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Real Estate Inventory
9 Months Ended
Sep. 30, 2016
Real Estate [Abstract]  
Real Estate Inventory

Note 3 – Real Estate Inventory

In the first quarter of 2016, the Company entered into a purchase and sale agreement with International Auto Processing Inc. (“IAP”) to sell the Company’s real estate inventory for $4.1 million.  IAP subsequently assigned the purchase and sale agreement to an affiliate, International Investments and Infrastructure, LLC (“III”).  

Concurrently, the Company entered into a five-year lease agreement with an affiliate of III to lease the building during the escrow period, which terminates at the close of escrow.  The purchase agreement gave IAP the right to terminate its obligation to consummate the sale for any reason before June 9, 2016, but in the event the sale is not consummated, the lease agreement would continue through the end of the lease term.  

Annual rental payments under the lease were $0.7 million, and the lessee was responsible for all operating costs associated with the property.  During the three and nine months ended September 30, 2016, the Company earned rental income of $10,000 and $0.3 million, respectively, which is included within services revenue in the condensed consolidated statement of operations.  No rental income was earned during the three or nine months ended September 30, 2015.    

In the third quarter of 2016, the Company completed the sale of its real estate inventory and, in accordance with the purchase and sale agreement, terminated the previously existing lease agreement between the Company and an affiliate of III.  The Company sold the real estate inventory for $4.1 million and, after recognizing carrying costs of $3.7 million and closing costs of $0.3 million, realized a gross profit of $0.1 million.

In the third quarter of 2015, the Company determined that the net realizable value of its real estate inventory, based on the most probable selling price net of costs to complete the sale, was $3.8 million.  As such, the Company recorded an inventory write-down charge during the three months ended September 30, 2015, of $2.7 million, reducing the carrying cost of the inventory to $3.8 million.  There were no such similar charges during the three or nine months ended September 30, 2016, as the Company executed the aforementioned purchase and sale agreement for a sales price in excess of the carrying cost of the real estate inventory.