.

StreetCapitalServices Provided to Company

Beginning in 2004, HGI and Street Capital entered into successive annual management services agreements (collectively, the “Agreement”). Under the terms of the Agreement, HGI agreed to pay Street Capital for ongoing services provided to HGI by Street Capital personnel. These services included preparation of the Company’s financial statements and regulatory filings, taxation matters, stock-based compensation administration, Board administration, patent portfolio administration and litigation matters. The Street Capital employees providing the services were:  1) its Executive Vice President, Secretary and Chief Financial Officer, 2) its Tax Manager, 3) an Accounting Manager, and 4) its Accounts Payable Clerk. These employees had the same or similar positions with HGI, but none of them received compensation from HGI. Rather, Street Capital allocated to HGI a percentage, based on time incurred, of the employees’ base compensation paid by Street Capital. Beginning in 2011, additional amounts were charged to HGI for Street Capital services specifically relating to the ongoing operations of HGI’s asset liquidation business. The amounts due under the Agreement were payable within 30 days following the respective year end, subject to applicable restrictions. Any unpaid amounts bore interest at 10% per annum commencing on the day after such year end.

In 2013, Street Capital announced its plan to dispose of its interest in HGI, and on March 20, 2014, Street Capital declared a dividend in kind, consisting of Street Capital’s distribution of its majority interest in HGI to Street Capital shareholders. The dividend was paid on April 30, 2014 to shareholders of record as of April 1, 2014.

Following this disposition, the Company and Street Capital entered into a replacement management services agreement (the “Services Agreement”). Under the terms of the Services Agreement, Street Capital remained as external manager and continued to provide the same services, at similar rates, until the Services Agreement was terminated effective August 31, 2015, as described more fully in the Current Report on Form 8-K filed with the SEC on September 1, 2015.

The amounts charged by Street Capital, which are included in selling, general and administrative expenses and have been added to the Street Capital Loan balance, are detailed below (in thousands):

	Year ended December 31,
	2015		2014
Management fees	$	240	$	360
Other charges		50		193
Total	$	290	$	553

Transactions with Other Related Parties

The Company leases office space in Foster City, CA as part of the operations of HGP. The premises are owned by an entity that is jointly controlled by the HGI Chief Executive Officer and Chief Operating Officer/President. It also leases office space in Edwardsville, IL, as part of the operations of NLEX, which is owned by senior officers of NLEX. The lease amounts paid by the Company to the related parties, which are included in selling, general and administrative expenses during the year ended December 31, 2015 and 2014, are detailed below (in thousands):

	Year ended December 31,
Leased premises location	2015		2014
Foster City, CA	$	228	$	228
Edwardsville, IL		97		57
Total	$	325	$	285